1. Logistics Benchmarking in a Nut Shell What is Logistics Benchmarking? Logistics benchmarking is an ongoing review process, allowing a business to appraise each part of their supply chain and determine where improvements could be made. This allows the business to explore other opportunities to improve profitability and strive towards best practice. In a nutshell it is: A tool for businesses to improve performance and gain a competitive advantage A process of identifying, sharing and using knowledge and best practice A driver for implementing sustainable change and innovation What does logistics benchmarking look like Logistics benchmarking is a review of a supply process; it should have a start and an end point, within which you identify critical control points (CCPs) i.e. activities which have the biggest influence on cost, quality or client satisfaction. Once CCPs are established, Key Performance Indicators (KPIs) can be identified. These are measurable things which can be recorded in order to evaluate efficiency, set economic thresholds and provide a reference point to compare (or benchmark) processes within your business or your business against someone else’s, or an industry standard. On Farm Processes Costs of Production Input costs impacted by location Fertiliser per Ha Chemicals Plant material Distance from Input supplier to farm (miles) Cost of delivery or collection of inputs Harvest logistics Delivery of produce Costs of Distribution (I) Total number of orders Critical Economic Load per vehicle Cost of ambient vs chilled transport Cost of courier service Distance to buyer or depot Produce quality requirements Depot Costs of Distribution (II) Distance to Depot Distance to Buyer Cost of courier service vs own vehicle(s) Quality of produce on delivery Customer satisfaction Retailer/Buyer What is the Value of Logistics Benchmarking? Benchmarking can be used by all types of business and at all scales. You are probably already doing some form of benchmarking within your business without knowing it! By formalising the process, calculating the costs of your various supply chains and recording the same data year on year you become able to identify areas within the process either on-farm or through the supply chain that you can gain better control of and improve upon. It is also a valuable tool for business planning and the exploration of potential new markets. Figure 1. Example CCPs in a model supply chain with example KPIs KPIs should be SMART Specific Measurable Achievable Realistic Time-based CCPs Key processes in the chain

2. How benchmarking is done To keep benchmarking simple and to avoid confusion initially it is recommended that you identify one process (i.e. one crop to one outlet) and work through each component, as seen in Figure 1. For each process identify the cost and non-cost KPIs that have the most impact on the overall current efficiency for that part of the process. Give the KPIs a measurable and relevant unit so that you can compare them to another process/scenario/outlet in your business or another company’s KPIs. For example see Table 1. Figure 2: The benchmarking cycle Supply chain KPIsMy Farm On Farm Processes i.e. logistics impacted by more remote location Fertiliser (£/Ha) Total Chemicals (£/Ha) Plant Material (£/Ha or tonne) Miles to input supplier from farm Cost of Fuel for collection of inputs from supplier (£/Period) Cost to have inputs delivered to farm (£/Period) Health and Safety on farm Distribution of Produce Cost of transport with own vehicle (£/period) Cost of fuel for transport (£/Period) Cost of transport with courier (£/period) Distance to buyer (miles) Distance to depot (miles) Cost of chilled transport (£/period or volume of produce) Cost of ambient transport (£/period or volume of produce) Climate requirement for transport of produce Depot Distance to depot (miles) Distance to buyer (miles) Packing and grading at depot? (Y/N) Retailer/Buyer Cost of delivery included in purchase? (Y/N) Produce delivered to buyer? (Y/N) Produce collected by buyer? (Y/N) Level of customer satisfaction/feedback? Customer loyalty? Quality of produce on delivery to customer? Current total cost Table 1. Example table of Supply Chain KPIs that can be collected and used to bench mark logistics Non-Cost KPIs Once costs are calculated it is important to link to non-cost measures which may play a big role in making a decision to use a more costly process, for example, in order to maintain client satisfaction, quality requirements or health and safety. This baseline can then also be compared with the same KPIs from another process, scenario, farm or business and used to look at what can be improved, how this can be done and when.

3. What next? After the analysis of KPIs is complete you can calculate your various cost and non-cost measures for that logistics chain. This baseline can then also be compared with the same KPIs from another process, scenario, farm or business and used to look at what can be improved, how this can be done and when. Once you have the costs laid out in a table ask yourself some questions, for example: Q: Are your logistics chains viable and cost effective? – Link to gross margin calculations; what is the maximum you could spend on the transport of produce and still make a profit taking into account costs of production? Q: What other market opportunities are available? Would supply to these be more or less cost effective? – e.g. supermarkets, farm shops, restaurants, online sales Q: Is the way you deliver produce achieving adequate produce quality and shelf life? Is the customer satisfied with timeliness of deliveries? Does your produce require refrigerated transport? Q: Are you spending too much time away from the farm delivering produce? What are the equivalent costs for using a haulier or other service? What is the economic threshold for using a haulier? Based on the gathered data and these answers set yourself business goals, and review at least annually A strawberry logistics benchmark example For a soft fruit crop, e.g. strawberries or raspberries, harvesting the crop and getting it to a chiller is a critical control point in the supply chain. In order to benchmark the process you would need to consider the following KPIs: How long will it take the pickers to harvest the field? What is the maximum amount of time between picking and getting the fruit into a chiller I can have before quality is affected? What is the distance from field to chiller? What is the capacity of the trailer? How many journeys are required? Are the roads bumpy? Is a tractor required, or can a more fuel efficient vehicle be used? Is there any QC required in the field or is this done at the chiller? Is there a training need? This is all before the fruit even gets into the pack house! Once the KPIs have been identified and data gathered against these you can start to build up a body of data which can be scrutinised. This body of data formalised as a benchmark can be discussed with your marketing group, other growers and published standards, and addressing all of these will save a farmer or grower money, or get the crop into the market in better condition, which is essentially the same thing. Where to get help? – Below you will find some sources or information and organisations which can assist with logistics benchmarking support Internal Audit - Internal audits are useful for farmers who can compare the logistics of their farm each year. Cost-based data can be collated using the Horticulture Wales Gross Margin Calculator as well as support from agricultural advisors: http://www.horticulturewales.co.uk/Library/Crop-Calculator.aspx. Farming Connecthttp://www.horticulturewales.co.uk/Library/Crop-Calculator.aspx http://farmingconnect.menterabusnes.co.uk/farmingconnect/horticulture Consultancy - A benchmarking company could go through a formal benchmarking process with a farmer and would potentially have access to information or market data from other farms. Such companies include Bidwells (http://www.bidwells.co.uk/services/rural/agribusiness), Rural Business Research (http://www.farmbusinesssurvey.co.uk/benchmarking/) and Agrii Farm Advice Services (http://www.agrii.co.uk/products-services/farm-advice-services/).http://www.bidwells.co.uk/services/rural/agribusinesshttp://www.farmbusinesssurvey.co.uk/benchmarking/http://www.agrii.co.uk/products-services/farm-advice-services/ Grower Association - Some grower associations e.g. HTA, run workshops on business management and development for members, which includes advice on the process. They also collate market data from other farms to which you can benchmark yourself.