Factor Identification for the Procurement of Raw Material in Food Processing Industry

Abstract

Procuring raw materials (RM) is essential in the supply chain (SC), particularly in the current business landscape where organisations actively seek innovative ideas to cut costs and maintain competitiveness. The procurement operation enables these organisations to navigate through increasing cost pressures. Within SC logistics, the procurement of RM faces numerous obstacles and complexities. To address these challenges and propose potential solutions, examining the specific issues that impact the procurement of RM in the Food Processing Industry (FPI) is necessary. Therefore, this article explores the challenges affecting the procurement process. The authors also provided recommendations for mitigating the identified challenges. This study utilises interpretive structural model methodology, a qualitative and interpretive approach that produces solutions for complicated issues through discussions based on the structural mapping of intricate relationships between elements to look at and analyse the challenges that affect the procurement process. A systematic review of the existing literature provides a comprehensive understanding of these challenges. The study found that challenges in contract and procurement, infrastructure and transportation, technology, govt regulations, quality and safety standards, etc., are the factors that constitute severe challenges and affect the growth of FPI. Data were collected from only those working in Indian companies or multinational companies operating in India. Every step of the process, starting from the development of the questionnaire to the data collection itself, is carried out with a focus on the Indian perspective. Addressing these problems and obstacles will yield advantages for decision-makers and stakeholders, including farmers, manufacturers, customers and consumer Food Business Organisations. It will enhance their comprehension of the current situation, identify issues and confront challenges, thereby facilitating improved planning and management strategies.