Supply Chain Management: Enhancing World Food

Security and trade facility.

Case study of Thai Poultry Industry,

CP Food and FAPP

Dr.Pornsri

Laurujisawat

FAPP Secretary

E-mail : Pornsril@yahoo.com

Tel. (668)-1-826-18001

2

0

100,000

200,000

300,000

400,000

500,000

600,000

1973

1977

1982

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(f)

MT

163

Bird Flu

Shock

192,000181,000

219,000

450,000

181,000181,000181,000

Bird Flu

Shock

181,000

Bird Flu

Shock

181,000

545,000Bird Flu

Shock

181,000

Ref : Thai Broiler Exports Association

A case study explain along Thai chicken historyA case study explain along Thai chicken history

And to do this in depth-

study and achieve goals, the study has introduced the Thai poultry industry and the practical

management of CPF Co, ltd and FAPP as well as the concept to explore beyond ASEAN as a case study explaining its

overview intention, particularly in the context of the industry and regional ASEAN Economic and Social Development.

Thailand started exporting chicken to

world markets in 1973

Lessons learned from history applicable to the present situationLessons learned from history applicable to the present situation: :

Case study of the Thai chicken business history and CPFCase study of the Thai chicken business history and CPF

3

1. "Demand1. "Demand--driving" leads to trade facilitationdriving" leads to trade facilitation

The graph shows that Thailand started exporting chicken to world

markets in 1973.

At the beginning Japan asked for imports.

Because of the

different culture of

consumption, Japan

importers needed to

teach Thai producers

to match Japanese

style.

And because the

huge trade volume

has increased year

by year, has lead to

enlargement of

capacity building.

Thai producers

have had to import

high technology

machines to

improve their

production

4

2.2.““Contract FarmingContract Farming””

management system is one management system is one

supply chain management mechanismsupply chain management mechanism

5

Farm Process is one

function of SCM

2.2.““Contract FarmingContract Farming””

management system is one management system is one

supply chain management mechanismsupply chain management mechanism

FarmersFarmers

Financial loan

to build farmSe

ll C

hick

en b

ack

Sell

Chi

cken

and

feed

back

Tech

nolo

gy a

nd

Kno

wle

dge

trans

fer

In countryIn country MarketMarket Foreign CountryForeign Country

Financial SectorFinancial Sector Public SectorPublic Sector

Distribution Export

RegulationInformationCompanyCompany

6

How to increase production to serve the rapidly demand from Japan?

3.PPPP-4Ps Model

(Small Private –

Large Private –

Public -

Partnership)

PPPP-4Ps Model (small Private –

large Private –

Public -

Partnership) applied from the contract

farming model enlarges trade facilitation and reduces chance of food insecurity in long term

In this point we can say that “Contract Farming”

management system is one of Trade Facilitation

and Supply Chain Security mechanism of chicken management business. More over if we notice the

four PPPP: Small Private–Large Private–Public Partnership actives and enlarges trade facilitation and

reduces chance of food insecurity in long term.

7Before After

Lessons learned from history applicable to the present situation:

Case study of the Thai chicken business history and CPF

In 1993, China joined in the chicken world

industry.

8

4. Technology enhances Trade Facilitation 4. Technology enhances Trade Facilitation

How to adjust ourselves or change strategy to complete with China new comers?

In the graph, the curve shows a downslide in 1993, this was because China joined in the chicken world

industry. At that time, China had just started to open its new economy; labor costs were quite low

compared to other countries.

This affected to

the exporting

of Thai chicken

It was

challenging time

to start cooked

chicken meat in

Thailand

The new

technology

chicken meat

Thailand is the

biggest exporter

of cooked

chicken meat of

the world

9

10

4. Technology enhances Trade Facilitation 4. Technology enhances Trade Facilitation

Fried Oven Stream Grill

Lessons learned from history applicable to the present situationLessons learned from history applicable to the present situation: :

Case study of the Thai chicken business history and CPFCase study of the Thai chicken business history and CPF

In 1997, there was economic crisis in Thailand

and ASEAN regional.

11

5.Economics situation, the external factor impact 5.Economics situation, the external factor impact

to Trade Facilitationto Trade Facilitation

In 1997 there was economic crisis in Thailand and

ASEAN regional, Thai devalue Baht supported to

enlarge Thai products exporting including chicken

meat, the graph sharply turned up. However, in 1998-

1999 the overview economic decreased, especially, the

major importers of Thai chicken meat such as Japan

and EU. The graph returned down. We can say that the

economic situation, the external factor with

uncontrollable, impacts to Trade Facilitation.

12

Late in 2001, animal products from some

countries (Vietnam, China and Brazil)

were found to contain residues related to

“nitrofurans”

and

“chloramphenicol.

Lessons learned from history applicable to the present situationLessons learned from history applicable to the present situation: :

Case study of the Thai chicken business history and CPFCase study of the Thai chicken business history and CPF

13

In 2002 the graph turned down again! Late in

2001, animal products from some countries (Vietnam,

China and Brazil) were found to contain residues

related to “nitrofurans”

and “chloramphenicol”, both

veterinary drugs which had been banned in many

countries. In March 2002, first cases of similar

residues in Thai chicken and shrimp were reported;

6. 5Ps (small Private 6. 5Ps (small Private ––

large Private large Private ––

Public Public ––

Partnership Partnership -- Professor) Model, Scientific data, and Trade Negotiation expand Professor) Model, Scientific data, and Trade Negotiation expand

Trade FacilitationTrade Facilitation

Value of exports during 2002 dropped, causing

significant economic losses.

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Export return and increase later

Public (DLD) solve the problems

by steps included:

•Development of a regulation to control standard

of broiler farm

•Implementation of the International Code of

Practice for control in standard farm

Development of a regulation to facilitate safe

production of food producing animals.

Cooperation with 5Ps Model

“Thai Chicken Business”

and the many

problems resulting from the “bird flu crisis” that has plagued it since 2004.

Lessons learned from history applicable to the present situationLessons learned from history applicable to the present situation: :

Case study of the Thai chicken business history and CPFCase study of the Thai chicken business history and CPF

15

The crisis has

affected not

only the chicken

business itself

but also the

Thai economy

and society

The immediate problems faced business

by were decreasing sales in both the local

and export markets

Consumers’

perception of purchasing

and eating chicken

The results lead to producers need to

concern about how to produce safe food

7. Bird Flu shock: the uncontrollable factor impact 7. Bird Flu shock: the uncontrollable factor impact

to Trade Facilitation and move to changeto Trade Facilitation and move to change

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8. Traceability and RFID mechanisms for Supply 8. Traceability and RFID mechanisms for Supply

Chain Security develop trade facilitationChain Security develop trade facilitation

Animal Welfare (

33

Kg/m2)

Bird Flu Free

Farm Veterinary

Compartment

HACCP

17

8. Traceability and RFID mechanisms for Supply 8. Traceability and RFID mechanisms for Supply

Chain Security develop trade facilitationChain Security develop trade facilitation

FeedFeed BreederBreederLive

Animal

Live

AnimalFresh

Meat

Fresh MeatFood &

Ready meal

Food & Ready mealGlobal brandGlobal brand

Feed millFeed mill BreedingBreeding FarmingFarming ProcessingProcessingAdding

Value

Adding

ValueBranding

& Marketing

Branding

& Marketing

MeatMeat

Traceability

(RFID) 18

9. Social Demand for future trade facilitation 9. Social Demand for future trade facilitation

enhancing enhancing

CP Chicken Product is the first production can use

Carbon Footprint Label

CP Fresh Chicken Meat

2.9

kg.co2

e/1 kg

Teriyaki Chicken

302

g.co2

e/110g19

10. Innovation such as the food nutrition10. Innovation such as the food nutrition

for the different agefor the different age

In near future, the world

statistics forecasted that the

situation will change to old

edge increasing society.

Then, innovation is very

important, especially to

develop food for different age,

especially, for increasing old

age consumers.

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Role of FAPP from Supply Chain Security to Food Role of FAPP from Supply Chain Security to Food

Security &The Mutual Benefits of CooperationSecurity &The Mutual Benefits of Cooperation

Aims1. Enhance sustainable growth of poultry production in ASEAN

2. Exchange and dissemination of knowledge and information

3. Promote fair and free trade in poultry in international market

4. Coordinate and collectively various activities

Thai Private

Thai Public

Trade Facilitation

International Public

ASEAN Private

Role of FAPP from Supply Chain Security to Food Role of FAPP from Supply Chain Security to Food

Security &The Mutual Benefits of CooperationSecurity &The Mutual Benefits of Cooperation

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Food Security

(Available, Safe

and Nutrition)

The model for The model for ““The more Supply Chain Security, The more Supply Chain Security,

The more Food SecurityThe more Food Security””

SCM

Supply chain

Security

Supply chain Security

focusing on the concept of

“the ability to

control security

on food safety on

the whole SCM”.

1. "Demand-driven" leads to trade facilitation

2. “Contract Farming”

trade felicity business

3. PPPP-4Ps Model (small Private –

large Private –

Public -

Partnership) enlarges

trade facilitation and reduces chance of food insecurity in long

term

4. Technology enhances Trade Facilitation

5. External & Economics situation, the external factor impact to Trade Facilitation

6. 5Ps (small Private –

large Private –

Public –

Partnership -

Professor) Model &

Scientific data, Trade Negotiation expand Trade Facilitation

7. Bird Flu shock: impact to Trade Facilitation and move to change

8. Traceability, RFID mechanisms and Supply Chain Security

Innovation such as the food nutrition for the different age consumers

9. Social Demand

10. Innovation such as the food nutrition for the different age consumers

Trade Facilitation

23