Greener cities: creating successful horizontal
collaboration in urban regions within the
food supply chain
Supervisor: dr. ir. P. Buijs
University of Groningen
Co-assessor: prof. dr. J. Wijngaard
University of Groningen
By
Richard de Jaeger
Student number: S3024326
r.f.de.jaeger@student.rug.nl
June 2017
MSc thesis Supply Chain Management
University of Groningen
Faculty of Economics and Business
2
ABSTRACT
3
ACKNOWLEDGEMENTS
4
INTRODUCTION
In the current era of urbanization, cities are becoming more congested due to ever increasing migrations to urban areas (Van Audenhove, Little, Durance & De Jongh, 2015; Lagario, Pinto & Golini, 2016). Supplying urban regions is becoming more difficult due to increased traffic and population. Horizontal logistics collaboration (HLC) projects are key to unlocking sustainable cities and their positive effects are proven in literature (Montoya-Torres & Munoz-Villamizar, 2016).
A common method of improving logistics performance in supply chains is HLC (Sanchez Rodriguez, Harris & Mason, 2015). HLC can be defined as “bundling transport of companies operating on the same level of the supply chain, who have similar or complementary transportation needs’’ (Vanovermeire et al., 2013). Collaborating organizations within urban regions have shown positive effects on costs, congestion, and environmental impacts (Montoya-Torres & Munoz-Villamizar, 2016). Legislation, trust among partners, common suppliers and delivery bases are the true enablers of HLC (Sanchez Rodriguez, Harris & Mason, 2015). Urban areas can benefit from increased HLC (Montoya-Torres & Munoz-Villamizar, 2016), since it decreases their congestion and improves sustainability.
In the food supply chain particularly, sustainability is a challenging upcoming issue (Darkow, Foerster, Von der Gracht, 2015). Food products made in a sustainable environment are more expensive and customers disvalue the extra benefit they give (Bhaskaran, Polonsky, Cary & Fernandez, 2006). Although organizations recognize the need to create a more sustainable food supply chain, there is uncertainty regarding their capability to translate this into fruitful strategy (Darkow, Foerster, Von der Gracht, 2015). Suppliers are key organizations in the food supply chain (Prakash, Soni, Rathore & Singh, 2017) and are a good starting point in creating successful HLC projects.
5 The food sector is struggling with sustainability and looking to find new ways of supplying cities (Darkow, Foerster, Von der Gracht, 2015). HLC projects can provide benefits in the form of efficiency and sustainability for urban regions (Montoya-Torres & Munoz-Villamizar, 2016). Involving stakeholders is key for the success of projects (Rowlinson & Cheung, 2008), but it is unclear how stakeholders can be effectively involved in these projects (Lagario, Pinto & Golini, 2016). Furthermore, there is need for pro-active research regarding the attitude of key stakeholders (Lagario, Pinto & Golini, 2016). For the food sector, these key stakeholders are the supplying organizations (Prakash, Soni, Rathore & Singh, 2017). This research positions itself in such a way to clear up these uninvestigated issues. Therefore, this paper will answer the question of how do potential suppliers perceive successful urban horizontal logistic collaboration projects in its start-up phase in the food sector?
This paper adds to current theory by attempting to find a way to successfully engage potential stakeholders into HLC projects and also advancing the literature regarding sustainability in the food supply chains. In practice, these results can help project starters to successfully collaborate with their partners. Urban logistics is a new field and HLC is a promising view on increasing the performance within urban regions, but stakeholder engagement needs more research within this context (Lagario, Pinto & Golini, 2016).
This research is conducted though a single case study at a B2B wholesaler in the province of Groningen, Netherlands, who is willing to start a HLC project named the Food-Hub. A Food-Hub is a local initiative where food producers collaborate with a logistics provider to create a direct link between production of goods and the point of sale. Research is done through interviewing local producers and investigating their current standing regarding the Food-Hub. This information can be used to create a reliable way to approach and engage potential partners in these projects and understand how HLC projects can aid in supplying food products to cities in a sustainable way.
THEORY
Food supply chain
6 characteristics (Prakash, Soni, Rathore & Singh, 2017). In this research the focus is on local level chains, instead of the global food supply chain. Most supply chain problems have been well studied in the manufacturing sector, but these problems aren’t as deeply studied in the food supply chain yet (Shukla & Jharkharia, 2013). The supplier is a key player in the food supply chain in which supplier reliability, ICT infrastructure, supply quality and supplier capability are known risks in this context, and information sharing is not a well-established practice yet (Prakash, Soni, Rathore & Singh, 2017). Transportation solutions are well established in literature, but they pay little attention to the characteristics of food products (Shukla & Jharkharia, 2013).
Drivers and barriers for horizontal logistics collaboration
Working together within the supply chain has shown success and created competitive advantage (Li, Ragu-Nathan, Ragu-Nathan & Subba Rao, 2006; Frohlich & Westbrook, 2001), but this research focuses on the vertical alliances while the research on horizontal alliances is still a relative new research field (Vanovermeire et al., 2013; Leitner et al., 2011). Successful horizontal logistics collaborations are found in the sea transportation sectors (Islam & Olsen, 2014), and also air transportation (Sanchez Rodriguez, Harris & Mason 2015). Due to the high costs of transportation in these sectors, the collaborating partners experience cost savings due to economies of scale and it also increased their customer service levels (Cruijssen, Dullaert, and Fleuren 2007). HLC in land-based logistics is still in its infancy (Pomponi, Fratocchi & Rossi Tafuri, 2015), due to trucks being less capital intensive, and the shorter distances and amount of orders increase the complexity of working together (Vanovermeire et al., 2013).
7 HLC is a form of a strategic alliance, of which more than half are already failing (Park & Ungson, 2001). Overcoming this failure rate means going against the many challenges that these collaborations pose. Key barriers to HLC are: partner selection problems, determining and dividing the gains, the unequal negotiating power of partners, and the uneven adoption of information communication technology (ICT) among partners (Cruijssen, Duallaert, & Fleuren, 2007). These barriers can lead to conflict between collaborating partners. Functional conflict can give rise to new ideas through learning from opposing views, but when conflict turns negative, the partnership becomes distorted (Wallenburg & Raue, 2011). Within cooperating firms on a horizontal level, no conflict is wishful, since smooth operations are more important than creative tension (Wallenburg & Raue, 2011). Active HLC-projects mostly fail due to opportunistic behavior of a partner, which can be controlled by using appropriate formal and relational governance methods (Wallenburg & Schäffler, 2014).
HLC in urban regions
Early research on urban logistics mostly focused on its benefits in terms of reducing environmental impact and logistics costs (Taniguchi and Van der Heijden, 2000; Ambrosini and Routhier, 2004). City logistics does not just focus on last-mile delivery, but consists of a broader scope including freight transport activities, optimizing traffic, reducing congestion and energy consumption (Rose, Mollenkopf, Autry & Bell, 2016). Literature within urban logistics is scarce when it comes to the interplay between institutionalized actors (Rose, Mollenkopf, Autry & Bell, 2016). Within Italy, success in urban logistics has been achieved by forcing organizations to use consolidated urban distribution centers through legislation (Ville, Gonzalez-Feliu, Dablanc, 2013). Space is a limiting factor in urban regions which leads to conflicts arising between different stakeholders due to forced interaction (Anand, Quak, van Duin & Tavasszy, 2012). In search for indicators for urban logistics project’s success, Morana & Gonzalez (2015) grouped these in three different categories: environmental, economical, and social. Organizations that need to incorporate these three categories in their business should use stakeholder theory to balance these three aspects to reduce conflict with stakeholders (Segarra-Oña, Peiró-Signes, Albors-Garrigós & Miguel-Molina, 2017)
Stakeholder engagement in urban logistics projects
8 (Lagorio, Pinto, Golini, 2016). Stakeholder engagement processes can create an open and honest dialogue between actors, which can be seen as a mutual learning process for all organizations involved (Mathur, Price & Austin, 2008). In addition, stakeholder engagement is an opportunity for social learning, where organizations can learn about other’s values and create shared visions and objectives (Mathur, Price & Austin, 2008). Therefore, engaging stakeholders can be invaluable in creating willingness among stakeholders for collaboration projects.
Research of Muñuzuri et al. (2005) suggest that stakeholders can be grouped as logistics operators, receivers, and local authorities. Stathopoulos, Valeri & Marcucci (2012) identified three main stakeholders in urban logistic projects namely: retailers, carriers, and policy makers. The main actors in HLC projects are thus the transporters of goods, the receivers of goods, and the local government. For the food sector, the suppliers of products should be added to that list. Research of Hingley, Lindgreen, Grant and Kane (2011) show that the power of grocery retailers inhibit horizontal logistic collaboration, due to their competitive market. Policy makers influence HLC projects through emission, time, and congestion restrictions (Stathopoulos, Valeri & Marcucci, 2012). The involvement of local authorities has a positive effect on the outcome of urban logistics projects (Lindholm & Browne, 2013), but they don’t have clear insight into urban logistics issues, since they lack a clear assessment method for these complex projects (Ballantyne et al., 2013).
Many urban logistics projects fail during their start-up, and the key to success may lie in increased stakeholder participation (Gammelgaard, 2015). In the case of freight sharing, stakeholder collaboration proved to be a main factor of success for implementation (Hensher and Puckett, 2005). Stakeholder engagement is key to success of projects (Rowlinson & Cheung, 2008), and provides the opportunity for social learning (Mathur, Price & Austin, 2008).
9
METHODOLOGY
Research design
This paper is centered on exploring the perspective of potential partners when starting up a HLC project. The perception of the stakeholders on success factors, barriers and engagement as explained in the theory section needs to be explored. Since there is not a lot of empirical information that exists on the subject, this research can be qualified as an exploratory research (Blumberg et al., 2011). A case study helps in creating a clear understanding of the nature and complexity of the phenomenon, and is suitable for early, exploratory investigation (Karlsscon, 2009). Since this research is exploring an unknown field of knowledge, it is important to generate data as rich as possible. By limiting the number of cases studied, the greater the depth of observation will be (Karlsscon, 2009). Therefore the choice was made to study one single case to generate in-depth knowledge regarding the research objective. For this research, the researcher has aligned himself with a wholesaler in Groningen, who is starting up a HLC project named: the Food-Hub. The Food-Hub project is the case of this study. Within this case, the researcher approaches potential partners to interview. The interviews are semi-structured which gives the opportunity for interviewees to voice their opinion. The unit of analysis is the process of initiating a HLC project in the food supply chain.
Research setting
10
Preparation
The Food-Hub project is part of a larger EU project named ReFrame. The ReFrame project wants to strengthen and develop short, regional food supply chains. ReFrame does this through supporting regional pilots that accommodate urban food demands and regional suppliers. The Food-Hub project is part of this overarching ReFrame program. Since the researcher is in the unique position of being involved from the very start of the Food-Hub project, initial meetings were organized with the researcher, a manager from the wholesaler, and a member of ReFrame. In these meetings the aim of the Food-Hub was made clear to the researcher. The wholesaler was responsible for delivering an initial list of potential interviewees and the researcher was responsible for contacting the organizations and planning interviews.
In this phase, the interview protocol was constructed. The completed protocol is found in Appendix A. First off, a deductive approach was used to generate the protocol. The researched literature provided the base for the themes ‘success factors’ (Mason, Lalwani & Boughton, 2007; Montoya-Torres & Munoz-Villamizar, 2016) and ‘barriers’ (Cruijssen, Duallaert, and Fleuren, 2007). The wholesaler and the member of ReFrame then checked this draft to use their experience in working with collaboration projects and suppliers in further developing the protocol. From this, the theme ‘regional market’ was added, and the other two themes were expanded with probing questions not found in literature. The ‘role of Food-Hub’ theme was added to generate opinions on freight sharing and connecting necessary processes. It was expected that sharing distribution centers was a part of the Food-Hub, but in this project shared inventory is not used and was therefore removed from the protocol. The theme ‘engagement’ was included to give interviewees a chance to add insights in how partners can be involved in a HLC project. Using the method of literature research and expert opinion ascertained that the protocol would cover all necessary subjects. In this way the reliability of the research is increased. Also, having experts, such as the project owner and the member of ReFrame, review the interview protocol increased the construct validity, as they could check if the questions measured the aspects that were investigated.
Data collection
11 radius of the city of Groningen. In total 10 out of 16 organizations were willing to cooperate, of which one of them could not be interviewed due to illness. The following table gives an overview of the interviewed companies.
Table 1 Organization overview
Nickname Description
Asparagus Single owned company growing asparagus on his own farm.
Beef Meat processor 50km from Groningen that is supplied by selected farms based on long-term contracts lead by a general manager.
Eggs Single owned chicken farm focused on producing eggs.
Fruit Single owned company growing apples, cherries, and figs.
Wine Company owned by a couple growing some fruit, but mostly focused on wines for the subject of this project.
Potatoes Family owned potato farm of considerable size compared to the others.
Pigs Meat processor located in the city of Groningen lead by a general manager with a project regarding local pigs.
Foodbank Social organization growing a variety of vegetables to supply the local food banks.
Beer A small beer brewery just outside of Groningen lead by two young entrepreneurs.
The interviewees were all owners of the organization, in the case of a family business, or general manager in the case of a larger organization. Therefore, the interviewees were experts in their field and had enough knowledge to answer the questions of the interview protocol. Since most organizations were very small, triangulation through multiple interviewees per organization was not possible. Multiple organizations per sector were interviewed as a way to increase construct validity. The following table shows the organizations and the sector to which they belong. The organizations all differed from each other, in size and in product, which resulted in a higher external validity.
Table 2 Organization grouping
Sector Organizations
Fresh products Asparagus, Fruit, Potatoes, Eggs & Foodbank
Meat Beef & Pig
12 The interviews were done face-to-face at the organization itself and took place over a two-week period. The interview protocol set the baseline for the interviews, but the interviewees were given opportunity to voice their opinion. This semi-structured method aided in guiding the direction of the interview, but due to open questions, the researcher avoided influencing the interviewee towards a certain opinion. The first three interviews were done by strictly following the protocol, to set a baseline of answers. Probing questions that did not get a rich response were removed, and emergent themes were added. For example the equal dividing of costs was removed, but probing questions regarding marketing were added. This was done to give interviewees the chance to speak about important emergent themes, without unnecessarily prolonging the interview, which could result in lowered concentration of interviewees, since interviews could become too long. Also, the interviews were conducted in the native language of the interviewees, Dutch, as to make sure that language was not a barrier to receive quality data.
Data analysis
13
RESULTS
Table 3 Within case analysis
Company Narrative
Asparagus Interviewee mostly sells his products in the local region, and has his own store at the farm, where he also sells products from other farmers. Generally, he is focused on the financial benefit of the HLC project through cost efficiency and increased sales. He is concerned about the quality and freshness of his product, since it needs specific care and is prone to rotting. The product’s price is restricted by market prices. Producer wants to know how much volume the project entails, and its success depends on the scale and scope of the project. He is not interested in deep involvement during the conceptual phase of the project, but would join if the project can increase his sales.
Fruit Interviewee tried to do own distribution of product, but deemed too costly. Producer is concerned about supply, since his products are seasonal, so he can’t deliver all year through. He sees the project as an opportunity to sell products that do not meet the regular market standards. Interviewee is not getting a fair price for his product, and wants to be able to get a higher price. He sees opportunities in promoting project through a market where producer can show their product and sell their story to customers.
Eggs Interviewee sells most of its product through traders, and sells about 1/6th through
direct sales. He is a more experienced entrepreneur regarding collaboration projects, and is head of a project trying to reduce to power of retail on the food supply chain.
Expects that freight sharing will take a lot of coordination efforts between partners to be successful, but sees it as an opportunity to increase sustainability. Base success of the project is profit, and he needs to know the scale of project in terms of demand. Project should start with few strong suppliers, and can be widened when the core project is successful.
14 are knowledgeable and commit long-term. Promoting the project is important to generate needed demand. Partners need to have basic certification to ensure health safety. Sees opportunities in contracting big customers to generate demand for products. Communicating the story behind the product is key to promote the project to costumers.
Pig Organization that has one line of regional products. The producer sells all of his products in the Northern provinces and has its own distribution network to do so. He thinks that bringing in too many partners will bring unneeded hazards. It is important that producers are open about how products are produced. He sees the wholesaler as a buying and selling party, and believes that they should stay in that role.
Foodbank Interviewee believes regional products should be available to all. Although he is not interested in turnover, he does see the importance of improving efficiency regarding sharing trucks. The Food-Hub should include the processing of food products, as it is wanted by customers, and can enhance the local region. He believes in a bottom-up approach and long-term commitment, but is concerned about the scale and scope of the project.
Wine Interviewee has his own store where he sells local products. He is skeptical about the costs of sharing trucks, as the wholesaler will charge for it. He is also concerned about the demand for local products, as he believes consumers want cheap products, and are unwilling to pay the necessary price to cover the producers cost. He believes increased profits are key to success. All partners should comply with legally required certifications. He believes the wholesaler should be in a leading role.
15 Potatoes Interviewee has experience in these types of projects. Generating enough turnover through these projects is key to its success. In a Food-Hub project, partners should be big enough to do their own transport to the city. He emphasizes the importance of creating a food-processing unit, as there is a high demand for processed food, and it is an industry with high margins. Partners need to be professional and of considerable size, have a shared vision, and commit long-term. Contracting big customers can generate the need for volume in demand, to ascertain the success of the project.
Regional market
All companies want to increase their regional sales, except for Pig as they are running at max capacity. Generally speaking, the organizations are supplying the regional market, want to increase their regional sales, but feel the pressure of bigger players and the national market price. The organizations are focused on the regional market, since on a global scale they are small farms. The margins on the food industry are ‘extremely low’ due to market restrictions on the organization’s pricing, which makes it difficult for them to get a fair price. Egg mentions that retail is ‘commanding what happens’ as they are the powerful players in the chain. The smaller, more remote organizations sell their product also in their own store. The companies see direct sales as an opportunity to gain ‘higher margins’ and to be ‘more sustainable’.
“Sales at home and restaurants is definitely 60-70% of the regional market. We also intend on increasing that.’’ – Asparagus
Two types of receivers of goods are distinguished by the interviewees: institutions & restaurants, Institutions such as hospitals, prisons, and universities work on a big scale by having to cook for a large amount of people with a limited budget. Restaurants have more freedom in their choice of diversified products. Therefore, restaurants can sell the product for more, as they can charge the customer extra.
Logistics resource sharing
16 thinking logically’. The interviewees were generally concerned about the extra coordination effort it would require.
“That is where you can get the most gains, but it does require an enormous effort.’’ – Eggs Companies need to know when and how often products would be picked up. Furthermore, the more organizations share the same truck ‘the more delays you’ll get, since something happens at every place’’. Interviewees did not mention connecting processes such as order management or ICT systems.
Organizations were very outspoken about the need for a food-processing unit, where products are processed into ready to cook products. Certain producers cannot process their own product, and it is stated that processing food products in the Food-Hub would be ‘a good move’, as there are ‘high margins in that industry’, and ‘customers can’t do it themselves’.
“The wholesaler could play an important role in working with local products and making it ready to cook, since what the customer wants, is what he pays for.’’ – Potatoes
Some restaurants want the charm and freshness of ‘raw products’ as they can sell the story behind the product, but generally the perception is that most ‘don’t want to get the hands dirty’, and therefore want ready to cook products. Although some interviewees mention the option of educating cooks to process it themselves, Potatoes says that ‘it just doesn’t work and it’s beating a dead horse’. Especially institutions ‘don’t have the capacity’ to process products themselves. They work on a high scale and want food ‘processed and preferably frozen, so they can fry it immediately’. The step from raw product to ready to cook is seen as an important factor for this project.
Success factors
17 “Everything can be rainbows and sunshine, but in the end you have to make money. It is as
simple as that.’’ – Wine
The Beef company was most outspoken on the fact that as local producers, you need to stick together to strengthen the region. Contracts can be a way of ‘guaranteeing procurement’ by the wholesaler, but the general opinion is that you just need to ‘make good agreements’. As a way to start up the Food-Hub project the interviewees explicitly mention the need for proper marketing. There should be ‘investments in promotion, to make it known’. All interviewees except for Wine and Asparagus, express the need for collaborative marketing. Mostly mentioned was a start-up market where producers have the chance to show their products to potential customers; this would include a taste test and a chance to hear the story behind the product. Customers are interested in the origin of the product, so ‘the story behind the product is very important’ and being able to market that to the customer. Most producers mentioned that they were uncertain about demand, and creating a start-up event would create the necessary attention to generate demand. Interviewees were all concerned about the scale and scope of the project, since you ‘need enough product turnover’ so ‘products don’t go bad’. Product quality is key to success, because this project deals with fresh products. Every product has their own needs regarding transport and storage in order to maintain its high quality. Furthermore, interviewees mention that ‘communication is very important’, so sharing information is perceived critical among the partners.
Barriers of concern
The most pressing point was finding the right partners. Beef and Potatoes, who were most experienced in collaboration projects, mention that you need partners of substantial size and that they need to have the knowledge and professionalism. Foodbank, Beef, and Potatoes see long-term commitment as key to the success, since ‘the first 2 to 3 years the project is developing’ so ‘you need partners you can build on’. Foodbank mentions it should be a select few that lead the project, but Potatoes thinks that a select few bigger partners will be more successful.
“Trust. You need partners you can trust, that is the most important. Not saying we can’t do this the moment things go sideways, you need to build.’’ – Beef
18 issue, since as mentioned before the margins are low, and it should cover the costs. Every product has their own needs for transport and storage in order to stay fresh, and ‘vegetables and fruits are a seasonal product’. Complying with all products requires that ‘the coordination is right’.
Engagement
There is a difference among producers in how they would like to be involved in the start-up phase of the project. Asparagus sees a passive role as ‘the most easiest’, Wine is ‘busy with producing’, and Pigs doesn’t want to ‘take a leading role’. Other organizations see the need for an active involvement, and are willing to participate.
“Actively, then you can guide it. Especially since we have experience in direct sales in the region, so you can avoid pit holes. You can add experience. As producer you are then also more
involved, and it’s more supported.’’ – Eggs
Although some producers are willing to guide the project, Foodbank mentions that ‘you need to prevent it from becoming top-down, so it is supported by producers’. It is important to interviewees that they have feeling with the vision of the project and can align with it. Potatoes mention that you should ‘have a strong core’ and Beef mentions that ‘projects start with investing’. Partners with a strong drive can create a vision for the project, get the ball rolling, and more partners can then join in on the momentum. Eggs, Beef, Potatoes, and Foodbank all agree that the start should be narrow and focused.
DISCUSSION AND CONCLUSION
The objective of this research was to identify how potential partners of a HLC project in the local food sector perceive a successful project. Interviewees mention the need for qualitative and fresh products, marketing of the project, long-term commitment of partners, increased profitability, and a place to process the food products to ready-to-cook produce. These concerns all deal with the need for a healthy product flow through the chain that can be sustained for a longer period. Potential partners perceive a success in a HLC project in the food sector when a steady, strong product flow is established and information is shared among partners.
19 and Dullaert (2007) and Mason, Lalwani and Boughton (2007) proposed. They mention that efficiency, costs and productivity benefits, and market position benefits are important, which is further strengthened by the results of this research. These points are therefore also relevant in the food supply chain regarding HLC projects. Service benefits, asset utilization, and customer response were not mentioned by interviewees, but this is more so due to the small scale of the case study, and these points were probably not relevant to companies as small as in this case.
There is little consensus regarding partner selection in a successful HLC project in the food sector. Potential partners have conflicting ideas on the project, which creates challenges in starting a HLC project. On one hand, there are partners who view the project with a small scope, while other organizations think the project is only feasible with a large scope. This is in line with the research of Cruijssen, Duallart and Fleuren (2007) as they mention that partner selection is a barrier. For a HLC project in the food sector, it is necessary to find partners that are likeminded and share the same vision on the project. That vision could be with a small or large scope, the key point is that partners with a different vision should not be mixed, as this might lead to more conflict.
Cruijssen, Duallaert and Fleuren (2007) also mention that determining and dividing the gains, the unequal negotiating power of partners, and the uneven adoption of ICT can be barriers to HLC. The interviewees did not perceive dividing the gains or the unequal power of partners as an issue and the adoption of ICT was never mentioned. These points may not be perceived as a barrier currently, but these might still become barriers further on as the project develops. This is due to the ex-ante position of this research where the interviewees were not yet confronted with contract negotiations, and therefore issues related to these.
20 generate demand, it does not increase the certainty of demand. Interviewees do mention another solution to this problem in the form of public procurement. Public procurement of food can aid in creating a more sustainable local chain, but the key issue here is also coordinating supply and demand (Wittman & Blesh, 2017). In the case of the Food-Hub public procurement can be a method of creating a stable flow of products, since institutional customers have a high demand of the same products. Contracting these public organizations will be difficult, as public organizations focus on the cost efficiency of procurement (Morgan, 2008), while regional products might be more expensive than regular food products. Furthermore, the risks of product waste and short shelf life (Prakash, Soni, Rathore & Singh, 2017) are mentioned by interviews in their concern for qualitative and fresh product needs, which adds extra difficulty for a HLC project in a food supply chain setting.
For managers contemplating setting up a HLC project in the food sector close collaboration with a strong, select core of experienced suppliers that all share the same vision is needed. To successfully engage stakeholders, managers need to bring a strong vision to the table and find likeminded partners. Through setting up a board with professional suppliers, key issues can be identified and tackled through sharing their experience. Every food product requires special attention; acknowledging and facilitating this requires close-knit collaboration and intense coordination effort. After identifying all the details, a contractual agreement with long-term commitment solidifies the collaboration. Contracting customers creates a known and stable demand which ascertains the necessary healthy product flow through the chain.
The theoretical implications are that it is now clear that potential partners of a HLC project in an ex-ante situation perceive the success factors the same as predicted by literature. This research furthermore strengthens the fact that long-term partnerships are needed in HLC projects, and that partners are aware of this beforehand. This paper further adds a solution to the demand uncertainty problems through public procurement, as this might stabilize demand into a predictable pattern.
21 commitment from partners from the start, as this is seen as key to its success. Since interviewees all had concerns and ideas limited to their own organization, future research should focus on finding connecting factors among food suppliers in order to successfully classify them. By doing so, future HLC projects can focus on food suppliers in the same classification, which can aid in their success. A limitation of this research was the inability to triangulate data through multiple interviews in each organization. The validity of this research could’ve been improved by interviewing certain organizations a second time to ask questions regarding emergent themes, stemming from later interviews.
22
REFERENCES
Ambrosini, C., & Routhier, J. (2004). Objectives, Methods and Results of Surveys Carried out in the Field of Urban Freight Transport: An International Comparison. Transport Reviews, 24(1), 57–77.
Anand, N., Quak, H., van Duin, R., & Tavasszy, L. (2012). City Logistics Modeling Efforts: Trends and Gaps - A Review. Procedia - Social and Behavioral Sciences, 39, 101–115.
Ballantyne, E. E. F., Lindholm, M., & Whiteing, A. (2013). A comparative study of urban freight transport planning: addressing stakeholder needs. Journal of Transport Geography, 32, 93– 101
Bhaskaran, S., Polonsky, M., Cary, J., & Fernandez, S. (2006). Environmentally sustainable food production and marketing. British Food Journal, 108(8), 677–690.
Blumberg, B., Cooper, D. R., & Schindler, P. S. (2011). Business Research Methods (Third Euro). Maidenhead, Berkshire: McGraw Hill Education.
Cruijssen, F., Dullaert, W., & Fleuren, H. (2007). Horizontal Cooperation in Transport and Logistics: A Literature Review. Transportation Research Part E: Logistics and
Transportation Review, 46(3), 22–39.
Darkow, I.-L., Foerster, B., & von der Gracht, H. A. (2015). Sustainability in food service supply chains: future expectations from European industry experts toward the environmental perspective. Supply Chain Management: An International Journal, 20(2), 163–178.
Frohlich, M. T., & Westbrook, R. (2001). Arcs of integration: an international study of supply chain strategies. Journal of Operations Management, 19(2), 185–200.
Gammelgaard, B. (2015). The emergence of city logistics: the case of Copenhagen’s Citylogistik-kbh. International Journal of Physical Distribution & Logistics Management, 45(4), 333– 351.
Hensher, D. A., & Puckett, S. M. (2005). Refocusing the Modelling of Freight Distribution: Development of an Economic-Based Framework to Evaluate Supply Chain Behaviour in Response to Congestion Charging. Transportation, 32(6), 573–602.
Hingley, M., Lindgreen, A., & Grant, D. B. (2015). Intermediaries in power-laden retail supply chains: An opportunity to improve buyer–supplier relationships and collaboration.
Industrial Marketing Management, 50, 78–84.
Hingley, M., Lindgreen, A., Grant, D. B., & Kane, C. (2011). Using fourth‐party logistics management to improve horizontal collaboration among grocery retailers. Supply Chain
23 Islam, S., & Olsen, T. (2014). Truck-sharing challenges for hinterland trucking companies.
Business Process Management Journal, 20(2), 290–334.
Karlsson, C. (2009). Research methods for operations management (2nd ed.). New York: Routledge.
Lagorio, A., Pinto, R., & Golini, R. (2016). Research in urban logistics: a systematic literature review. International Journal of Physical Distribution & Logistics Management, 46(10), 908–931.
Leitner, R., Meizer, F., Prochazka, M., & Sihn, W. (2011). Structural concepts for horizontal cooperation to increase efficiency in logistics. Journal of Manufacturing Science and
Technology, 4(3), 332–337.
Li, S., Ragu-Nathan, B., Ragu-Nathan, T. S., & Subba Rao, S. (2006). The impact of supply chain management practices on competitive advantage and organizational performance.
Omega, 34(2), 107–124.
Lindholm, M., & Browne, M. (2013). Local Authority Cooperation with Urban Freight Stakeholders: A Comparison of Partnership Approaches. EJTIR, 13(131), 20–38.
Mason, R., Lalwani, C., & Boughton, R. (2007). Combining vertical and horizontal collaboration for transport optimisation. Supply Chain Management: An International Journal, 12(3), 187–199.
Mathur, V. N., Price, A. D. F., & Austin, S. (2008). Conceptualizing stakeholder engagement in the context of sustainability and its assessment. Construction Management and Economics, 26(6), 601–609.
Montoya-Torres, J. R., Muñoz-Villamizar, A., & Vega-Mejía, C. A. (2016). On the impact of collaborative strategies for goods delivery in city logistics. Production Planning & Control, 27(6), 443–455.
Morana, J., & Gonzalez-Feliu, J. (2015). A sustainable urban logistics dashboard from the perspective of a group of operational managers. Management Research Review, 38(10), 1068–1085.
Morgan, K. (2008). Greening the Realm: Sustainable Food Chains and the Public Plate. Regional
Studies, 42(9), 1237–1250.
Muñuzuri, J., Larrañeta, J., Onieva, L., & Cortés, P. (2005). Solutions applicable by local administrations for urban logistics improvement. Cities, 22(1), 15–28.
24 Pomponi, F., Fratocchi, L., & Rossi Tafuri, S. (2015). Trust development and horizontal
collaboration in logistics: a theory based evolutionary framework. Supply Chain
Management: An International Journal, 20(1), 83–97.
Prakash, S., Soni, G., Rathore, A. P. S., & Singh, S. (2017). Risk analysis and mitigation for perishable food supply chain: a case of dairy industry. Benchmarking: An International
Journal, 24(1), 2–23.
Rose, W. J., Mollenkopf, D. A., Autry, C. W., & Bell, J. E. (2016). Exploring urban institutional pressures on logistics service providers. International Journal of Physical Distribution &
Logistics Management, 46(2), 153–176.
Rowlinson, S., & Cheung, Y. K. F. (2008). Stakeholder management through empowerment: modelling project success. Construction Management and Economics, 26(6), 611–623.
Sanchez Rodrigues, V., Harris, I., & Mason, R. (2015). Horizontal logistics collaboration for enhanced supply chain performance: an international retail perspective. Supply Chain
Management: An International Journal, 20(6), 631–647.
Segarra-Oña, M., Peiró-Signes, A., Albors-Garrigós, J., & Miguel-Molina, B. De. (2017). Testing the Social Innovation Construct: An Empirical Approach to Align Socially Oriented
Objectives, Stakeholder Engagement, and Environmental Sustainability. Corporate Social
Responsibility and Environmental Management, 24(1), 15–27.
Shukla, M., & Jharkharia, S. (2013). Agri-fresh produce supply chain management: a state of the art literature review. International Journal of Operations & Production Management, 33(2), 114–158.
Stathopoulos, A., Valeri, E., & Marcucci, E. (2012). Stakeholder reactions to urban freight policy innovation. Journal of Transport Geography, 22, 34–45.
Taniguchi, E., & Van Der Heijden, R. E. C. M. (2000). An evaluation methodology for city logistics. Transport Reviews, 20(1), 65–90.
Van Audenhove F.-J., Little, A. D., Marc Durance, B., & De Jongh, P. (2015). How to unlock value from last mile delivery for cities, transporters and retailers.
Vanovermeire, C., Sörensen, K., Van Breedam, A., Vannieuwenhuyse, B., & Verstrepen, S. (2014). Horizontal logistics collaboration: decreasing costs through flexibility and an adequate cost allocation strategy. International Journal of Logistics Research and
Applications, 17(4), 339–355.
25 Wallenburg, M.C., & Raue, S.J. (2011). Conflict and its governance in horizontal cooperation of
logistics service providers. International Journal of Physical Distribution & Logistics
Management, 41(4), 385–400.
Wallenburg, M.C., & Schäffler, T. (2014). The Interplay of Relational Governance and Formal Control in Horizontal Alliances: A Social Contract Perspective. Journal of Supply Chain
Management, 50(2), 41–58.
Wittman, H., & Blesh, J. (2017). Food Sovereignty and Fome Zero: Connecting Public Food Procurement Programmes to Sustainable Rural Development in Brazil. Journal of Agrarian
26
APPENDICES
Appendix A: Interview protocol
Interview protocol
Dit interview vindt plaats om uw mening te verkrijgen over het Food-Hub project. In de brief kon u de algemene informatie over dit project lezen.
Openingsvragen:
0. Kunt u in het kort vertellen wat uw bedrijf produceert en wat uw rol hierin is?
Thema 1: Regionale markt
Bij de Food-Hub is een kerndoel dat de afzet voor regionale producten wordt versterkt en dat er een hogere prijs voor kan worden verkregen.
1. In hoeverre levert u nu al direct of indirect aan de regionale markt? Wilt u dit vergroten?
2. Welke voordelen ziet u in het vergroten van de regionale afzet? (Bedrijf, maatschappelijk, en milieu)
3. Wat voor druk voelt u op uw afzetprijzen? (Maatregelen)
Thema 2: Rol van Food-hub
Een project als de Food-Hub omvat meerdere aspecten. De meest belangrijke zijn het bundelen van lading en het gedeeld gebruik maken van vrachtauto’s (freight sharing/consolodating). Hierbij neemt bijvoorbeeld de wholesaler transport, emballage, en opslag op zich. Dit zou vanuit een eerste indicatie uitkomen op 30-35% op basis van de verkoopprijs, afhankelijk van specifieke factoren. Uw product gaat dan niet van uw locatie naar een groot warenhuis in het midden van het land, maar direct naar de locatie Groningen. U als producent bepaalt dan de uiteindelijke verkoopprijs. (controle begrip concept)
27 4a. Wat ziet u als voor- en nadelen hiervan?
4b. Wat is volgens u de toegevoegde waarde hiervan? (economisch/sustainability)
6. Hoe kijkt u aan tegen het aansluiten van uw processen met partners? (kwaliteitscontrole / klantvraag informatie / linken van informatiesystemen / juiste formaat batches)
6a. Wat ziet u als voor- en nadelen hiervan?
Thema 3: Succesfactoren
7. Wat voor voordelen ziet u bij een Food-Hub en welke ziet u als het belangrijkst? (Voorbeelden: kostenbesparingen, efficiëntie, milieu-impact, klantbereik, verminderde verkeersopstoppingen)
7a Ziet u een hogere omzet als een belangrijk voordeel voor de Food-Hub? Waarom wel of niet?
7b. Ziet u een duurzamere logistieke keten als belangrijk voordeel voor de Food-Hub? Waarom wel of niet?
7c. Met dit project heeft u niet te maken met tussenhandelaren, maar gaat uw product direct van uw locatie naar de verkooplocatie. Ziet u dit als een belangrijk voordeel? (Meer marge voor producent/wholesaler)
Thema 4: Obstakels voor de Food-Hub
8. Wat zouden volgens u de voornaamste obstakels zijn bij het opzetten van een Food-Hub? (Het vinden van de juiste partners/ oneven onderhandelingskracht van partners / gebruik van ICT / delen van informatie)
9. Zoals eerder is genoemd is een eerste idee dat u als producent de eindprijs bepaald en dat wholesaler als transporteur en verkoper een percentage hiervan als kosten doorberekend. Denkt u dat het rechtmatig verdelen van kosten een obstakel kan zijn in dit project?
28 10. Bij dit project is het belangrijk dat producten verkoopklaar en in de juiste hoeveelheden worden aangeboden bij de transporteur (wholesaler). Daarbij kan het ook zijn dat er certificering nodig is om de kwaliteit van het product te garanderen. Ziet u dit als een obstakel voor het project? Waarom wel of niet?
Thema 5: Verdere betrokkenheid
11. Op wat voor manier zou u graag betrokken willen worden in de Food-Hub? (actieve rol/ samen vergaderen met potentiële partners / contractonderhandelingen.) (passieve rol: potentiële opbrengsten en kosten aangeleverd krijgen en alleen nee/ja antwoorden)
12. Wat zijn volgens u de belangrijkste punten voor het opzetten van een Food-Hub en deelname aan een project als dit? (delen van vrachtauto’s/ duurzaamheid/ meer controle over product)
Afsluiting
12. Heeft u zelf nog inzichten die u graag wilt delen aan de hand van dit interview?
13. Dit interview wordt door mij uitgetypt. Kan ik deze naar u toesturen zodat u deze kan controleren op juistheid?
Appendix B: Code tree Regional A1 Sales A2 Price pressure A3 Customer orientation A4 Other A5 Customer Food-Hub roles
B1 Freight sharing - advantage
B2 Freight sharing - disadvantage
B3 Processes B4 Processing industry Success factors C1 Financial C2 Customer orientation C3 Sustainability C4 Social C5 Contracts C6 Marketing C7 Communication
C8 Volume + turnover rate
30
Engagement
E1 Involvement
E2 Creating willingness
