Agri-food supply chain performance: an empirical impact of risk

Abstract

Purpose The purpose of this paper is to examine the key risk components (probability and consequence) and their respective thresholds affecting agri-food supply chain operations in Ghana. In addition, it seeks to understand the relationship between the major risk sources and to fathom the risk/disruption impact on agri-food supply chain performance in Ghana. Design/methodology/approach Cross-sectional survey data were collected using a structured questionnaire. The risks threshold associated with agri-food supply chain were categorized using the risk matrix scale and classification described in the Project Management Body of Knowledge (Project Management Institute, 2013). Next, the Pearson correlation was used to understand the relationship between the various risks and agri-food chain performance. Lastly, to investigate how firms’ supply chain operations have been affected by risks/disruptions, an ordinary least square regression model was employed to quantify the impact of some major risk sources on agri-food chain performance in Ghana. Findings The results in this paper show variations in risks’ probability, impact and threshold in agri-food supply chain. While risk sources such as periodic change in interest/exchange rate policies and volatility in customer demand are high-rated risks, uncertain land policies/tenure and poor quality control are low rated risks in the operations of the chain. The performance of the agri-food chain significantly but negatively correlates with all the major risks studied. Whereas demand, supply, weather, logistics/infrastructure and financial risk sources significantly undermined the chain’s performance, risks emerging from biological/environmental, management/operational, policy/regulations and political-related issues insignificantly affect the performance of agri-food supply chain in Ghana. Research limitations/implications This research is an area biased. However, some insightful managerial implications can be drawn from this paper to manage agri-food chain operations in a similar unstable environment. The result implies that risks are inevitable in agri-food chain but they differ in terms of menace to the chain’s operation. Therefore, to manage agri-food supply chain risks effectively, managers should periodically identify, quantify and categorize risk sources before making risk response decisions. In addition, the results show that risks account for about half of the overall agri-food chain performance in Ghana. This infers that managers/practitioners could improve the performance of the agri-food chain if limited resources are allocated to plan and effectively respond to major risks sources (such as demand, supply, finance, weather and logistical/ infrastructural services-related risks) undermining the performance of the chain. Originality/value This research contributes to the agri-food chain risk literature and provides managers/practitioners with empirical evidence of risk thresholds and their corresponding major impact on agri-food chain’s performance. Since risks explained about half of agri-food chain performance in Ghana, this research would prompt decision makers to improve on their risk assessment and responds (e.g. by employing efficient demand, supply and weather forecasting systems, logistic/infrastructure services, hedge to finance, etc.) to improve the chain’s performance.

Conceptualising the moderating role of knowledge management within supply chain risks and supply chain risk management

“…e. Financial risk: Financing is required in every level of the business of the firms. For instance, investment is needed in inputs and to improve production practices; but unfortunately, funds are not always accessible or affordable (Nyamah et al, 2017). Producers cannot accept the financial risk of borrowing to upgrade unless the premium market is assured (Jaffee, Siegel, and Andrews, 2010).…”

“…Thus "governance matters" and applying a proper structure of risk management are important parts of the overall process of the optimisation (effective allocation) of resources (Bachev, 2012). For instance, in a supply chain with high risks related to environment, demand, supply, etc., some previous studies (Behzadi et al, 2017;Edmond et al, 2014;and Nyamah, et al, 2017) have demanded effective SCRM to reduce SCRs.…”

“…Several empirical studies conducted on the relationship between SCRs and supply chain performance found negative relationships. The major reason behind this was the improper implementation of the SCRM (Nyamah et al, 2017;Wagner & Bode, 2008). This is because the SCRM aspects are still ambiguous and there is no mutual consent of the researchers.…”

“…It implies that the identified risks are most relevant to supply chains. The present study has categorised SCRs into five risks, i.e., supply risk, process risk, demand risk, financial risk, and environmental risk (Chen, 2013;Louw and Jordaan, 2016;Nyamah et al, 2017;Prakash et al, 2017;and Samvedi, Jain, and Chan, 2013).…”

Vertical Cost-Information Sharing in a Food Supply Chain with Multiple Unreliable Suppliers and Two Manufacturers

“…Some scholars analyzed food SC management in different views. For example, Nyamah et al [5] and MacKenzie and Apte [6] investigated food quality risk management from the operations management perspective. Keizer et al [7] and Jin et al [8] investigated food SC by considering supply network and food traceability, respectively.…”