Don’t Forget Logistics – A Cautionary Coconut Story

My first job in procurement was very much a supply chain role, as Buyer for a range of raw materials at Mars Confectionery. Dairy products were my largest category within the portfolio, and supply chain issues such as transportation, storage, logistics and product handling were every bit as important as negotiating the price or getting the specification correct.

Indeed, my two biggest achievements were moving to tanker deliveries of skimmed milk powder, and moving from butter to AMF (anhydrous milk fat or “butter with the water taken out” as I used to describe it to puzzled friends and family).  In both cases, the basic product cost went up once we made our innovative move, but we saved a large amount of time and effort, as well as improving quality and safety, through the new ways of handling material into and through the factory.

So remember that when you buy, you also need to understand certain key issues such as where you’re going to put the stuff you’ve bought. Sounds trivial, but it appears that the State Government in Karnataka (the Indian State of which Bengaluru or Bangalore is the capital) does not always think along those lines. There’s a bit of foresight lacking, it appears.

The Hindu newspaper website reports that, “The Agriculture Produce Marketing Committee, on Sunday, started three coconut procurement centres in Hassan district, but does not have any cold storage units to store them …  The State government had instructed APMCs to open the centres so that the Karnataka State Cooperative Market Federation officer can procure coconuts at a support price of Rs.1,600 per quintal. But, there is no clarity on how to store the procured coconuts”.

That is a bit of a problem, because fresh coconuts don’t last that long without proper storage.

We don’t know where to keep coconuts procured from farmers. We have been told to purchase and keep it in godowns. The fresh coconuts, with no husk, have a short shelf-life. Many coconuts also get broken while handling,” said Rangaswamy, manager of Market Federation”.

So, what happens next? Will the coconuts rot? Or be distributed to the poor? Will the Bounty bar raw-material buyer step in with a huge order (and a large fridge)? Will the State Government find some cold-storage space to rent, and quickly? We will follow the next steps with interest.

And the metaphorical moral of the story, for all of us in procurement, is this – don’t buy your coconuts until you know where you’re going to put ‘em!

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