Is NPD bakery's achilles heel?

09 November, 2007
The HGCA's Alastair Dickie argues that information-sharing and debate benefits companies right across the board and urges the industry to boost its NPD
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You may be surprised to know that research carried out as part of the Cereals Industry Forum (CIF) has shown that the cereals industry in the UK has a weakness when it comes to new product development (NPD) and innovation.
After all, those companies closest to the consumer, such as the breakfast cereal manufacturers and bakers, quite rightly have an excellent reputation for NPD. However, the work, conducted by Comparison International Limited (CIL), using a technique developed by the CBI and known as Probe, looked at companies right across the cereals supply chain.While the research is completely confidential as far as individual companies are concerned, the overall trend is clear: many companies did not take part in the NPD part of the research (only 15 out of 48), and only four out of the 15 were doing well in this area. CIL was happy to point out that these four companies were those further up the chain and closer to the consumer.Many people would see this as 'fair enough', believing that the companies whose products appear on the supermarket shelves are the ones who should be innovating, dragging the rest of the industry along behind them. The Home Grown Cereals Authority's (HGCA) new initiative, the Supply Chain Partnership, is about precisely the opposite approach to issues that affect the industry. It is about trying to share good practice and encouraging all parts of the chain to talk to each other.the benefit of debateThe whole chain will benefit from discussing each of the five themes that have been chosen for the campaign - communication and collaboration goes without saying, but cost and price, duplicate materials testing, transport and NPD all need to be debated and addressed right across the chain. Some of these themes may seem to be less relevant to the higher end of the chain, but ultimately they affect costs and efficiency across the board.HGCA's Supply Chain Partnership is a follow-on to work conducted by the Cereals Industry Forum (CIF) such as the Value Chain Analyses (VCAs), which looked at the whole supply chain for products such as flour, and Masterclasses, that address practical issues at individual com- panies. Those who participated in the VCAs invariably found that they benefited simply by talking to each other and developing a better understanding of each others' businesses. successful outcomeOne of the outstanding success stories of CIF concerns a feed company that identified problems relating to stockholding. It decided it needed a better system to work out the optimum stock required and a better way of allocating space to it. As a matter of routine in this particular exercise - a CIF Masterclass - it talked to its customer about what it was doing. The customer suggested a totally different solution to the problem, and saved the company money in the process.Issues across the chain are everyone's responsibility. New ideas and innovations can apply just as much to growers and processors as they do to food manufacturers. Everyone in the cereals industry should learn from the innovators and examine how they can benefit in their own businesses, services and products.You can find out more about HGCA's Supply Chain Partnership at [http://www.hgca.com/supplychain]. Visit today and get involved! n



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