Operations and Information Management Group
[Working Title] Supply chain integration in the UK bio-energy industry.
The aim of this study is to focus on CHP biomass for the production of power to supply the national grid in the UK and to investigate the extent of supply chain integration.
Biomass, for the purpose of the study, is defined as timber, waste timber from saw mill residue, agricultural and domestic waste.
This study takes the view that the bio-energy industry is new and novel to the UK and by its relative infancy is characterised by small CHP companies that generate less than 30Mw of power to the national grid. This may not present an accurate picture of the current scenario of bio-energy production and thus their supply chain organisation. Evidence from the pilot research suggests utility companies are the main drivers of bio-energy and therefore such small bio-energy companies do not have to compete but rather form integrated partnerships with a large energy supplier such as utility companies. The need for partnerships is more or less mandatory for small companies but there are differences emerging between partnerships formed at one level with large-scale production facilities, which contrast with small-scale bioenergy companies. Current research findings show small bio-energy supply chains in the UK are characterised by downstream operations and processes whereas the large scale bio-energy company supply chains concentrate on upstream integration. This may have a direct bearing on risk reduction due to the length of term in the procurement policies with particular suppliers. On the one hand, large CHP plants will secure long-term agreements with fuel suppliers of up to 25 years whereas small CHP companies have negotiated much shorter term agreements and are also highly dependent upon a utility provider to purchase power supply from them.
One of the areas that this research will focus on is what type of agreements have any real benefit and reduce supply chain risk? It goes without saying that forming strategic partnerships with fuel suppliers, logistics and distribution providers will help provide utility providers ensure supply chain control, but in the case of smaller CHP production facilities fuel and energy consumption by supplementing their total energy use with bio-energy. Therefore, it is this form of integration (piggy backing) on other organisations to supplement fuel and energy provision that is worthy of study. This study focuses on one main research question, which is to investigate the extent of supply chain integration in the UK bio-energy industry. In relation to this question a further sub-question will be addressed as to what are the factors that optimise bio-energy supply chains?
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- March 2007 - Cumbrian Procurement Initiative (Cumbria County Council)
- January 2006 - Evaluation of Productivity and Manufacturing Activities in the North East (ONE North East & ERS)
- March 2006 - Midterm Review of Producers for the 'Distinctly Cumbrian' Programme (Cumbria Rural Enterprise Agency)
- December 2005 - Views on the Future of Business Support to Rural Enterprises in Cumbria (Cumbria Rural Enterprise Agency)