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02/21/2018

A question of networking

Consumer products. The interplay of production, logistics and trade determines how much consumers learn about supply chains. In reality, however, there are still many problems.

BY RAINER HENNIG

Wandering through the supermarket, consumers always find out at least three things about the items in their shopping bags: What the price is, what the maturity date is and what the origin is. However, in order not to buy "a pig in a poke", consumers have to think further. If you really want to know about the product, that will eventually end up on your table, you have to think about the entire supply chain - from the region of origin to your own refrigerator.

Volker Plass brings the two ends of the supply chain together in ecological terms. The Greenpeace programme director in Austria provides examples of how complex the relationships are from a comprehensive perspective. For example, the conditions of cultivation play an important role: "The carbon footprint of outdoor tomatoes from Spain is better than that of greenhouse tomatoes from Austria, as the heating of greenhouses, usually with fossil fuels, is more problematic than almost 2,000 kilometres of transport". According to him, it is not only the regional origin of individual products, but also, in particular for food items, the seasonal nature that is important. However, Plass also stresses that the "last kilometres" are decisive. The member of the environmental protection organisation therefore urges consumers: "If you travel from your home address to the supermarket with your SUV, your regional products also become climate killers."

Obvious issues

In the meantime, industry and trade have realised that they must provide greater transparency in order not to lose certain consumer groups. "In the recent years, awareness amongst many end consumers has increased to such an extent that compliance with social and ecological standards along the supply chain has become increasingly important," says Gundula Pally, Managing Director of Kerkhoff Consulting in Austria, a management consultancy specialising in supply chains. The expert emphasises that this development now not only affects the food industry, but also a wide variety of industries. "Transparency along the entire value chain is increasingly an important competitive factor," explains Pally.

Under pressure to justify

Despite the awareness or transparency, there is no escape from the fact that: if bananas from Ecuador and Peruvian avocados are to be found next to limes from Brazil on the shelves of Austrian supermarkets in February, it is world of invisible, but very complex supply chains, which therefore pose many questions.

"Whenever consumers ask questions, companies can come under pressure to justify," says Pally. But she also stresses that often it is not because "something is to be hidden". Often it is due to the fact that "even within the company there is no clear transparency about all procurement channels". In order to avoid a lack of transparency, traders must be active on several fronts as an interface between producers and consumers.

"Greater transparency in the supply chain can only be achieved through the interaction of production, logistics and trade," says Paul Pöttschacher, spokesman for Rewe International. The subsidiary of the German Rewe Group has a strong presence in Austria, for example with the Billa and Merkur stores. Pöttschacher also emphasises, that the retailer is also in daily contact with customers, who continue to "increasingly demand products from their region".
Origin and shorter transport routes play a significant role in this regard. Information about the former is no longer a problem for the trading giant. In some cases, there is information to the last detail. However, Pöttschacher admits that in other instances it becomes unclear for the consumer, "Currently, there is no way for consumers to check the exact transport routes." But the Rewe spokesperson emphasises, "Needless to say, in the interests of efficiency, we always try to keep these paths as short as possible."

Practical problems

More information regarding travelled distances would also be well received by Plass from Greenpeace. Yet at the same time, however, he also states the problem that an exact calculation of the total travel distance for products with a large number of components could prove to be "very complicated". According to Plass, even packaging prints, which cannot take the actual point of sale into account, provide insufficient information, "For example, if a Chinese manufacturer ships a packaged product for the German-speaking world to Hamburg, it in turn makes a huge difference, whether the product is ultimately consumed in Hamburg or in Vienna or Zurich". The problem is, "The manufacturer will hardly be able to understand the supply chains of the individual retailers".

AT A GLANCE

A great deal of transparency in supply chains is already possible today, but there is still a lack of cooperation between the involved parties. Parcel logistics provides proof that it works from a purely technical point of view. Here, end customers of large service providers have the opportunity to obtain a lot of information. By means of online queries, the route of your parcel from A to B is made very transparent. In the case of consumer goods on supermarket shelves, this information alone could reveal a great deal about the environmental footprint of the distance travelled.

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