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6.2 Integration Across the Supply Chain
Traditionally the agricultural supply chain can be seen as the elements of production, harvest and
transport and processing. A range of decisions are required at various levels to optimize this supply
chain. Some of these are logistic and operational in nature and others are strategic.
Gaucher et al (2003) identify a number of key decisions along the supply chain for the sugar industry,
some of which are relevant to the Mallee woody crop industry.
Production - Supply area to meet supply agreement, optimal variety mix (product quality, yield,
disease, drought, risk), harvest timing (to optimize product quality and plant age), field location
and layout (maximize production, harvest efficiency, soil/drainage issues).
Harvest and Transport – Capacity planning, utilization efficiency, scheduling deliveries,
maximizing haul load, matching harvest/haul capacity, stockpiling buffers, reduced delivery
delays.
Processing – Biomass supply for optimum capacity throughout the season, optimum season
length. Schedule supply areas to deliver optimum product quality.
Interaction between these elements is important as the decisions made in one area will impact the
others. For example decisions made by sugar millers regarding mill capacity, the location of mill and
transloading centres, and delivery allocations, will impact on the choices made by growers regarding
mechanization and harvest management (Gaucher et al, 2003). In turn, decisions made by growers
regarding variety selection, harvest capacity and work organisation, will impact on milling efficiency.
Poor cane quality will reduce crushing capacity, while irregular deliveries will disrupt the continuity
of mill supply. Intermediate operators involved in cane flow management, such as harvest contractors
and hauliers, will also affect the supply process. Total sugar production at mill area level thus depends
on the efficient functioning of these technical interfaces, as well as on each stakeholder’s management
processes (Gaucher et al, 2003).
Many of these elements are relevant to the Mallee Industry. Biomass supply will be driven by market
requirements with block plantings near the processor supplemented with biomass as part of integrated
farming systems. Biomass processors are likely to set the price based on competing products but are
unlikely to have interest in controlling the supply chain.
Key issues to consider in the developing a sustainable supply chain for the Mallee woody crop
industry will include:
• How to match capacities of the processor and harvest-transport supply system with the biomass
supply including location of processing facility relative to the supply area.
• How to organize the supply area in order to transport biomass from the fields to the plant,
location and capacity of transloading centres, role of hauliers and contractors.
• Which planning and operation rules would be efficient and in line with the objectives and
constraints of each stakeholder: season length and dates, delivery allocation and flow
monitoring.
In most cases these are site specific issues that need to be resolved locally. Integration across the
supply chain is complex and alternative products may introduce substantial changes to the supply
chain, the impacts of which will be difficult to predict.
Modelling offers insights into the impacts of, and benefits from changes to value chains (Thorburn,
2006) but has generally been applied only to one or two sectors of the Australian sugar value chain.
Thorburn et al (2006) report on modelling the whole of the chain in order to evaluate diversification
options. In particular the additional income from electricity and Renewable Energy Certificates sales
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