Discuss any two supply chain management trends with reference to the case study provide a recommendation and

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A commodity value chain analysis of apples Stephanie J.E. Midgley Under contract from WWF-SA, Newlands, South Africa "Apple production in South Africa and its value chain are focused on the export market and the product makes a sizeable contribution to national agricultural exports. Just less than half of the production is exported, with the rest divided between domestic markets and processing. The supply value chain consists of suppliers of farming inputs, producers, fresh produce markets, retailers, processors, cold storage and pack house operators, transporters, exporters, quality control and certificallon agents, and terminal and port operators. On arrival in foreign countries, importing agents, distributors, market agents and retailers then supply the apples to consumers. Within the export value chain, about half of the income accrues within South Africa (at delivery to port). A large part of this must cover production and packaging costs. The producer's share (net farm profit) is around 11% of the foreign sales price. Supply and demand determine price and profit throughout the value chain. Signiticant changes and variability in supply/quality and price are also transmitted through the chain. A combination of production (tonnes) and price determines the overall value to the producer and those who follow in the value chain. While variability of production can be problematic, variability in quality and price often causes greater problems. Shifting fruit meant for the export market to the domestic and processing market because of quality problems can be very disruptive, as it puts prices under pressure and dramatically reduces profits. Given the industry's dependence on exports, global competitiveness must be maintained and increased. The impacts of climate change will be felt most in greater variability of production and quality, and thus of price and income. The rand value of the apple industry has grown over the last 10 years, supported by strong import demand in foreign markets and increasing prices, a drop in the value of the rand and improvements in fruit quality. Year-on-year declines in production in some years were mainly the result of unfavourable weather conditions, including drought, heat waves and hailstorms. Domestic demand and prices have also increased. These positive trends are expected to continue over the next 10 years, assuming stable weather conditions as well as social, economic and political stability. Increases in production and value will have to come from yield and quality improvements rather than from an increase in hectares under production. Climate extremes and climate change have the potential to severely disrupt apple production and income. Negative impacts on quality will put pressure on the domestic market and demand greater absorptive capacity for fresh consumption and processing of second- and third-grade fruit. The key climatic risks for production are lack of winter cold units, particularly in the warmer areas; heat stress and unfavourably warm weather during key developmental stages; conditions that promote pests and diseases; lack of water for irrigation; and hailstorms and flooding. Impacts are felt on the value chain through reduced production and quality, as well as direct damage to transport, energy and water infrastructure, buildings and ports. Climate change in the core apple production regions is projected to bring about warming and shifts in seasonality and rainfall characteristics, with both more and less rain being possible, according to a range of climate models. Changes which could cause the most damage to apple farming are significant reductions in winter chilling; increased heat stress; more frequent shortages of water in the storage dams, leading to irrigation water restrictions; increased postharvest problems such as bitter pit and scald (symptoms appear after harvest); and changing risks of hailstorms and pest outbreaks. Shifts in flowering and harvest dates could disrupt marketing windows. A warmer climate will also increase the demand for and cost of energy for production (irrigation pumping). packaging, cold storage, refrigerated transport, processing and cooling of retailer shelves. The current situation, where increasing risks and costs are either absorbed by farmers or passed on to retailers and ultimately reflected in the price of fruit, is expected to continue. Farmers and consumers are likely to be the value chain members who are most negatively affected." Discuss any two supply chain management trends with reference to the case study provide a recommendation and