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A conceptual framework for supply chain collaboration: empirical evidence from the agri-food industry
A. Matopoulos, M. Vlachopoulou, V. Manthou, B. Manos,
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To cite this document:
A. Matopoulos, M. Vlachopoulou, V. Manthou, B. Manos, (2007) "A conceptual framework for supply chain collaboration:
empirical evidence from the agrifood industry", Supply Chain Management: An International Journal, Vol. 12 Issue: 3,
pp.177-186, https://doi.org/10.1108/13598540710742491
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Abstract
Purpose The purpose of this paper is to analyse the concept of supply chain collaboration and to provide an overall framework that can be used as a
conceptual landmark for further empirical research. In addition, the concept is explored in the context of agri-food industry and particularities are
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identified. Finally, the paper submits empirical evidence from an exploratory case study in the agri-food industry, at the grower-processor interface, and
information regarding the way the concept is actually applied in small medium-sized enterprises (SMEs) is presented.
Design/methodology/approach The paper employed case study research by conducting in-depth interviews in the two companies.
Findings Supply chain collaboration concept is of significant importance for the agri-food industry however, some constraints arise due to the nature
of industrys products, and the specific structure of the sector. Subsequently, collaboration in the supply chain is often limited to operational issues and
to logistics-related activities.
Research limitations/implications Research is limited to a single case study and further qualitative testing of the conceptual model is needed in
order to adjust the model before large scale testing.
Practical implications Case study findings may be transferable to other similar dual relationships at the grower-processor interface. Weaker parts in
asymmetric relationships have opportunities to improve their position, altering the dependence balance, by achieving product/process excellence.
Originality/value The paper provides evidence regarding the applicability of the supply chain collaboration concept in the agri-food industry. It takes
into consideration not relationships between big multinational companies, but SMEs.
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
vertical and horizontal co-ordination. As Cadilhon and Figure 1 An overall framework of supply chain collaboration
Fearne (2005) argue, most of the articles on supply chain
collaboration typically focus on large multinational
companies, while the agri-food industry, particularly in
Europe, is to a great extent an industry dominated by small-
medium sized enterprises (SMEs) (European Commission,
2002). Drawing on this aspect, the paper provides empirical
evidence based on a case study conducted at the grower-
processor interface. The companies of the case study are not
large multinationals but SMEs, operating in the Greek
market. This will offer valuable insights regarding
collaboration issues and whether the supply chain
collaboration really applies or not in the sector, as well as,
the intrinsic difficulties and risks associated to collaboration.
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
one of the crucial factors which will guide companies Figure 2 Linking supply chain activities to specific collaboration
towards close collaboration. An interaction of other benefits
elements, such as trust, power and dependence, has been
also identified in the literature to play an influential role in
companies decision to collaborate. La Londe (2002), for
example argues that trust and risk issues are very important
in supply chain relationships because of the interdependency
between companies. Dependence of one company on
another means that the company will have power over the
other. Power as a concept in supply chain relationships has
not been discussed extensively (Cox et al., 2003) and when
discussed it has received irregular and contrasting treatment
from analysts (Hingley, 2005). For some authors, power is
one of the greatest deterrents to trust, which is the single
more discussed element in making supply chains function
effective and efficient (Kumar, 1996; Dapiran and Hogarth-
Scott, 2003; Handfield and Bechtel, 2004). The interesting
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
analyse the sector by identifying its particularities, as well as, industry and how a range of factors impact on the intensity of
the changes that have occurred lately. Which are the supply collaboration.
chain activities where collaboration is possible and what are
the particular elements, benefits, and risks of collaboration The conceptual framework and its propositions
that need to be considered by companies operating in the A conceptual framework is developed based on the overall
sector? framework suggested earlier in paper. All the issues
A number of changes have occurred the last decade in the encapsulated in the overall framework are examined apart
agri-food sector. The entrance of global retailers, industrys from the issue of selecting the appropriate data and
consolidation in most of the sub-sectors, the changing information techniques and technologies, since no valuable
consumer consumption attitudes, as well as the existence of findings were expected to arise. This is due to the level of use of
more strict regulations and laws regarding food production, information and communication technologies in Greek agri-
have altered the business environment for most of the food SMEs, which is rather low (Manthou et al., 2005). On
companies operating in the sector, encouraging collaboration the contrary, the role of industrys macro factors, as well as,
attitudes among companies at all levels. In particular, global micro-factors is included in the framework and explored.
retailers are building partnerships and support close Macro factors are related to the external environment of the
collaboration practises with many of their suppliers in an sector and include general trends and changes that have taken
effort to achieve performance improvements across many place. Micro factors, on the other hand, include the specific
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A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
alliance with Goodys, which is the biggest fast-food restaurant your relationship? What were the main drivers for this
chain in Greece. HC currently operates in two facilities in situation?
Thessaloniki and Athens, employing nearly three hundred and
.
How much do you trust the other company? Has the
eighty people. Its main business activity includes the production level of trust altered during the collaboration? What
of meat-products, ready to eat meals, sauces and fresh were the main reasons for this situation?
vegetables. Nearly 80 per cent of the production goes to
Goodys, while the remaining 20 per cent goes to hotels and The protocol aimed at encapsulating the constructs of the
supermarkets. conceptual framework. In particular, the first part of the
In order to collect data an interview protocol has been questionnaire contained questions regarding the business
developed, as follows. activities, the size of the companies and general discussion
related to the particularities of the sector, as well as, the
Interview protocol changes that had occurred lately. The second part dealt with
Overview the relationship between the two companies. In this particular
1 General company information: part, a number of issues regarding the type of relationship, its
.
Size of the company (number of employees, annual evolution over time, the nature of dependence and the role of
turnover). other critical elements, such as power and trust to the
.
Business structure and business units of the company. intensity of collaboration were explored. Semi-structured in
.
Describe the business activities undertaken by the depth interviews were conducted with the purchasing
company. manager and the managing director of the two companies
2 Sector characteristics: respectively. In fact, the first interview was conducted with the
.
Describe the competition in the sector in comparison purchasing manager of the first company, where he also
to the past. What drives competition nowadays? introduced to us the contact of the other company. The
.
Has the strategy towards competition evolved over duration of the interviews was more than an hour each. A
years? How? follow up was done by telephone, in order to clarify some of
.
What are the requirements in market today and have the responses given. To ensure the internal consistency of the
they changed the last years? If yes why? data, responses of each participant were further explored and
3 Changes and developments in your supply chain: cross checked by asking the other participant, avoiding in any
.
What is currently the structure of your supply chain case to provoke debate between participants.
(number of suppliers/customers, areas of
collaboration, requirements? Has it changed the last Findings-discussion of results
years? In what way? The propositions formulated in the conceptual framework can
.
What were the drivers for the above changes, if any? now be supported or not, based on the empirical results of the
.
What were the benefits and the constraints of such an case study.
evolution? P1. Industrys macro-factors enhance the design and
government of supply chain relationships by
Relationship between companies enhancing the intensity of supply chain collaboration.
1 General characteristics: The case study revealed that some industry macro- factors
.
Describe your relationship with the specific partner enhance the intensity of collaboration in the agri-food supply
(history of the relationship, areas of collaboration, chain. For example, the case study supports the fact that
percentage of products supplied). changing consumer attitudes enhanced the intensity of
.
What were the reasons for starting up the specific collaboration. Indeed, in the late 1990s there was an
collaboration? increased need in the market (originated by Goodys) for
2 Analysing the relationship: greater quantities of vegetables in response to changing
.
Describe your relationship with the other company consumer attitudes and preferences (more people eating out
(advantages/disadvantages). in fast-food restaurants, preferring more healthy-like food).
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
This resulted in a strategic-level decision from HC and Analogously, reduced demand for lettuce from HC, in
Goodys to start up collaboration. Thus, HC became Goodys relation to overproduction or stable production of lettuce
exclusive supplier of fresh vegetables. In addition, industrys from BC resulted in similar practises from HC, which posed
consolidation enhances the intensity of supply chain issues for quality standards resulting in downward price
collaboration. The appearance of new companies operating pressures. Even if this situation was not occurring at a regular
in HCs sector resulted in increased competition pressuring basis, it created conflicts and lack of trust in the business
HC to become more efficient in its activities. As a result, the relationship. The data support this proposition, corroborating
company decided to change its supply policy, towards an also the suggestions of OKeeffe (1998), regarding the trust-
effort to rationalise its supply base, ensuring product building process.
excellence (in terms of quantity- quality) and process P4. Power asymmetry a) increases the dependence of a
excellence (in terms of cost and time reductions). The company from another, in favour of the more powerful,
company up to the late 1990s had a really big supplier base for and b) amplifies the imbalance of risk-reward sharing
fresh vegetables (tomatoes, cucumber, lettuce, carrots etc.), among companies hindering trust development and as
constituting of nearly forty suppliers. In fact, the company a result collaboration intensity.
was buying fresh vegetables from the local central fruit and One of the most interesting aspects of this collaboration is
vegetable market, negotiating prices and quantities on a related to the way power asymmetry has been evolved over
regular basis. This situation quite often resulted in losses of time and the way it has affected the interdependence of the
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product quality and at the same time significant excess of two companies as well as, the risk-reward sharing. At the
costs. Costs included not only the actual price-driven costs, beginning of the collaboration the size imbalance between HC
but also indirect costs of finding, negotiating and monitoring and BC was in favour of HC, making BC completely
the appropriate supplier. The exploratory evidence also shows dependent on HCs decisions. Despite this extremely power
that macro factors such as, globalization, stricter food laws unbalanced relationship, BC did enter the relationship and
and regulations, do not play an important role in enhancing tolerated power imbalance supporting also the suggestions of
the intensity of supply chain collaboration. Blundel and Hingley (2001), regarding the initial decision of
P2. Industrys micro-factors hinder the design and an SME to start a collaboration. However, this situation has
government of supply chain relationships by been reversed. Bretherton and Carswell (2002) suggest, the
deteriorating the intensity of supply chain imbalance of power drives the weaker party to seek alternative
collaboration. alliances. In the case study this is almost the case, since BC
The case study demonstrates deterioration on the intensity of did not seek for alternative alliances, but instead it entered
supply chain collaboration due to product features and the very successfully to new business activities in addition to
structure of the industry. Indeed, due to product features the lettuce production. This resulted in a shift of dependence,
main area for collaboration between HC and BC concerns with HC becoming to a great extent more dependent than
predominantly logistics-related activities, such as BC, despite the power imbalance which was still in favour of
transportation, ordering, procurement, rather than activities HC.
related to joint development of new products, or joint demand Risk-reward sharing, also, evolved over time following to a
management. This occurs not only as a result of the specific great extent the power-dependence balance. Initially, when
characteristics of the product, but also the structure of the BC was dependent from HC, no mutuality in risk sharing
sector. For example, in order to achieve joint development of existed. Indeed, the risk for BC was quite significant. Huge
new products, or joint demand management, further investments in production facilities (greenhouse operations)
integration upstream and downstream in the chain is were needed and on the contrary no commitment, in terms of
required. The case study shows that both upstream and contract, was given from the part of HC. The result was a
downstream integration is difficult to achieve, particularly continuous pressure from the BC to HC, which created trust
upstream integration with the entities responsible for problems and collaboration inefficiencies (increased control
developing new varieties; no such links exist. Finally, the and production monitoring etc.). However, as the
volatile nature of price and supply, deters the depth of dependence of BC from HC reduced over time, even if
collaboration to operational and tactical level, rather than power asymmetry still existed, risk-reward sharing imbalance,
strategic, despite the fact BC, put pressure on HC to also, reduced and resulted in better collaboration attitude,
collaborate on a strategic level by conducting joint and more intense collaboration particularly at the operational
investments in the field of greenhouse vegetable production. and tactical level. The exploratory evidence, in contrast to
P3. Industrys micro-factors hinder the establishment and Handfield and Bechtel (2004), show that it is the element of
maintenance of supply chain relationships, by dependence affecting the trust-building process and thus
impinging the trust-building process, and deteriorate collaboration intensity, rather than the element of power. As a
the intensity of collaboration. result, neither the proposition of power asymmetry increasing
the dependence of a company from another, in favour of the
The case study identified that products features impinge the more powerful, nor the proposition of power asymmetry
trust-building process and hinder the establishment of supply amplifing the imbalance of risk-benefit sharing among
chain relationships. In particular, the volatile nature of the companies is supported.
product, in terms of quantity and quality, impinged trust
building between companies. Indeed, there were cases where
Conclusions
increased demand from HC followed by low production
volumes (due to weather conditions, or farmers Collaboration is a very broad and encompassing term and
incompetence) resulted in increased requirements in terms when it is put in the context of the supply chain it needs yet
of prices and better payment terms, from BC for all levels. further clarification (Barratt, 2004). The complex nature of
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186
supply chains adds difficulties in the elements involved in the second limitation is the focus on dyadic relationships;
concept of supply chain collaboration. The literature review extending the research focus to more complex supply chain
undertaken, although not exhaustive, served as a relationships across the entire chain would be also useful.
comprehensive base for understanding and developing a While none of the factors identified in the research are truly
framework for supply chain collaboration. Two major pillars new or novel, they have never been studied in the agri-food
were identified: the design and government of supply chain context before, and this is the key contribution of this study.
activities, and the establishment and maintenance of supply Future research on supply chain collaboration is required in
chain relationships. order to develop a more clear understanding of the benefits,
Part of this overall framework was further explored in the as well as, the risks of supply chain collaboration and the way
context of the agri-food industry in an effort to understand the aforementioned elements of trust, power and dependence
the concept of supply chain collaboration in a specific context. interact in the collaboration building process.
The case study conducted revealed that while there is a true
need for supply chain collaboration, the structure of the agri-
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Spekman, R. and Salmond, D. (1992), A Working Consensus to corresponding author and can be contacted at:
Collaborate: A Field Study of Manufacturer-Supplier Dyads, arismat@uom.gr
Marketing Science Institute, Cambridge, MA. M. Vlachopoulou is an Associate Professor of e-Marketing/
Spekman, R. and Sawhney, K. (1995), Toward a conceptual Business at the University of Macedonia, Department of
understanding of the antecedents of strategic alliances, in Applied Informatics, Thessaloniki, Greece. Her professional
Wilson, D. and Mollen, C. (Eds), Business Marketing: expertise and research interests include: Marketing information
An Interaction and Network Perspective, Kent Publishing, systems, E-Business, ERP/CRM systems, Supply chain
Boston, MA, pp. 157-92. management, Knowledge management, e-supply chain
Stank, T.P., Crum, M. and Arango, M. (1999), Benefits of management, e-logistics, Virtual organization/enterprise
inter-firm co-ordination in food industry supply chains, modeling. She has participated in European Projects in the
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Journal of Business Logistics, Vol. 20 No. 2, pp. 21-41. above fields, and she was an expert evaluator of STAR project
Sterns, J.A., Schweikhardt, D.B. and Peterson, H.C. (1998), research. She has published papers in Greek and International
Using case studies as an approach for conducting Journals, and books. She acts as a reviewer in the International
Agribusiness Research, International Food and Agribusiness Journal of Production Economics, the International Journal of
Management Review, Vol. 1 No. 3, pp. 311-27. Business Information Systems, the European Journal of Operational
Stevens, G.C. (1989), Integrating the supply chain, Research, and for the Balkan Conference of Operations
International Journal of Physical Distribution and Materials Research. She has been chairman in several scientific
Management, Vol. 8 No. 8, pp. 3-8. conferences, and member of organizing and scientific
Trienekens, J. and Beulens, A. (2001), The implications of committees. She is a member of Hellenic and International
EU food safety legislation and consumer demands on Associations and visiting research professor at the University of
supply chain information systems, working paper, Sunderland, UK. She has also served as a consultant to private
Department of Management Studies, Wageningen companies in Greece.
University.
V. Manthou is an Associate Professor of Information Systems
Wagner, B.A., Macbeth, D.K. and Boddy, D. (2002),
& Logistics at the University of Macedonia, Department of
Improving supply chain relations: an empirical case
Applied Informatics, Thessaloniki, Greece. Her professional
study, Supply Chain Management: An International
expertise and research interests include: analysis and design of
Journal, Vol. 7 No. 4, pp. 253-64.
management information systems, Supply chain management,
Walker, M. (1994), Supplier-retailer collaboration in
European grocery distribution, Logistics Information Logistics, ERP, e-commerce, health information systems. She
Management, Vol. 7 No. 6, pp. 23-7. has participated and participating in European Projects in the
Yin, R.K. (1994), Case Study Research: Design and Methods, above fields (e-business forum, ISIS project) and has published
2nd ed., Sage Publications Inc, Thousand Oaks, CA. papers and reports in Greek and International Journals, and
Yin, R.K. (2003), Case Study Research: Design and Methods, books. She acts as a reviewer for the International Journal of
3rd ed., Sage Publications Inc, Thousand Oaks, CA. Production Economics, the International Journal of Logistics Systems
and Management, the TQM Magazine, the International Journal of
Enterprise Information Systems and for the Balkan Conference of
Further reading Operations Research. She has been chairman in many scientific
Ellram, L.M. (1991), A managerial guideline for the conferences, and member of organizing and scientific
development of implementation of purchasing committees. She is a member of Hellenic and International
partnerships, International Journal of Purchasing and Associations and visiting research professor at Loyola
Materials Management, pp. 2-8. University, USA. She has also served as a consultant to private
companies in Greece.
B. Manos is a Professor of Agricultural Economics at the
About the authors Aristotle University of Thessaloniki, School of Agriculture,
A. Matopoulos is a Doctoral candidate at the University of Lab. of Agricultural Informatics, Thessaloniki, Greece. His
Macedonia, Department of Applied Informatics, professional expertise and research interests include: decision
Thessaloniki, Greece. He received his BSc in Agriculture, support systems, agricultural economics, operational research
from Aristotle University of Thessaloniki, and his MSc in and computer applications in the agricultural sector. He has
Food Industry Management and Marketing, from Imperial participated and participating in a number of European
College, Wye Campus, University of London. His current projects in the above fields and has published several papers
research interests include: Logistics and supply chain and reports in Greek and International Journals, and books.
management, E-business adoption and E-Business impact He is a member of Hellenic and International Associations.
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