Integrated planning in white fish supply chains

Through integrated supply chain planning by sharing information, uncertainty is mitigated leading to improved supply chain performance in whitefish processors. During the iProcess project, NTNU has had several researchers and students at NTNU has worked on tasks related to this. 

Throughout the Norwegian history, fishing and the fishing industry has been a basis for life and culture, contributing significantly to economic growth, export earnings and industrial innovation.  

Despite the downturn of the industry with respect to profitability, downscale of facilities, and employees, the industry has managed to increase the market reach and initiate product and process innovation. However, the industry is operating in a highly global and competitive market forcing performance improvement, efficiency and market responsiveness. By managing the supply chain operations, securing alignment of demand and supply applying integration and coordination mechanisms, information sharing performance can improve.     

MASTERSTUDENTS 

Through the iProcess project several students have written their master thesis on the research conducted in the iProcess project. Their research explores the impact of supply and demand uncertainty on supply chain operations: how tactical supply chain planning can improve performance, particularly the role of information and technology. The analysis proposes a process design for integrated tactical supply chain planning.   

SUPPLY UNCERTAINTY 

Literature have highlighted the negative impact of supply uncertainty on supply chain performance, such as inefficient capacity utilization, risk and cost of over- and understocking, unreliable availability of materials and poor service level. Supply chain planning (SCP) aims to mitigate uncertainty through coordinating and integrating key business processes from raw materials procurement, production, distribution and sales, and by managing demand and supply. This is particularly relevant in environments as the whitefish interesting  

In iProcess we have identified sources of supply uncertainty has been identified and ranked, and applied to propose how whitefish processors can improve the ability to increase capacity utilization, service level (availability of products) and profitability. Further, the analysis shows the high demand sensitivity to price mechanisms, and identifies the importance of the access to updated information about raw material quality and market information (short and long term). 

SUPPLY AND DEMAND 

Through analysis of supply and demand uncertainty, mitigation strategies are proposed. The integrated tactical planning design proposes to integrate suppliers and customers in the planning, and to make us of updated information and technology to support planning. Additionally, suppliers can be involved in supplier development programmes leading to collaboration, commitment and contractual terms with collaborative incentives (price mechanisms and risk sharing). Information dashboards providing information for market related decision can improve performance.  

Planning at a tactical supply chain level is particularly important in environments with long term uncertainty where decision makers struggle to predict internal and external long-term changes such as seasonality and quota systems.   

GLOBAL CHALLENGE 

Supply uncertainty has because of globalization, outsourcing, lean principles and competitiveness become a critical source of uncertainty, particularly for sectors based on raw material from natural resources with limited possibilities for storage, such as the food sector. Except from characteristics such as supply quantity, quality, lead time, price and product/raw material (size and type) less is known about the supply uncertainty profile in terms of likelihood, severity and contextual factors, which makes the planning more efficient and robust.  

By: Heidi Carin Dreyer