Links:
Google Doc
Presentation 1 - Lynne - Dynamic Supply Chains Distributed Logistics
Presentation 2 - Serenity - Short Supply Chains Logistics Pilot- “Open Road”
Recording
What is the purpose of this session?
To think about how OFN can help users with logistics, make delivery more affordable, take advantage of upcoming developments in logistics
What outcomes/deliverables do we want?
Who is facilitating? Serenity (Kirsten as sidekick)
Who is scribing? Gen
Summary:
Lynne (OFN UK) gave an overview of the context re: dynamic supply chains and distributed logistics: Presentation here
Serenity (OFN AUS) introduced us to the Australian “Open Road” logistics pilot: Presentation here (producer-led)
Simon and Sarah from Tamar and SW food hubs (UK) explained the development of their shared logistics project (hub-led). Intending that this will become a separate organization to Tamar, collectively owned by the hubs who use it.
Georgia (OFN AUS) shared her experience of working with Social Enterprises in Victoria to get locally produced food to vulnerable people during COVID.
Group discussion of Implications/opportunities for OFN. We note that this seems to be popping up in multiple places, so it’s a pressing area of development re: API, DFC, etc
Actions:
- Use Collaborative Logistics post on the Forum as a central place for the ongoing discussion, updates re: funding, etc.
- Maybe set up a logistics slack channel
Detailed notes:
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Introduction (Serenity, OFN Aus) - 5 mins
- How might we reduce the cost of logistics for producers and/or hubs?
- How can we better position to adapt to/benefit from massive changes/trends in logistics?
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Context re dynamic supply chains and distributed logistics (Lynne, OFN UK): Presentation here
- e.g. shortage of lemons during COVID crisis - it was very difficult to understand why the price of lemons spiked because we don’t have visibility on product movements, just the single indicator of the price
- Leads to supermarket oligopsony (rather than monopoly), where supermarkets are the only viable buyers of produce (since they can control end-to-end supply chains with efficiencies of scale), and so have outsized power
- Upcoming logistics developments:
- Drones, driverless cars
- Dominated by big players right now (e.g. Amazon, Google)
- But also means logistics companies will become more efficient - could mean they become affordable and accessible to OFN users as a way to outsource logistics
- Interoperability is especially important to allow for API integrations
- Kirsten question: has Lynne seen hints of these networked supply chains emerging?
- Lynne: we do see all sorts. One hub imports a lot of citrus and sells on to food hubs - star model of distribution. Pickup-dropoff point model. Often happens quite organically but OFN doesn’t support this aspect of the system very well right now.
- Serenity question: cost of logistics for mainstream supply chains is up to 10-30% of the final cost to the end customer.
- Lynne: this would be interesting to ask our hubs about - should be pretty easy to derive from their budget lines.
- Kirsten: definitional issue, what counts as logistics for hubs?
- Lynne: Big aspect is the local infrastructure. e.g. Logistics in east Africa is so expensive, takes so much just to get it to the port. So we need to think about the national context too.
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Australian “Open Road” logistics pilot (Serenity, OFN Aus): Presentation here
- Helping users achieve scale required for financial viability, access markets further afield, share logistic costs amongst many producers
- AUS gov ill-conceived e-commerce platform with “free” logistics - realise too late this is difficult and expensive, and also they were stepping on OFN and others’ toes
- infuriating at the time, but now an opportunity - gov understands better the importance and difficult of shared short supply chains - Open Road pilot project
- First round of funding approved: $AUD75,000
- More of a producer-side problem; hubs have cobbled-together systems working at the moment, plus some really specific pain points to be addressed
- One distinction of an OFN logistics approach might be a personal relationship with a consistent weekly driver. Gov funding pushes low-ish pay for drivers, but this might not fit with the active role OFN would want a driver to play.
- Electric trucks would be much more economically sustainable in the long term - pilot funding could be used to buy 3
- Funding could also be used for a metro warehouse
- Kirsten question: how does this fit into avoiding a centralized distribution system?
- Lynne: this is a big question - how to support a distributed logistics system. Not necessarily our problem to solve, but we have a lot to contribute
- Kirsten: OFN in Victoria has become a valuable advocacy “peak body” in terms of representing the sector to government. There’s a level of trust and integrity to how we go about things, so maybe there’s a possibility for OFN to do things to support and facilitate rahter than control. The OFN platform is open-source and so designed to make control impossible. How might we replicate this design for something like a logistics systems?
- Lynne: Better Food Shed are doing this in London to send food out to regional CSAs to top up their boxes. Lots to learn from their experience.
- Georgia: “I also wonder about the potential for Melbourne/the big city to become the focus for all the logistics so all produce is moving in and out of there and the movement of food between regional hubs might be forgotten/not prioritised because the orders are smaller etc”
- Rachel: “We have 2 big projects in France also. I can send them a questionniare that I can translate if you want. One of them is https://kiosquepaysan.fr/”
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Tamar and SW food hub (Simon and Sarah, UK)
- Foray into shared logistics - 2 lifespans
- First: 18 months ago began discussing shared logistics with. Our soil won’t grow carrots, so we need to get them from further afield. Were buying them from conventional wholesale, which they didn’t like doing. Wanted to source from people with similar ethical stances. Finding spare capacity in the “fleet” of trucks of the hubs to do decentralized redistribution of carrots, etc. Didn’t achieve critical mass of produce to make it worth the driver’s time, the fuel, etc.
- Second: Exeter food hub opened up, 1h15 away from Tamar. Tamar started swapping produce between them - still not enough to cover cost of delivery. So then Tamar started looking at other hubs and suppliers along nearby routes to batch more produce to make the whole system viable.
- Has become quite complicated now - bolting together orders from 4 different order cycles. 3 different hubs involved right now, 2 more getting ready to join in. These hubs are all 40 mins distance away from each other, seems to be a sweet-spot for maximising value.
- Kirsten notes that this 40 min rule seems to apply where they are in AUS too
- Lots of admin work, so hoping to find ways to streamline this aspect through OFN
- But, on the upside, didn’t take long to reach critical mass for the viability of the delivery van
- Serenity comment: this is a hub-driven approach, while we’re looking at producer-driven logistics
- Kirsten question: is the admin complexity linear? Does each additional hub add the same number of admin hours?
- Tamar: not sure. But intending that this shared logistics be separate to Tamar, collectively owned by the hubs that use it. So the admin won’t always be on Tamar’s shoulders.
- Georgia question: “What is the rough volume of food you’re moving in the van usually?”
- Tamar: Not much in terms of mass - it’s all high-value stuff. Cordials, mushrooms. Chickens soon. Break-even point is around 500GBP to do the Exeter loop. 10% distribution fee right now, but trying to refine that.
- Joe question: Do you take changing fuel costs into account in planning going forward
- Tamar: Still in pilot phase right now, but hoping to get funding for an electric vehicle to minimise the cost and risk associated with petrol.
- Kirsten question re: refrigeration
- Tamar: Not at the volume yet where external refrigeration is required, since transfers between vans can happen within the required window. Have got an offer of access to a refrigerated space for a full day. But able to manage so far with large cool boxes and icepacks, critical temps maintained.
- Lynne: food hygiene regulations are quite appropriate to scale. So this is a progressive aspect of UK policy that’s not necessarily replicated elsewhere.
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Local experience - logistics challenges and solutions - everyone
- Georgia
- OFN AUS got some funding to support a group of Social Enterprises that came together during COVID to ensure vulnerable people in Victoria had access to food. Georgia’s group got funding to improve the procurement for this group - helping them get food from local farmers rather than wholesalers. Coherent with SEs’ values. Spoke with producers in the OFN to see if there was excess capacity to supply this group. Supply wasn’t there as much as expected - farmers had already found alternative buyers, and primarily wanted to sell at a wholesale scale. Interesting partner as the SE group can be flexible in terms of buying what’s available. Logistics has continued to be an issue in terms of finding sufficient supply and getting the produce to the buyers.
- Georgia
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Discussion of Implications/opportunities for OFN platform (and OFN more generally) - everyone
- Lynne: how can we collectively pool this learning? It’s such a complex issue, but we are making inroads and innovating.
- Kirsten: how to capture, and also how to continue the conversation? The Open Road project will keep us moving on this. Can we be active in shopping for logistics partners - this is a big project so maybe we can leverage that.
- YoGi is a platform used by the SEs in Melbourne - a collaborative economy firm - Kirsten is meeting with them this week
- Eriol: “I’d like to see how we can talk logistics + OFN at Mozfest”
- Mozilla tech fest - sessions on how to “wrangle” sustainability, Eriol would like to bring the big intimidating discussion re: stopping climate change down to earth with discussions re: how to do e.g. sustainable logistics
- Lynne: “It would be super interesting to link with others in the OSS space on logistics”
- Rachel: “OSS project on vehicle routing optimization http://vroom-project.org/”
- Kirsten: maybe we’re focusing a lot of the routing aspect of logistics, but there’s also stuff to do with e.g. how to cleverly pack vans, etc. We should not try to build this from scratch, there are already a lot of smart people working on this - so we need to decide who to connect with as our key partner on this (similar to what we did with Stripe)
- Lynne: maybe different tools are better in different areas, for different problems, so we might need to focus especially on interoperability.
- Kirsten: connects with DFC conversation.
- François Turbelin: “API is the way to work on interoperability for sure, DFC API could help for sure to share data with a common format.”