Agriculture Reference
In-Depth Information
the United States to source raw materials. Information, and methods of shipment, must be
developed to guarantee timely arrival of inputs. On the output side, agribusinesses seeking
to export their products or to expand their operations globally must develop their own market
channels or form partnerships with foreign fi rms. To do so, agribusinesses must understand
the special needs and wants of the foreign consumer. Relationships must be developed with
new suppliers, distributors, and retailers that often operate under different regulatory and
cultural environments.
Supply chain management functions
This chapter provides the framework for understanding the role of supply chain management
in the agribusiness and its interrelationship with the other functions of an agribusiness.
Figure 15.
1 shows the different activities of the supply chain management process. As you
view this fi gure, keep in mind that the unique features of agricultural products such as per-
ishability, seasonality, and bulkiness drive the way these functions are performed.
The supply chain management function begins where the marketing function of forecast-
ing demand ended.
Aggregate production planning
transforms the long-term demand fore-
casts into general production plans for the next quarter and year.
Master production
scheduling
follows with a fi nal production schedule detailing the exact timing and specifi c
quantities to be produced. Purchasing uses the master production schedule to perform the
Forecasting
demand
Aggregate
production planning
Customer
Physical
distribution
Master production
scheduling
Inventory
Purchasing
Production
control
Suppliers
Figure 15.1
Supply chain management process
