This November, the Food Chain Centre comes to the end of its five-year life. And what a five years. Since it was launched in 2002, it has carried out value chain analyses of no fewer than 33 different supply chains handling everything from organic vegetables to large-scale cheese making. It was also instrumental in setting up the Dunnhumby academy for consumer research at Kent Business School, which helps farmers and processors use Tesco Clubcard data.
Audits of the FCC's impact show that £5.5m has been stripped out from five chains alone. Work is currently under way to assess the other projects. The final total is expected to reach into the tens of millions of pounds.
"That's a pretty good return on the investment in the FCC," says FCC chairwoman and IGD chief executive Joanne Denney-Finch. "Defra has given us £600,000 a year for the past five years, along with some funding from the Milk Development Council, so the worst you can say is that we've been cost-neutral."
So what happens when the FCC is no more?
The idea behind value chain analysis is that by getting everyone involved to 'walk the chain', it is possible to iron out inefficiencies (see box).
VCAs assess the whole supply chain, rather than just a single business within the chain, mapping out relationships within the chain, evaluating the time a product spends in the chain and breaking the chain down into different activities. They also provide a flow diagram of how companies in the chain interact.
One of the most shocking findings was that chains were leaking an average of 20% in unnecessary costs through inefficiency. This has translated into some major cost savings for the farmers, processors and retailers involved.
A project with Dairy Crest's cheese business, for instance, achieved savings worth £2m. Another VCA with a meat processor saved £2.3m by removing a day's unnecessary stock from the chain and improving carcase quality.
The impact of the FCC's work won't end with its demise, insists Denney-Finch. "The benefit of these VCAs isn't just from the full analysis - other companies can sift through the details," she says.
To that end, she is arranging for the supply chain work, which was carried out by Cardiff Business School's Lean Thinking unit, to be available after the centre is gone. All 33 VCAs will be posted on the IGD's website, and a 'son of FCC' will carry on promoting the findings from within the IGD.
Despite the impressive results, it hasn't all been plain sailing, admits Denney-Finch. The FCC had to counter suspicion about its ability to manage sensitive company data. Farmers feared the VCAs could be used to beat them over the head about price.
Even now, several of the companies involved are insisting on confidentiality, which could affect the FCC's ability to disseminate its VCAs more widely.
However, few would dispute the benefits to date. If other companies can benefit from the work, the FCC's legacy will be more impressive still.n