Industrial Food Supply Chain

1. Synopsis and Summary of Facts

In the time when focus in on specialized Industrial Food Supply Chain (IFSC), to meet the increasing demand of food, we have seen Polyface farms which is doing completely the opposite. To increase productivity IFSC have reduced their scope to single product operations. Specialized breeding techniques has allowed animals to grow bigger and faster into similar size and proportion. On the other hand, throughout the years Polyface has diversified its product portfolio. Polyface is small scale family owned (by Joel Salatin), community farm and has grown substantially over time, once the industrial farming and slaughtering practices were revealed. Although many might consider this a small business, however it quite large if we look at the product portfolio and distribution channels. The farm directly markets it produce to customer base that numbers 2000 individual customer, 10 retail outlets and 50 local restaurants. In addition, despite pressure from increasing demand, technological innovation and government regulations, Polyface continued to mimic nature’s bio diverse template, to keep costs low.

Polyface’s vision has always been to achieve sustainability economically and environmentally. This can be observed through their operations (to be discussed later in detail). Moreover, another important factor for the vision has been Joel’s father Willam Salatin, who was an accountant. As all account are focused on costs of an activity, William’s guidance has been significant for keeping a low cost strategy and fully utilizing resources available to Polyface. (Exhibit#1 shows Polyface guiding principle).

1. Operating Model

There is a significant difference between operations of industrial and family farms (Exhibit#2 & 3 shows the operation model of both systems). The industrial revolution brought in new mechanical techniques that replaced manual labor and supported mass production. Farming industry also shifted its focus from different types of livestock and vegetables to a less labor intensive single output farms. To control the scale of farming operations the government introduced new regulations to ensure safety and quality of produce. Polyface considered these regulations expensive and superfluous, but complied and followed the same regulations as large industrial farms.

Polyface is a producer driven model, small scale producer who has stabilize and secured his position in market. Also has the opportunity to access new markets and obtain higher market price. On the contrary, industrial farm is buyer driven model, as they want to assure supply and increase volumes and touch more discerning customers, meeting market niches and interest. Buyer’s interest is to procure a flow of products and use finance as a way of facilitating or committing producers, processors and others in the value chain to sell to them under specified condition.

Polyface method was to understand the natural inclination and psychological distinctiveness of the animals and use it to their advantage. Whereas, industrial farms prime focus was to get mass productivity and earn profits. It took considerable amount of time and analytical skill by Joel to understand different animals and use their unique attributes in attain natural fertilizer from the excrement of various animals. Although Polyface had only 6 human employee working on the farm, who were able to perform diverse roles when required, but they had helping hand from these animals. Every animal had a role to play in labor force. Polyface synchronized these roles as such that they did not require to hire more employee to perform manual labor, which was done in industrial farms. In addition, Joel’s focus always was to use natural inputs for the animals and land. Effective management of the grass growth was one of the prime reasons for the farm’s success. Polyface developed natural operational techniques to optimize the delivery of the inputs for healthy grass growth. Rain water was collected in ponds in the hills and channelized to the farm. Grazing pattern of the animals was closely supervised to operationalize the system. By following a management-intensive grazing system, nutrient content of the soil and the density of the soil improved. Which helped support many different animals. Moreover, through paddock system technique, Polyface was able to support 2 cows per acre per year when compared to less than 1 cow in the other farms. Furthermore, Polyface operations was concentrated on composting, which is nature's process of recycling decomposed organic materials into a rich soil known as compost. Composting allowed Polyface to keep the natural design of operations, focus on low costs and abstain from using chemical fertilizers which can affect the grassland and animals.

All these techniques adopted by Polyface were of natural design and were critical to produce quality products. Quality of his products allowed interest in Polyface farming method to grow. Therefore, Polyface adopted an open approach. Farmer were given training through their apprenticeship programs. Also Polyface supported guided tours of the farms for everyone who was interested in small scale community farming. (Exhibit#4 further represents tabular wise difference between both systems).

1. Expansion Challenges

Interest in small scale community farming was on the rise. Joel featured in book and documentary gave recognition to Polyface and their farming techniques. On the other hand, Industrial farm were causing a number of diseases. Also, nutrient composition of industrial foods was on a decline. Besides, health issues like obesity and diabetes were on the rise, and was being linked back to farming methods. Likewise, environment was also getting polluted because of animal waste being disposed by the industry. Hence, more customers were moving towards local pasteurized products. However, to expand Polyface has to look into the following list of challenges:

1. Current geographic and environment dynamics, supported Polyface operations. To expand they have to start from scratch and study these dynamic, which will be time consuming.
2. Considering to expand in new areas, Polyface need to study the agronomy of the land and check if they can be able to product similar kind of grassland. Grass is a critical nutrient for their animals to produce quality product.
3. Expanding operations and not meeting customer expectation can affect the brand image of Polyface products, if they are unable to meet customer expectation.
4. Increasing distribution and coverage of product, will require a hefty investment in infrastructure which help in increasing the shelf life of the products.
5. At present Polyface is supervised by Joel’s family, so for expansion Polyface need to hire new employees who will have the analytical skills and patience to improve the current operations. Also employees should match the vision and philosophy of the company.
6. Polyface gives out training to other farmers who want to adopt their techniques. Polyface can work with them as partners in the future. However, it would be difficult for them to replicate the techniques if they do not have the similar condition to Polyface which allows them to run their operation model.
7. Polyface cannot immediately introduce new animals to the farms. They need to understand the natural inclinations and physiological distinctiveness of animals, how they can fit in the current operating model. Everything should have a reason and a purpose.
8. Composting and mineralization can work for small scale farms. For larger scale Polyface needs more animals and workforce, or need to make use of chemical fertilizers. This is a dilemma as Polyface has never used such practices and know the risk associated with using them.
9. To meet the demand relying on natural design will not be ideal. Will need to incorporate industrial farms practices which can affect the quality and image of Polyface.
10. At present the ratio of hens to cows in Polyface is 16:1. To keep the current ratio intact, chicken should be increased correspondingly subject to a max of 20,000 hens as per the Wholesome Poultry Products Act. Finding a balance will be a major challenge.

In contract, it is easy for Industrial farms to achieve economies of scale, as they already have made the investment and have the infrastructure to meet the demands. However, will need to work on the quality of inputs which means adopting natural design techniques of Polyface, but it can also limit the scope of operations. Moreover, industrial farms are focused on one product outputs, so they cannot adapt the supply chain for new products and will have to create another chain which is capital intensive.