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Canadian On-Farm Food Safety Delivery Option Identification and Evaluation
on behalf of theCanadian Federation of Agriculture’s OFFS Delivery Options Committee
Final Report Discussion
November 29-30, 2006
Canadian On-Farm Food Safety Delivery Option Identification and Evaluation
on behalf of theCanadian Federation of Agriculture’s OFFS Delivery Options Committee
Final Report Discussion
November 29-30, 2006
CONSULTING OBJECTIVESCONSULTING OBJECTIVES
To contribute to the determination of the most effective options that will support efficient delivery of producer-led on-farm food safety initiatives - to help remain competitive in production
to determine the current and projected cost of delivery of OFFS programs at the national and provincial level; and,
to identify and profile the options for delivery of OFFS programs.
WORK PLANWORK PLAN
Phase 1:Project Plan Development
Phase 1:Project Plan Development
Phase 2:Cost of Delivery Tool Development
Phase 2:Cost of Delivery Tool Development
Phase 4:Development of Delivery Options
Phase 4:Development of Delivery Options
Phase 3:Collection and Analysis of Data
Phase 3:Collection and Analysis of Data
March 20th, 2006 April 15th, 2006 June 15th, 2006 October 1st, 2006September 1st, 2006
Estimated timingEstimated timing
April 15th, 2006
COSTS OF DELIVERYCOSTS OF DELIVERY
Sources of the data: 21 participants
7 national 14 provincial / regional commodity sectors: dairy, chicken, egg, pork, horticulture, sheep, turkey,
bison, herb and spice, vegetables
few costing reports, more estimates of actuals, some projected estimates required
ultimately, good co-operation and participation; significant efforts to get the data
Indicative cost data versus detailed costing study 68,700 total producers represented; 12,500 trained; 10,175
certified; 9,418 validated / registered
Includes costs incurred by the delivery agent Key business processes:
Direction and ControlPlanning, Directing, Reporting, Monitoring
OperationsProducer training, awareness and supportAuditor training and auditing, program levelCertification, validation of producers, appeals, dispute resolutionRecognition: of program, of producers
Supporting Administration Information management, Finance, Legal, Administration,
Communications
COSTS OF DELIVERYCOSTS OF DELIVERY
Does not include: costs associated with program development, sustainability, or QMS additional costs incurred by grower additional costs incurred by distribution network
COSTS OF DELIVERYCOSTS OF DELIVERY
Total costs collected: $5.8 million
$0.8 million Directing and Monitoring activities 14% $4.0 million Operations activities 69% $1.0 million Administration Support activities 17%
($1.4 million of Program Development activities excluded)
Total costs per producer: $468 per producer, using a weighted average calculation
COSTS OF DELIVERYCOSTS OF DELIVERY
Weighted average: the cost per producer for an organization with small numbers of
producers is not given equal weighting to the cost per producer for an organization with large numbers of producers
is appropriate to use when significant variation exists in the data, and the goal is to determine average costs per unit
COSTS OF DELIVERYCOSTS OF DELIVERY
COSTS OF DELIVERYCOSTS OF DELIVERY
Calculation of a Simple Average
gross $ per organization divided by number of producers for that organization equals average $ per producer per organization; total of the average $ per producer per organization divided by total
number of organizations equals Simple Average per Producer Organization a (50 producers): $150,000/50 = $3,000
Organization b (5,000 producers): $2,000,000/5,000= $400
Organization c (7,450 producers): $3,002,350/7,450= $403
($3,000+$400+$403)/3 = $1,268 per producer
Calculation of a Weighted Average
average $ per producer times number of producers equals gross weighted $ for the organization’s producers; total of the gross weighted $ for each organization divided by total number of producers
equals Weighted Average per Producer Organization a: $3,000 x 50 = $150,000
Organization b: $400 x 5,000 = $2,000,000
Organization c: $403 x 7,450 = $3,002,350
($150,000+$2,000,000+$3,002,350)/12,500 = $ 412 per producer
COSTS OF DELIVERYCOSTS OF DELIVERY
% of % of Total Costs Function Costs
Directing and Monitoring 14% 100% Board of Directors 6% 42% Executive Management 8% 58% Operations 70% 100% Producer Training and Support 23% 31% Certification of Producers 22% 31% Registration 19% 28% Official Recognition 5% 8% Administration / Support 17% 100% Finance 1% 9% Legal 1% 8% Information Technology 3% 15% General Administration 4% 27% Communications 5% 28% Human Resources 2% 13%
COSTS OF DELIVERYCOSTS OF DELIVERY
COST ELEMENTS PERSONNEL Number of Full Time Equivalent (FTE) 3.1 Salaries $176,587 Benefits (percentage of salary) 14,880 Per Diems (contracted resources) 33,825 Third party 61,227 TOTAL (62% of the Total Dollars) 286,519 MATERIALS AND SUPPLIES Office Supplies 22,937 Printing 26,663 Displays 826 Postage/Courier 1,316 TOTAL (11% of the Total Dollars) 51,743 TRAVEL Transportation 79,787 Meals/Accommodations 28,208 Telephone 1,660 TOTAL (24% of the Total Dollars) 109,655 FACILITIES Utilities 793 Equipment (computers, vehicles, office equipment) 2,900 Building costs/workspace (depreciation, rent) 10,483 Repairs and Maintenance 0 Insurance 365 TOTAL (3% of the Total Dollars) 14,542
TOTAL DOLLARS $462,463
COSTS PER PRODUCER (WEIGHTED AVERAGE), NOT INCLUDING PROGRAM DEVELOPMENT * $468
COSTS OF DELIVERYCOSTS OF DELIVERY
Make-up of the costs personnel 62% materials and supplies 11% travel 24% facilities 3%
92% actual and 8% projected Differences - by region, within a commodity group:
variation in activities exists completeness of the data economies
COSTS OF DELIVERYCOSTS OF DELIVERY Range in costs:
per producer $0 to $400: 5 national (co-ordinating role); 5 provincial/regional $401 to $1,000: 2 national (co-ordinating role); 3 provincial/regional $1,001 to $3,600: 6 provincial / regional
per function: Directing and Monitoring: $60 to $70 Administrative Support: $70 to $80 Operations-Training and Support/Awareness Building: $30 to $50 Operations-Training and Support/Skill Development: $50 to $400 Operations-Certification: $40 to $50 Operations-Validation of Production Unit: $200 to $500 Operations-Registration: $200 to $1,300 Operations-Official Recognition: $5 to $120
COSTS OF DELIVERYCOSTS OF DELIVERY
Cost drivers: variations in delivery activities flexibility - market driven and voluntary economies of scale, number of producers economies of scope, integration with other programming considerable fixed costs (versus variable); capacity planning whether producer produces multiple commodities uptake by producers technology - scheduling, producer database on-farm audit activities costly customer requirements need for compliance-level audit
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY
Key differentiating attributes: single or multiple commodity national or provincial or regional customer recognized or not officially (CFIA) recognized or not certification versus accreditation multi-commodity audits (contracted through NPOs) versus
pooled audits (contracted through a qualified 3rd party) in-house versus third-party
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY Potential Delivery Models:
Single Commodity (National delivery) Single Commodity (Provincial or Regional delivery) Officially Recognized Single Commodity (Provincial or Regional) Officially Recognized and Accredited Single Commodity
(Provincial or Regional delivery) Multi-Commodity (Provincial or Regional delivery) Officially Recognized Multi-Commodity (Provincial or Regional) Officially Recognized Multi-Commodity Pooled Audit Officially Recognized and Accredited Multi-Commodity
(Provincial or Regional delivery) Officially Recognized National Certification Body (Provincial or
Regional delivery) Customer Recognized Programs (Provincial/Outsource)
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY Potential Delivery Models:
Single Commodity (National delivery) Single Commodity (Provincial or Regional delivery) Officially Recognized Single Commodity (Provincial or Regional) Officially Recognized and Accredited Single Commodity
(Provincial or Regional delivery) Multi-Commodity (Provincial or Regional delivery) Officially Recognized Multi-Commodity (Provincial or Regional) Officially Recognized Multi-Commodity Pooled Audit Officially Recognized and Accredited Multi-Commodity
(Provincial or Regional delivery) Officially Recognized National Certification Body (Provincial or
Regional delivery) Customer Recognized Programs (Provincial/Outsource)
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY
Possible Evaluation Criteria, technical issues whether certification to the specified performance standard is
possible regional / provincial differences and requirements commodity differences and requirements contributing to remaining competitive; acceptance by food
industry / customers; issues of commercial acceptance, i.e. branding
applicability to other related initiatives, i.e traceability, environment, stewardship, animal welfare – ability to deliver greater than food safety
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY Possible Evaluation Criteria, business issues
cost independence, objectivity expertise available affordability; ability to pay; availability of resources application / use of technology overlap / economies with other initiatives / management systems whether effective linkages / communications in place
with producers with other commodity organizations
staged implementation: complexity and scale feasibility: capacity / availability / practicality timeliness: availability / proximity / location public good versus commercial benefit (not-for-profit vs profit)
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY The future?
no one model for all national or regional co-ordination where possible national training design and materials provincial or regional delivery of training, certification,
maintenance or follow-up partial audits evolution of verification requirements ultimately, objective, independent full audit service investment in information management technology cost-effective resource planning limited multi-commodity co-operation
OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY
PROVIDER SERVICE
AIB
International
Beef
Improvement Ontario *
(BIO)
Collis
Consulting Inc.
FB
Andersen and
Associates Inc.
Gestation Qualiterra
Inc.
Guelph Food Techn-ology
Centre (GFTC)
North
American Food
Safety Associates (NAFSA)*
Prisme
Quality
Manage-ment
Institute (QMI)
SGS
Canada Inc.
Safefood
Consulting Inc.
Silliker
Inc.
Steritech
Group Inc.**
Program Development Generic Model Development
Producer Manuals
Auditor Training Materials
Program Management Services
Program Implementation Producer Awareness Session
Producer Training Sessions
Audit Training
Pre-audit Services
On-Farm Audits
Certification Schemes
NEXT STEPSNEXT STEPS
Follow-up telephone meetings with participants feedback on, and clarification of, individual report discussions on potential delivery models and possible evaluation
criteria ideas / direction on possible subsequent phase of project
Possible Phase 2: further evaluation of options for delivery
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