Modelling Supply Chain Management in the Sugar Industry

Greater competitiveness and deregulation in agribusiness and the food industry require new forms of co-ordination between farmers and their clients to increase the efficiency and profitability of the supply chain. Various co-ordination processes are used by processing firms to control the quantity and quality of their raw material. In the sugar industry, millers plan their cane supply to ensure that the mill operates at optimum capacity throughout the entire season. They may also take into account variations in cane quality within the supply area and at different times during the season to maximise sugar production. These decisions will impact on the choices growers make with regard to their harvest capacities and management and, depending on the cane payment system in place, on their incomes as well. Other stakeholders in the supply chain, such as contractors and hauliers, also directly affect its management and results. Any modification to the structure of the supply chain or the management rules should take into account stakeholder strategies and ways of operating. A modelling approach based on two complementary models has been developed to simulate on a weekly basis the planning and operation of mill supply throughout the season. The first model compares weekly and total sugar production for a season. The second model focuses on the simulation of logistic chains, and enables the impacts of technological and structural changes on daily harvest and transport capacities to be assessed. Both models can be used to support discussion and negotiation between growers and millers regarding evolutions in the supply chain management.