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A fairer rate for the food on your plate

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03.11.2008

Rising food prices means research is needed on how those in the supply chain can be paid fairly.

Dr Lisa Jack, from the Essex Business School, is looking at whether participants in the food supply chain, from farmers to retailers, could adopt target cost management (TCM).

Dr Jack explains: ‘TCM has potentially an important role to play in negotiating fair terms in any collaborative relationships between links in supply chains. It facilitates sharing and learning so as to enhance the reputations and bottom lines of all businesses involved’

‘Users establish what the market will pay, then factors in the realistic return they need in the long-term to arrive at a target cost. Then they examine their processes to see if that target is achievable. This may lead to operations being re-designed or to prices being re-assessed’

Although farmers could be against using TCM because of its perceived office-based nature, Dr Jack believes that, in reality, the nature of crop and livestock lifecycles mean there are fewer and more significant opportunities to intervene. This is in contrast to the continuing tinkering which might be experienced if using TCM in a factory environment.

Dr Jack added: ‘TCM is more of a broad management philosophy and is a market-drive approach, not just an accounting technique. It is a way of thinking strategically and to gain competitive advantage.’

Dr Jack intends to hold focus groups to stimulate consideration of TCM within the food supply industry. These will be held in late 2008/early 2009 in the UK and by video conference with overseas participants. Farmers and other producers, distributors, agricultural extensionists and retailers who wish to participate are invited to register their interest with the Chartered Institute of Management Accounting on e-mail: research@cimaglobal.com

Victoria Bartholomew | Source: alphagalileo
Further information: www.essex.ac.uk

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