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Beyond the Bale : Jun 07 - Jul 07
15 SUPPLY CHAIN BEYOND THE BALE Wool Connect director and Cowra wool producer Michael Flannery shows the spun yarn produced by the Yangtse Spinning Company (Sudewolle) of Zhangjiagang, which is sold to Humphrey Law for the manufacture of socks. PHOTO: NICOLE BAXTER Disillusionment with the traditional auction system has led three woolgrower groups down an alternative path to market, one that has driven them to manage their own supply chains through an AWI-funded IT (information technology) system. WoolConnect, based in Boorowa in south-west NSW, the Traprock Wool Association, based in south-east Queensland and northern NSW, and I-Merino of Kojonup,WA, wanted to establish closer links with their customers and take control of their own supply chains -- from wool off the sheep's back to yarn and fabric sold to manufacturers. However, to make this marketing goal a reality, all three groups needed effective, efficient and simple supply-chain management systems, which is where AWI-funded work by Graeme Forsythe and Associates (GFA) has been important. GFA has developed supply-chain management systems for the horticulture, beef and viticulture industries. AWI funded the initial work to convert GFA's system into one that would support wool. Graeme Forsythe says the process started about three years ago when his company was asked to develop a supply- chain management system that would allow grower groups to manage their wool from farm through to processing. Mr Forsythe says the system needed to fulfil four objectives. First, it had to determine whether enough wool would be available to fill a customer's demand. Second, it had to select the right wool to fill a customer's order.Third, it had to make sure wool was processed to specification, giving the customer the desired outcome. And finally, it had to provide the means to trace wool from a sheep mob through to batches of yarn, fabric or garments, and do this in reverse -- from yarn, fabric or garments back to the mobs. The system achieves these goals by incorporating a wool production forecast, accessing relevant wool test certificates and efficiently managing inventory, quality and traceability. Mr Forsythe says the system works simply. Each season, growers forecast their wool clip using electronic forms.This information makes its way to a central repository, where each group's marketer matches expected supply to customer demand.Through negotiations with the Australian Wool Testing Authority (AWTA), both groups are also able to access test data for their members' greasy wool.This allows them to confirm that wool to be used in the processing batch meets the required specifications. The system also incorporates documentation -- dispatch notes, receival confirmations and manufacturing records -- that works through e-forms. "This is important for letting everyone know where things are, and for inventory status," he says. "Underlying it all is the need to keep everything simple and have the system support the required business processes." Mr Forsythe says the system supports chains that are driven by customer demand, not supply, and has been instrumental in meeting increasing demands for traceability. "The system can be used by growers to maintain mobs IT tracker joins mobs to makers A goal of becoming more customer-focused led three woolgrower groups to develop a system that would allow them to manage their own supply chain Law's specifications -- 19.5 micron fleece wool with a minimum comfort factor of 98. When Humphrey Law places an order, John McGrath emails members to source wool. But not every producer checks their email every day, and this is where AWI has helped. WoolConnect was a commercial partner in an AWI-funded project conducted by Graeme Forsythe and Associates (GFA) to construct a web-based supply-chain platform. Now the project has been successfully completed, the system will underpin the management, logistics, product and funds-flow up and down the production chain, linking all partners and service providers. With further tailoring of the platform to meet WoolConnect's needs, Mr McGrath believes GFA's work will enhance communication at all levels of the supply chain, and facilitate linking the horizontal producer base with the vertical processing and manufacturing chain to achieve high-quality outcomes. "Successful tailoring of the system will allow us to access our members' information directly from the AWTA's wool-testing data and give us a greater window of opportunity to select and sell product to manufacturers," he says. "Unless we make the system more interactive, we are basically left in the dark when it comes to knowing what our suppliers can deliver," Mrs Gay says. It has not all been smooth sailing for the grower-based marketing group. Two years ago the group was ready to expand its customer base and was hit with the news that Riverina Wool Combers would reduce its topmaking and superwash capacity. "We had no other option to produce the yarn in Australia so the logical step was China," Mr McGrath says. WoolConnect directors visited China to investigate three potential business partners and returned with a recommended topmaker and spinner. All of WoolConnect's processing is now done in China, with Reward of Ningbo topmaking and super washing and Yangtse Spinning Company (Sudewolle) of Zhangjiagang producing its yarn. After trial batches were processed to build manufacturers' confidence in WoolConnect's overseas topmaker and spinner, Humphrey Law was more than happy with the WoolConnect's yarn quality. Mr McGrath says the implementation of the web-based supply chain platform will allow the organisation to consolidate and expand its customer base, and provide an alternative marketing technique in the supply of product through to customers. ú More information: John McGrath, 02 6227 2810, 0429 853 247, firstname.lastname@example.org, www.woolconnect.com; www.wool.com.au and keep track of chemical and other procedures.Traprock, for example, wanted us to go back to the grower level, and we've basically created an electronic wool book and classer specification to manage bale inventory, and given growers the ability to associate their mob and paddock history to the wool bales. It means groups can track a garment back to a mob to batches of yarn, fabric or garments." He says this type of traceability is becoming more important for two reasons: customers' environmental awareness and regulatory requirements. "The northern hemisphere wants green, organic products produced with good environmental practices. And regulatory requirements covering water and chemicals used to produce the wool also require traceability." AWI knowledge services program manager Paul Swan agrees, saying supply-chain management is becoming increasingly important, as is traceability. "In our work with retailers and other end users, authenticity and thus traceability is important, as are turn-key solutions. Supply-chain management can be important in achieving these goals." However, he says it is up to industry to decide how they market their wool. "Retailers and others in the supply chain use a number of different systems to handle their information flow needs -- through this project we have given them another option," Dr Swan says. -- REBECCA THYER More information: www.wool.com.au "WoolConnect allows us to order the premium-quality product."
Jun 07 - Jul 07 Supplement
Apr 07 - May 07