The communication vacuum in the wool supply chain – insights from an exploratory study of the Australian apparel wool textile industry

Supply chain management is currently receiving much attention in the wool textile industry especially following recent wool industry enquiries in Australia and New Zealand that have highlighted the need for improved communication between processors and wool growers. Supply chain management is also seen as a way of improving on-farm innovation, which is currently low compared to other agricultural and fibre industries. Improved communication is the key yet there are a number of barriers to the development of this communication including ‘biological lag’ and the presence of ‘functional silos’ due to the traditional ‘arms length’ approach to wool fibre procurement. This paper highlights the weaknesses inherent in the traditional approach to wool marketing and provides some evidence of a change in trading arrangements as stakeholders in the Australian apparel wool supply chain recognize the need for change and seek to create vertically co-ordinated supply chains from wool grower to garment manufacturer. INTRODUCTION Supply chain management (SCM) approaches are currently receiving much attention in the wool textile industry, especially in Australia and New Zealand, who together account for 92% of world raw wool exports (IWS, 1997). Amongst wool growers (on-farm), the interest has developed largely from the desire to get closer to downstream chain members (post-farm). This was a factor identified as critical for industry development in major wool industry reviews commissioned in both Australia (Wool Industry Future Directions Taskforce, 1999) and New Zealand (McKinsey and Company, 2000) and arises due to the need for the on-farm sector to better understand the requirements of the post-farm sector with respect to raw wool quality. A macro-analysis of the wool textile supply chain suggests that greater vertical co-ordination and improved communication is especially important given that significant challenges to the industry exist with respect to wool’s ability to compete as a textile fibre (Wool Industry Future Directions Task Force, 1999) and the need for improved levels of innovation on-farm (McKinsey and Company, 2000). Points of competitive disadvantage include the time from wool harvesting