The emergence of supply chain accountability within the Dutch flower bulb export sector

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The emergence of supply chain accountability within the Dutch

flower bulb export sector

Name: Adriaan de Wit Student number: 10780335

Thesis supervisor: Prof. dr. B.G.D. O’Dwyer Date: 25 June, 2018

Word count: 22675, 0

MSc Accountancy & Control, specialization Accountancy Faculty of Economics and Business, University of Amsterdam

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Statement of Originality

This document is written by student Adriaan de Wit who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

Through interviews, this case study aims to capture and analyze the emergence of the supply chain accountability within the Dutch flower bulb export sector. The Netherlands is the worlds’ second largest exporter of agricultural goods, according to the CBS. Without phytosanitary information exchange, international trade of agricultural goods is not possible. Together with Dutch authorities, the Dutch flower bulb sector established the Chainregister. The purpose of the Chainregister is to digitally connect traders to CLIENT Export during the application for export certificates, which guarantees the highest quality export goods to third countries by digitally recording, verifying, and exchanging phytosanitary information between growers, traders, and the inspection service. Interviews with stakeholders are used to investigate why the Chainregister was established, what problems affect accountability, and how this type of digital self-regulation contributes to transparency and accountability in the supply chain. As a result of digitalization, supply chain members are (more) accountable for their quality. However, the conservative nature, low affection with automation, hostile tension between traders and growers, and feared loss of creativity in trade cause strong resistance against the rigid Chainregister. The challenges can be beaten by close collaboration of the supply chain members to optimize the use of the Chainregister. This study is the first to the emergence of accountability in a non-food agricultural sector.

Keywords: Accountability; Digitalization; Dutch Agriculture; International Trade;

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Preface

This thesis embodies the final part of my MSc Accountancy (& Control) at the University of Amsterdam, under supervision of Prof. Dr. B.D.G. O’Dwyer. This case study investigated, explored, and documented the emergence of accountability in the Dutch flower bulb exporting sector after the establishment of the Chainregister.

While I got your attention, I would like to thank my family, friends, fellow students, colleagues at KPMG for their support during my study. Also, I want to thank R. Kock for his support and coaching during my internship at KPMG. Moreover, I want to explicitly thank all individuals who contributed to this study.

Likewise, I want to thank prof. dr. B.D.G. O’Dwyer for his enthusiasm since the first moment I discussed my ideas, which motivated me to engage in this qualitative research.

In special, I am grateful for the immeasurable support of my parents during my study. I hope the reader will enjoy reading this study. I believe one can learn from reading upon. Yours sincerely,

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1 Introduction

Agricultural goods mentioned for international trade have to meet high phytosanitary quality (Dong & Jensen, 2004; Henson & Loader, 2001; Calvin & Krissoff, 1998). In 2005, the NVWA (Netherlands Food and Consumer Products Safety Authority) introduced CLIENT Export, an innovation to digitalize the information exchange required for export certificates. Before, information was communicated by paper documents, this process and its subsequent administration were sensitive to fraud and time-consuming. Since the introduction, the NVWA claimed in 2012 that there is less fraud, better oversight, and optimal performance of both government and business (Netherlands Food and Consumer Product Safety Authority, 2012).

Within the Dutch agricultural sector, there are multiple specific sectors that had to be connected to CLIENT Export individually, such as diary, poultry, vegetables, and tulips. The Dutch flower (bulb) sector is unique and accounts for 9.1 billion worth of export (CBS and Wageningen Economic Research, 2018). The Netherlands is the center of the global flower bulb industry for centuries (De Hertogh, 1974). Billions of bulbs are produced annually, of thousands of different cultivars. Products are exported to parks, forcers, and garden centers worldwide. As bulbs are living plants, they can introduce and spread plant pest and diseases. The NVWA is tasked to safeguard plant health in the Netherlands and prevent the introduction of plant pests. Besides carrying out phytosanitary inspections at import, the organization supervises the inspection of outgoing shipments of plant material.

In the last decades, international phytosanitary requirements for agricultural products have become more strict and diverse (Gebrehiwet, Ngqanqweni, & Kirsten, 2007). The need for supply chain management in the flower bulb sector has only became stronger (Ooms & Pinxterhuis, 2015). Therefore, the flower bulb sector initiated and established the Chainregister in cooperation with authorities to enhance transparency and traceability in the intercompany trade and make operations more efficient by digitalizing the exchange of phytosanitary information. Bellon-Maurel et al. (2015) defined traceability in agricultural context as ‘all compulsory and voluntary on-farm records.’ The quality of export products and trade in general should increase after the adoption of the Chainregister.

This study explores specifically how digital transition of the Dutch flower bulb sector, from the undisciplined ‘Wild West’ towards a sector that electronically communicates with (inter)national authorities, led to improved supply chain accountability. Therefore, this study

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is set out to investigate the emergence of supply chain accountability in the Dutch flower bulb export sector.

This study reveals that digitalizing exchange of phytosanitary information among supply chain members improves transparency and accountability. There is broadly-shared awareness that digitalization is inescapable. Yet, there is resistance against the exposure of private business information to authorities digitally.

The study is relevant because the NVWA is responsible for the safety of consumer goods and IT is central in the organization. The organization serves the public trust, and is the subject of news items weekly. For instance, while finalizing this study, the NVWA announced an IT setback of €59 million euros (Nederlandse Omroep Stiching, 2018). Dutch government IT projects hardly succeed at the first attempt. Furthermore, the Netherlands is a typical export country. To maintain their high reputation, quality of export goods cannot be affected by dysfunctional IT systems. Lastly, the increasing global trade demands effective (phytosanitary) inspections to avoid spreads of diseases, which can be disastrous for affected products. For example, the Panama disease could exterminate the banana globally (Vlaams infocentrum land- en tuinbouw, 2017).

This study contributes to literature by firstly analyzing the emergence of accountability in an agricultural, non-food (!), sector. Thus far, literature only focused on accountability in agrifood sectors that have different dynamics, because public pressure is much stronger. Furthermore, the study potentially offers an example by illustrating how change is dynamic and what effects of digitalization are. This study should provide lessons to those who want to successfully introduce new IT projects in supply chains.

This paper is structured as follows. The next section reviews literature on supply chain management and accountability. Before introducing the context of this case study, the research method used to understand the development of supply chain accountability is clarified. The analysis starts by examining the content of two reports published by independent research bodies. The analysis proceeds by assessing interviews to identify the drivers for change, and how digitalization enables transparency and accountability to emerge. Digitalization is obstructed by conservative practices and thinking, which subsequently prevented costs to reduce as promised. The analysis ultimately aims to look ahead into the future. The findings are summarized and interpreted in the discussion. Finally, this study concludes with the implications of the findings and directions for future research.

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2 Literature review

In this chapter, relevant concepts will be explained and reviewed using scientific literature. To start, the concept of (sustainable) supply chain management (SCM) will be introduced. Secondly, the concept of accountability and its role within supply chains will be discussed. This concept will be expanded by literature about self-regulation. Thirdly, Corporate Social Responsibility is included. Fourthly, the role of information technology (IT) and Accounting Information Systems (AIS) will be considered, because literature reveals the relation of technology to supply chain performance. Fifthly, sustainable supply chains will be discussed from an accountability perspective. Finally, the literature review is summarized briefly to integrate the different subjects.

2.1 Supply chain management

Firms, through entire global supply chains, are increasingly being held accountable for social and environmental outcomes by the public and governmental institutions. Recent scandals, such as pollution, toxicity problems, other environmental damage, human rights violations, demonstrate the need for managing supply chain members and external stakeholders (Parmigiani, Klassen, & Russo, 2011; Srivastava, 2007; Maloni & Brown, 2006). In this paragraph, the concept of supply chain management will be explained, as introduction to show later how supply chains can respond to these changes. The literature regarding supply chain management is relevant as it concerns the Dutch flower bulb (exporting) sector’s effort to benefit in multiple ways from the introduction of the Chainregister, initiated by the advocate of exporters. After discussing supply chain management (SCM), sustainable supply chain management (SSCM) will be introduced.

Since the concept was introduced to public in 1982, supply chain management became a new area of research in the 1990s. Current academic literature broadly considers supply chains as Handfield and Nichols described in 1999: "the supply chain encompasses all activities associated with the flow and transformation of goods from raw materials stage (extraction), through to the end user, as well as the associated information flows." After analyzing literature in-depth, Mentzer et al. (2001) define supply chain as "a set of three or more entities directly involved in the upstream and downstream flows of products, services, finances, and/or information from a source to a customer." Handfield and Nichols (1999) claim that "supply chain management (SCM) is the integration of these activities through

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other words, members of supply chains cooperate and integrate their activities, using scale to lower cost, to ultimately achieve joint economic competitive advantage relative to other supply chains.

In order to get a better understanding of the concept SCM and critical factors for its effectiveness, outcomes of the literature review by Mentzer et al. (2001) and the research of Fawcett et al. (2008) will be discussed briefly hereafter. It is important to understand that many problems can arise while adopting supply chain management effectively. The following activities contribute to effective SCM. Firstly, entities must cooperate with other entities, as suppliers, manufacturers, and carriers, through integrated behavior. The main goal is to fulfill end-customers’ demand in the dynamic environment. Secondly, to implement SCM effectively, supply chain members have to cooperate and share information mutually and frequently for planning and monitoring processes. Thirdly, supply chain members that aim to achieve competitive advantage together with its SCM activities, have to share risks simultaneously. Fourthly, the cooperation and coordination of joint actions should serve the same goal and the same focus on serving customers. This requires explicit policy integration among supply chain members. Fifthly, processes, from sourcing to manufacturing and distribution across the supply chain need to be integrated. Lastly, competent partners are required in SCM to build and maintain long-term relationships. Furthermore, Fawcett et al. (2008) claim that trustamong supply chain members, adequate and consistent performance measures, and training for new mindsets and skills are essential for the implementation of effective SCM.

Interestingly, Fawcett et al. (2011) found that within a supply chain, the willingness of a company to share information leads to improved decision-making and ‘better’ value creation. Information could have multiple natures (i.e. financial, origins, quality, sustainability, phytosanitary) alongside the ‘connected’ IT capability, an information-sharing culture is complementary to a firm’s ability to connect. Beyond better performance, companies are learning how to achieve greater collaboration and reach higher levels of satisfaction using information sharing. Thus, culture plays an important role in optimizing the supply chain, especially when IT resources are available. The importance of IT in supply chains will be discussed later in section 2.4.

Besides the increased need for management of supply chains to be accountable for economic, social, and environmental impact, research has identified another driving force of SCM for the member firms. The main goal of organizations is to create value by strategic

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SCM, which is seen as the enabler to create and sustain competitive advantage (Fawcett, Magnan, & McCarter, 2008; Handfields & Nichols, 1999). Moreover, supply chain competitive advantage is the main motivation behind the adoption of SCM (Mentzer, et al., 2001). Again, the idea is that firms cooperate with their suppliers and customers to create consumer value. Obviously, the paradigm has changed, firms do not longer compete each other individually and they rather compete as supply chains, according to Lambert (2000) and Fawcett et al. (2008).

Other forces that drive collaboration of supply chains are economic globalization, outsourcing, more demanding customers, greater intensity of competitiveness, more tight alliance relationships, continued merger activity, need for better information, and new information technologies (Fawcett, Magnan, & McCarter, 2008).

Main benefits of effective SCM identified by the survey by Fawcett et al. (2008) are satisfying customer needs and cost reduction. Furthermore, products and services can be more unique and differentiated to consumer’ needs, R&D cycles can be much faster, higher quality can be achieved, responses to customers’ demand can be more flexible, order cycles can be shorter, and delivery performance can be enhanced.

Where social and environmental pressure on individual firms and supply chains has increased, adequate supply chain management is one way for firms to jointly improve their social and environmental performance. According to Carter & Liane Easton (2011), this trend fits in corporate social responsibility (CSR) and sustainability positions of firms, the more holistic approaches that can apply to SCM. As both concepts are complementary, Carter and Rogers (2008) were encouraged to set up the sustainable supply chain management (SSCM) framework that includes the interrelationships between environmental, social, and economic performance. Two building blocks of SSCM, distinctive from ordinary SCM, are a culture of high ethical standards and expectations with respect to society and the natural environment, and operational transparency by having traceability and visibility throughout the supply chain and communicate this to stakeholders.

Thus, sustainable supply chains manage their responsibilities, as public and institutions hold them accountable for their actions, policies, and operational practices. In the next section, the concept of accountability - in supply chains - is explained and examples are provided. Moreover, this will also contribute to the understanding of SSCM and CSR, which became increasingly important in the last decades.

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2.2 (Supply Chain) Accountability

Academics defined accountability in multiple ways. Concerning both firms and supply chains, “accountability captures the extent to which firms (and supply chains) are required or expected to justify their decisions and actions, thus for product design, sourcing, production or distribution to stakeholders” (Valor, 2005; Parmigiani, Klassen, & Russo, 2011; Ebrahim, 2003). Actors are held responsible for their actions. Moreover, accountability implies sanctions and compensation. Transparency, one of the key features of the Chainregister, can generate organizational accountability (Fox, 2007). If an organization has access to information, it demonstrates institutional answerability to public scrutiny. Therefore, the organization can be held accountable with sanctions or compensation. Hence, it is the relationship between the agent (i.e. company and subordinates or supply chain) and the principal (i.e. stakeholders and authorities), in which the principal is in the position to enforce its responsibility by calling the agent to account for its actions, policies, practices, and decisions, which the agent has to be able to justify or explain by providing information to a review authority (Sinclair, 1995; Unerman & O'Dwyer, 2006). Organizations can be held accountable through legal obligations and explicit reporting and disclosure requirements by (market) authorities. Furthermore, organizations and individuals seem to hold internal responsibility for establishing organizational goals and values, and moreover for exposing themselves to public scrutiny and assessing performance (Ebrahim, 2003).

It is important to note that a wide variety of stakeholders can have a central role with respect to decision-making and actions. Organizations (and supply chains!) are no longer only accountable to stakeholders with a direct economic interest, such as shareholders, customers and suppliers. Instead, they are even accountable for environmental and social impact (Parmigiani, Klassen, & Russo, 2011; Maloni & Brown, 2006). Other stakeholders are the media, social and environmental activists, regulators, and other parties outside of the flow of goods and services. Each stakeholder has different interests. To demonstrate the how these stakeholders can exert pressure on organizations and supply chains improve their social and environmental impact, (thus to adopt sustainable supply chain management), an example from the textile industry will be illustrated.

Seuring & Müller (2008) state that textile and apparel industries have to comply with the demands of customers and show commitment to high ethical standards. Huge accidents in fabrics in countries as India, Pakistan, and Bangladesh caused public to hold organizations such as H&M, Zara, Levi Strauss, Adidas and Nike accountable for the unsafe and inhumane

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working environments in which the production of their clothing occurs. Large textile firms failed in their responsibility in the production chain, and started to manage the supply chain to improve its economic, social, and environmental performance sustainably. Here, the different partners have aligned incentives for supply chain management.

Hence, as part of their strategy, textile firms started to offer sustainable products to consumer market. This is a reflection of their improved social and environmental quality to satisfy consumers and create competitive advantage. Joint actions are undertaken to supply green products. Another important part of this strategy is the establishment of supply chain codes regarding labor conditions, after firms experienced pressure from public. This is part of the Corporate Social Responsibility, which will be discussed in the next paragraph.

More specifically, Diabat, Kannan, and Mathiyazhagan (2014) investigated the SSCM adoption of the textile industry in India. The authors claim that industries in India feel pressure to ensure SSCM by reducing waste and consuming less energy, because there are limited resources available and heavy pollution. Also, local government and Western consumers become more conscious about the environment. The authors concluded that textile organizations want to retain their customers by improving their environmental and social performance. The supply chain adopts SSCM, partially as a consequence of environmental social awareness. Besides increased accountability, common motives to implement SSCM are employment stability, employers’ health and safety issues, community economic welfare, the adoption of green processes and purchases, government regulations, customer satisfaction, and the improvement of product characteristic.

Non-governmental organizations (NGOs) and corporations deal with various stakeholders and have to manage their different accountability demands, according to Ebrahim (2003) and Baur & Schmitz (2012). These different accountability demands can conflict with each other sometimes. Therefore, organizations have to strategically manage these interests and demands of those who are affected by its business operations. Diverse accountability mechanisms, like social auditing and self-regulation, were established. Social auditing is formally reviewing one firm’s endeavors in corporate social responsibility, but this is not applicable to this study. These mechanisms became more and more relevant since accounting scandals in early 2000s. Below, the mechanism of self-regulation will be examined, as this actually is what the Chainregister is about.

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2.2.1 Accountability mechanism: self-regulation

The efforts of sectors, industries, or supply chains that attempt to establish, for example ethical, quality, or environmental standards or codes of behavior or performance are identified as self-regulation (Baur & Schmitz, 2012; Ebrahim, 2003; Sharma, Teret, & Brownell, 2010). These attempts are often mentioned to recover the image of the sector and to prevent new governmental regulations. Although external interference is appropriate to deal with issues of public trust, self-regulation is a complementary method to focus on sector-wide problems and simultaneously keep a level of integrity. In NGOs, self-regulation has been a valuable way to restore public trust, but also to enhance performance. The process to develop self-regulation is complex, and requires clear coordination to be considered as legitimate, but can result in an outcome that benefits both public and the supply chain members itself.

Self-regulation is voluntary, and often claimed to center consumer welfare. Furthermore, decent self-regulation has several benefits; Sharma et al. (2010) claims that “governmental resources are conserved, the systems are more flexible, and it is timelier than government regulation.” However, to be successful, the governance must be supported by all stakeholders, the formulation of standards has to be transparent, and compliance has to be evaluated by objective external bodies.

Self-regulation is often supposed to complement government regulation. A significant difference is that governments can exercise sanctions if a firm does not comply, where self-regulation cannot be forcefully employed without explicit sanctions. King and Lenox (2000) revealed that the subjected self-regulation initiative suffers from opportunism; the number of poorly complying organizations is substantial and members do not improve significantly better than non-members. Self-regulation without explicit sanctions is seldom effective.

The food industry has several self-regulatory initiatives in the past, for example the tobacco, forestry, marine fisheries, and alcohol (Sharma, Teret, & Brownell, 2010). Some attempts were successful, others were not. Most are related to agriculture, and therefore can serve as example how to establish and implement self-regulation for the Dutch flower bulb sector. Motivations for self-regulation are contingent, underlying factors are external threats (litigation, negative public attitude’s) or one industry’s internal interest (overuse of natural resources).

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2.3 Corporate Social Responsibility

The scrutiny on Corporate Social Responsibility (CSR) practices of companies by consumers and governments is a result of failed corporate ethics, according to Maloni and Brown (2006). The Chainregister fits in CSR theory because it is an initiative of the flower bulb sector to restore entrustment by the government (indirectly through the NVWA). One company recall the Chainregister on its website as big achievement to conduct ethical business. However, there is no conceptual model of CSR that can be applied to all industries. The international textile industry for example. Both organizations and supply chains are hold accountable for their CSR. Since its importance has increased, this paragraph will explain CSR, which formally originates from the 1950s in the 20th_{century (Carroll, 1999).}

CSR is generally known as the term for multiple overlapping concepts that represent business and society relations, as well as ‘business ethics,’ according to Matten & Moon (2004). The underlying fundamental idea is that corporates may be held accountable socially and ethically by stakeholders (Maloni & Brown, 2006). One particular US sector that is under public view is the (agri) food sector, which supports human life and has a large role in national economy. Public awareness about CSR issues can be limited, still there is high probability for significant backfire.

In 2003, Schwartz and Carroll created the Three-domain model of CSR, which categorizes CSR activities and orientations in business community. The three basic domains of responsibility are economic, ethic, and legal. Combinations of these three domains are possible either. Although their framework might be a useful construct for analysis, the boundaries are fluid and topic of discussion.

From a broader angle, going beyond business ethics, CSR also comprises corporate citizenship, philanthropy, community, workplace diversity, health & safety, human rights, sustainability, environment, fair trade, social auditing, procurement, and stakeholder management (Carter & Jennings, 2004; Schwartz & Carroll, 2003; Maloni & Brown, 2006). Same literature has elucidated supply chain management as a manner to consider these issues, especially concerning the environment.

2.4 Role of Information Technology and Accounting Information Systems

The adoption of supply chain management (SCM) is mainly facilitated and accelerated by the new information technology (IT) possibilities. The quality and

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transparency of information is key, because it will solve information asymmetry and it will reduce the need for intermediation (Barratt, 2004). Information exchange by IT creates a virtual supply chain, and improve timeliness. This is linked with the proposition that effective SCM is enabled by the integration of supply chain members and the necessary sharing of (accounting) information. Furthermore, jointly coordinated competitive initiatives become possible by improved IT possibilities, especially when IT resources are homogeneous and aimed to connectivity (Fawcett, Wallin, Allred, Fawcett, & Magnan, 2011). Still, companies’ IT strategies are mostly focused on improving productivity instead of connectivity. From my point of view, the Chainregister is such a jointly coordinated initiative to create competitive advantage, possible by the advanced IT. Therefore, it is relevant to consider key IT factors that contribute to efficient (and sustainable) SCM.

The adoption of IT systems is time-consuming and expensive, according to Grabski et al. (2011). In order to accomplish successful implementation, it is important that change management is carefully carried out. For example, culture matters. The use of IT might require cultural changes of an organization, employees should be prepared by education. Where many organizations introduce IT systems to gain competitive advantage, they should realize that competitive advantage is often short-lived for the pioneers. Competitors will follow and the advantage will disappear.

The role of information technology cannot be overstated for effective SCM. It is evident that the integration and the exchange of information between the parties contributes to effective supply chain management and performance (Mentzer, et al., 2001; Zhou & Benton Jr, 2007; Lee & Whang, 2000). Especially, this can be achieved by relatively new integrated IT systems such as Enterprise Resource Planning systems (ERP-systems), which enable departments within an organization to interchange information (Rom & Rohde, 2007). Although the paper only considers departments with one organization, different organizations with compatible and/or homogeneous IT systems can exchange financial and material information with other supply chain members. Systems of such capabilities can contribute to monitor within organizations and supply chains. It is evident that data integration improves information quality. Intercompany process integration in the supply chain is one important factor to benefit from sharing information (Barratt, 2004).

Another critical factor is strategic alignment. The centrality of IT in business operations requires the strategic alignment between delivering business value and the use of IT (Wilkin & Chenhall, 2010). Dynamic strategic alignment of business focus and IT

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investments is that important, because IT can function as an intrinsic enabler to the creation of business/customer value and competitive advantage. Furthermore, important factors are the integration of new IT investments with current structures, determination of IT capabilities, operational IT resources and the future IT requirements to meet the needs of the business. This is the responsibility of the managing institution in organizations and supply chains.

The adoption of ERP often results in higher quality information, which can be used for management accounting practices (Rom & Rohde, 2007). Often, top management of an organization uses the new systems for monitoring activities and processes. Hence, supply chain top management can benefit from IT adoption as well, which relates to the management accounting practices that generate trust in a supply chain (Free, 2008). This relation is explained more detailed in the next section.

2.5 Supply chain accounting, the open book accounting concept

As stated earlier, Fawcett et al. (2008) and Barratt (2004) claim that without trust, effective supply chain management will not be achieved. Do accounting practices among supply chain members enhance trust? Free (2008) argues that, theoretically, supply chain accounting practices form an important fundament to the constitution of trust, because self-interest actions will be less likely. However, Free further finds that the adverse occurs during his research in the UK retail industry.

Management accounting approaches based on mutuality and reciprocity do not always have the desired outcome. In the case study of Free (2008), the parties in the sector adopted open book accounting. With open book accounting (OBA), firms disclose cost – and other financial data. This data is sensitive in competitive environments, but OBA practices are adopted under certain circumstances of trust. OBA practices may actually contribute to building trust in networks of organizations, but it does depend on the specific purpose of the relationship (Kajüter & Kulmala, 2005).

Even when all actions are numerically sound and registered, Free (2008) observed that organizations are cynical about the calculations and distrust arises. Eventually, implemented supply chain accounting techniques to monitor can result in less trust among the organizations within the supply chain. Thus, Free (2008) concludes that forceful accountability and open book accounting practices are not probable to create trust and provide strong incentives to manipulate management accounting information. One essential

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fact is that the incentives were not aligned. In the end, the retailer wanted to buy its products as cheap as possible from its supplier.

These findings are interesting because the author suggests that information sharing and accounting practices are not the solution to trust issues. This proposition will be tested while doing interviews with the exporters of flower bulbs. Although information shared concerns quality and phytosanitary, instead of financial information, the open book accounting concept is still applicable to the Chainregister. Furthermore, the Chainregister includes three parties, instead of only buyer and supplier. An independent quality monitoring party is present, which monitors the transactions accurately.

2.6 Summary

In this paragraph, the literature review is summarized to elucidate the integration of the different parts. Effective supply chain management is dependent on many factors that determine failure or success.

Firms face more challenges and are held accountable by public for social and environmental outcomes with more scrutiny than ever. Some issues cannot be solved by one individual firm, due to a wide variety of reasons (e.g. globalization and outsourcing). Moreover, consumers and governmental organizations hold entire supply chains accountable for their economic actions. Hence, firms have to collaborate with other supply chain members to comply with social expectations. This collaboration and coordination requires effective supply chain management, to constitute CSR-standards to improve environmental and social quality. One mechanism to improve accountability is regulation. To be successful, self-regulation must be supported by all stakeholders and formulated transparently.

Likewise, supply chain management enables supply chain members to generate competitive advantage and customer satisfaction.

Technology is an important enabler of this supply chain management, as IT systems facilitate the inter-company integration and exchange of information. Before, IT was mainly used to improve productivity rather than connectivity. Nowadays, connectivity becomes more important as IT is central in SCM. The interchange of management accounting information between supply chain members does not guarantee the desired outcome. Instead, organizations can become suspicious and distrust their partners.

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3 Qualitative research method

This field study aims to increase our understanding of the emergence, execution and evaluation of supply chain accountability within the Dutch flower bulb exporting sector. Qualitative methods will be used, in order to gain knowledge about the specific circumstances of the Chainregister, and to understand the perceptions of the stakeholders; the users, quality inspection services, the trade organization and other sectors’ representatives. In his paper, Flyvbjerg (2006) argues that qualitative research, e.g. case studies, are an important method to achieve knowledge and understanding in social sciences, like economics.

In field research, the researcher examines data from the particular case. Later, obtained insights will be elevated towards are more general setting. This is called inductive reasoning. Qualitative research methods are known to be effective in generating grounded understanding of everyday practices and problems. Moreover, qualitative research that assess alternate perspectives can result in complementary information instead of conflicting viewpoints. Each opinion can generate additional knowledge (Power & Gendron, 2015).

Also, the (often) exploratory nature of qualitative research can offer detailed descriptions of phenomena and sound classification that pave the way for new quantitative studies. By analyzing qualitative data (gathered by interviews), it is possible to generate new knowledge and even new hypotheses to be tested in subsequent studies (Qu & Dumay, 2011). This case study will be performed through the positivist school of thought, where, according to Eisenhardt (1989), one researcher aims to find the best causal theoretical explanation for a phenomena. If such causal explanations exist already, the inductive method can be used to challenge these theories. Ultimately, an explanation can be falsified and replaced with a superior one, according to Malsch and Salterio (2016).

Nonetheless, qualitative researches should be aware that one cannot generalize findings of their case study. Descriptive case studies without any generalization still can be of value, because Flyvbjerg (2006) claims that the process can often speed up scientific innovation. Still, efforts to generalize are essential and an effective way of scientific development when limitations are highlighted.

The goal of this study is to understand the reality of the Chainregister and the circumstancing supply chain dynamics. Data will be collected from interviews and existing professional analytical reports prepared by specialists. These will be used to describe the case

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and themes of the case. Moreover, multiple data sources contribute to triangulation, which will result in greater accuracy of observations. The analytical approach to the case study implicates a precise description of the case, the setting of the case within its contextual circumstances, and a presentation that may or not may be chronological (Creswell, Hanson, Clark Plano, & Morales, 2007; Yin, 2003).

This chapter includes the method in detail, data collection, interviewee selection, transcription, data processing, the analysis, the description and finally a broad interpretation of the case study.

3.1 Data collection: Interviews

The gathering and processing of interviews is explained in this section. To be able to answer the research question, data will be collected through in-person interviews by the author. Interviews are suitable to observe and document how practice actually works (Power & Gendron, 2015; Qu & Dumay, 2011). Furthermore, interviewees can express themselves and share their own perceptions, which is a unique feature of the interview. Moreover, interviews contain more detail and depth than the normal survey. Although interviews are highly subjective and depend on the interpretation of the researcher, the method will be used to answer the research question.

Interviews will be semi-structured, because both structured and exploratory questions are necessary to get clear understanding of the emergence of supply chain accountability in the Dutch flower bulb sector. By applying the semi-structured method, researchers can interview from a systematic and consistent basis, while interviewees can share their perception of the social setting best in their language. Qu and Dumay (2011) note that semi-structured interviews are adequate to obtain important (and invisible) aspects of human, group, or organizational behavior in social situations. Moreover, interviewees can add nuances to statements. Prepared interview questions are added in the appendix. For example, to those who implemented and use the Chainregister, structured questions about their internal accounting and first encounter will be part of the analysis. To obtain perceptions and opinions, questions with an open character will be used. Hence, conversations are dynamic and depend on the responses of the interviewees.

All interviews are conducted in Dutch and will be recorded, after the interviewee gives permission. During the interview notes will be made in detail as well, which will be used to ask questions later in the interview, or for other interviews. After the interview, recorded

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interviews will be transcribed by the author in Dutch. This will enable scientific analysis in later stages. The transcription will be validated and approved by the interviewee concerned through email. Transcribing interviews by the researcher himself results in better connection to the data while progressing (O'Dwyer, 2004). Lastly, the interviews will be summarized in English. This can serve as a helpful tool when writing the case analysis. The analysis of data will be discussed later.

3.2 Interviewee selection

Here, the selection of interviewees will be explained. The section is explained from the first perspective, because of its strong personal character. This process is described in detail, as I am already familiar with some people involved. The way I have acquainted interviewees is known in theory as snowball sampling (Noy, 2008). Snowball sampling enables researchers to understand dynamic embodiments of social knowledge in specific settings.

My father runs, together with cousins, the company Jan de Wit en Zonen B.V. He is financial director and salesman. Therefore, I started to ask him and another member of the management, the director responsible for logistics and automation, to which parties I had to contact about the Chainregister. Since then, December 2017, I got in contact with some people who are willing to help and be subject of interview(s).

Management of Jan de Wit en Zonen B.V. allowed me to attend a meeting with the BKD (the Bloembollenkeuringsdienst, Flower Bulb Inspection Service) on December 7th 2017, to meet one official and his subordinates. He is officer ‘Inspection and Quality,’ and responsible for the Chainregister. This introduction led to the interview ultimately.

Furthermore, they recommended me to contact to the chairman of Anthos. According to various sources, Anthos ordered the BKD to develop the Chainregister. Hence, it is a key party involved in the Chainregister. They offered me to get in touch with exporters and other national bulb trade organizations. Through their help, I got in contact with an additional organizations. Despite asking, they did not enclose their interviewee selection process.

Lastly, I attended the ‘Bloembollen Vakdagen Flevoland’ in Creil on February 1st_2018.

There were presentations regarding cooperation in the flower (bulb) sector in the Netherlands. One of the guest speakers mentioned the Chainregister. Afterwards, I asked him if he would be subject of an interview for this thesis.

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During the interviews, interviewees named other potential interviewees and helped me to contact them. The officials of the BKD helped me to get in touch with the NVWA (Nederlandse Voedsel en Warenautoriteit, Netherlands Food and Consumer Product Safety Authority). Exporters named other organizations.

Finally, a union producer will be interviewed to better understand the statements of other interviewees about the complexities of flower bulbs compared to vegetables. Tulip bulbs and unions are more or less similar. Likewise, the export to non-European countries requires e-CertNL.

3.3 Plan of interview

The plan for the interviews will be explained shortly. Collected data has much value. 12 interviews were held in the short period April-June 2018, with 16 individuals. In 4 interviews there were 2 interviewees, which is an advantage, because interviews with more individuals result in less biases (Qu & Dumay, 2011).

Initially, the goal was to schedule appointments in the order below: First, the chairmen of the trade organization (Anthos) will be interviewed, because this organization ordered other parties in the sector to develop the system. Secondly, the current (maybe even the former) chairman of the quality inspection service, the BKD, (and colleagues) about the daily functioning and their experiences with clients who do (not) adopt the Chainregister. Both parties can identify proponents and opponents. Thirdly, the association for flower bulb growers will be interviewed, to obtain more knowledge about the phytosanitary statuses and the upstream parties within supply chain.

Besides information about the specific characteristics, the interviews with these three parties will provide facts, perceptions, and opinions about the past, present, and future of the Chainregister. Then, the users of the system will be interviewed, in order to understand the pros and cons of the Chainregister. However, it soon turned out that schedules were conflicting and appointments were delayed. This required creativity, but certainly this did not harmed the study. (Next paragraphs are from first perspective, because of its strong personal character.)

Consequently, I started with one of the initiators of the system, one director from Jan de Wit and Zonen B.V. He gave me clear insights on the establishment of the system. The interviewee and the company are (very) familiar to me, but it was a good starting point before

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speaking representative organizations, such as Anthos and the KAVB. These were interviewed second and third. Readers might question my objectivity since my familiarity, I will recur this at the end of this section.

Fourth interview is with two staff-members of a lily-export company, who shared their experience with the system. The fifth interviewee is employed at an intermediary organization. Although the organization is not a direct user, the interviewee has much contact with parties involved and stimulates the use of the Chainregister. The sixth interview is with two staff members of an export firm. The seventh interview is with an export company, specialized in tulips. The eight interview is with two officials of the BKD, the Quality inspection service. They developed the system and are responsible for the operations. Moreover, the organization is monitored by the NVWA, the Dutch government quality inspection body. Ninth, an employee of another intermediary organization is interviewed. Tenth, two officials of the NVWA were interviewed. The eleventh interviewee is a union producer and exporter. This interview has been conducted to better understand the complexity of flower bulbs compared to other agricultural products. The last, twelfth interviewee is an exporter, specialized in tulips.

Readers might question my objectivity, I will explain how I ensured objectivity as much as possible. First, I only used the network of the family business to get in touch with competitors, the BKD, and branch organizations. All correspondence is done privately by me. Before the interviews, I assured interviewees I would not discuss the content with relatives, that I conduct this study for my own interest, anonymity is guaranteed. Besides EX1 and VEX1, I do not know any interviewees personally. This allowed me get in touch with different perspectives, opinions and ideas. Moreover, the BKD and the NVWA are independent organizations. The use of independent reports allowed me to work objectively.

3.4 Data collection: Reports

The collection of reports is described in this section. Reports can give detailed insights of situations, opinions, and potential solutions to identified problems at a certain point in time. Also, the value of statements can be assessed. The use of multiple data sources increase accuracy through triangulation (Creswell, Hanson, Clark Plano, & Morales, 2007).

Initially, the management assistant of Anthos, the branch organization of flower bulb exporters, has been asked to share notes (and other data) from meetings regarding the

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Yet, Anthos did provide me two studies in Dutch, published in 2010 and 2011 before the actual Chainregister was established. Both include informative sections about the setting at that time, the motivations behind the establishment of the Chainregister, and an analysis of the sector and its characteristics. Data analysis is discussed in the next chapter.

3.5 Data processing and analysis

In this section, the methodology of data processing and analysis is explained. The data of this case is mostly constructed from 12 interviews. Information obtained in interviews will be used in other interviews, while remaining anonymity. Furthermore, the two reports are assessed and analyzed too for triangulation. Qualitative data analysis (QDA) experience of O’Dwyer (2004) is used as guidance; analysis and interpretation.

During the interviews, topics discussed by previous (anonymous) interviewees are also used to explore the perceptions of topics. Referring to other interviewees was helpful, because it led to more perspectives on the same problem; avoiding biasedness in the analysis later.

To structure the phase after interviews, O’Dwyer (2004) distinct three processes of analysis as proposed by Huberman, Miles, and Saldana (2013): data reduction; data display; and data interpretation. In the first process, available data (i.e. interview transcripts, notes, reports, contextual facts) will be reflected to find important items and patterns. Also, the interview recordings will be listened again to capture the intonation and emotion of the conversations twice. For this study, coding systematics are applied after the transcripts are completely read multiple times (Life, 1994). The professional QDA software Atlas.ti is used as a tool for open coding. Atlas.ti is used by many for academic research in social sciences. Open coding is a useful tool to assist researchers when identifying themes. The open codes are re-evaluated for patterns before they are categorized. Simultaneously, the data resulting from this first analysis have to be presented logically. Here, data reduction and data display overlap. Data display is carefully done in matrices, which revealed the frequency of topics discussed by each interviewee. The final code matrix can be found in the appendix 8.3.

Lastly, the data display forms a start for data interpretation. Since data is still in Dutch, a first rough interpretation has also been performed in Dutch for personal understanding. Afterwards, a writing plan has been composed for the ultimate case analysis (in English). This plan and initial analysis was later enriched with citations, that were translated simultaneously.

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Besides focusing on the key themes, the analysis will focus on three main timeframes: the time before the Chainregister, the time since adoption, and the future.

The reports obtained will be critically evaluated for an understanding of the setting before the Chainregister, when the need for the system was recognized. Also, the reports provided objective background knowledge during the interviews after they were gathered.

Number Group Code Date

Duration (in minutes)

1 Exporter EX1 20-4-2018 67

2 KAVB (Growers association) GA1 1-5-2018 45

3 Anthos (Exporters association) EA1 1-5-2018 52 4 Exporter EX2 22-5-2018 40 5 Intermediary IM1 25-5-2018 41 6 Exporter EX3 31-5-2018 52

7 BKD (Quality inspection) QI1 1-6-2018 69

8 Exporter EX4 1-6-2018 42

9 Intermediary IM2 5-6-2018 42

10 NVWA AUT1 8-6-2018 67

11 Union exporter VEX1 9-6-2018 27

12 Exporter EX5 11-6-2018 37

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4 Context

This chapter aims to give the reader a comprehensive understanding of the Dutch flower bulb sector. Besides businesses, there are many other organizations in the sector. The Chainregister is an initiative of the market and requires cooperation of all organizations. Therefore, each organization is introduced briefly for the understanding of the reader.

4.1 The Dutch bulb supply chain

To experts, the Netherlands have an excellent reputation in agriculture/agribusiness. For example, Dutch flowers are exported worldwide, it is Dutch expertise. In terms of capital, the country is the second largest exporter of agricultural products, after the USA. In 2017, export worth more than 90 billion euros was exported, according to official government statistics (CBS and Wageningen Economic Research, 2018). In the last decade, the annual trade surplus of agricultural products was stable between 25 and 30 billion euros.

One of the main export products is floriculture and cut flowers, worth 9.1 billion euros. Another expertise of the Netherlands is the production and export of flower bulbs, latter is worth 1.24 billion euros in 2017. There are a lot of exporters, unofficial numbers estimate more than a 100 individual entities. The products are produced by over 1000 growers.

The biggest categories are hyacinths, tulips, narcissus, gladioli, iris, and lilies. All are (meant to be) included into the Chainregister. The ability to grow bulbs is special, because the product requires specific conditions in climate and soil. Together with specific knowledge, these factors cause the organic monopoly position that the Netherlands have gained over the years.

About 55% of the flower bulbs is exported to EU countries, 45% to other countries worldwide. Compared to other agricultural products, outside-EU sales are high.

In its trends report 2016/2017, the Rabobank identifies important issues for the Dutch flower bulb sector for the near future: volatile exchange rates, uncertainty due to trade boycotts (Russia, the US), over- and underproduction, changing demand, and phytosanitary threats. Phytosanitary threats are plant diseases and infections, which will be explained later. The sector is dynamic, small companies stop operations or focus on a narrow market, whereas bigger companies still grow.

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As this thesis focuses on the Chainregister, the phytosanitary aspect will be explained later in this chapter. But before, the supply chain will be described using the report ‘Optimalisatie bloembollenketen,’ by Vellekoop&Meesters (2010).

Within the supply chain of flower bulb export, there are three components/processes. First, the growing component, to be seen as the production process. Second, so-called chain-processes, including trade on the Dutch market from growers to exporters. Third, the export-processes itself. In the next paragraph, the export-processes within the supply chain will be elucidated.

4.2 The inspection services

In this section, the inspection service and market authority, the BKD and the NVWA, will be introduced to provide the readers more background about their duties and operations. First the NVWA, thereafter the BKD.

The Netherlands Food and Consumer Product Safety Authority, hereafter the NVWA, “safeguards the health of animals and plants, animal welfare and the safety of food and consumer products and maintains the legislation in the field of nature.” More specifically, one of its goals is “to prevent the introduction and to limit the spread of regulated plant pest and diseases.” To achieve this goal, the NVWA “carries out phytosanitary inspections at import, monitors the presence of quarantine organisms in plant production chains and the natural environment, and inspects outgoing consignments of plant products” (NVWA, 2018).

The Ministry of Economic Affairs legally tasked the Flower Bulb Inspection Service, the BKD, with inspecting the quality of all flower bulb crops in the Netherlands on both quality defects and quarantine pathogens, as the organizations states on its website. Additionally, the organizations performs import and export inspections and laboratory analysis.

4.3 The representative organizations

In the Dutch flower bulb export supply chain, there are two branch organizations relevant with respect to this case study. First, Anthos represents the interests of trade organizations in flower bulbs and tree nursery. They act on both national and international level, on many subjects.

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Second, the flower bulb sector’s branch organization Koninklijke Algemeene Vereeniging voor Bloembollencultuur, the KAVB, which represents bulb growers, bulb forcers and wholesale companies. The organization represent the collective flower bulb sector and aims to educate its members.

One significant contradicting detail is that Anthos claims on its website that the KAVB is the branch organization for production side, thus growers.

4.4 Seasonal processes within the supply chain

As mentioned, the chain contains three parts; growing, processing/trading, and export. Each step will be explained briefly. Also, the moments of plant quality check will be clarified. This process repeats seasonally. Hence, after this paragraph, the reader should be able to know how the Dutch flower bulb exporting sector operates1. (Vellekoop&Meesters

Rapport, 2011)

The growing season starts when the bulbs are planted. Growers have to send a statement to the BKD about the field where bulbs are planted; including the size, cultivars, quantities and AM-status (AardappelMoeheid/nematode). This information is digitalized by the BKD. During the growing season, inspectors visit the fields for visual inspection to classify each lot into class I and class ST (standard). Each field will be inspected visually one to three times, in different stages of growing. Information collected during the field inspections will lead to conclusions in a report. After harvest, a sample of 200 bulbs is gathered and tested in the BKD laboratory. The grower (sometimes the trader), will clean and dry the harvested bulbs.

Then, after harvest, the bulbs are ready for trade. 60% of trade between growers and exporters runs through intermediaries, according to IM2. Growers also trade directly with exporters. These transactions are confirmed and proved by a purchase letter for the exporter. The actual delivery is secured by a delivery note, which includes the classifications of plant health, and counts as the so-called ‘plant passport.’

After delivery, exporters examine the quality and the phytosanitary status to determine the quality of the bulbs. The exporter determines whether the quality is adequate for its purpose. If quality is not acceptable, the goods can often be returned to the grower.

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When accepted, the exporter can decide to perform operations like washing or disinfecting the bulbs. This treatments have to be confirmed by authorities. For export, the bulbs have to be clean and free of soil.

Bulbs are processed and traded. Henceforth, the exporter prepares the product for export. A third party, the BKD, should examine whether the bulbs meet relevant phytosanitary requirements. The exporter has to apply for inspection. Hereby, he needs to provide a list of offered goods available for inspection. This inspection always consists of three parts; document inspection, identity inspection, and physical inspection of a lot. Inspection can be for stock, when the goods will be shipped within a certain period, or the inspection focuses on one specific shipment.

Before shipment, the bulbs are packed according to the packaging list. Furthermore, the shipment contains an invoice summary and a summary sheet. These documents together provide an overview of the shipment, it is the main source of information for the inspector. The phytosanitary certificate is prepared by the exporter. After a last document checkup, the BKD will finally sign a phytosanitary certificate to declare that the shipment meets al requirements for the importing country. Hence, with the authenticated phytosanitary certificate, the shipment can be shipped overseas. Also, shipping documents for customs are necessary.

4.5 Phytosanitary requirements; e-CertNL

Phytosanitary concerns plant health. Phytosanitary legislation should prevent the spread of organisms considered as harmful to local environment, according to the NVWA. Many products, like flower bulbs and unions, will be replanted at different locations, which can spread diseases. Phytosanitary requirements of importing countries increased a lot in recent years, as preventive means to the distribution of plant diseases that are potentially harmful for domestic flora and fauna. In the scope of this thesis, this applies for countries outside the European Union, such as China, Japan, Russia and the United States of America. Dutch exporters of flower bulbs have to comply to secure their trade. This compliance is hard to reach for companies individually. Consequentially, the sector has to work together ( (Verbeek, 2014). In 2010, phytosanitary problems increased, because of the expansion of international trade, required quarantine and improved disease detection (Van der Meulen, Janssens, Breukers, Bremmer, & Dijkxhoorn, 2010). This section includes an explanation of the process of export and phytosanitary restrictions.

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The Dutch agricultural sector is responsible for 19.4% of total Dutch export of goods (CBS and Wageningen Economic Research, 2018). For export within the European Union, agreements regarding phytosanitary quality checks and safety are made by EU directives. Contrastingly, for export outside the European Union, each country has its own requirements. The NVWA is part of the Dutch ministry of Agriculture, Nature, and Food Quality. The organization supervises risks and enforces the compliance of food safety and plant health, amongst others. It operates and maintains e-CertNL, which "is the official application for Dutch exporters to get legally certified the export of their consignments and for stakeholders to verify the authenticity and validity of these certificates (at the moment operational for food only)." These electronic certification is the flow of information between competent authorities of the sending - and the receiving country, which enables business entities to guarantee the data quality. E-CertNL is ‘the module to apply and receive (electronic) certificates. It contains certificates for third countries, outside Europe.’ Thus, exporters have to apply their documents into e-CertNL. E-CertNL is part of CLIENT Export, the electronic system that support the processes of export certificates. The transition from paper to electronic documents started in 2005. Two missions could be achieved; the quality of inspection will increase and the administrative burdens of business will decrease.

For each importing country and product combination, the e-CertNL contains three elements, according to the official website:

- The requirements that must be met to deliver the certificate. - The certainties to proof that the requirements if fulfilled. - The model of the document.

This e-CertNL is important for flower bulb exporters, because more than 50% of products are shipped to third countries. The certification guarantees third countries’ authorities that phytosanitary requirements are met. If one exporter wants to ship phytosanitary goods, he must apply for e-CertNL at the NVWA. For flower bulbs, e-CertNL uses data from the Chainregister to verify whether the requirements are satisfied.

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4.6 The Chainregister

In this section, the concept of the Chainregister will be explained briefly, using the annual report 2017 of the BKD and the official website of the Chainregister. In the case analysis, a deeper understanding of its systematics will be provided. The Chainregister is “a tracking and tracing system for flower bulbs, that digitally stores the results of both field and export inspections.” By bundling the growing registers of the BKD and e-CertNL of the NVWA, an entirely digitalized chain of information is created. Furthermore, the risk of errors in the input of information decreases by verified entry. The flowchart in figure 1 demonstrates the information flows.

The BKD promises that the Chainregister optimizes the export process by requiring ‘less paperwork and less logistic disturbances.’ Therefore, the BKD promotes and facilitates the use of the Chainregister to supply chain members. Moreover, phytosanitary certainties are secured more efficiently (BKD, de Bloembollenkeuringsdienst, 2018).

It is claimed that the Chainregister makes internal and external administration much more efficient. Before, traders had to communicate the inspection data through different channels to the BKD in order to receive the e-CertNL.

First product to use the Chainregister was lilies, which is considered to be the easiest one in trade. After harvest, the bulbs are prepared before they are frozen and stored in cooling rooms. Cooling period depends on the intention of the buyer abroad. Tulips are second. The products is mainly used for 3 purposes; dry sale in garden centers, park planting, or for flower forcing abroad. After harvest, each purpose requires different processing schemes, which increases complexity. Lastly, there is miscellaneous (in Dutch: bijgoed), which are small cultivars, like gladioli’s, alliums, Scylla’s, and so on.

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Figure 1: Information flow chart 1 (Telers = growers who release growing information, Exporteurs = exporters who apply lots for inspection through the Chainregister)

4.7 Edibulb

The communication within the Chainregister between entities uses the Edibulb standards, which is an initiative of the KAVB (growers), Anthos (traders), and B4 (intermediaries). The standards form the basis for electronic intermarket communication concerning economic transactions of flower bulbs. Benefits of the standards are the uniform accessibility and processing of information. The standards were implemented far before the Chainregister, and software of the entities in the sector was already set to use the standards.

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5 Case Analysis

In this chapter, the case study will be analyzed to get a better understanding. First, a Wageningen University study published in 2010 will be used to clearly describe the situation before the Chainregister was established. Also, a study by Vellekoop&Meesters BV will be analyzed, with the same purpose. Second, the interviews will be analyzed. The analysis is separated into 6 main subjects.

Please note that in paragraph 4.1, the seasonal operations of the flower bulb sector are explained. Furthermore, the phytosanitary aspect is elucidated in paragraph 4.5. Hence, it is assumed that the reader has a certain level of knowledge.

5.1 Report analysis

The purpose of the report analysis is to provide readers an objective view into the situation before the Chainregister was established. Furthermore, having multiple sources is one important feature of triangulation used in positive research, according to Malsch and Salterio (2016).

5.1.1 Analysis of setting in 2010. Report ‘Fytobberij: de fytosanitaire lastendruk in feiten en beleving (2010)’

The report is a qualitative snapshot of the phytosanitary legislation in 2010, including literature and interviews with representatives and entrepreneurs. It focuses on the entire vegetable industry, including flower bulbs. The report is written by LEI, currently named Wageningen Economic Research. This report is shared after the interview of the director of Anthos, who was the third interviewee at 05-04-2018.

The exploratory study aims to map the perceived and factual concerns regarding phytosanitary legislation. For this thesis, the results will be examined and used to describe phytosanitary policies and practices within the flower bulb export sector before the Chainregister.

In general, the phytosanitary policy received support and many understand applied legislation. However, entrepreneurs and representatives express their irritations and comments, which has been categorized into three areas by the study: outside-EU countries, factual burden and experienced burden. Issues are highlighted, which indicate the need for more efficient operations in the phytosanitary inspections.

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Until 2010, flower bulb traders had to deal with multiple inspection services, of which the BKD is the most important. This opaqueness with several inspection services was one motive for Anthos to research the process of phytosanitary inspections for their members in 2009 (p. 38). At that time, the BKD had a cooperative attitude concerning addressed problems experienced in the flower bulb exporting sector. Besides their inspections, the organization operated as a platform between sector representatives and the government. For example, together with other agricultural exporting sectors, Japanese inspection services visit the Dutch inspection services to develop a better relationship (p. 37). Of all countries, the Japanese inspections are known to be the most rigid.

There is no unambiguous international phytosanitary regulation, making communication between inspection services difficult. Besides the administrative work required, problems arise frequently, resulting in the delay of shipments. For most agricultural goods, lags in transport are (commercially) disastrous, as it affects quality negatively. The study recognizes the need for an analysis of the inspection process to identify obstacles, in order to make enhance the operational process.

Besides the international vagueness, the exporters do not always perceive the operations of local inspections as part of healthy business management. This is caused by the discretion in the interpretation of phytosanitary rules and the vagueness of inspections. Physical inspections are subject to human judgement. For example, the size of the inspection sample is inconsistent and the duration of the inspection can vary either. In order to clarify phytosanitary inspections, the timely communication of the necessity and implications of new regulations and policies is key. Additionally, the phytosanitary risks of international trade have to be emphasized by the authorities. Lastly, the inspection process has to become more transparent to the entrepreneurs.

5.1.2 Report ’Optimalisatie Bloembollenketen’ Realisatie ketenregister, Vellekoop&Meesters B.V. (2011)

This report aims to find opportunities to optimize the export of flower bulbs (and other living plants) by establishing the so-called Chainregister. The exploratory study is performed and published by Vellekoop&Meesters BV in 2011, to provide Anthos an informed advice for decision-making with respect to the establishment and realization of the concept. Vellekoop&Meesters BV is an independent advisory office specialized in

The emergence of supply chain accountability within the Dutch flower bulb export sector