The Effect Of Ict To Collaboration Strategies Commerce Essay Example
The Effect Of Ict To Collaboration Strategies Commerce Essay Example

The Effect Of Ict To Collaboration Strategies Commerce Essay Example

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In a competitive market, companies have had to quickly respond to customer demands by developing products faster and reducing delivery time. However, predicting and meeting demand can be challenging, especially for short life-cycle products like food. Collaboration between manufacturers and retailers is necessary to effectively match supply with demand. Collaboration involves transparent information sharing within and among organizations to maximize profits. Information and Communication Technology (ICT) can support collaboration by facilitating data exchange between end consumers and manufacturers, improving customer service at lower costs. By implementing collaboration strategies, firms can share risks and benefits with the main objective being higher performance compared to operating independently. This report will focus on the benefits of using ICT in collaboration strategies within the agri-food supply chain.

Collaboration Schemes

According to Anthony (2000), supply chain collaboration occurs when two or more companies share the responsibility of exchangi


ng common planning management, execution, and performance measurement information. He suggests that collaborative relationships transform information sharing and drive changes to business processes (Barratt and Oliveira, 2001 cited Anthony, 2000).Zacharia et al.(2009) stress the importance of collaboration for an efficient supply chain. Collaboration can have different levels, from low to high. High levels of collaboration require commitment, joint activities, overlapping operations, and open exchange of information and ideas (Zacharia et al., 2009). Conversely, low levels of collaboration involve separate decision-making processes and limited information sharing (Zacharia et al., 2009). Barratt (2004) classifies collaboration into vertical and horizontal types. Vertical collaboration involves collaborating with clients, internal functions, and suppliers. Horizontal collaboration involves collaborating with competitors, internal teams, and non-competitors such as sharing manufacturing capacity (see Figure 1). This paper will specifically focus on vertical collaboration. Despite

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Barratt's (2004) suggestion that collaboration should be implemented at various levels in organizations across the supply chain, it is undeniable that sharing information is crucial in collaborative supply chains.Transparency of information, both cross-functional and cross-organizational, plays a vital role in successful collaboration within supply chains (Simatupang and Sridharan, 2002). This holds particular significance in Collaboration Planning, Forecasting and Replenishment (CPFR), which aims to integrate demand management within supply chains.Improving information management and ensuring timely transmission of demand data are crucial for promoting collaboration in the supply chain (Taylor & Fearne, 2006). The use of electronic tools and activities such as prediction, refilling, and planning has enhanced the accessibility of sharing and distributing information within the supply chain (Cassivi, 2006). Collaboration is essential in agri-food supply chains because consumer shopping habits lead to higher demand at the end of the week (Friday and Saturday) compared to weekdays. This creates capacity planning challenges for suppliers who have employees working five days a week, while retailers increase orders on weekends to meet consumer demand (Taylor and Fearne, 2006). One suggested solution by Taylor and Fearne (2006) is "overproducing" and building up stocks for the end of the week. However, managing demand in the food supply chain is complex due to limited shelf-life of food products. Van de Vorst et al (2005) classified the food supply chain into two categories: agricultural products and processed food products.The agricultural product supply chain involves various stakeholders such as farmers, auctions, wholesalers, importers/exporters, and retailers. These participants are responsible for tasks such as handling, conditioned storage, packaging, transportation, and trading of these goods. In 2021, the importance of collaboration in the food supply

chain was emphasized. Manufacturers were advised to work together and share data to ensure product quality and safety. This collaboration should extend not only within the supply chains for agricultural products and processed food products but also throughout the entire supply chain for processed food products. By establishing well-coordinated collaboration between these two supply chains, manufacturers can enhance their merchandise's value and better meet consumer demands.

In recent times with events like the BSE crisis in the UK or outbreaks of Swine Fever and Avian Influenza in the Netherlands, it has become increasingly important for consumers to have verifiable evidence of traceability as a criterion for food product quality and safety. Hence manufacturers must control and intensify chain cooperation to address these concerns effectively. According to a study conducted in 2007, consumer concerns have shifted towards healthier food options that come with higher levels of food safety labeling.The need for transparency, traceability, and due diligence in the agri-food supply chain has led to increased public pressure. Collaboration among supply chain partners has become more essential. To effectively respond to consumer trends, information sharing, teamwork, cooperation, and collaboration are crucial. Relationships within the agri-food supply chain involve suppliers, retailers, and consumers. The collaboration between suppliers and retailers aims to satisfy end consumers while maximizing profit and minimizing costs. This collaborative approach benefits both parties through consumer satisfaction. Improvements in infrastructure are necessary for both suppliers and retailers due to growing demand for quality products and fluctuating demand patterns. Implementing ICT systems in agri-food supply chains has been emphasized for planning, forecasting, and inventory management. Trends in information sharing have become a competitive factor with increased availability of

information in food supply chains (Wolfert, 2009).Meeting consumer demands for shorter lead times and more frequent small batches of fresh and safe food products requires highly flexible production, organization, and supply chain management. Effective information sharing among supply chain partners is crucial for achieving this flexibility. ICT systems connect and transmit information within the supply chain using technical facilities such as computers, software systems, application software, procedures, technical messages, etc., which are essential for efficient transfer and processing of information (Van der Vorst et al., 2005). The use of ICT can decrease information costs and improve client services in various operations and technologies used compared to traditional methods (Setboonsarng et al., 2009 Table 1).

Table 1:
Traditional method VS ICT method
- Operations:
- Technologies Already Used
- ICT Technologies Applied Recently

Designation of nutrient:
- Stomping with ink:
- Printing technology (inkjet printing, sticking printed labels)

Data input:
- Handwritten or manual input
- Auto identification technology such as bar codes, QR codes, or RFID
- Global positioning system (GPS)
- Hand-held detectors for scanning and recording data

Data transfer:
- Fax:
- Sending information to clients through websites
- Exchanging data electronically among food business operators

- Onsite visual inspection
- Software that automatically calculates and compares total volumes received and released.Examination technology, such as DNA testing, enables real-time information exchange between consumers and providers in terms of collaboration strategy. This is made possible through the use of ICT in data input, transfer, and confirmation processes. Various forms of engineering, including computer software packages, mobile phone technology, and internet-based websites, play a crucial role in ensuring efficient operations throughout the supply chain. This includes inventory management,

production planning, and transportation planning which can be effectively controlled by all partners involved. In a case study conducted by Taylor (2006), the implementation of CPFR was examined in the supply chains of major UK retailers like Tesco, Asda, Sainsbury's Waitrose,and Somerfield. The supply chain for each retailer encompasses farmers to supermarkets for different products. Effective collaboration is essential for efficient planning, forecasting,and replenishment in these relationships. It was found that variable demand within agri-food supply chains necessitates collaboration due to short life-cycles of agri-food products preventing overproduction to meet sudden increases in demand.This research study provides an overview of the value chains analyzed (see Table 2).The text discusses the various companies and facilities involved in producing specific products within supply chains, such as pork chops, cheddar cheese, pork sausages, beef brisket, organic potatoes, and organic carrots. The main concern is related to data transferring within these supply chains. Issues such as data availability and accuracy, effective sharing of consumer demand data, and lack of "on-shelf availability" data can lead to long lead times for information flow and prediction problems. It is crucial that point of sale (POS) information is reported from supermarkets to suppliers along the supply chain. Electronic point of sale (EPOS) systems are used to capture demand movements in these chains. Information and communication technology (ICT) plays a vital role in sharing data along the chains through methods like radio frequency identification (RFID) tags which collect POS data faster and more accurately than manual input. Additionally, using an internet-based platform speeds up data transfer. By implementing ICT in the supply chain, an information hub can be created for all subdivisions to exchange

data resulting in reduced transfer times compared to traditional methods. This supports the concept of collaborative planning, forecasting, and replenishment (CPFR) for fostering long-term relationships among stakeholders.
None of the six chains studied utilized ICT to exchange information between farmers and retailers. Typically, agricultural food production has a long lead time and farmers make decisions without input from end-consumers, creating a "push" system. By incorporating ICT into CPFR processes, farmers can access demand data early on in agriculture processes and adjust volume decisions accordingly. The goal of CPFR is to improve responsiveness within the supply chain while keeping all members connected with end-consumer demand intact. The "bullwhip effect" demonstrates poor communication and emphasizes the importance of establishing end-to-end communication in the supply chain. ICT enables comprehensive understanding for partners involved in CPFR in the Agri-food supply chain. Collaborative strategies aim to build trust among marketing partners, with information sharing through ICT benefiting CPFR. Furthermore, ICT is extensively used for product tracking and tracing in the food supply chain to ensure safety and minimize recalls. Objectives of tracking and tracing include informing stakeholders about product origins and history, enabling identification of any issues or negative feedback from consumers. In conclusion, planning and forecasting production in the agri-food supply chain is complex due to fluctuating consumer demand and short product lifecycles.
Cooperation within this supply chain is based on a "win-win" approach, which benefits both suppliers and retailers in satisfying consumers. The implementation of CPFR is supported by the use of ICT, playing a crucial role in the agri-food supply chain by facilitating faster data transfer and providing real-time information. This eliminates manual processes such as handwritten notes or

faxing through technologies like RFID, Barcode, and internet-based systems. However, challenges persist in terms of inefficient data transfer including issues with data availability, accuracy, sharing consumer demand information, and lack of "on-shelf availability" data. Nevertheless, ICT can provide real-time information to supply chain partners for effective production planning and forecasting. An important advantage of ICT in the agri-food supply chain is its ability to enable direct feedback from end-consumers helping farmers make more accurate volume decisions at the beginning of the farming process. Additionally, ICT aids tracking and tracing systems related to food safety trends while enhancing customer service experience by confirming merchandise production start times to clients and notifying consumers about any issues. Furthermore, ICT is essential for successful CPFR (Collaborative Planning Forecasting and Replenishment) ensuring quick responses to consumer preferences for enhanced customer satisfaction.Although six food supply chains have implemented CPFR through EPOS information collection methods, it is uncertain if any of these chains integrate an ICT system to consolidate this data. Nevertheless, incorporating ICT in the agri-food supply chain offers several advantages, such as enhancing information management. Despite the initial investment required for ICT implementation, it ultimately saves time and reduces paperwork compared to conventional record-keeping approaches.

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