CATEGORIA: PROTECCIÓN DE BOSQUES PARA FUENTES DE AGUA

Woolgrowers have not been complacent in attempting to increase business performance and some have attempted closer liaison with chain partners to achieve improved marketing outcomes. For example, a 1997 survey of some 19 woolgrower groups (out of 31 identified), accounting for some 2000 woolgrowers producing 90,000 farm bales (about one per cent of the annual Australian clip), indicated about half the groups were established on specific bloodlines; 68 per cent had a quality assurance objective; 42 per cent were regionally based and 37 per cent included a value adding component. Clearly a number of groups had more than one focus. It was found some groups have survived the test of time but they are few and are characterised by a strong commitment to management of the group, often with professional assistance (Michael, 1997; RMSG, undated).

Similarly in 1999 the Task Force also received evidence from individual growers, such as Vale View, and grower groups, such as Queensland-based regional group, Traprock Wool, and bloodline group, Pooginook Wool. Each of these sought to differentiate their product with chain partners involved in processing and/or retailing. It concluded that alternatives such as these provided for innovation in wool marketing “…which was poised for great change and dynamism in the immediate period ahead” Task Force (1999, p73). It was important to understand the costs of production and to use appropriate financial management tools, network with others, obtain feedback from processors on spinning performance and implement quality management approaches. Why hasn’t this occurred? Some 80 per cent of the clip is still sold though auction, with most of the balance sold through brokers under private treaty arrangements (AWI, 2007).

The recent AWI Scoping Study report analysing the current situation with many woolgrower groups found their marketing strategy has often been some type of supply chain management (SCM) strategy. It found most have ceased operations for various reasons whilst those still operating have tended to become niche product suppliers.

“There has, however, been one alternative, the New Zealand Merino Company’s model, that appears to have a sound commercial base and the model may offer an opportunity to expand this type of marketing option in Australia.” (RMSG, undated p41)

AWI has responded to widespread interest in the NZ Merino Company model with the report commissioned in 2005 referred to earlier. AWI’s response to that report and the related Scoping Study indicates some reluctance to take the steps recommended to invest grower levies in training and capability development. The outcome suggested, surprisingly and contrary to other evidence from various enquiries such as evidence to the Wool Taskforce (1999), that there was a low level of dissatisfaction with the current system (auction), and a low level of understanding of what an alternative system might provide. There was also little interest among participants in the vertical chain in alliances with woolgrowers to develop demand chain management models, the degree of interest declining along the chain.

It could be argued that New Zealand woolgrowers were more attuned to the potential for the McKinsey proposals, given previous experience with the Merino New Zealand Ltd branding initiative in 1998 and the associated alliances developed at that time with processors and manufacturers. NZ farmers generally have a reputation for being more internationally oriented, because they have to be given their small domestic market, and hence demonstrate a more aggressive international marketing orientation than Australian farmers (examples include horticulture, lamb, beef and dairy products).

Recent reports from AWI and Woolmark (Wilcox, 2007) indicate more attention is being paid to activities suggested in the Task Force report. This attention includes greater interest in supply chain initiatives by grower groups and brokers to link to retailers, designers and manufacturers to promote the qualities of wool. AWI is also engaged in the development of product integrity verification for Australian merino wool as an example of information management and transparency through the chain (Wilcox, 2007).

As indicated previously, in 1998 the WA Government-sponsored Wool Strategy Group commissioned a Strategic Plan for the West Australian Wool Industry, the Medici Report (Medici, 1998). This report provided growers with an alternative to the traditional auction system to consider; an alternative largely directed to forming relationships with major buyers in the market. The strategy was developed in discussions with businesses in Europe and Asia across the entire wool supply chain with a view to developing a better “…understanding of the needs and wants of the market” (Medici, 1998 p10).

“As evidenced by its behaviour, the Western Australian wool industry does not understand its market as a whole nor does it understand the basis of decision making throughout the entire value chain …which …has at a minimum nine stages. …Each …has a good appreciation of the stage immediately before and after it, but weak information beyond this point.” (Medici, 1998 p10)

Table 2.2 highlights differing attitudes among woolgrowers to their businesses. It also highlights the attitudes underpinning a commodity versus a product or market orientation. Similar analysis could be extended to businesses in the vertical chain. The TMC (undated) study discusses a variety of research to explain the failure of various approaches to enhance supply chain performance and possible reasons for failure. This research seeks to provide additional insights into the factors likely to achieve success in developing a value chain business model.

Table 2.2: Characteristics of Woolgrowing Approaches

Lifestyle (Occupation) Business (Small business)

Passive Active

Males (fathers and sons) provide the labour Farm family provides the management

Future is owning the land Future is management ability

Commodity prices determine income Decisions (largely) determine income

Income determines investment and expenditure decisions Investment and expenditure decisions business decisions Little value in information; closed information networks.

New information often introduced by the retailer, breeder and/or stock agent

Value information – open information networks

Minimising costs is the only profit driver under control Productivity leads to profitability Never consider changing the grazing system Interested developing more efficient grazing systems

Waiting for the next wool price hike Managing wool price volatility and links with customers is an important challenge

Farm stops at the farm gate Farm extends beyond the farm gate

Time has low value High value on time

Few alternatives Alternatives