“Complexity in supply chain of dairy farming business”
Milk is very fast consuming good around the world and its very essential part in our daily routine. Dairy farming is very huge and important business industry though out the world and its going very systematically and there are no complexities in their businesses than Pakistan and other Asia’s countries like India, Bangladesh etc .In this blog we are focusing on the dairy farming business in Pakistani region and the supply chain of dairy farming, what challenges farmers are facing or a company in this business, i.e. labor problem, transparency, payment/credibility and many other problems.
The supply chain of a business process comprises mainly five activities. Purchase of materials from suppliers, transportation of materials from suppliers to facilities, production of goods at facilities, transportation of goods from facilitates to ware houses and transportation of goods from ware houses to customers.
Following are the main challenges in dairy farming business:
1. Demand and Supply is a main challenge in the dairy farming business because the demand of milk products are inflated, in the market there are many tetra pack milk companies exist but these companies are unable to fulfill market demand they have their own dairy farms but they are also collecting milk from local dairy farms in the small villages but they cannot fulfill market demand so it’s a very big challenge for farmer and companies in dairy farming. In this case we should have written agreement for 1 year with customer or retailer which include price of milk for year constant and also fix an amount of quantity of milk for a year.
2. Labor blackmailing is also a serious problem in dairy farming business because milking process is a core part in the whole process and in local farms there are blackmailing factor present from labor side. They want advance salaries, long holidays and also they treat animals very badly if you don’t fulfill their demands, then in that case we can restrict labor as much as possible, we can install different machines for milking, with the help of these machines we can collect milk from minimum 2 cow’s at a time so it is very useful for reduce cost, increase efficiency, save time and it is hygienic process of milking. Normally in Pakistan tetra pack companies use these machines for milking.
3. Storage problem is big issue in the dairy farming business in Pakistan because there are many uncertain conditions present in Pakistan like traffic problem, strike, transportation, rain storms and delayed supply are some problems for these we can install chillers in our location it helps to store milk at certain temperature for a long time.
4. Expiry. Milk is a perishable item and its expiry is like 2 to 3 hours in summers and 10 to 12 hours in winter if we will not store it on time then there is a very high possibility that it will expire within few hours, so it’s a very big challenge for dairy farming industry.
5. Seasonal demand variation. Milk demand varies according to seasons like in summer milk demand is inflated because consumption is increase and also use in summer products like ice cream, lassi, yogurt and other milk products in the other hand demand in winter decrease because production is more increase and consumption rate decrease in winter.
6. Animal diseases/death of animals. Animals are expensive and its death or diseases are very complicated for farmer and due to diseases production of milk decrease and companies have to suffer a lot. In this case we should do pre vaccine course for prevention of disease.
7. Dangerous injections and medicines To increase milk production in dairy cows, what farmers do is they inject some vaccines which increase hormones known as bovine somototropin, it increases cows natural levels of insulin like growth factor called IGF-1 like somatech, boostin are also used by farmers however, It is very dangerous for animal health and as well as animal’s meat. It is very dangerous for human health because it pre activates humans hormones. Now government has banned these injections throughout the country it is a very huge step for dairy farming and live stock industry.
Dairy farming is very big industry and consumption of milk is high all over the world. This industry has great challenges but on the other hand some good and possible solutions are also available which make it attractive for many investors all around the world.
Supply chain management is the plan and control of material and information flow among suppliers, facilities, warehouses and customers with the objectives of minimization of cost, maximization of customer services and flexibility. The supply chain of a business process comprises mainly five activities , Purchase of materials from suppliers, transportation of materials from suppliers to facilities, production of goods at facilities, transportation of goods from facilitates to ware houses and transportation of goods from ware houses to customers.