Obstacles to competitiveness
By Gary FreadBusiness Operations business strategy competitiveness Exports
Gary Fread explains why attitude and leadership can sometimes act as barriers to competitiveness
In my articles I’ve spoken about many things involving strategies and actions that need to take place for the Canadian food industry to be globally competitive. Clearly, I do believe it’s possible for the sector to attain that status, and hopefully, you do too at this point.
However, I continue to see two major obstacles to getting on with the achievement of this vision. The first impediment is the overall attitude that continues in many, even most, parts of the sector; the second is a lack of overall leadership committed to making it happen.
A change of attitude
The attitude I’m referring to comes down to the question “Why do we need to change the way we do business?” It usually doesn’t come through quite that blatantly in a conversation, but it definitely underlies many discussions. Why change? The answer is pretty clear in my mind – because the market place has changed and continues to change. Doing business as we always have is no longer adequate for success. Let’s look at another example of changes in another industry – the auto industry.
Back in the 1950s and ’60s, the market wanted “muscle cars” with huge engines and lots of power. Quality wasn’t even a big issue at the time. And what happened? First of all, the industry globalized during the 1970s and ’80s and a different kind of car entered the market – the compact economy car. People started buying them because they were less expensive, both to buy and to operate. And, in many cases, they were of higher quality in general. This was because the industry was starting to move into the quality management mode with the Deming and Juran approaches to continuous process improvement, leading to Six Sigma and lean operations. Gas prices also started to rise, and consumers, even if they wanted a muscle car, didn’t want to pay the operating cost for their commute to work. Now what if the North American auto industry had the attitude that it didn’t need to change? It certainly wouldn’t have lasted as long as it has, despite the challenges the industry has still faced over the past several years. It had to adapt – or change – or go out of business.
The food sector is in that mode right now. The market is growing, but in developing countries. And we can’t just sell these markets food and beverage products that we’ve always eaten here in North America. On top of that, consumer tastes are changing and globalizing, with “foodies” who want interesting, perhaps more upscale global foods; “speedies” who want fast, convenient and portable products; “healthies” who want foods that will keep them healthy; and “greenies” who want food that is environmentally friendly and socially responsible. And we have more competition from developing countries like Brazil, Argentina, Chile and China, where costs are lower, pushing us to improve our productivity. All this leads to the need to change the way we do business in the value chain, in other words, how we work with our suppliers and customers. Change is essential to understanding the market place and how it’s evolving, and to innovate in our products and processes to meet market challenges.
The role of leadership
Then there is the obstacle of lack of overall leadership. It’s like a multi-divisional, global corporation without a CEO and senior management team. Every level of every sector of the food industry has its own focus on its specific concerns and doesn’t really pay a lot of attention to the needs of the overall Canadian food industry. The leadership that does exist is for the most part at each level, each sector, and each geographic area.
There is also no overall approach to the food industry, even at the governmental level. Most provincial ministries are concerned primarily with agriculture, not so much the rest of the food value chain. And the seafood/aquaculture industry is often not included, even though it is food. Industry associations are based on commodities or levels. For example, food retailing is broken down into foodservice and grocery sectors, the latter being part of a larger retail industry encompassing virtually every kind of retailer. Most other organizations are focused either on a commodity, such as grains in the case of baked goods, and/or on a level of the chain, such as meat producers vs. meat processors. There is no food industry organization. We have built a silo around it to the point where the industry is so “broken up” that it may well disintegrate unless a means of overall leadership is developed with the mandate of achieving the vision of a globally competitive Canadian food industry.
The Canadian Agri-Food Policy Institute, the Conference Board of Canada, and the Canadian Federation of Agriculture have all tried to take a more encompassing approach. Now perhaps the next step is to get them collaborating and working as a single force for leadership and change so we can achieve that vision. Perhaps there are other ways, but who is aggressively trying to make it happen?
Let’s not disintegrate – let’s become the world’s best. It can be done.
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at firstname.lastname@example.org
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