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The Effect Of Ict To Collaboration Strategies Commerce Essay

Presents, in competitory market environment has forced houses to react more rapidly to client demands through faster merchandise development and shorter bringing clip. While the demand from clients for merchandise assortment peculiarly in the instance of short life-cycle merchandises such as nutrient supply concatenation makes it hard for makers and retail merchants to foretell demand and provide decently to the market. To be successful in fiting demand with supply, makers and retail merchants need to join forces in the supply concatenation ( Simatupang and Sridharan, 2002 ) . Collaborative supply concatenation trade with transparence of information internal and external organisations propose to maximise net income. Therefore, the usage of Information and Communication Technology ( ICT ) can back up the demand for coaction scheme in order to success in the supply concatenation in many ways included primary informations from terminal consumers to maker and bettering clients services at lower costs ( Van der Vorst et Al, 2005 ) . Firm apply coaction scheme in order to portion hazards and benefits. The chief aim of coaction is to accomplish higher public presentation than runing separately ( Min et al, 2005 cited Lambert et Al, 1999 ) . In this study will concentrate on the benefit of utilizing ICT in coaction scheme focal point on agri-food supply concatenation.

Collaboration Schemes

Anthony ( 2000 ) suggests that supply concatenation coaction occurs when “ two or more companies portion the duty of interchanging common planning direction, executing, and public presentation measuring information ” . He goes farther by proposing that “ collaborative relationships transform how information is shared between companies and drive alteration to the underlying concern procedures ” ( Barratt and Oliveira, 2001 cited Anthony, 2000 ) . Zacharia et Al ( 2009 ) besides stated that “ Collaboration has become a critical factor for the smoothly operation of a productive supply concatenation ” . The degree of coaction can screen from a low degree coaction to a high degree coaction. High degree of coaction requires a high degree of committedness, legion articulation activities, overlapping operations and an unfastened exchange of information and thoughts. While a low degree of coaction, the coaction among the houses in determination devising procedure are non jointly made and small information is shared. Zacharia et Al ( 2009 ) .

Harmonizing to Barratt ( 2004 ) , there are two chief classs of coaction ( see Figure 1 ) . These are perpendicular coaction and horizontal coaction. Vertical coaction includes the coaction with clients, internally ( across maps ) and with providers. Horizontal coaction includes coaction with rivals, internally and with non-competitors, for illustration: sharing fabrication capacity. In this paper will analyze concentrate on perpendicular coaction merely.

Figure 1: The range of coaction: By and large

Even though, Barratt ( 2004 ) stated that “ Collaboration is non merely about developing close information exchange based dealingss at an operational degree of activity, but besides needs to be implemented at tactical and strategic degrees in the organisations across the supply concatenation ” but it is non possible to state that sharing of information in collaborative supply concatenation is unneeded. As one of the key to be successful in coaction supply concatenation is transparence of information cross-functional and cross-organizational ( Simatupang and Sridharan, 2002 ) .

Particularly in Collaboration Planning, Forecasting and Replenishment ( CPFR ) which is a construct aimed to incorporate demand direction within supply concatenation. The demand of bettering information direction and timely transmittal of demand informations is a basic of developing coaction across the supply concatenation ( Taylor and Fearne, 2006 ) . The usage of electronics tools and activities such as prediction, refilling and planning are now carefully created, therefore, handiness in sharing and distribution of information through the supply concatenation are besides of import ( Cassivi, 2006 ) .

Why do Agri-food supply concatenation need to join forces?

Consumer shopping wonts tend to hold higher demand at the terminal of hebdomad ( Friday and Saturday ) than during weekdays. This causes to troubles for providers regard to capacity planning. For case, employees in the providers ‘ mills work five yearss per hebdomad while retail merchants increase their order in order to response to consumer demand on weekend ( Taylor and Fearne, 2006 ) . As pointed out by Taylor and Fearne ( 2006 ) , “ Overproduce ” to construct stocks for the terminal of the hebdomad seems to be the logical manner to cover with this job ; nevertheless, demand direction for nutrient supply concatenation is more complicated because of shelf-life limited of nutrient merchandises. Van de Vorst et Al ( 2005 ) categorized nutrient supply chained into two groups. These are nutrient supply concatenation for agricultural merchandises and nutrient supply concatenation for processed nutrient merchandises. Food supply concatenation for agricultural merchandises such as fresh veggies, flowers and fruits. In general, these ironss included husbandmans, auctions, jobbers, importers and exporters, and retail merchants. The major undertakings are the handling, conditioned storing, wadding, transit and particularly trading of these goods. Food supply concatenation for processed nutrient merchandises such as bites, canned nutrient, portioned meats and sweets ) . In these ironss, makers use natural stuffs from agricultural merchandises to bring forth consumer merchandises. The procedures will add higher value to merchandises. It can be seen that non merely merely doing consumer gross revenues informations available but nutrient supply concatenation besides required a good coaction within supply concatenation every bit good. For illustration, in nutrient supply concatenation for agricultural merchandises and processed nutrient merchandises, it is of import to hold a well collaborate between these two supply ironss. A well collaborate will assist these two supply ironss to hold better public presentation to react to stop consumer demands as they can be after and work harmonically.

In add-on, consumers in many parts of the universe addition demand for “ verifiable grounds of traceability as an of import standard of nutrient merchandise quality/safety ” ( Opara, 2002 ) . As in recent events, there are many jobs happened to the nutrient supply concatenation such as BSE crisis in the United Kingdom and the Swine febrility and Avian Influenza in among others the Netherlands ; this made manufacturers concern to the necessity of commanding and intensification concatenation co-operation ( Simatupang and Sridharan, 2002 ) . Furthermore, Matopoulos et Al ( 2007 ) claimed that nowadays consumers are more concerned in holding healthy nutrient and are labeled by higher degrees of nutrient safety. In combination of those aforesaid factors, “ it has increased public force per unit area for transparence, traceability and “ due diligence ” throughout the agri-food supply concatenation ( Matopoulos et al, 2007 cited Fearne et Al, 2004 ) ” and has increased the demand for coaction within the agri-food supply concatenation spouses ( Matopoulos et al, 2007 ) . Therefore, a high degree of information sharing, teamwork, cooperation and coaction are required in agri-food supply concatenation in order to react to consumers ‘ tendency efficaciously ( Taylor and Fearne, 2006 ) .

To sum up, the relationships in Agri-food supply concatenation relate to three chief histrions which are suppliers-retailers-consumers. Collaboration between providers and retail merchants is to fulfill terminal consumers in order to maximise net income and minimise cost. The aim of coaction in agri-food supply concatenation is based on “ win-win ” scheme which is both providers and retail merchants can increase their benefit based on consumers ‘ satisfaction. Increasing in demand for quality and fluctuated demand require providers and retail merchants to better substructure within procedures. As a consequence, the execution of ICT system in agri-food supply ironss becomes more importance in planning, prediction and make fulling the stocks ( Szymanowski, 2007 cited Ross, 2003 ) .

ICT in Agri-food supply concatenation

Tendencies for information sharing in nutrient supply ironss have been defined by Wolfert ( 2009 ) that the increasing of information becomes a competitory factor ( Wolfert, 2009 ) Information sharing & A ; ICT in agri-food. As consumers tend to demand for short lead clip and more frequence of little batches due to agri-food merchandise life rhythms are short. Consumers satisfy with fresh and safety merchandises. To react to the demand, nutrient supply ironss, hence, require a really flexible production and organisation and supply concatenation. In order to accomplish that end, the sharing of information demand to be undertaken within the supply concatenation spouses efficaciously. As aforesaid that the sharing of information will let coaction scheme in agri-food supply concatenation successful. ICT system can associate the information within the supply concatenation Van der Vorst et Al ( 2005 ) .

Van der Vorst et Al ( 2005 ) described the definition of ICT as all available proficient installations and the users which allow organisations to pass on and interchange information. Technical installations included computing machines, systems package, application package, processs, proficient, message, and etc. that are used and necessary for reassigning information processing. The usage of ICT can take down information cost and better client services as explained by Setboonsarng et Al ( 2009 ) in the tabular array 1 about the cardinal procedures that ICT can back up to both input informations, every bit good as to portion or end product informations comparison to the traditional manner.

Table 1: Traditional method VS ICT method


Technologies Already Used

ICT Technologies Applied Recently

Designation of nutrient

Stomping with ink

Printing engineering ( inkjet printing, stick oning printed labels )


Data input

Handwritten or manual input

Auto designation engineering such as saloon codifications, planar saloon codifications ( speedy response [ QR ] codifications ) , or the experimental
adio frequence designation ( RFID )

Global placement system ( GPS ) Hand-held detectors to scan and record informations

Datas transportation


Unwraping information to clients through web sites

Exchanging informations electronically among nutrient concern operators


Onsite ocular review

Software that automatically calculates and compares entire volumes received and released. Examination engineering such as DNA scrutiny

In term of coaction scheme, the usage of ICT in informations input, informations transportation and confirmation procedure will supply real-time informations from terminal consumers to providers without hold. As the high degree of engineerings can run from simple package on a computing machine, informations sharing through nomadic phone engineering, or an internet-based information input web site, to complex detectors utilizing planetary placement system ( GPS ) engineering. As a consequence, the operations in the supply concatenation such as stock list direction, production planning, transit planning and etc. can be traced by all supply concatenation spouses, therefore, the planning and direction can be controlled efficaciously.

Case Study

The construct of CPFR has been widely used over the clip. In this paper will describe six instance surveies from Taylor ( 2006 ) paper. The six ironss as shown in table 2 involved a major UK retail merchant including Tesco, Asda, Sainsbury, Waitrose and Somerfield. These companies involve the usage of CPFR in their supply concatenation. It can be seen that in each merchandises have their ain supply ironss which start from husbandmans to supermarkets. Along these relationships need a good collaborated in order to be effectual in be aftering, prediction and refilling. After studied, I found that the cause of the job is variable in demand as aforementioned in the subdivision 2, “ why do agri-food supply concatenation need to join forces? ” that agi-food has short life-cycles, therefore, it can non overproduce in progress in order to react to rapid demand increasing.

Table 2: Value ironss on which the research is based


Focal Merchandises

Companies/facilities in the concatenation







Pork chops

Cheddar cheese

Pork sausages

Beef brisket

Organic murphies

Organic carrots

Supermarket-packing plant-abattoir-farms

Supermarket-packing plant-maturation store-dairy-farms

Supermarket-sausage producer-meat processor-abattoir-farms

Supermarket-packing plant-abattoir-farms

Supermarket-packing plant-farms

Supermarket-packing plant-farms

The chief concerning is about informations reassigning. Data handiness, informations truth, sharing consumer demand informations and deficiency of “ on-shelf handiness ” informations can take to long lead clip in information flow and prediction jobs. The demand of point of sale ( POS ) information to be reported from the point of sale ( supermarket ) to the providers along the supply concatenation is critical. In these ironss, they applied the usage of EPOS to capture the demand motions.

In order to portion informations along the ironss, ICT plays of import function as shown in table 1. For illustration, RFID ticket can besides be used in agri-food supply concatenation to roll up informations from POS and reassign straight to devices in the system much faster than manus written or manual input and besides more accurate. Additional, in footings of informations reassigning can besides be speed up since the information will be sharing on cyberspace system footing. In short, this can make information hub which every subdivision in the supply concatenation can portion together. This cans shorter clip in reassigning informations comparison to the traditional manner ; facsimile. The usage of ICT in this instance can back up the construct of CPFR in long term relationships every bit good. When the informations can reassign from retail merchants to husbandmans straight, it will consequence to production planning. With respect to the instance surveies, there is no usage of ICT in all the six ironss to interchange informations between husbandmans and retail merchants. In general, agricultural nutrient has long lead clip in production procedure. For illustration, sweet maize takes 65-90 yearss from seting to reap ( Iannotti, 2010 ) . Farmers make their ain determination about how much to bring forth without information from end-consumers. Farm production is basically “ push ” system. With the benefit of ICT in CPFR will assist husbandmans to obtain demand informations which will be utile to do volume determinations at the start of the agriculture procedure ( planting-harvest ) .

The aim of CPFR is covered to do their supply ironss more antiphonal and maintain all the supply concatenation members connect with end consumer demand, both in footings of merchandise and its volumes. “ Bullwhip consequence ” is a good illustration of bad communicating. To set up end-to-end communicating, it will let supply concatenation spouses to hold a clear image of the whole supply concatenation. The usage of ICT can besides back up the construct of CFPR in Agri-food supply concatenation start from the planning till the refilling phase, the whole supply concatenation will be prompted to react to variable demand and do it more proactive instead than reactive. Generally, the end of coaction scheme is to make a high degree of trust between merchandising spouses, therefore, the benefit of sharing information from ICT will be support CPFR in Agri-food supply concatenation absolutely.

Recently, the usage of ICT in nutrient supply concatenation is besides widely use in footings of tracking and following merchandise. The ground is to vouch nutrient safety and cut down the size of a merchandise callback. The chief aims of tracking and following are the possibility to inform consumers and stakeholders about the beginning of points of merchandises, about their history. In instance that there are any jobs occur or bad feedback from consumers, it will be possible to happen out beginnings of the job.

Decision and Recommendation

As the nature if consumer demand in agri-food supply concatenation is variable and agri-food merchandises have short-life rhythm, as a consequence, planning and prediction production is comparatively complex. The aim of coaction in agri-food supply concatenation is based on “ win-win ” scheme which is both providers and retail merchants can increase their benefit based on consumers ‘ satisfaction. From the study, it can be seen that the usage of ICT can back up the construct of collaborative planning prediction and refilling ( CPFR ) in agri-food supply concatenation. Since ICT can assist informations reassigning procedure much faster by supplying real-time informations and cut out manual procedures such as manus written or fax by utilizing ICT system such as RFID, Barcode, or net based information alternatively. Basically, the chief job in agri-food supply concatenation comes from inefficiency informations reassigning such as informations handiness, informations truth, sharing consumer demand informations and deficiency of “ on-shelf handiness ” informations. ICT provides real-time informations along the supply concatenation spouses which utile in production planning and prediction for fulfilment efficaciously. Another of import advantage of ICT in agri-food supply concatenation is that the direct information from end-consumers will let husbandman to do volume determinations at the start of the farming procedure more accurate. In footings of nutrient safety tendencies, ICT can be a portion of client service with the trailing and following system. It will vouch the client about beginning of merchandises and in instance there is any jobs, the consumers will be notified the cause behind it. It can be assumed that ICT is the key of successful in CPFR as the benefit of ICT can react to consumers ‘ tendency which helps to keep client satisfaction.

With respect to the instance surveies, there is the usage of CPFR in those six nutrient supply ironss which roll uping informations base on electronics point of sale ( EPOS ) information. However, there is no information that any ironss use ICT system to link all information along the ironss. As aforesaid, ICT can back up the construct of CPFR. I would wish to urge agri-food supply concatenation spouses to concern more about execution of ICT in order to pull off information system within the concatenation more effectual. Even though, organisations have to put in ICT system, but it is deserving. As ICT can cut down clip and certification work which keep entering on paper-based. Compare to electronics record-keeping, maintaining entering on paper based will be more in long term.

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