Food Supply Chain Management - Thesis Proposal Example

Background

Supply chain management is the arrangement of upstream and downstream abilities of production network accomplices to convey better esteem than the end client at less cost to the inventory network all in all (Leeman 2010, p. 66). The process involves the management of the efficient and effective flow of goods and services in the supply chain stream, encompassing the movement and storage of an inventory of raw materials, work-in-progress as well as the finished goods from their point of origin to the final consumer. The process of supply chain management is aimed at designing, planning, controlling and monitoring the activities involved in the creation of utility in products and services. This enables the organization to establish a competitive infrastructure, measure performance, leveraging logistics and matching supply with demand.

It is important for organizations to adopt an effective supply chain management technique because this can be used as a competitive advantage in the global business world as characterized by dynamism. It is a modern approach which organizes the entire business process in a value chain of several companies. The strategic role of supply chains cannot be overemphasized along with the need to align supply chain strategy with overall organizational strategy (Coyle & Coyle 2009, p. 79). The agricultural sector and food consumers are important elements that are linked to food processing. The food supply chain unites three main sectors: the agricultural sector, the food processing industry and the distribution sectors (Bukeviciute et al. 2009, p. 4).

With the increasing importance of the supply chain management at the local and global level, food supply chain management offers one of the critical areas where more attention should be assigned. The food sector is a relatively sensitive area as compared to other sectors owing to the perishable nature of the items and the way that the consumption of the products directly affects the health of the final consumer. It is thus important that an effective supply chain management is used in order to ensure the maintenance of quality from the source to the final consumer. The food sector is witnessing rapid growth as well as significant structural transformation. Various players both in the private as well as the public sector are investing in the food sector with the aim of improving production, procurement, and distribution. This calls for the need of firms that operate in this sector to work on their effectiveness and efficiency so as to meet the customers’ changing preferences and demand for high quality food products, consistency, and safety standards in order to comply with the strict food laws and demands both in the home market as well as the foreign markets.

From the global perspective companies operating in the food, the sector is faced with various challenges inherent in the fact that, the food products are now sourced from across borders, bringing about the issue of food security in terms of quality. Product recalls quality issues, tougher regulations, new industry standards, rising costs they are all impacting food and beverage supply chains across the globe (Bowman 2015).This present challenges that can better be addressed through major changes in the supply chain management in the food sector in order to meet the needs of various users including feed companies, exporters, consumers, retailers and processors. Food supply chains operate in a dynamic, time-critical, and complex environment where the product integrity is vital. There must be a high level of guarantee that sustenance will be of a specific quality (Bourlakis & Weightman 2003, p. 2).

With globalization, food products have become abundant in supply, enhancing the availability of a variety of products. However, this has also brought about other challenges. Sourcing, packaging, pricing, transportation, and traceability have emerged to be sensitive issues in the whole supply chain, calling for an effective system in the supply chain management. Traceability is acknowledged as an essential element for guaranteeing food safety as well as quality which entails the reorganization of the whole supply chain. Seasonal produce supplies, creating a dependable distribution network, managing price fluctuations, and consumer choice, and keeping food fresh and affordable all challenge the industry every day. Huge quantities of food are thrown out across the country at each stage of the chain, adding to the cost and reducing the availability of fresh food (Grackin 2011, p. 1). Forward-looking companies are finding it increasingly important to incorporate supply chain management in their company’s overall objective as a competitive advantage over other peer companies.

Literature review

Globalization and the food supply chain

Food supply chain performance management is key to meeting the growing consumer demand for products that are safe, of high quality, sustainably produced, and of assured provenance (SGC 2013, p. 2). Globalization has brought about many capabilities especially on information accessibility across boundaries all over the world. This has led to the increase in the number of informed customers who demand the best products and service delivery. The fact that products from one end of the globe can be made available to consumers at the other end of the globe begs the question of how safe or sustainable the quality is after going through various processes from their source to destination. This offers a challenge to the food processors that are required to meet the high demands from different stakeholders. An effective supply chain management ensures that various stakeholders are brought on board to create a comprehensive network that will facilitate the provision of food products to the final consumer in a way that both the quality and safety of the products are maintained.

There has been a shift in the international food supply chains from independent systems to interconnected systems characterized by complex relationships. Globalization has resulted in an increasing trade in the food sector which has necessitated changes in sourcing, production as well as marketing of the food products. As a result, new risks have emerged together with more potential for food-borne disease outbreaks. Due to better accessibility to information, consumers are more aware of potential food hazards and are greatly concerned with the quality as well as the safety of food products. Crises such as dioxin crisis, BSE crisis and Swine fever just to mention but a few, have increased these concerns (Van der Vorst et al. 2007, p. 3). Countries and regions worldwide are now setting up regulations and legislations that are meant to enhance the safety and quality of food products.

Businesses are also increasingly becoming more conscious of food safety, nutritional benefits, and healthfulness among other attributes, incorporating them into their business strategy. They are also forming networks with other businesses aimed at ensuring high quality and safety of food products. All these changes have necessitated the changing roles in the stakeholders in the supply chain, calling for the need to adopt new and more strategic forms of the supply chain management. A number of recent trends that include globalization, urbanization, and agro-industrialization, are placing increasing demands on the organization of agrifood chains and networks. Food and agribusiness supply chains and networks which tended to be primarily characterized by autonomy and independence of actors are now rapidly moving towards globally interconnected systems with a large variety of complex relationships (Van der Vorst et al. 2007, p. 3).

Challenges in the food supply chain

Supply chain management is a challenging process owing to the complex nature of the supply chains as a result of the growing number of the key players. For example, in the US, more than 2.1 million farmers and producers supply over 26000 processors and manufacturers who in turn sell to 33000 wholesalers and distributors. The wholesalers and distributors then supply more than 580 000 food service vendors and 210 000 retailers. This sums to about 3 million partners through the whole inventory network and its quality is evaluated to create $ 1 trillion in US purchaser deals every year and a further $ 115 billion in exports (SGC 2013, p. 3). Due to the complex nature of the supply chain, there is a need for comprehensive supply chain management that will incorporate the farmers, middlemen, manufacturers, distributors and the final consumers to ensure that bottlenecks in the supply chain are eliminated. Gone are the days when companies acted independently in the sourcing and distribution of food products to the final consumer.

There is a symbiotic relationship among the key players in the supply chain which ensures the efficiency and effectiveness in the supply chain logistics in the food sector. Managing the system effectively will result in a competitive advantage that will enhance sustainability and growth for the stakeholders amidst the changing business environment. Food supply chains are becoming increasingly complex (Dani 2016, p. 9). For instance, fish got in the North Sea or off the western bank of the United States is ice-covered and delivered to China where it is defrosted, filleted, stuffed and refrozen before achieving retail retires in Europe and the United States. The main explanation behind the production network being this confused is to save money on working expenses. However, this additionally brings more dangers into the chain (Dani 2016, p. 9). Such risks can be witnessed in several scandals worldwide that involve the safety of the food products after going through such long and complicated distribution channels. Just to mention but a few, in April 2004, several babies died in Fuyang, Anhui-China as a result of malnourishment due to the ingestion of fake powdered milk.

In Europe, the horse meat scandal rocked the world after discoveries were made that traces of horsemeat were found in burgers in Ireland and some beef products indicating 100% presence of horse meat resulting in a recall of 10 million burgers. The horsemeat scandal is an issue of sustenance well-being, not on the grounds that individuals are becoming ill but instead in light of the fact that individuals are expecting one item and getting another. It is an issue of sustenance quality too, and a capable case that the worldwide natural way of life is a confounded and untidy undertaking (Huffpost business 2013). High energy prices, poor harvests, rising demands for growing populations, use of biofuels and export bans have pushed up prices. The food supply chains aiming at maximizing the ‘value creation’ are heavily reliant on imports and a multi-tiered supply chain (Deep & Dani 2009, p. 6). Reliance on imports to fill the deficit gap between the supply and demand brings into question the traceability issue which relates to food safety as well as its quality. Customers, as well as the regulatory bodies, need assurance that the food products meet their safety and quality standard. An effective supply chain management will ensure that such standards can be successfully met.

Demand for organic nourishment is developing at a much speedier rate than at any other time, yet not without various operational difficulties. Agriculturists, retailers, and nourishment processor producers are along these lines hoping to streamline their supply chains while tending perpetually to extend market prerequisites (Cognizant 2014, p. 1). Suppliers, manufacturers as well as distributors need to work together in a systematic organization of the supply chain in order to meet the ever increasing demand from the consumers. This means that an effective management of the system will ensure both efficiency and effectiveness in sourcing and distribution of the food products for more competitive advantages. Another issue in the food supply chain arises when the pressure from competition as well as the increasing demand leads to the excessive use of the scarce available resources as well as production practices that negatively impacts on the environment (Burritt 2011, p. 45-47).

Environmental degradation through global warming and land and water pollution has become a sensitive issue for governments, activists as well as the larger society. While companies undertake production, they also are required to conserve the environment within which they operate. An effective management of the supply chain from the source to the destination will ensure the participation of all the stakeholders to minimize environmental impact. Companies are experiencing growing pressure from various stakeholders such as governmental agencies, communities, workers, advocacy groups and non-governmental organizations and some customer segments to deal with social and environmental issues related to their supply chains (Yakovieva et al. 2009, p. 3).

In the recent past, there has been a general shift from the traditional supply chain management to a more strategic form owing to pressures exerted on the food processing companies regarding their transparency in the sourcing, quality as well as the safety of the food products. The food and beverage sector of the economy have confronted expanding pressure from purchasers to give straightforwardness on the sources and operations identified with their items. The successful management of the supply chain is all encompassing such that it stretches from the source to the destination of the food products and involves a well-articulated procurement system that is responsible and observes ethical practices. Responsible and ethical procurement is especially challenging because agricultural commodities rely on low-cost labor inputs and environmentally damaging technology and practices in order to produce high volumes (Lin 2007, p. 3).

A successful food supply chain management needs to be flexible to the changing internal and external environment in order to keep up with the current pace. It should be considered from a more strategic point of view by companies, unlike the traditional independent approach. Alternative food supply chains represent a very marginal supply chain model compared to retail-driven and food industry-driven conventional supply chains. Hence, in the current food system, food processing companies, manufacturers and retailers are the key players for partnering consumers in the building of resilient food supply chains (Paloviita & Jarvela 2015, p. 78-83).

Current trends in the food sector

There is a general expansion in the demand and supply of food all over the world. The food sector in India is balanced for quick development and auxiliary change. The division is as of now seeing generous private and open venture with the target of enhancing procurement, production, distribution, processing, and retailing efficiency (Iim Ahmedabad 2013, p. 1). Growth in the food sector has resulted in more challenges on how the supply chain can be structured to adapt to the changes so as to meet the current requirements of customers and other regulatory bodies. As a result, collaboration among the suppliers, manufacturers, and distributors to form a comprehensive system in the supply chain guarantees that there is a systematic flow which will guarantee safety and quality of food products from their source to their destination. The focus then goes to how the stakeholder can effectively manage the system through the supply chain management.

The other major issue concerning the supply chain management is food security and the ability to meet the needs of the world populations. Different nations both in the developing as well as established economies have engaged in different initiatives to ensure food security. In the developed worlds, the initiative is focused towards the utilization of the available local produce as well the creation of local supply chain capabilities to enhance regional economic development. In the developing nations, the focus is directed towards empowering the farmer through building their capabilities in the management of the supply chain.

Collaboration is a prerequisite for an effective supply chain, and companies need to incorporate the supply chain management in their organization strategies in order to stay abreast with the changing external business environment. The operations of the food store network are likewise influenced by various outer components, for example, control, open strategy and the macroeconomic environment, which affect cost structures and value advancements crosswise over part states (Bukeviciute et al. 2009, p. 5).

Companies can no longer act independently or irresponsibly in their business operations as various stakeholders want to ensure their compliance. They have to operate within the required standards in order to remain sustainable and continue their operations. It is impossible to meet such stringent standards independently. It becomes the responsibility of everybody involved to work together and realize a successful food supply chain management (Gebresenbet & Bosona 2012, p. 1-2). Due to changes that have been witnessed in the food value chain, the traditional practices have automatically become obsolete and thus inadequate to deal with the current pressures that are being imposed on different areas in the quest to maintain the safety and quality of food products.

Companies are required to manage a more complex system of the supply chain due to the integration of various key players into the system. How they manage this system through a successful food supply chain management will make the difference between their success or failure. The current trend in food value chain is characterized by three overriding features: a greater concentration of farms, food industries, and wholesalers into smaller number with large sizes, the evolution of integrated supply chains linking producers and other stakeholders and ever increasing consumers demand for food quality and safety (Gebresenbet & Bosona 2012, p. 1-2).

Food supplies chain and economic growth

The world has witnessed trade liberalization resulting to the free flow of factors of production including capital and labor. Consequently, this has impacted positively on growth leading to the expansion of business sectors and the food sector has not been left behind. The UK food and grocery supply chain employ more than 3.2 million people, representing 16% of the total workforce in the U.K. It is responsible for over £125 billion of consumer expenditure and contributes to over 8 % of GDP. The UK food and grocery market are one of the most competitive and customer focused in the world. Strong competition, coupled with a passion for delighting the consumer, inevitably leads to intense pressure on all parts of the supply chain to perform more efficiently, drive out the unnecessary cost, add value, innovate and offer competitive prices (Bourlakis & Weightman 2003, p. 9).

The food sector plays a very important role as a significant contributor to regional as well as the global economy. To ensure that its potential for employment creation and general economic growth is fully tapped, it is necessary that effective food supply chain management is put in place. Food chain logistics is a critical part of logistics framework in general. The sustenance segment assumes a huge part in the economy being one of the fundamental supporters to the GNP of numerous nations, especially in the creating nations. As per the European Commission (2010), the food and beverage industry is one of Europe's most essential and mechanical element divisions comprising of more than 300,000 organizations which give employments to more than 4 million individuals (Gebresenbet & Bosona 2012, p. 1).

India is a large producer as well as consumer of rice. Late studies have demonstrated that there has been a stoppage in the growth of rice production in the country as a result of supply chain and logistics issues. This has called for more focus on how effective systems of supply chain management can be adopted so as to enhance sustainability in the production and distribution of rice. Rice is the fundamental grain expended as nourishment in India, which is found in verging on each Indian kitchen. It is the most well-known grain and the most well-known sustenance in India. Not just is India a major customer of rice, however, it is additionally the second biggest maker of rice on the planet after China. India additionally holds the biggest agrarian area for paddy generation on the planet (Sharma et al. 2013, p. 1).

Objectives

To determine the current practices in the food supply chain management, to assess the quality assurance practices in the food supply chain management, to assess customer satisfaction level in the current food supply chain management and to assess the level of compliance in the current food supply chain management.

Methodologies

Research design

As per Kerlinger, Research design is the arrangement, structure, and system of examination considered to get answers to research addresses and to control difference (Sumathi & Saravanavel 2003, p. 85). The descriptive survey will be used in this research as it is the only method through which opinions, views, attitudes and suggestions for improvement can be successfully gathered. The questionnaires shall be administered through face to face guided interviews to assist the respondents in understanding the questions before answering them. Notwithstanding, the drawbacks of this system is that the respondents may not give their full views as they are limited to choosing only among the alternative answers provided to them. The theory of constraints (TOC) shall be useful in analyzing the weak links in the supply chain which affect the effectiveness of the food supply chain management. This will give an insight as to the reasons for failures in the entire system.

Data collection

The data shall be collected using structured questionnaires which will be designed in a Likert-scale format. The questionnaire will be divided into two major parts. The first part will facilitate the collection of general information from the respondents while the second part shall be used to gather information on the actual research. The model to be used in the research is the new supply chain model. Jeff Trimmer explained the new supply chain model in terms of three principles as follows: first, the main body that places cash into a supply network is the end client. Second, the only solution that is stable over a long time is where every element of the supply chain from raw materials to the end customer, profits from the business. Third, supply chain management is about economic value added and content of a product/service (Handfield 2002).