Primary Uncertainty in the Seafood Industry: An Exploratory Study of How Processing Firms Cope

Abstract

A key challenge to processing firms in the seafood industry is that they are exposed to a high degree of external uncertainty. Such uncertainty comes in several forms, but primary uncertainty due to more or less unpredictable changes in "states of nature" related to the supplies of raw materials, is particularly important. This paper explores how eight processing firms in the Norwegian seafood industry cope with primary uncertainty to secure timely and adequate supplies and compete effectively in their output markets. It was observed that different types of primary uncertainty are present, and that a wide range of different coping strategies exists. Different strategies are applied to cope with different types of uncertainties. Further, coping strategies are applied at the input, throughput, and output stages of firms' operations, indicating that supply uncertainty has a profound effect on processing firms' behavior.

Do SMEs influence their markets? An exploratory study

“…For example, the supply of wild fish is highly uncertain in the seafood industry (Prochaska, 1984). This is of great concern for the manufacturing industry that is dependent on supplies of wild fish (Ottesen and Grønhaug, 2003), which probably explains the high frequency of influencing attempts directed at the supply sector (see Table III). Consequently, the GM tries to influence these conditions to Alfa's benefit.…”

An Integral Systems Theory Perspective of Interdisciplinary Collaboration: The Example of CATCH, a Capture-Based Aquaculture Research Project for Quality Norwegian Cod Products

“…The project is founded on the premise that cod products based on live storage have the highest potential to optimize the value of at least some parts of the cod resource. By keeping cod alive after capture, the long-standing and substantial logistical challenges associated with variations in supply volumes and quality (Ottesen & Grønhaug, 2003) can be overcome (Olsen et al, 2013b;Dreyer et al, 2008). This opens up completely new possibilities for market-oriented and sustainable value chains for wild cod where consumers are provided with premium value and satisfaction and grocery retailers with long shelf-life, very high and uniform product quality and timely delivery.…”

“…The live storage of cod faces challenges relating to how risk, costs and profits are shared in the value chain. In addition, live storage has to compete with the traditional value chains based on different capture technologies such as trawl, gillnets, long-line and Danish seine (Ottesen & Grønhaug, 2003). In order to succeed, the live storage concept must perform better than these value chains in terms of ecological, economic and social sustainability (Eggert & Tveterås, 2013).…”

Supply Uncertainty in Food Processing Supply Chain: Sources and Coping Strategies

“…Backward integration by owning a stake in fishing vessels to signal commitment and ensure availability of supply [30] is a SC organization aspect. Maintaining a portfolio of suppliers and focusing on specific types of vessels to get the desired catch are SC configuration related coping strategies [30], which can be used to reduce uncertainties of volume and quality, reduce supplier related uncertainty of capacity constraints faced by individual suppliers due to quota restrictions or limited number of vessels or manpower and also to reduce supplier opportunism. Another strategy is catch-based aquaculture [1] where a fish is caught in periods when it is close to shore and easy to catch, then kept alive, and fed to better serve the market demand for fresh fish.…”

“…Finally, we identified some coping strategies that deal with supplier related sources of uncertainty. Processors could offer various services to the fishing vessels to make themselves attractive, motivate the staff to stay extra time onboard by paying the crew a fixed portion of the sales revenue [1], offer good prices to attract and educate specific suppliers [30], while suppliers could exercise volume flexibility by varying the length of time at sea to catch the allotted quotas.…”