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Figure 6.1 Building blocks <strong>of</strong> the supply chain (Bezuidenhout and Bodhanya (2010)<br />
Agricultural supply chains are <strong>of</strong>ten more complex compared to other commodities. Bezuidenhout and<br />
Bodhanya (2010) highlight the need to identify:<br />
• where along the supply chain improvements can be made,<br />
• which tools will be the most appropriate drivers <strong>of</strong> change, and<br />
• in what way should policies and management be altered to support possible opportunities.<br />
In the sugar industry the supply chain is complex containing trade-<strong>of</strong>fs and unpredictable outcomes.<br />
The introduction <strong>of</strong> alternative products introduces more system complexity but adds resilience.<br />
Fragmentation and especially grower miller conflict is universally prevalent (Bezuidenhout and<br />
Bodhanya, 2010). In particular the cane payment system promotes risk shifting between parties and is<br />
<strong>of</strong>ten perceived as a disincentive towards innovation and system integration. Industry leadership and<br />
sufficient government support have been essential to drive improvements. The mallee supply chain<br />
will require similar trade-<strong>of</strong>fs especially with multiple product streams.<br />
On the downstream side <strong>of</strong> the supply chain commodity-type products, such as sugar and biomass,<br />
demand lean supply chain principles. However, upstream, the supply chain can comprise <strong>of</strong> a<br />
multitude <strong>of</strong> autonomous producers with unsynchronized and individually focused decision-making<br />
incentives. In addition, as a result <strong>of</strong> climatic variability, upstream supplies <strong>of</strong>ten produce inconsistent<br />
volumes and qualities. The latter characteristics demand more agile supply chain principles and hence<br />
create potentially contradictory goals within the integrated chain. As a result, upstream production<br />
chains are <strong>of</strong>ten over capitalized (Bezuidenhout and Bodhanya, 2010). Under-utilisation is not<br />
necessarily a problem when a certain level <strong>of</strong> risk mitigation is incorporated into the system to create<br />
resilience.<br />
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