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Lee Feng-Chi1 and Hsieh Chia-Hao2
1Manager, Fuyah International Company limited
2TseXin Organic Agriculture Foundation
Fuyah was set up to help meet various challenges in organic agriculture. As a result of the successful work done earlier by TseXin Organic Agriculture Foundation, Taiwan’s organic agriculture is now on track promising to become a successful industry.  However, one of the main problems impending this industry to expand is the lack of a centralized system of managing information on suppliers (farmers), customers, transport, storage, processing/sorting, and labeling.    
Keywords: Taiwan, organic production, supply chain management.
Taiwan is a small island and farmlands are relatively smaller than where conventional farming is. Small -scale farming is a way of life for majority of the people.  Organic farming has only become a recent development during the past 15 years where some farmers decided to grow pesticide-free vegetables in their small plots.  In 1997, venerable Master Jih-Chang started TseXin Organic Agriculture Foundation in response to the increasing use and reliance on pesticides and the negative impact it brings to the soil, the environment, and to the local animal habitats.  
TseXin Organic Agriculture Foundation pushed to prevent further destruction to the environment and local species of animals in Taiwan and more importantly, it tried to prevent fertilizers from contaminating the water reservoirs upstream and downstream.  Through this process, TseXin Organic Agriculture Foundation engaged farmers shifting from conventional to organic farming as an alternative way and thus save countless animals that died as a result of pesticide poisoning.  
Education:  The first step was to educate the public, especially consumers about the importance of saving our environment through organic farming. TseXin Organic Agriculture Foundation worked to convince farmers on the benefit of organic farming.  To those farmers who wish to convert to organic farming, TseXin provided technical and economic assistance to help facilitate their transition from traditional to organic farming.
Certification: TseXin Organic Agriculture Foundation began certification of farmers who have met the requirements to become an organic farmer. To date, TseXin Organic Agriculture Foundation certified approximately 30% of Taiwan’s total organic farms, which are all of 1,800 hectares.
Certification is an integral part of developing organic farming because it helps to gain customer confidence in organic products.
Marketing, logistics and distribution:  As TseXin Organic Agriculture Foundation became successful in helping farmers convert to organic farming, they also saw a need to provide farmers with technical knowledge on how to grow quality farm products and transport and distribute their products to the market.  Thus, Fuyah International Company Limited started to meet this growing need to transport, store, sort, distribute and finally sell organic products. 
Challenges:  Through this gradual trans-formation, many challenges surfaced:  Farmers’ plot sizes were small and thus yield only small volume of products.  Farmers did not fully grasp how to grow organic products without pesticides, how to obtain and comply with organic farm laws and regulations.  Lastly, farmers had no means to transport their products to the market, and did not know where to sell their products.
Our aim is to strengthen and expand organic farming in Taiwan through an improved integrated information system which will be effective in providing comprehensive information and communication to all parties in the supply chain.  We believe that an integrated information system can help in the effective management of organic agriculture.  We seek to improve further to integrate our existing system to allow for better management of our expanded supply chain management services.
Our motto is to be 1) honest and trustworthy, 2) improve quality, and 3) provide support to farmers.
Honesty and trustworthy
A strong sense of honesty and trust is very important in the organic industry.  Mutual honesty and trust between farmers and Fuyah ensures that our customers are buying the best products.  Our customers’ trust us to provide them with pure organic products.  Likewise, farmers are advised of the importance in providing honest uncontaminated organic products to us. By mutually being honest and trustworthy, both parties can work together to expand the organic agricultural products in Taiwan. 
Improve quality
Good quality and good appearance of organic products are not easily obtained.  Farmers must constantly try new ways to improve their appearance and taste.  In order to ensure customers of acceptance of organic products, we have to continuously provide educational classes or consumer information to explain the challenges faced by farmers growing organic food without pesticide.  
To create a larger customer base, we also need to constantly upgrade our products by encouraging farmers to produce products with good appearance, and convince farmers that organic products do not have to look ugly.   Thus, we constantly provide farm techniques, and other resources which farmers may use to upgrade their products.   
Closer support to farmers 
We attempt to work closely with farmers, to care about their livelihood; to ensure that they are able to have a good livelihood through organic farming and not revert back to conventional farming. 
Currently Fuyah’s operation is divided into three regions – North, Central and South regions in Taiwan each with its separate suppliers, customers, storage/processing facilities and delivery. But this has prevented us from having even distribution of goods, especially for seasonal products, and because it is not integrated, each region cannot track the progress of the other nor communicate with each other to move products when necessary. Inaccurate product labeling and manual processing of some documentation also costs incalculable time loss. During these past few years, Taiwan formally adopted organic farm laws. Therefore, we must comply with the adapted laws, and accurate record keeping is essential and required by law. As more and more consumers buy organic produce, an efficient and effective data processing management system becomes increasingly important.  
Because of these challenges, we modified our management system and established a standardized system of inspection procedures to avoid mistakes and have better control. This standardized procedure is primarily to minimize repeat of past mistakes and improve management control. There are still some minor errors which we hope can be eliminated through an integrated database system. The following is our current management system.  It includes an inspection management system which is partially integrated.
In addition to the certification that farmers already obtained from the government, Fuyah also conducts its own farm evaluation. This includes: 
  1. A general review of farmers’ concept of organic farming to ensure they clearly understand and follow organic farming regulations;
  2. Environmental assessment – evaluate the surrounding environment for potential contamination from neighboring areas;
  3. A water system and soil evaluation to determine if the water system and soil are not contaminated or have potential of being contaminated; and 
  4. A periodic review of farm records and plans to ensure that farmers keep an accurate log of their farming activities.  During the contract period, we make periodic visits to the farms to ensure that the above are followed.
Inspection of incoming products
We inspect all delivered products and make sure they are properly labeled with farm names, date/time of arrival and quantity.  An inspection number is then generated at this time. 
Storage management 
We make sure that the product labels include product origin, date/time of arrival, and product name. Then products are stored according to classifications in order to provide appropriate storage temperature.
Product management 
We make sure that each incoming product identification label matches with the product delivered. Once the identification label is cleared, a computerized work sheet is generated with the volume, weight of each package, total packages to be allocated to each retail outlet, assigned lot number, product origin, whether the product is organic or from a farm in the transitional period. With this information, a product label is ready for printing after sorting and processing. Signature of each production line supervisor is shown with time and date of work completed. Wastage are weighed and also recorded onto the work sheet. Products are then sorted according to weight, quality before being packaged. When the sorting/packing is finished, product labels are put onto each package.   
Product distribution 
Once products are packaged and ready for shipping to the retail outlet, they are consolidated into plastic containers with a color coded label according to the final destination.  
A person will use the working sheet to do one last check and make sure the appropriate products are shipped.  We still rely on manually writing and inputting into our database all information pertaining to status of the farm, farm visits, and contract management.    
Currently, the following information is already integrated into our existing database system.  
  1. Farmers’ supply plan –After we sign a contract with the farmer, we can review what the farmers can expect to grow during the season, what product he is currently planting, general delivery schedule, specific delivery for the coming week, and quantity.
  2. Incoming product inspection report – Incoming products labeled properly according to its origin, date/time delivered, delivered volume, and quantity. After this has been verified, an identification number is assigned to this incoming batch. This will help us know how much we have in storage and help us plan our sorting and packaging work. 
  3. Storage- with the information from the data processing center, we can easily know how much to send to each retail.  Using this, we can process and package and know the volume of our delivery.  Once this is done, the produce are sorted, packaged, weighed.  These are all recorded so that volume, date, farm origin, weight will be included in the package label.  
  4. Allocation – Once we have the incoming product inspection, our current system will allocate the quantity evenly to each retail outlet.  When fully integrated, we can input each retail outlet’s requests or special features and allocate products accordingly. 
  5. Documentation – a print out of all the products, date/time of delivery, quantities delivered etc. will be included in each delivery to each retail outlet. This will help us track our products more effectively.  
As mentioned earlier, our existing system is only partially integrated.  Our next step is to further expand the integrated database system to include the following:
Suppliers’ management
This information are all the information mentioned earlier in “Origin”-data kept by farmers showing  total land size, actual organic farm size, parcel lot number, land ownership, all activities related to planting , i.e. products planted past, present, future ; compliance/non-compliance information, organic farm authorization validity, etc.  This will help increase in tracking and monitoring all organic products received with background information on each supplier.
Contract farm management 
Detailed description of each farm contract. This document will include volume of contract, expected delivery schedule, which parcel of land was planted, contract compliance.   In addition, it will have a complete up- to- date status on farm - size, a history of crop planted, quality of products; current and past certification, inspection, and verification information, description of the farm’s environmental situation, water system, potential for contamination, farm records, and compliance to national organic farming regulations
An integrated database will help us plan our daily transportation requirement, i.e. number of trucks needed, truck routings, and on-time delivery.
Customer service
We will have the ability to better understand our customers’ needs, and thereby allocate the appropriate quantities or special product requests. This customer database will give us a profile of buying habits, preferences, and more importantly, track any problems that our retail customers may have with the products. 
Ultimately, we also want to further consolidate and centralize our business to simplify processing procedure as we expand.  By so doing, we hope it will become more efficient and cut costs further. 
National collection and distribution center
Currently we have three collection and distribution centers in Taiwan – North, Central and South.-each has its own separate contract, sorting, storage, allocation, and delivery aystem. Each also only services their own retail customers.  This has causedsome uneven allocation.  For example, carrots are mostly grown in central and southern Taiwan.  Thus if the Taipei region does not have enough supply, it would have to seek assistance from the other two regions to place orders from farmers in those regions.  However, farmers would have to find ways to deliver the products to the retail stores in Taipei, thus driving up their costs. 
We plan to establish a national collection center to avoid duplication of work currently performed by the three regional centers and minimize costs. All organic products will be collected and delivered here for storage, and sorting here. For example, carrots, potatoes, pumpkin, corn and winter melons can all be consolidated in the national center for sorting, packaging and storage.  During the initial period, some products which are small volume, which can be grown locally will continue to be processed at the local distribution center during the interim period.  There will be organic products which are in small quantities or size.  For example, cucumbers, and beans may still remain to be handled by the regional centers and need not be consolidated for the time being
The national collection and distribution center will be located in central Taiwan which will be closer to the farmers or suppliers.
Centralized allocation center
A centralized allocation center will also be established in Taipei, closer to our retail customers   All farm work plan, contract management, and information on production sales, and logistic will be centralized here.  All allocation and distribution will be consolidated here. In the near future, we hope to integrate a centralized purchasing system from this Center.  Once these information are consolidated here, there will be a better view of the quantity of all products collected or expected,  thus making  the entire process -all purchasing,  allocations, and distributions -more efficient and allow for better planning. 
Our objective, as mentioned earlier, is to strengthen and expand Taiwan’s organic farming industry.   Therefore, we hope that this centralized allocation center can also serve as a platform for other organic farms or trading companies like us who want to use it to expand their businesses.  We offer to share our centralized system to enable farmers and buyers to build and expand their network, produce quality products, and find prospective customers.  We want to share our experiences with others like us so that together, we can strengthen and expand Taiwan’s organic farm industry.  Together, we hope to return back to nature for healthier bodies and healthier minds. 

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