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Supply Chain Management: An International Journal

A conceptual framework for supply chain collaboration: empirical evidence from the agri-food industry
A. Matopoulos, M. Vlachopoulou, V. Manthou, B. Manos,
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A. Matopoulos, M. Vlachopoulou, V. Manthou, B. Manos, (2007) "A conceptual framework for supply chain collaboration:
empirical evidence from the agrifood industry", Supply Chain Management: An International Journal, Vol. 12 Issue: 3,
pp.177-186, https://doi.org/10.1108/13598540710742491
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A conceptual framework for supply chain
collaboration: empirical evidence from the
agri-food industry
A. Matopoulos, M. Vlachopoulou and V. Manthou
University of Macedonia, Thessaloniki, Greece, and
B. Manos
Aristotle University of Thessalonki, Thessalonki, Greece

Abstract
Purpose The purpose of this paper is to analyse the concept of supply chain collaboration and to provide an overall framework that can be used as a
conceptual landmark for further empirical research. In addition, the concept is explored in the context of agri-food industry and particularities are
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identified. Finally, the paper submits empirical evidence from an exploratory case study in the agri-food industry, at the grower-processor interface, and
information regarding the way the concept is actually applied in small medium-sized enterprises (SMEs) is presented.
Design/methodology/approach The paper employed case study research by conducting in-depth interviews in the two companies.
Findings Supply chain collaboration concept is of significant importance for the agri-food industry however, some constraints arise due to the nature
of industrys products, and the specific structure of the sector. Subsequently, collaboration in the supply chain is often limited to operational issues and
to logistics-related activities.
Research limitations/implications Research is limited to a single case study and further qualitative testing of the conceptual model is needed in
order to adjust the model before large scale testing.
Practical implications Case study findings may be transferable to other similar dual relationships at the grower-processor interface. Weaker parts in
asymmetric relationships have opportunities to improve their position, altering the dependence balance, by achieving product/process excellence.
Originality/value The paper provides evidence regarding the applicability of the supply chain collaboration concept in the agri-food industry. It takes
into consideration not relationships between big multinational companies, but SMEs.

Keywords Supply chain management, Channel relationships, Food industry

Paper type Research paper

Introduction efficient data and information exchanges between supply


chain members, have been more or less surpassed by the
The recognition, the last decades, of the supply chain as a key information and communication technology revolution and
and vital field for enterprises success, in contrast to the the development of e-business applications. A number of
traditional intra-enterprise focus on internal processes, has factors related to the business environment, the specific
been a major change and challenge, in the modus operandi of industry features, and endogenous firm characteristics, may
enterprises. In many cases, their ability to compete has been still influence the series of dyadic business relationships,
directly linked with their ability to collaborate with other which constitute the supply chain, enabling or deteriorating
enterprises. Many writers, (Lewis, 1990; Lamming, 1993; this way collaboration opportunities.
Hines, 1994; Gattorna and Walters, 1996; Christopher, 1998; Despite the barriers that potentially deteriorate
Gunasekaran et al., 2001), have recognised this increased collaboration among companies for many industries all over
need for collaboration, stressing out the establishment of the world, collaboration is becoming more of a necessity than
closer and long-term working relationships even partnerships an option. Based on existing research on supply chain
with suppliers at various levels in the chain, as a way to collaboration, this paper attempts to understand the concept
construct ever more efficient and responsive supply chains, in of collaboration and to provide a theoretical landmark to be
order to deliver exceptional value to customers. However, used by more empirically oriented research. Emphasis is given
collaboration in the supply chain is not always easy to achieve, in the agri-food industry, which is characterized by a number
even when past communication restrictions, regarding of key and unique characteristics, mainly related to: product
features, and the sectors structure, where collaborative
The current issue and full text archive of this journal is available at practises developed in response to the economic pressures
www.emeraldinsight.com/1359-8546.htm are driving the evolution of the chain and encourage greater

The authors would like to thank G. Michalitsos and K. Balatsos,


Supply Chain Management: An International Journal
12/3 (2007) 177 186 purchasing manager of HC and managing director of BC respectively, for
q Emerald Group Publishing Limited [ISSN 1359-8546] the provision of all the relevant information and data in order to complete
[DOI 10.1108/13598540710742491] the research.

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

vertical and horizontal co-ordination. As Cadilhon and Figure 1 An overall framework of supply chain collaboration
Fearne (2005) argue, most of the articles on supply chain
collaboration typically focus on large multinational
companies, while the agri-food industry, particularly in
Europe, is to a great extent an industry dominated by small-
medium sized enterprises (SMEs) (European Commission,
2002). Drawing on this aspect, the paper provides empirical
evidence based on a case study conducted at the grower-
processor interface. The companies of the case study are not
large multinationals but SMEs, operating in the Greek
market. This will offer valuable insights regarding
collaboration issues and whether the supply chain
collaboration really applies or not in the sector, as well as,
the intrinsic difficulties and risks associated to collaboration.

Supply chain collaboration: analysing the concept


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Collaboration is about organisations and enterprises working


together and can be viewed as a concept going beyond normal
commercial relationships. It is a departure from the anchor
point of discreteness which underlies spot market transactions
to a relational exchange, as the roles of supplier and buyer are
no longer narrowly defined in terms of the simple transfer of
ownership of products (Macneil, 1981). Collaboration
The second element involves selecting the activities on which
appears as enterprises recognise cases where working and
operating alone is not sufficient to resolve common problems collaboration will be established. The plethora of the activities
and to achieve the desired goals (Huxham, 1996; Corbett constitutes the width of collaboration. Companies need to
et al., 1999; Barratt and Oliveira, 2001; Wagner et al., 2002). determine the specific activities upon which they will
Collaboration between supply chain partners is one of the collaborate, since not all the activities require the same
issues which lately have received increased attention in the amount of involvement and close relationship (Sahay, 2003).
supply chain literature (Andraski, 1999; Anderson and Lee, After selecting the activities the third element is to identify in
1999, 2001; McCarthy and Golicic, 2002), in addition to what level companies will collaborate. A three level approach
attention received in the past in the strategic management namely strategic, tactical, operational, is rather essential, since
literature (Spekman and Sawhney, 1995; Brandenburger and companies seldom choose or decide to collaborate across all
Nalebuff, 1996; Kumar, 1996). decision taking levels. This distinction on strategic, tactical
In fact, some authors (McLaren et al., 2002; Becker et al., and operational, which has been very common in the supply
2004) argue that there is a new school of thought in the chain literature, constitutes the depth of collaboration
supply chain literature regarding the notion of supply chain (Stevens, 1989; Chopra and Meindl, 2001; Fawcett and
collaboration. Essentially, a prerequisite for the existence of Magnan, 2002).
supply chain collaboration is the existence of supply chains in The combination of those three elements comprises the
addition to collaboration. The notion implies that the chain intensity of collaboration. The more the depth (from
members, two or more, become involved and actively work operational to tactical and strategic), the width (from simple
together in coordinating activities which span the boundaries supply chain activities to more complex such as new product
of their organizations in order to fulfil and satisfy customers development) and the number of entities (two or more
needs (Bowersox, 1990; Mentzer et al., 2000; Muchstadt et al., entities, upstream-downstream) the more intense the
2001). Based on existing relevant literature, a general research collaboration is.
framework for supply chain collaboration is suggested Finally, another important element for the design and
(Figure 1). Two pillars are distinguished in the framework governing of supply chain activities includes the decision of
for supply chain collaboration, which are dealing with the selecting the appropriate technique and technology to
design and the government of supply chain activities, and the facilitate information sharing. It is a very complicated
establishment and the maintenance of supply chain decision, since not all potential collaborators are able to
relationships, respectively. meet the requirements of collaboration in terms of technology
and techniques.
Design and government of supply chain activities
The first pillar in the framework is related to the design and Establishing and maintaining supply chain
government of supply chain activities consisting of three relationships
elements. The first element is about taking the decision of The second pillar concerns the establishment and
selecting the appropriate partner. Companies in the real maintenance of supply chain relationships. It includes the
business world are interacting with a number of suppliers and less tangible, but equally important, elements of
customers. Obviously, not all of them can become close relationships. The critical elements that have been also
collaborators and under this prism a selection is needed, cited in the literature include mutuality of benefits, risk, and
based on the expectations, perceived benefits and drawbacks, rewards sharing (Stank et al., 1999; Barratt and Oliveira,
and the business fit of companies. 2001). The risk and reward sharing balance will be probably

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

one of the crucial factors which will guide companies Figure 2 Linking supply chain activities to specific collaboration
towards close collaboration. An interaction of other benefits
elements, such as trust, power and dependence, has been
also identified in the literature to play an influential role in
companies decision to collaborate. La Londe (2002), for
example argues that trust and risk issues are very important
in supply chain relationships because of the interdependency
between companies. Dependence of one company on
another means that the company will have power over the
other. Power as a concept in supply chain relationships has
not been discussed extensively (Cox et al., 2003) and when
discussed it has received irregular and contrasting treatment
from analysts (Hingley, 2005). For some authors, power is
one of the greatest deterrents to trust, which is the single
more discussed element in making supply chains function
effective and efficient (Kumar, 1996; Dapiran and Hogarth-
Scott, 2003; Handfield and Bechtel, 2004). The interesting
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issue is to identify how these elements interact with each


other and how they affect and determine the intensity of
collaboration, as well as, the selection of the appropriate
information-data sharing technologies and techniques.

Benefits and risks of collaboration: approaches


and critical aspects
Undoubtedly, a plethora of benefits associated with inter- collaborations is the risk of failure (Dwyer et al., 1987). The
enterprise collaboration exists. The way these benefits can be risk of failure includes the loss of significant investments in
regarded depends on the way supply chain collaboration is money, time and delay or abandonment of business plans, in
viewed. One way to view them is by approaching supply chain cases where collaboration is unsuccessful. In addition, an
collaboration, and its respective benefits, at a macro level inherent risk to the risk of failure is the exposure to
(Sahay, 2003), which means general cost reductions, as well competition. Indeed, companies should bear in mind that the
as, general revenue growth. In this case, a company takes potential collaborator may become at some point in time the
decisions regarding the other collaborator on the basis of how partner of another competitor. Another important risk is
good is performing with collaborator A, in comparison to the related to potential increased dependence of one company on
collaborator B. A different way to approach supply chain another. The issue of dependence is one of the more complex
collaboration benefits is by taking a more activity-based issues in business relationships. It arises in cases where a
approach. By relating the benefits of collaboration to the company is to a greater or lesser extent relied on another
specific activities, it is more likely to better identify the real company across a number of processes. In fact, many authors
benefits of supply chain collaboration, since not all activities (Spekman and Salmond, 1992; Adams and Goldsmith, 1999)
require the same amount of companies involvement. Some of have argued that in the process of procurement for example,
the most commonly cited, in the literature, supply chain the more a buyer buys from a supplier, the more likely the
activities include: buyer will be able to influence the supplier. In most of the
. procurement; cases in the literature, dependence has been viewed as a risk,
.
inventory management; which is particularly high for small companies collaborating
.
product design and new product development; with big ones, especially when combined with the element of
.
manufacturing (planning); power. Furthermore, an inherent risk associated to
.
order processing; collaboration is the risk of increasing operational complexity.
.
transportation/distribution; For example, a company-supplier of two other companies,
.
sales; one a collaborator and one not, may end up running two
.
demand management; and separate supply chains, which means duplication of effort in
.
customer service. many cases. In particular at the front of technology
In Figure 2, some of the benefits arising from collaboration, as integration many future collaborators are facing difficulties
those identified in the literature, are linked to the in integrating their systems. This increased complexity in
aforementioned supply chain activities (Lewis, 1990; Ellram, technology integration can sometimes cause even the
1995; Walker, 1994; Parker, 2000; Horvath, 2001; Mentzer termination of the collaboration.
et al., 2000; McLaren et al., 2002; Simatupang and Sridharan,
2004). Driving forces and barriers of supply chain
Despite the benefits that have been identified in collaboration: implications for the agri-food
collaboration among companies, collaborative practises may
industry
not be appropriate for every business relationship (Krause,
1999). In fact, apart from the benefits, risks are also involved In order to understand the concept of collaboration in the
in collaborations. One of the most obvious risks in context of the agri-food industry there is a need to better

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

analyse the sector by identifying its particularities, as well as, industry and how a range of factors impact on the intensity of
the changes that have occurred lately. Which are the supply collaboration.
chain activities where collaboration is possible and what are
the particular elements, benefits, and risks of collaboration The conceptual framework and its propositions
that need to be considered by companies operating in the A conceptual framework is developed based on the overall
sector? framework suggested earlier in paper. All the issues
A number of changes have occurred the last decade in the encapsulated in the overall framework are examined apart
agri-food sector. The entrance of global retailers, industrys from the issue of selecting the appropriate data and
consolidation in most of the sub-sectors, the changing information techniques and technologies, since no valuable
consumer consumption attitudes, as well as the existence of findings were expected to arise. This is due to the level of use of
more strict regulations and laws regarding food production, information and communication technologies in Greek agri-
have altered the business environment for most of the food SMEs, which is rather low (Manthou et al., 2005). On
companies operating in the sector, encouraging collaboration the contrary, the role of industrys macro factors, as well as,
attitudes among companies at all levels. In particular, global micro-factors is included in the framework and explored.
retailers are building partnerships and support close Macro factors are related to the external environment of the
collaboration practises with many of their suppliers in an sector and include general trends and changes that have taken
effort to achieve performance improvements across many place. Micro factors, on the other hand, include the specific
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internal characteristics of the sector related to its products,


business levels (Kaufman, 1999). The undisputed competitive
processes and structure. In this particular research, the macro-
pressures in the sector also fostered consolidation in most of
factors further considered are; the globalization and
the sub-sectors of the agri-food industry and thus, have
consolidation of the industry, changing consumer
increased the need for collaboration. Consumers nowadays,
consumption attitudes, stricter regulations and laws regarding
are more than ever interested in having healthy food and are
food production and food safety issues. All these have been
characterized by higher levels of food safety concerns
shown in the literature to interact in the development of
(Hughes, 1994). This reality, in combination with the
collaboration in the agri-food supply chain (Hughes, 1994;
recent food crises has increased public pressure for Shaw and Gibbs, 1995; Fearne et al., 2004). Regarding the
transparency, traceability and due diligence throughout micro factors emphasis is given on the particular structure of
the agri-food supply chain (Fearne et al., 2004), and has the industry, as well as, specific product features. The
increased essentially the need for collaboration among entities framework and propositions for subsequent testing are
in the agri-food supply chain. described below (Figure 4) and are generated based on a
Despite the increased importance for collaboration across literature survey. Bacharachs (1989), guidelines on theory
the entire agri-food supply chain, important barriers also exist development have been used, particularly in developing
which may limit collaboration intensity. Most of the barriers relationships between constructs in terms of propositions.
to supply chain collaboration are related to industrys complex The first two propositions link the first pillar of supply chain
and heterogeneous structure. A typical agri-food supply chain collaboration (design and government of supply chain
may consist of a number of entities linked from farm to activities) with macro and micro factors, while the third links
fork, such as farmers, input suppliers, co-operatives, pack- micro factors with the second pillar of supply chain
houses, transporters, exporters, importers, wholesalers, collaboration (establishing and maintaining supply chain
retailers, and finally consumers. The structure of the agri- relationships). Finally, the fourth proposition focuses on the
food industry may be really complex, and for some products it less tangible elements of relationships, emphasizing the way
is quite extended including many entities and resulting in they interact and their role in the intensity of collaboration.
numerous interactions (Matopoulos et al., 2004). The more Concerning industrys macro-factors, globalization extends
the number of the companies, participating in the supply the business scope and activities of a company, to other
chain increases, the more the information exchanges become regions. At the same time, the government of activities that
problematic, hindering supply chain collaboration, as are now dispersed in a greater geographical range becomes
companies often do not have compatible systems for more difficult, increasing the need for collaboration
information exchanges. (Kaufman, 1999). Consolidation of the industry, in
Another important barrier for collaboration arises from the response to the increased competition, encourages
increased diversity of the entities constituting the supply companies to collaborate to a range of supply chain
chain. Companies differences in terms of economic size, activities in order to become competition resistant.
structure, and access on ICT applications, may deteriorate Changing consumer attitudes and stricter food laws and
collaboration intensity due to power-trust reasons, operational regulations, are the drivers that have forced companies of the
complexity or technical reasons, respectively. In Figure 3, a sector to pay attention in securing product quality.
schematic representation of the entities which potentially Collaboration in the form of increased information
participate in the agri-food industry is presented. Different exchanges is needed in order to achieve transparency across
line patterns indicate potential interaction channels. the supply chain (Trienekens and Beulens, 2001). As a result,
the following proposition is proposed:
P1. Industrys macro-factors enhance the design and
Empirical case study government of supply chain relationships by
In this section, empirical insights from the agri-food industry enhancing the intensity of supply chain collaboration.
are provided. In particular, a case study at the grower- Industrys micro-factors affect both the width and the depth
processor interface was conducted in order to investigate and of collaboration. Hypothetically, an intense collaborative
understand collaboration in the context of the agri-food relationship among members in the fresh produce supply

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

Figure 3 A schematic representation of the agri-food supply chain

Figure 4 A conceptual framework of collaboration development in the


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There is a relationship between products specific


agri-food supply chain characteristics of price and supply volatility to the trust-
building process and the intensity of collaboration (OKeeffe,
1998). When the supply of a product is decreased (due to
weather conditions, farmers competence) the farmer may
demand higher prices and better payment terms. Analogously,
the processor when the supply of the product is increased may
demand lower prices, longer payment periods, as well as,
impose stricter product controls. In both cases, the trust
building process is impinged as companies try to realize short-
term benefits. This puts pressure on the collaboration-
building process, deteriorating the intensity of collaboration
and specifically the depth of collaboration from strategic to
operational and tactical. As a result, the third proposition
relates industry micro factors to the establishment and
maintenance of supply chain relationships.
P3. Industrys micro-factors hinder the establishment and
maintenance of supply chain relationships, by
impinging the trust-building process, and deteriorate
the intensity of collaboration.
The balance of power and dependency and its role in the way
relationships evolve has been identified in the literature.
Asymmetrical relationships generate disadvantage for the
weaker party (Johnsen and Ford, 2002) and are less stable
chain would include the identification of the consumption
than symmetrical relationships (Bretherton and Carswell,
trends at the consumer level, the transfer of this information 2002). In the context of the agri-food industry, power
upstream in the chain, the development of the new product imbalance issues are extremely relevant and have been clearly
varieties from the research centre, and finally movement of recognised (OKeefe and Fearne, 2002; Hingley, 2005).
the product downstream in the chain. However, due to time- OKeeffe (1998), agues that it is difficult to achieve
constraints this is unfeasible, since the research for new interdependence in the agri-food industry due to size
varieties and the biological growth cycle of a product may imbalance and as a result, small and less powerful
reach a decade, limiting the width of supply chain activities to companies will be more dependent from large powerful
the more logistics oriented ones in order to meet the increased companies than the opposite. This power asymmetry will
requirements arising by the perishability of agricultural enable large companies to exercise their power, by imposing
products (Schotzko and Hinson, 2000). In addition, the their rules to collaboration, continuously increasing
constraints of the product, related to the uncertain production requirements and risk-reward sharing imbalance. This
imbalance reduces the collaboration attitude, impinges trust
(due to weather conditions or/and farmers competence), limit
and deters collaboration intensity. Therefore, the last
the depth of collaboration from the strategic level to tactical
proposition relates power asymmetry to dependence and
and operational, in order to avoid risky long-term decisions. risk-reward sharing.
This leads to the second proposition: P4. Power asymmetry a) increases the dependence of a
P2. Industrys micro-factors hinder the design and company from another, in favour of the more powerful,
government of supply chain relationships by and b) amplifies the imbalance of risk-reward sharing
deteriorating the intensity of supply chain among companies hindering trust development and as
collaboration. a result collaboration intensity.

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

Case study design .


What were the main problems encountered in
The method chosen for this study was research by case study. In managing this relationship?
particular, the case study method used was the single-case .
What kind of strategies, if any, were adopted in order
design as called by Yin (1994), with single unit of analysis and to overcome problems?
single number of cases. Research by case study was preferred, .
How successfully did you confront these problems?
since it enables a more descriptive and exploratory approach .
Did differences in the size of companies cause any
allowing for more rich insights into the research object (Yin, difficulties? In which cases did you exercise your
1994; Miles and Huberman, 1994). Case study research has power (or experience it)?
been lately recognised as an increasingly important type of .
How dependent do you consider your company is
research in the context of agri-business sector, since traditional from the other company? What will happen if
research strategies have been often proved to be limited in their tomorrow the collaboration you have ends? What
applicability and scope (Sterns et al., 1998). The case study will be the consequences, if any, for your company
presented in this research is about Hellenic Catering (HC), one and how quickly you will overcome this situation?
of the biggest food processors in Greece, and the collaboration Compare the current situation with the past (the
with Balatsos Company (BC), a family-based company, which beginning of the relationship). Has it changed? In
became HCs biggest supplier of fresh vegetables. HC is the what way?
major supplier in fresh produce and has also established an
.
How risk and reward sharing has been evolved during
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alliance with Goodys, which is the biggest fast-food restaurant your relationship? What were the main drivers for this
chain in Greece. HC currently operates in two facilities in situation?
Thessaloniki and Athens, employing nearly three hundred and
.
How much do you trust the other company? Has the
eighty people. Its main business activity includes the production level of trust altered during the collaboration? What
of meat-products, ready to eat meals, sauces and fresh were the main reasons for this situation?
vegetables. Nearly 80 per cent of the production goes to
Goodys, while the remaining 20 per cent goes to hotels and The protocol aimed at encapsulating the constructs of the
supermarkets. conceptual framework. In particular, the first part of the
In order to collect data an interview protocol has been questionnaire contained questions regarding the business
developed, as follows. activities, the size of the companies and general discussion
related to the particularities of the sector, as well as, the
Interview protocol changes that had occurred lately. The second part dealt with
Overview the relationship between the two companies. In this particular
1 General company information: part, a number of issues regarding the type of relationship, its
.
Size of the company (number of employees, annual evolution over time, the nature of dependence and the role of
turnover). other critical elements, such as power and trust to the
.
Business structure and business units of the company. intensity of collaboration were explored. Semi-structured in
.
Describe the business activities undertaken by the depth interviews were conducted with the purchasing
company. manager and the managing director of the two companies
2 Sector characteristics: respectively. In fact, the first interview was conducted with the
.
Describe the competition in the sector in comparison purchasing manager of the first company, where he also
to the past. What drives competition nowadays? introduced to us the contact of the other company. The
.
Has the strategy towards competition evolved over duration of the interviews was more than an hour each. A
years? How? follow up was done by telephone, in order to clarify some of
.
What are the requirements in market today and have the responses given. To ensure the internal consistency of the
they changed the last years? If yes why? data, responses of each participant were further explored and
3 Changes and developments in your supply chain: cross checked by asking the other participant, avoiding in any
.
What is currently the structure of your supply chain case to provoke debate between participants.
(number of suppliers/customers, areas of
collaboration, requirements? Has it changed the last Findings-discussion of results
years? In what way? The propositions formulated in the conceptual framework can
.
What were the drivers for the above changes, if any? now be supported or not, based on the empirical results of the
.
What were the benefits and the constraints of such an case study.
evolution? P1. Industrys macro-factors enhance the design and
government of supply chain relationships by
Relationship between companies enhancing the intensity of supply chain collaboration.
1 General characteristics: The case study revealed that some industry macro- factors
.
Describe your relationship with the specific partner enhance the intensity of collaboration in the agri-food supply
(history of the relationship, areas of collaboration, chain. For example, the case study supports the fact that
percentage of products supplied). changing consumer attitudes enhanced the intensity of
.
What were the reasons for starting up the specific collaboration. Indeed, in the late 1990s there was an
collaboration? increased need in the market (originated by Goodys) for
2 Analysing the relationship: greater quantities of vegetables in response to changing
.
Describe your relationship with the other company consumer attitudes and preferences (more people eating out
(advantages/disadvantages). in fast-food restaurants, preferring more healthy-like food).

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

This resulted in a strategic-level decision from HC and Analogously, reduced demand for lettuce from HC, in
Goodys to start up collaboration. Thus, HC became Goodys relation to overproduction or stable production of lettuce
exclusive supplier of fresh vegetables. In addition, industrys from BC resulted in similar practises from HC, which posed
consolidation enhances the intensity of supply chain issues for quality standards resulting in downward price
collaboration. The appearance of new companies operating pressures. Even if this situation was not occurring at a regular
in HCs sector resulted in increased competition pressuring basis, it created conflicts and lack of trust in the business
HC to become more efficient in its activities. As a result, the relationship. The data support this proposition, corroborating
company decided to change its supply policy, towards an also the suggestions of OKeeffe (1998), regarding the trust-
effort to rationalise its supply base, ensuring product building process.
excellence (in terms of quantity- quality) and process P4. Power asymmetry a) increases the dependence of a
excellence (in terms of cost and time reductions). The company from another, in favour of the more powerful,
company up to the late 1990s had a really big supplier base for and b) amplifies the imbalance of risk-reward sharing
fresh vegetables (tomatoes, cucumber, lettuce, carrots etc.), among companies hindering trust development and as
constituting of nearly forty suppliers. In fact, the company a result collaboration intensity.
was buying fresh vegetables from the local central fruit and One of the most interesting aspects of this collaboration is
vegetable market, negotiating prices and quantities on a related to the way power asymmetry has been evolved over
regular basis. This situation quite often resulted in losses of time and the way it has affected the interdependence of the
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product quality and at the same time significant excess of two companies as well as, the risk-reward sharing. At the
costs. Costs included not only the actual price-driven costs, beginning of the collaboration the size imbalance between HC
but also indirect costs of finding, negotiating and monitoring and BC was in favour of HC, making BC completely
the appropriate supplier. The exploratory evidence also shows dependent on HCs decisions. Despite this extremely power
that macro factors such as, globalization, stricter food laws unbalanced relationship, BC did enter the relationship and
and regulations, do not play an important role in enhancing tolerated power imbalance supporting also the suggestions of
the intensity of supply chain collaboration. Blundel and Hingley (2001), regarding the initial decision of
P2. Industrys micro-factors hinder the design and an SME to start a collaboration. However, this situation has
government of supply chain relationships by been reversed. Bretherton and Carswell (2002) suggest, the
deteriorating the intensity of supply chain imbalance of power drives the weaker party to seek alternative
collaboration. alliances. In the case study this is almost the case, since BC
The case study demonstrates deterioration on the intensity of did not seek for alternative alliances, but instead it entered
supply chain collaboration due to product features and the very successfully to new business activities in addition to
structure of the industry. Indeed, due to product features the lettuce production. This resulted in a shift of dependence,
main area for collaboration between HC and BC concerns with HC becoming to a great extent more dependent than
predominantly logistics-related activities, such as BC, despite the power imbalance which was still in favour of
transportation, ordering, procurement, rather than activities HC.
related to joint development of new products, or joint demand Risk-reward sharing, also, evolved over time following to a
management. This occurs not only as a result of the specific great extent the power-dependence balance. Initially, when
characteristics of the product, but also the structure of the BC was dependent from HC, no mutuality in risk sharing
sector. For example, in order to achieve joint development of existed. Indeed, the risk for BC was quite significant. Huge
new products, or joint demand management, further investments in production facilities (greenhouse operations)
integration upstream and downstream in the chain is were needed and on the contrary no commitment, in terms of
required. The case study shows that both upstream and contract, was given from the part of HC. The result was a
downstream integration is difficult to achieve, particularly continuous pressure from the BC to HC, which created trust
upstream integration with the entities responsible for problems and collaboration inefficiencies (increased control
developing new varieties; no such links exist. Finally, the and production monitoring etc.). However, as the
volatile nature of price and supply, deters the depth of dependence of BC from HC reduced over time, even if
collaboration to operational and tactical level, rather than power asymmetry still existed, risk-reward sharing imbalance,
strategic, despite the fact BC, put pressure on HC to also, reduced and resulted in better collaboration attitude,
collaborate on a strategic level by conducting joint and more intense collaboration particularly at the operational
investments in the field of greenhouse vegetable production. and tactical level. The exploratory evidence, in contrast to
P3. Industrys micro-factors hinder the establishment and Handfield and Bechtel (2004), show that it is the element of
maintenance of supply chain relationships, by dependence affecting the trust-building process and thus
impinging the trust-building process, and deteriorate collaboration intensity, rather than the element of power. As a
the intensity of collaboration. result, neither the proposition of power asymmetry increasing
the dependence of a company from another, in favour of the
The case study identified that products features impinge the more powerful, nor the proposition of power asymmetry
trust-building process and hinder the establishment of supply amplifing the imbalance of risk-benefit sharing among
chain relationships. In particular, the volatile nature of the companies is supported.
product, in terms of quantity and quality, impinged trust
building between companies. Indeed, there were cases where
Conclusions
increased demand from HC followed by low production
volumes (due to weather conditions, or farmers Collaboration is a very broad and encompassing term and
incompetence) resulted in increased requirements in terms when it is put in the context of the supply chain it needs yet
of prices and better payment terms, from BC for all levels. further clarification (Barratt, 2004). The complex nature of

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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

supply chains adds difficulties in the elements involved in the second limitation is the focus on dyadic relationships;
concept of supply chain collaboration. The literature review extending the research focus to more complex supply chain
undertaken, although not exhaustive, served as a relationships across the entire chain would be also useful.
comprehensive base for understanding and developing a While none of the factors identified in the research are truly
framework for supply chain collaboration. Two major pillars new or novel, they have never been studied in the agri-food
were identified: the design and government of supply chain context before, and this is the key contribution of this study.
activities, and the establishment and maintenance of supply Future research on supply chain collaboration is required in
chain relationships. order to develop a more clear understanding of the benefits,
Part of this overall framework was further explored in the as well as, the risks of supply chain collaboration and the way
context of the agri-food industry in an effort to understand the aforementioned elements of trust, power and dependence
the concept of supply chain collaboration in a specific context. interact in the collaboration building process.
The case study conducted revealed that while there is a true
need for supply chain collaboration, the structure of the agri-
food sector along with the nature of products impinges the References
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A conceptual framework for supply chain collaboration Supply Chain Management: An International Journal
A. Matopoulos, M. Vlachopoulou, V. Manthou and B. Manos Volume 12 Number 3 2007 177 186

Shaw, A.S. and Gibbs, J. (1995), Retailer-supplier on supply chain operations. He has been involved as a
relationships and the evolution of marketing, researcher in the national research programme Heraklitos
International Journal of Retail & Distribution Management, and EQUAL, and he participated in the E-business forum
Vol. 23 No. 7, pp. 7-16. (work-team Z2: Using RFID for the integration of the supply
Simatupang, T.M. and Sridharan, R. (2004), Benchmarking chain, and work-team I2: E-business in SMEs in the food
supply chain collaboration: an empirical study, industry, under the auspices of the Greek Ministry of
Benchmarking: An International Journal, Vol. 11 No. 5, Development). He is also a member of Hellenic and
pp. 484-503. International Associations. A. Matopoulos is the
Spekman, R. and Salmond, D. (1992), A Working Consensus to corresponding author and can be contacted at:
Collaborate: A Field Study of Manufacturer-Supplier Dyads, arismat@uom.gr
Marketing Science Institute, Cambridge, MA. M. Vlachopoulou is an Associate Professor of e-Marketing/
Spekman, R. and Sawhney, K. (1995), Toward a conceptual Business at the University of Macedonia, Department of
understanding of the antecedents of strategic alliances, in Applied Informatics, Thessaloniki, Greece. Her professional
Wilson, D. and Mollen, C. (Eds), Business Marketing: expertise and research interests include: Marketing information
An Interaction and Network Perspective, Kent Publishing, systems, E-Business, ERP/CRM systems, Supply chain
Boston, MA, pp. 157-92. management, Knowledge management, e-supply chain
Stank, T.P., Crum, M. and Arango, M. (1999), Benefits of management, e-logistics, Virtual organization/enterprise
inter-firm co-ordination in food industry supply chains, modeling. She has participated in European Projects in the
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Journal of Business Logistics, Vol. 20 No. 2, pp. 21-41. above fields, and she was an expert evaluator of STAR project
Sterns, J.A., Schweikhardt, D.B. and Peterson, H.C. (1998), research. She has published papers in Greek and International
Using case studies as an approach for conducting Journals, and books. She acts as a reviewer in the International
Agribusiness Research, International Food and Agribusiness Journal of Production Economics, the International Journal of
Management Review, Vol. 1 No. 3, pp. 311-27. Business Information Systems, the European Journal of Operational
Stevens, G.C. (1989), Integrating the supply chain, Research, and for the Balkan Conference of Operations
International Journal of Physical Distribution and Materials Research. She has been chairman in several scientific
Management, Vol. 8 No. 8, pp. 3-8. conferences, and member of organizing and scientific
Trienekens, J. and Beulens, A. (2001), The implications of committees. She is a member of Hellenic and International
EU food safety legislation and consumer demands on Associations and visiting research professor at the University of
supply chain information systems, working paper, Sunderland, UK. She has also served as a consultant to private
Department of Management Studies, Wageningen companies in Greece.
University.
V. Manthou is an Associate Professor of Information Systems
Wagner, B.A., Macbeth, D.K. and Boddy, D. (2002),
& Logistics at the University of Macedonia, Department of
Improving supply chain relations: an empirical case
Applied Informatics, Thessaloniki, Greece. Her professional
study, Supply Chain Management: An International
expertise and research interests include: analysis and design of
Journal, Vol. 7 No. 4, pp. 253-64.
management information systems, Supply chain management,
Walker, M. (1994), Supplier-retailer collaboration in
European grocery distribution, Logistics Information Logistics, ERP, e-commerce, health information systems. She
Management, Vol. 7 No. 6, pp. 23-7. has participated and participating in European Projects in the
Yin, R.K. (1994), Case Study Research: Design and Methods, above fields (e-business forum, ISIS project) and has published
2nd ed., Sage Publications Inc, Thousand Oaks, CA. papers and reports in Greek and International Journals, and
Yin, R.K. (2003), Case Study Research: Design and Methods, books. She acts as a reviewer for the International Journal of
3rd ed., Sage Publications Inc, Thousand Oaks, CA. Production Economics, the International Journal of Logistics Systems
and Management, the TQM Magazine, the International Journal of
Enterprise Information Systems and for the Balkan Conference of
Further reading Operations Research. She has been chairman in many scientific
Ellram, L.M. (1991), A managerial guideline for the conferences, and member of organizing and scientific
development of implementation of purchasing committees. She is a member of Hellenic and International
partnerships, International Journal of Purchasing and Associations and visiting research professor at Loyola
Materials Management, pp. 2-8. University, USA. She has also served as a consultant to private
companies in Greece.
B. Manos is a Professor of Agricultural Economics at the
About the authors Aristotle University of Thessaloniki, School of Agriculture,
A. Matopoulos is a Doctoral candidate at the University of Lab. of Agricultural Informatics, Thessaloniki, Greece. His
Macedonia, Department of Applied Informatics, professional expertise and research interests include: decision
Thessaloniki, Greece. He received his BSc in Agriculture, support systems, agricultural economics, operational research
from Aristotle University of Thessaloniki, and his MSc in and computer applications in the agricultural sector. He has
Food Industry Management and Marketing, from Imperial participated and participating in a number of European
College, Wye Campus, University of London. His current projects in the above fields and has published several papers
research interests include: Logistics and supply chain and reports in Greek and International Journals, and books.
management, E-business adoption and E-Business impact He is a member of Hellenic and International Associations.

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