Managing Uncertainty Through Sustainable Re-engineering of the Value Chain. An Action-Research Study of the Aquaculture Industry

Abstract

Aquaculture is a constantly growing industry that provides food for the world’s growing population. However, fish supply chains are not efficient and are, largely, unsustainable. As a result, without re-designing fish supply chains, aquaculture could provide solutions to feed the world’s population but at the expense of the environment and global fish stocks. Uncertainty in the aquaculture value chain makes its management challenging and efficiency more difficult to achieve. Uncertainty can be found at all stages including supply, production, distribution and demand. Uncertainty largely derives from the nature of fish, as a highly perishable and price-sensitive commodity. A rule of fish price devaluation is that “every day that fish remains unsold the average selling price decreases by at least 20%”. This study presents an action-research case study of one large aquaculture enterprise in the Mediterranean Sea. The case company executed a sustainable re-engineering of its value chain in order to reduce fish life-cycle time, bring it to market more quickly and reduce the uncertainty previously found in production and distribution processes. The findings suggest best practices to re-engineer the supply chain in a sustainable way to manage uncertainty in the aquaculture and food sector in general. Aquaculture literature has long stressed the critical reduction of global fish stocks and its huge impact on sustainability, yet few studies have provided empirically rich data on how to effectively manage uncertainty and thus increase the sustainability of the industry while also preserving fish stocks globally. Thus, this study has significant implications in global fish regions, including Asian countries, where there is stressful impact on managing the fish stocks effectively.