Creating sustainable fresh produce supply chains by managing uncertainties

Abstract

The aim of this empirical paper is to study the influence of supply, demand, and price uncertainties in fresh produce supply chains (FSC), in an effort to improve sustainability. Fresh produce are foods of plant origin with short shelf life, and the uncertainty in FSC stem from intrinsic characteristics (e.g., perishability, quality variation, seasonality) of the produce.As per resource-based view (RBV), a firms' performance depends on its resources and capabilities. In line with RBV theory, internal integration (through operational capability) and external integration (through relational and information technology capabilities) are viewed as a resource, which lead to improved delivery performance, of Firms' supplier (the dimension of FSC performance), and enables the firm to improve its sustainability measures. It is proposed that FSC performance is positively associated with the performance of the firm, and that FSC uncertainty negatively moderate the positive relationships between firms' capabilities and FSC performance. Survey data is used to independently calibrate and validate a structural equation model. Results provide support for the model, and the finding fits with the theoretical bases. In conclusion, to manage uncertainties, firms need to strike a balance between the benefits and investments in resources. In case of large firms, substantial resource commitment is often necessary when undertaking integrative activities and an improvement in Firm performance may take substantial time. The small firms in this study are able to integrate both internally and externally without committing significant resources, and see an improvement in Firms' performance, as indicated by sustainability measures.