Agricultural chains are sometimes long. Months often elapse between planning production and final consumption. Properly matching supply and demand in terms of quantity, quality, price and delivery times is not easy. Agricultural markets are often supply-driven, which means that they do not always match the current demand.
All in all, this leads alternately to surpluses and shortages of certain types of product. A phenomenon that is not called the pig cycle for nothing, after a market in which this often occurs.
If different links in the chains are better coordinated and focus on the ultimate demand, the pig cycle can in principle be switched off. This also yields cost benefits. This is easiest in a closed chain, where one party literally owns all links in the chain. For example, the restaurant chain Van der Valk manages beef cattle farms and vineyards in-house to serve their customers steak and wine. Planning, quality, pricing and distribution of margin is in one hand. In other chains this must be determined in mutual consultation.
As an independent director, DCA-Markets offers support for these kinds of processes by benchmarking revenues and costs in the column and by recording agreements about mutual settlement. Supply and demand are better aligned in this way and quality is better secured. This working method promotes efficiency in the chain and offers scope for long-term planning. Cash flows are therefore higher and more stable. The chain as a whole is becoming more robust and competitive.
The challenge in this area is in various sectors.
Are you curious how we as DCA approach and guide the above? Or would you like to spar with us to solve similar challenges within your company? Then call 06 46 26 58 74 or email R.vantRiet@DCA.nl
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