It is to briefly introduces the academic paper "Mongolia's Meat Supply Chain Management: Benchmarking with Australian Meat Supply Chain". It outlines Australian and Mongolian meat supply chain analysis and stages comparison between meat supply chain of these 2 countries.

1. Mongolia’s meat
supply chain
analysis:
Benchmarking with
Australian meat
supply chain
School of Management
and Economics
Student name: Khulan Altangerel
Supervisor: Feng Yi, Associate
professor

2. CONTENTS
• Outline
• Sector background
• Statement of the problem
• Purpose
• Objectives
• Methodology
• Cold chain
• Australian meat supply chain analysis
• Mongolia’s meat supply chain analysis
• A case study of meat wholesaling: Ulaanbaatar city’s “Huchit shonhor” food
market
• Integrity of the cold chain in Mongolia's meat supply chain
• Main factors of meat price
• Stage comparison
• Recommendations for Mongolia's meat supply chain improvement
• Conclusion

3. OUTLINE
• Introduction
• Literature review
• Australian meat supply chain analysis
Chapter 1
Chapter 2
Chapter 3
Chapter 6
• Mongolia’s meat supply chain analysisChapter 4
• Stages comparison and recommendationsChapter 5
• Conclusion

4. SECTOR BACKGROUND
• Mongolia is one of the leading countries in terms of the livestock number
and meat consumption per capita and home to 45 million head of livestock.
The meat industry is considered to be one of the most potential sectors for
future development. Despite the growth of livestock, Mongolia’s meat
industry faces many problems such as meat price increase, meat
contamination and improper meat processing during last several years.
Source: National Statistical Office of Mongolia
Table: Average price of beef

5. PROBLEMS IN MONGOLIAN MEAT INDUSTRY
Reduce
Cost
Improve
Product
Quality
Not optimized
Supply Chain
Poor
quality
High
price
Improper
processing
These problems indicate that Mongolia’s meat supply chain is not optimized
and reminding effective management must take into account in the supply
chain, to reduce cost and to improve service level.

6. PURPOSE
– To ANALYZE MONGOLIAN MEAT SUPPLY CHAIN
to determine what factors and which stage of the
supply chain lead to price increase and quality
decline of the end-consumer product.
– To GIVE RECOMMENDATIONS on where
improvements can be made in the Mongolia’s
meat supply chain based on the analysis of
Australian meat supply chain.

7. OBJECTIVES
• To investigate cold chain management
• To identify the impact of the meat industry in
Mongolian economy.
• To examine primary factors which affect high meat
price.
• To identify where improvements can be made in
the supply chain.
• To investigate Australian beef supply chain and
find out the factors that may have favorable
impacts on the improvement of Mongolia’s meat
supply chain.

8. METHODOLOGY
Cold chain
characteris
-tics
Bench
marking
Supply
chain
analysis

9. METHODOLOGY
Analyzing
Australian meat
supply chain
Analyzing
Mongolia’s meat
supply chain
Proposing
supply chain
framework
Making a
stage
comparison
Performance
Proposing
supply chain
framework
Recommendations

10. Meat &
marine
products
Fruits &
vegetables
Fish & Sea
food
Dairy
products
Beverages
COLD CHAIN PRODUCTS: FOOD SECTOR
• If cold chain control is violated at any point, meat safety, quality and
hygiene are compromised.
• Controlling the temperature of meat products from the processing
stage has been proven to not only help control microbial growth, but
also assist in creating a quality meat product.

11. COLD CHAIN
• A cold chain is a temperature-controlled supply chain that
provides a series of facilities for maintaining ideal storage
conditions for perishables from the point of origin to the point
of consumption.
Major Industries: Food, Pharmaceutical
• A well-organized cold chain reduces spoilage, retains the quality
of the products and guarantees a cost efficient delivery to the
consumer given adequate attention for customer service.
• Feature of cold chain is every stage in the chain should comply
with cold chain standards which extend shelf life and ensure
product quality and safety.
SUPPLY CHAIN
TEMPERATURE
CONTROL
(REFRIGERATION)
COLD CHAIN

12. AUSTRALIAN MEAT SUPPLY
CHAIN ANALYSIS

13. Australia is one of the world’s largest producers of
commercial livestock and red meat. Beef cattle and
sheep are the dominant industries. Also they are
major agricultural commodities and represent a
significant segment of the economy.
The Australian meat industry is affected by both domestic and international
demand for its products. So the market is characterized by a range of domestic
and export consumer types at the point of final consumption and through the
supply chain.
AUSTRALIAN MEAT INDUSTRY

14. Supply
Chain
Participants
Regulatory
Groups
Australian meat industry has a diverse range of
stakeholders which can be broadly categorized into two
groups.
STAKEHOLDERS OF AUSTRALIAN MEAT SUPPLY CHAIN

15. AUSTRALIAN MEAT SUPPLY CHAIN
• Livestock supply chain is the most extensive in Australia in terms of
distance and geographical spread.
• The meat supply chain has seven key functional stages, made up of:
Breeding
Fattening
Feedlotting
Marketing
Transportation
Processing
Retailing
1
2
4
5
6
7
3

16. AUSTRALIAN MEAT SUPPLY CHAIN FRAMEWORK

17. AUSTRALIAN MEAT SUPPLY CHAIN FRAMEWORK

18. QUALITY ASSURANCE (QA)
The QA systems developed by the Australian meat industry that
cover all the links in the supply chains, from paddock to fork.
• Livestock Production
Assurance
• LPA Quality Assurance
National Feedlot
Accreditation Scheme
TruckCare
• Australian Government
Legislation and Standards
• AQIS health certificate
• Australian Government
Halal Slaughter Program
• Micro-organism monitoring
• MLA food safety program
• National Residue Survey
National Saleyard
Quality Assurance
Program
• National Livestock
Identification System
• AUS-MEAT
QA on farms QA on feedlots
QA on
transportation
QA on
saleyards
QA on
processing
QA on overall
supply chain

19. INTEGRITY OF THE COLD CHAIN
Quality
Assurance
Systems
Integrity of
the Cold
Chain
Integrity of the cold chain is critical for both the domestic and the export market.
Quality assurance systems ensure integrity of the cold chain in Australian meat
supply chain. However cold chain is complicated to manage the product arrives at
market in prime condition.

20. MONGOLIA’S MEAT SUPPLY CHAIN ANALYSIS
MONGOLIAN LIVESTOCK INDUSTRY
• Livestock industry was the main foundation of Mongolia’s
economy and it still plays an important role in economy,
employment and export revenues.

21. CONTINUED…
80 percent (1.35 million
hectares) of total land is
suitable for livestock
herding.
Main livestock production
comes from meat, milk
and cashmere products
which are included in the
country’s strategic
products.
80%

22. MONGOLIA’S MEAT INDUSTRY
Meat industry plays an important role in the food sector and is
considered to be one of the most potential sectors for future
development. Mongolia annually produces 200-250 thousand tons
of meat from 8.2 million livestocks and self-sufficient for its
domestic meat consumption (MoIA, 2013).
2008 2009 2010 2011 2012 2013 Performance
2013/2012
Meat production 221.3 264.4 204.4 208 220.4 238.2 107.40%
Meat processed
through plants
12 21.4 14.7 15.6 16.4 22.1 134.70%
Source: MoIA, 2013
Table 8 : Recent meat production (thousand tons)

23. MEAT EXPORT
Mongolia’s contribution to world meat exports is very small. Meat
export occupies very small portion in meat production. Actual
meat exports during the last six years averaged around 10.3-3
thousand tons.
Meat products are mainly exported to Russia (horse meat, beef),
Arab countries: Turkey, Jordan … (mutton, lamb), China (mutton,
goat) and Japan (horse meat).
Meat production and export, in thousand tons, (Source: MoIA, 2013)

24. PRODUCT CHARACTERISTICS
Five types of livestock are raised in Mongolia:
sheep, goats, cattle, horses, and camels. Sheep
and goats comprise the majority of livestock
and respectively accounted for 44.5% and
42.6% of the total number of livestock in 2013.
Mongolian livestocks are organically produced related to the traditional pastoral
livestock breeding. All livestocks fed with organic grass while they graze on native
pasture and that can be a special characteristic of Mongolian livestocks.
The structure comparison of Mongolian livestock
In 1990 In 2013

25. END CONSUMER DEMAND – MEAT CONSUMPTION
• Meat consumption in urban areas and rural areas are different.
But the difference is getting smaller in recent years. Mongolians
mainly consume beef and mutton, accounting for around 45% and
35% of the total quantity of meat respectively, while horse, goat,
and camel meats occupy small portion in consumption.
Province name
Total meat
consumption
thousand tn
Percentage of meat
consumption %
Total meat
consumption mn.
₮
Percentage of
meat
consumption
in GDP
Ulaanbaatar 97,0 40,1% 378 252,10 12,7%
Selenge 12,6 5,2% 37 800,00 19,4%
Uvurkhangai* 11,5 4,7% 26 353,58 24,1%
Khuvsgul 10,4 4,3% 29 094,24 20,5%
Arkhangai* 9,8 4,0% 20 502,72 16,7%
Khentii 8,3 3,4% 18 009,00 22,4%
Table 14 : Annual meat consumption by province
Source: NSO and MOIA, end of 2008

26. DISTRIBUTION OF SUPPLY
Although livestock is relatively uniformly distributed in
comparison with the population size of each region, the
forests and mountainous areas of northern and eastern
Mongolia are most populous in terms of livestock.
Overgrazing is becoming problematic in areas close to major
markets.

27. INCONSISTENCY OF DEMAND AND SUPPLY
Inconsistency of demand and supply led to threefold increase in
meat price between 2001 and 2009 (Mercy-Corps, 2010).
MAIN FACTORS:
1) Dependence of livestock production on weather and seasonal
conditions
Dependence of pastoral
livestock breeding on
weather conditions
causes the supply
shortage because of the
decrease of livestock
number during adverse
weather.

28. 2) Meat supply has the characteristic of seasonal fluctuation.
Annual supply, Source: Mercy Corps, 2010
INCONSISTENCY OF DEMAND AND SUPPLY
Shortage
Surplus
There is a supply shortage between January and June and
supply is exceeded between July and December. This is because
herders tend to sell livestock in the months between July and
December when livestocks have the heaviest weight.

29. Supply
Chain
Participants
Regulatory
Groups
STAKEHOLDERS OF MONGOLIA’S MEAT SUPPLY CHAIN
Herder households
Agents
Intermediaries
Slaughterhouses
Meat Processors
Wholesalers
Retailers
Mongolian Meat Association (MMA)
Ministry of Industry and Agriculture (MoIA)
State Specialized Inspection Agency (SSIA)
Mongolian National Agency for
Standardization and Metrology (MNASM)

30. SUPPLY CHAIN STAGES
Livestock
production
Marketing Processing Distribution Retailing

31. MONGOLIA’S MEAT SUPPLY CHAIN FRAMEWORK
MARKETING
household

32. MONGOLIA’S MEAT SUPPLY CHAIN FRAMEWORK
MARKETING
household

33. A CASE STUDY OF MEAT WHOLESALING: ULAANBAATAR
CITY’S “HUCHIT SHONHOR” FOOD MARKET
In the past, Huchit Shonhor food market was just one of many small
markets in the city, but with the movement of fowl places out of the city,
the Huchit Shonhor market began to carry out "the wholesale market"
functions. The majority of the meat for Ulaanbaatar city consumption is
shipped to the Huchit Shonhor food market from fowl places and then
retailers and merchants of other food markets buy the meat from the
Huchit Shonhor food market and then sell to consumers.
Wholesaler
from
countryside
Wholesaler
inside the
market
Meat
salesperson
inside the market
Retailers
Food
markets
Others
Wholesalers
Increases price
Increases price
Increase price
Increase price
Increase price

34. CONTINUED…
Wholesaler from
countryside
Wholesaler
inside the market
Meat Salesperson
inside the market
Mutton 1300 - 2200 1550 - 2200 2200 - 2500
Beef 1600 - 2000 1400 - 2200 2000 - 2400
Horse meat 500 - 1000 700 - 1000 1100 - 1300
Goat meat 1100 - 1600 1400 - 1700 1800 - 2000
Camel meat 1100 - 1200 1200 - 1450 1750 - 2000
Meat transaction participants in this market have a strong influence in
meat price formation of Ulaanbaatar city. At each stage of the meat sales
transaction, meat price become more expensive than previous stage and this
transaction with multi-participants is the main reason of high meat price in
Ulaanbaatar city.
Source: Changes and Actual State of Mongolian Meat Market and Distribution System
A Case Study of Ulaanbaatar City’s “Khuchit Shonhor” Food Market, 2006
Table: Meat prices by stages of sale in Huchit Shonhor food market, tg/per kg

35. MAIN FACTORS OF MEAT PRICE INCREASE
1. Strong Influence of Wholesale Function of the
supply chain.
2. Inconsistency of Demand and Supply
– Adverse weather conditions (dzud and drought)
– Supply fluctuation

36. Stage comparison and
Recommendations for Mongolia’s
meat supply chain improvement

37. STAGE COMPARISON OF AUSTRALIAN AND MONGOLIA’S
MEAT SUPPLY CHAIN - LIVESTOCK PRODUCTION
AUSTRALIA MONGOLIA
Responsiveness
to harsh
weather
conditions
Australian meat industry has developed necessary
capacity to handle such uncertainties which are
caused by adverse weather conditions.
Mongolia’s cannot respond
significantly to changes in weather
conditions.
Rearing
method
The use of feedlots has developed. The use of
feedlot removed most of the seasonality in the
weight gain of livestock by providing a year-round
supply of feed, and the extremes in the variability
of growth rate of livestocks when they graze on
seasonal grasses. In the southern part, more
intensive farms are mainly located. Livestock graze
on improved pastures that have replaced the less
nutritious native grasses there.
The usual pastoral livestock
breeding method used in
Mongolia involves the extensive
grazing of various types of
livestock at one herder household
site (livestock farming).
Livestock
producer
Private companies and farmers produce most of
the commercial livestocks. They own stations
where the livestock graze on vast land. Some of
them are vertically integrated and operated as a
meat processor and a distributer of end-products.
Producer Alliances are well developed.
Almost all (97%) livestocks are
privately owned by herder
households. This is the result of
the large-scale privatization
process that began in the early
1990s, almost all state-owned

38. STAGE COMPARISON - MARKETING
AUSTRALIA MONGOLIA
Selling
Systems
Various livestock selling systems are
used in Australian meat supply chain
including saleyard auctions, direct sale,
auction plus, property auctions,
forward contract, over the hooks
marketing and niche markets to cater
for different needs and markets. Each
of selling systems has their own
advantages and disadvantages and it is
possible for the processors to choose a
convenient method to source livestock
depending on targeted market and a
season.
In Mongolia, livestock is mainly
sold to a merchant or an agent.
A buyer may visits the property,
inspect the livestock, and
negotiate a price. Other selling
systems are not implemented
in the meat supply chain. Meat
processing plants are mainly
source through their agents
and other processors source
through an intermediaries. This
type of marketing method
increases the role and influence
of intermediaries in the supply
chain.

39. STAGE COMPARISON - PROCESSING
AUSTRALIA MONGOLIA
Regulations There are around 240 to 300 slaughterhouses
and their operations are accredited by QA
systems. The Australian processing industry has
also introduced a number of measures to
enhance meat quality.
Portion of the meat which are being
processed under regulations are as
low as 13%. It shows that the
control of meat quality and standard
fulfillment of processing is loosely
defined.
Processing
Technology
Australian meat processors produce value-
added meat products by advanced technologies
and techniques while supporting the high
quality. Meat is packaged in a variety of ways for
ease of handling and transportation for both
export and domestic markets.
The portion of value-added meat
products is small due to the lack of
sophisticated processing technology
in small slaughterhouses.
Vertical
Integration
Most of the large processors operate a
significant vertically integrated supply chain
from cattle breeding to distribution and occupy
majority of the market.
Few of large processors operate
vertically integrated supply chain
from marketing to distribution.
Responsiveness
to the Change of
Consumer Taste
High proportions of Australians are eating less
red meat and are looking to lower the fat levels
in the diet. The industry has responded by
producing meat cuts with lower fat level.
Large cuts are still dominated in
Mongolia’s meat industry.

40. Australia Mongolia
Regulations The transport requirements for
livestock are complex and
governed by a number of
restrictions and guidelines in
Australia. Livestocks must be
transported live on specialized
livestock vehicles between farm-
based and intermediate
movements and once slaughtered
the product must be transported
between 4ºC and -22ºC by
refrigerated truck depending on
the end marketplace and whether
the product is chilled or frozen to
comply with cold chain rule.
But in Mongolia, livestock is
transported through the
functional stages by
unspecialized truck. Also meat
products from small
slaughterhouses are
distributed to food markets
and retailers by unrefrigerated
trucks. This stage affects badly
to product quality due to the
transportation which is not
abided by any specific cold
chain rules relating to loading,
unloading and transporting
livestock in Mongolia.
STAGE COMPARISON - TRANSPORTATION

41. STAGE COMPARISON - RETAILING AND WHOLESALING
AUSTRALIA MONGOLIA
Regulations In Australia there are a number of
initiatives to enhance existing
regulations to ensure the quality
of meat is maintained until the
final consumers. Domestic meat
retailers are developing a quality
assurance program covering areas
such as product handling,
cleaning, display temperature and
even business management.
Meat products are mainly sold in food
markets under inappropriate
temperature which is not in compliance
with cold chain standard. Almost all
meat products which are sold in food
markets are contaminated due to its
polluted environment and operation
which is not regulated by standards of
product handling, cleaning, and display
temperature.
Influence of
Wholesalers
Increasing vertical integration of
supply chain reduced a role and
influence of a separate wholesale
function.
In Mongolia, wholesaler has a very
strong influence in this stage. Meat
products slaughtered in
slaughterhouses are mainly supplied to
food markets by wholesalers. Many
intermediaries participate in retailing
and wholesaling stage. It is one of the
main reason of high meat price.

42. PERFORMANCE
EFFECTIVENESS
QA
systems
Intensive
Livestock
Operations
Effective
Marketing
Systems
Sophisticated
Processing
Technology
Flexibility
Respon-
siveness
Supply
Chain
Integration
Australia Mongolia
Livestock
production
Marketing
Transportation
Processing
Retailing

43. PERFORMANCE
• The effectiveness of the cold chain in maintaining the safety, durability and
quality of foods relies on controlling product temperature through each and
every step in the cold chain.
• The analysis of supply chain structure and stage comparison between
Australian and Mongolia’s meat supply chain clarifies that Australian meat
supply chain performance and effectiveness are better than Mongolia’s. It is
attributable to the well-established QA systems, which support cold chain
control that cover every stage in the Australian meat supply chain. Also the
effectiveness and well formulated management of Australian meat supply
chain is attributable to some other factors such as supply chain integration,
responsiveness and flexibility to change of demand and weather conditions,
sophisticated processing technology, effective marketing systems, intensive
livestock operations and so on.
• On the contrary, cold chain control is violated at each stage in Mongolia’s
meat supply chain. Meat safety, quality and hygiene are compromised due
to the poor temperature control in the supply chain.

44. RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT
LIVESTOCK PRODUCTION
• To develop necessary capacity to handle such
uncertainties which are caused by adverse weather
conditions.
• To develop livestock producer vertical and horizontal
alliances to provide producers with leverage to get
into the commercial world by combining to deal with
a significant volume of product.
• To develop the use of feedlot to remove seasonality in
the weight gain of livestock, and the extremes in the
variability of growth rate of livestocks when they
graze on seasonal grasses.

45. RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT
LIVESTOCK PRODUCTION
• To develop necessary capacity to handle such
uncertainties which are caused by adverse weather
conditions.
• To develop livestock producer vertical and horizontal
alliances to provide producers with leverage to get
into the commercial world by combining to deal with
a significant volume of product.
• To develop the use of feedlot to remove seasonality in
the weight gain of livestock, and the extremes in the
variability of growth rate of livestocks when they
graze on seasonal grasses.

46. RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT
MARKETING
• To develop various selling systems to distribute
livestock efficiently. Implementing various selling
systems can be efficient. It will give opportunity for
processors to source livestock through a variety of
channels. Generally, Australia's mechanism to
distribute livestock between different stages and
vertical integration of the supply chains can offer
valuable benchmarks for the Mongolia’s meat
industry.

47. RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT CONTINUED…
• To enhance the audit of the regulatory bodies on
slaughterhouses operations and to make consolidation
of small slaughterhouses.
• To be innovative when respond to consumer taste
change.
• To improve processing technology to produce value-
added products while supporting high quality.
• To attract export market by its’ organic products.
MEAT PROCESSING

48. RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT CONTINUED…
• Livestock should be transported live on specialized
livestock vehicles between movements to ensure the
welfare of the animal and work so that the livestocks do
not become stressed or hurt. Once slaughtered the it
must be transported by refrigerated truck depending on
the end marketplace and whether the product is chilled
or frozen to comply with cold chain rule.
TRANSPORTATION

49. l
RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT CONTINUED…
RETAILING AND WHOLESALING
• To improve the environment and product handling operations
of food markets.
• To increase supply chain vertical integration of meat processors
to reduce wholesale function in the supply chain. Vertical
integration of Australian meat supply chains can be a good
lesson to reduce the role and influence of a separate wholesale
function.

50. l
RECOMMENDATIONS FOR MONGOLIA’S MEAT SUPPLY
CHAIN IMPROVEMENT CONTINUED…
WHOLE SUPPLY CHAIN
• Developing quality assurance systems which cover all stages of
the supply chain is necessary in Mongolia’s meat industry.
• Forming an alliance with the Australian meat industry can be
another useful approach to quickly learn how meat supply
chains are developed and managed in Australia. In this respect,
industry exchange visits may be arranged through peak bodies
in both countries for senior industry personnel. On the other
hand, technical training tours may be organized for various
other industry personnel to learn from each other various
techniques related to meat products such as preparation,
processing, and specifications.

51. Further Research
The recommendations for the future
development of Mongolia’s meat supply chain
can be improved by basis of economic
calculations and feasibilities.

52. CONCLUSION
• Success of the Australian meat industry is attributable to
the development and effective management of its meat
supply chains. In this regard, Mongolia’s meat industry can
benefit from learning how Australia has developed and
managed its meat supply chains.
• The paper accomplished two main aims.
• It can be helpful to any stakeholders of Mongolia’s meat
supply chain since it can give them clear understanding
about the supply chain.
• Analyses included in the paper might be a valuable source
of information for scholars who intend to conduct
research in this area.

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