Driving best-practice procurement in Wales

4Food Supply Chain

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Distribution

Food distribution and logistics in Wales is a complex and often problematic area. Given some of the remote locations, distribution can act as a barrier to routes to market for many small producers and suppliers. Also, distribution costs are disproportionately high for small producers and this can also work against them. As a reduction in emissions also contributes to environmental improvement, a review of distribution is therefore important.  A number of framework agreements exist in different sectors within the public sector and there appears to be significant opportunity for cross-sector collaboration in distribution requirements for remote access areas.

Food contracts can either be tendered for supply and delivery of products, or distribution can be tendered separately and suppliers appointed whose function is to collect product from source and deliver to various locations. Where storage is also required the distributor often also sets the product range, but this can be approached differently. Again, an understanding of the cost / benefit of different approaches is required. If savings are possible in distribution costs this could allow specification standards to be increased to raise food quality. A review of distribution may also raise the possibility of changing the location and method of preparing meals, allowing for use of the organisation’s own transport or removing the need for some transport requirements. It is recommended that distribution requirements and costs be reviewed prior to starting the tender process.

Many distribution studies have been carried out in recent years.  In 2004, Value Wales (formerly Welsh Procurement Initiative) commissioned Strategic Marketing to carry out a South West Wales Food Distribution Pilot Study to explore the issues faced by suppliers and organisations. It re-confirmed that transport costs have the biggest impact on the costs of food and suggested some ways to overcome this would be to consider setting up distribution hubs, multiple cross-sector drop sites within regions eg schools and hospitals and ensuring suppliers have accurate usage information in tenders.

London Food Link also commissioned Distribution Research in 2004 explore the distribution barriers which exist for local food producers and suppliers and for purchasing organisations to buy locally made and distributed foods. Although this is London-based research, it is of interest as many of the principles will apply and the outcomes are interesting.

In March 2005, the report Developing Local Supplier Networks for Greater Manchester Authorities was published. It is a study that set out to understand the public sector procurement situation in Greater Manchester, to examine the physical restraints on local food supplies and develop methods to overcome them.

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Developing local supply chains opens up opportunities for small Welsh producers.

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