Agency Theory and Supply Chain Management: Goals and Incentives in Supply Chain Organisations

Purpose Agency theory (AT) offers opportunities to examine how the risk of opportunism can be prevented or minimised along supply chain organisations using incentives to achieve goal alignment. Methodology The study presents evidence of how members of such organisations achieve goal alignment through the use of incentives by empirically examining two complete supply chain organisations, including final customers, within the UK agri-food industry using a case study methodology. Findings The findings show that contractual goals can be divided into two different categories, shared supply chain organisational goals, and independent goals of each individual participant. In addition to monitoring ability, incentives can also be classified into short term financial and long term social incentives. Product attributes, in particular credence attributes, are also identified as having implications for both goals and incentives. Research limitations The supply chain perspective and case study methodology mean that the research findings cannot be generalised to other supply chains. A further limitation of the research is the use of different methods of data collection at the final customer point. Practical Implications Managers must ensure that appropriate incentives for all departments and individuals are designed to deliver the strategic goals of the supply chain organisation

Export Promotion, the Fallacy of Composition and Declining Terms of Trade (or the Moors’ Last Sigh).

This paper examines various schools of trade policy reform and finds little difference between them in regards their essential export optimism. This optimism is based on an unwarranted assumption in cross-country empirical studies. In practise the increasing number of large LDC’s shifting towards export promotion since the 1980s is found to coincide with declining terms of trade for labour-intensive manufactures. So far this decline has been offset by growth in volume. The positive relation is actually dependent on market growth in developed countries rather than domestic policy reform. Marx (the Moor) provides a useful framework in which to analyse this process. His analysis of competition and accumulation within a national economy is transposed to that of international trade. Finally, the increasing integration of capital into ‘value chains’ and the formation of regional trading blocs can be related to the crisis tendencies of competition and the erosion of profit margins

Outsourcing the logistics function: the supply chain role of third-party logistics service providers in UK convenience retailing

Logistics, defined as the process of strategically managing the procurement, movement and storage of materials; parts; finished inventory and related information flow through the organisation and its marketing channels, is increasingly being recognised as a vital part of an organisation’s marketing strategy. In many organisations, the logistics function is currently facing significant challenges. Pressures from increasing competition and high customer service-level expectations have created a need for more professional and better-equipped logistics services. Confronted with such competitive pressures, these organisations are faced with decisions of the make OR buy kind with regard to the logistics processes of supply and distribution. In addition, the emergence of a need to focus on core capabilities has led many organisations to contract out all, or part of, the logistics function to third-party providers. This paper explores the challenges of outsourcing logistics in the UK convenience-retailing sector

The pharmaceutical distribution chain in the European Union: structure and impact on pharmaceutical prices

In an environment characterised by fragmentation in the market structure of wholesale and retail entities, significant diversity in terms of remuneration schemes as well as regulations pertaining to operational features of wholesale and retail entities, but also significant developments in policy and practice concerning distribution, the objective of this report, is twofold: First, to map the distribution chain in EU Member States, including the main actors in wholesaling and retailing, discuss the requirements to provide certain services and outline their sources of remuneration, both direct and indirect. Second, to collect and analyse data on distribution margins, fees and service requirements in the originator and generic markets in EU Member States with a view to understanding the impact the distribution chain is having on the prices of reimbursable prescription only medicines (POMs). The report does not address issues relating to over-the-counter (OTC) medications

An application of hybrid life cycle assessment as a decision support framework for green supply chains

In an effort to achieve sustainable operations, green supply chain management has become an important area for firms to concentrate on due to its inherent involvement with all the processes that provide foundations to successful business. Modelling methodologies of product supply chain environmental assessment are usually guided by the principles of life cycle assessment (LCA). However, a review of the extant literature suggests that LCA techniques suffer from a wide range of limitations that prevent a wider application in real-world contexts; hence, they need to be incorporated within decision support frameworks to aid environmental sustainability strategies. Thus, this paper contributes in understanding and overcoming the dichotomy between LCA model development and the emerging practical implementation to inform carbon emissions mitigation strategies within supply chains. Therefore, the paper provides both theoretical insights and a practical application to inform the process of adopting a decision support framework based on a LCA methodology in a real-world scenario. The supply chain of a product from the steel industry is considered to evaluate its environmental impact and carbon ‘hotspots’. The study helps understanding how operational strategies geared towards environmental sustainability can be informed using knowledge and information generated from supply chain environmental assessments, and for highlighting inherent challenges in this process

Measuring Market Power in the UK Retail Salmon Industry

This paper presents an investigation into the market structure for three product types of salmon (smoked, fresh and whole salmon) in the UK retail market. Evidence of the potential for market power and pricing conduct is analysed using structural simultaneous system equations based on the Bresnahan (1982) model. The importance of the retail market is recognised given the dominance of supermarket chains which accounted for £1.6 billion sales of seafood and the share of about 87% of all seafood retail sales in 2004 as compared with only 16% in 1988. The results indicate that the system is well represented by the models and that the market is competitive for fresh fillets and whole salmon but retailers exert some market power for smoked salmon. The hypothesis that market power is the same for all three products in the study was rejected; further indicating that retailers may be exercising market power for smoked salmon.Market power, Error correction model, Dynamic demand systems, salmon, Marketing, JEL-1, JEL-J,

Organic supply chain collaboration: a case study in eight EU Countries

This study aims at contributing to a better understanding of the linkage between supply chain performance and possible performance improvement with respect to food quality and safety. Therefore, the paper addresses the question whether the level of collaborative planning and close supply chain relationships could help improve quality and safety of organic supply chains. The study was conducted as a part of the multi-disciplinary EU-wide survey of organic supply chains, carried out in 8 European countries. In this paper we report the results of the study regarding the structures and performance of six different organic supply chains in these eight European countries: milk (CH, UK), apples (DE, CH), pork (UK, NL), eggs (DE, UK), wheat (HU, IT, FR) and tomatoes (IT, NL). In depth interviews with key-informants were carried out in 2006 to investigate the structures, performance and relationships within the supply chains. Results show a low level of collaboration among various actors especially on cost and benefits sharing. Highly integrated supply chains show higher collaboration especially in the domain of Decision Synchronization. Trust and collaboration appear to be related with increased performance, while, the higher the perceived risk for quality and safety is, the higher the probability of supply chain collaboration.Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,

Coordination risk and cost impacts on economic development in poor rural areas

This paper addresses issues relevant to a critical problem in economic development: how to get rapid pro-poor economic growth in poor rural areas in Africa and South Asia where most of the world’s dollar a day poor live. It examines constraints to the development of coordinated exchange systems in poor rural areas, focusing on the core problem of thin markets and low density of economic activity in these areas. Transaction cost and risk analysis is integrated into a conventional neoclassical production economics framework to describe the existence of low level equilibrium traps in transactions and supply chains and to generate important insights for development policy.Development, agriculture, market liberalization, coordination problem

Agricultural marketing and agribusiness supply chain issues in developing economies: the case of fresh produce in Papua New Guinea

Large quantities of fresh produce can be grown in the Highlands provinces of Papua New Guinea, and this produce is then marketed to a range of markets, including the coastal cities of Port Moresby and Lae. However, it is often argued that the marketing system performs poorly, and various reasons for this are cited. In this paper, the results of a study on the marketing of smallholder produce originating in the Highlands provinces and destined for a range of markets, including the coastal cities, are presented. A defensible supply chain framework is used to evaluate a range of marketing issues and to evaluate the performance of the marketing system. The results of the study are refreshingly positive. It was found that the marketing system was remarkably vibrant, given the current level of market development in Papua New Guinea. It is characterised by entrepreneurial behaviour by the private sector, where businesses along the chain compete and innovate in order to expand their operations and meet the needs of the customers in their varied market segments. However, they are constrained in their endeavours by poor infrastructure, which raises their costs of doing business. It was concluded that the use of a Supply Chain Framework can yield a very robust and insightful understanding of the performance of the agricultural marketing system in developing economies