Supply chain management: the case of a UK baker preserving the identity of Canadian milling wheat

This paper examines bread wheat quality and its effect on vertical co‐ordination in the wheat supply chain. Wheat quality is defined by many different characteristics, which poses limitations on the effectiveness of industry grading schemes in meeting the quality needs of end‐users. Consequently, individual processors may have an incentive to segregate wheat based on their own quality specifications. The costs and benefits of wheat segregation are analysed using a simple economic model, and illustrated with a case study of supply chain management taken from the UK bread industry. Warburtons Ltd procures bread wheat varieties with specific intrinsic quality attributes from Canada using identity preserved supply contracts. The paper concludes that the benefits of wheat quality control will encourage millers and bakers to develop closer vertical linkages with wheat suppliers in the future.