Potential for 10% savings in the red meat sector identified

The Food Chain Centre (FCC) and Red Meat Industry Forum (RMIF) estimate there is potential for red meat supply chain cost savings of up to 10% in the first of a series of guides entitled 'Cutting Costs - Adding Value in Red Meat', published today.

The British red meat industry faces a constant challenge to compete with low cost imports. Savings throughout the chain are urgently required. In phase one of a three year project, the FCC and RMIF in partnership have identified a large number of areas with potential for savings. These have been grouped into a top ten list of improvement opportunities.

1. Reduce product variability

2. Better manage the problem of carcase balance

3. Improve product quality

4. Streamline administration

5. Reduce handling and movement

6. Improve layout

7. Optimise the use of equipment and inputs

8. Reduce the number of physical faults

9. Improve staff productivity

10. Reduce damage and theft

These opportunities apply to all stages of the red meat chain and could help improve profits for all parties from livestock farmer, to abattoir/processor, to distributor and retailer. To extract savings in these areas, FCC/RMIF recommend a philosophy known as 'Lean Thinking'. This has delivered substantial benefits to other industries, for example it has helped to protect the British automotive parts industry against the threat of imports. Lean Thinking provides a way to do more with less - whilst coming closer to providing consumers with exactly what they want.

The crux of the approach is to work in partnership throughout a chain to cut out waste and focus on value. The first edition of the guide includes advice on performance measurement and on demand-smoothing. This will be followed in future editions with a

growing library of 'best practice' advice.

Deirdre Hutton, Food Chain Centre Chairman, said: 'We want to see the British red meat industry make big inroads into the 10% of unnecessary costs and put it to better use, improving competitiveness and profitability and we

hope that the guide will help.

It mirrors our philosophy at the Food Chain Centre by providing joined up thinking and will give farmers a better understanding of the issues faced by retailers and vice versa. Working in partnership to raise efficiency is the key. ' FCC &RMIF with the help of a grant from the DTI are sponsoring eight 'Value Chain Analysis' pilots to apply Lean Thinking in red meat. The guide features a case study from the first of these pilots involving BQP (British Quality Pigs - farmers), Dalehead (processor) and Asda.

It explains how a team drawn from these partners walked their pig meat chain, mapping out what they saw and recommending improvements. Peter Barr, Chairman of the Red Meat Industry Forum said: 'I am delighted that Value Chain Analysis is proving its worth to the red meat sector. This is one of 10 projects in the Red Meat Industry Forum programme to improve competitiveness and I am greatly encouraged by the start that's been made.' Recommendations in the pig meat case study included reducing inventory levels, cutting out unnecessary activities (that add cost but no value), sharing more information and introducing new performance measures. According to John Hughes, Managing Director of Dalehead: 'We realised the need to challenge existing approaches and knew it was sensible to look at best practices from other industries - even if at first sight these seem very different to the red meat chain.' Added Chris Brown, Head of Agriculture at Asda: 'This exercise is the first time we have seen the whole chain in detail and really started to appreciate each others operational challenges and the problems we create for each other in the current way we do business.' Additional pilots, to be featured in future releases, include lamb sold through Sainsbury's and Lloyd Maunder plus beef sold through Whitbread and Chitty Foods.

The free pack includes a detailed explanation of Lean Thinking, a list of cost saving opportunities, 'best practice' guidelines and case studies that show how the theory works in practice. It will be regularly updated with new material and is available from www.foodchaincentre.com or by calling 01923 851904.