Free Essay

Agro Loistics

In: Business and Management

Submitted By alexklinch
Words 521
Pages 3
Agro logistics
With the changes in lifestyle introduced by the new healthier way of life, massive food inflation knocked on our door. In 2006 the annual food inflation was 7.5 %. This figure doubled in 2011, 14.21 %, influenced by growth in consumption, income rise and change in the demographic structure of the world’s population, food production, processing, distribution and retail. People started using more fresh vegetables and fruits, animal protein, dairy products and processed food. The problem here is simple, the companies can’t deliver fully what customers ask from them. To get out of this situation the companies and the governments were searching for innovative, efficient and more secure way to improve the agriculture business and maybe reinvented it. Opportunities can arise to deliver greater value to consumers from both an economic and social standpoint. Through the new way of practicing agriculture the companies not only made a lot of profit, but also improved supply and demand by investments in production, processing, distribution and retail and communication. These actions were supported by the governments with introducing policies that stimulate growth, supply chain efficiency, cost optimization and market development. One of the main issues in the agro process is the constantly growing distance between primary produces and the customers. The most used way of distribution of the goods is obviously by cargo transport, causing heavy traffic, accidents on the road and polluting the environment. This scaring facts made the producers to invest the new more efficient and safe way of delivery, including trains, boats and pipelines. Smart move here is to be closer to the spenders, so maybe the allocation of their factories will do the trick. The producers will be closer to the consumers, using the near motorways for more faster and efficient transport. With today’s modern technology and communication advances, the producers can even re-use their products to drastically lower costs. Innovative ways in water and energy supply and use can save you a lot of money. Also partnering with similar companies, for example if you produce cheese but you don’t pack and slice it, maybe you can partner with a company that does that. Regarding this many companies today perform a lot of their distribution activities in so-called Agriparks, a place where related businesses can find home. Several of them are arriving the goods from their factories, the rest of the companies provide the empty boxes, crates and other production materials and one company provides the space or the Agripark. With this they are cutting time and costs, reducing of 20% money and time and combining various products flows for minimization of order to delivery time to the supermarkets. In spite that the great importance of logistics in industry, business and other branches is generally acknowledged, this problem is not systematically investigated in agriculture. The examples above are just a small portion of solutions presented by companies that are willing to discover the importance of logistics in agriculture. For me this is a science, but filed of work that is still new for us, waiting to be discovered and mastered. Author: Aleksandar Klincharov ID: 9759

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