Articles
CHAIN MANAGEMENT AND MARKETING PERFORMANCE IN FRUIT INDUSTRY
The effectiveness of the vertically linked marketing system, and thus many supply chain management aspects, are very important for this competitiveness and for the long run viability of agricultural commodity industries.
Supply chain management represents a collection of the management activities exercised between vertically related firms to improve efficiency, vertical coordination, an overall performance of the participating firms within an industry (Ricks, et al., 1999).
The new dynamics of buying and selling within the produce industry have been well-documented (McLaughlin, et al., 1999). U.S. retailers are consolidating rapidly and increasingly buying direct from the very large grower-shipper entities.
Spot buying is decreasing, while contract buying is on the rise.
The close communication about numerous aspects of product attributes and distribution is increasing within the market channel as trading is becoming more technology driven.
Retailers are placing the highest premium on those suppliers that can deliver consistent quality, consistent on-time delivery, provide PLU or UPC coding and deliver a supply large enough to fill demand of a majority of their stores.
In order to meet the needs and preferences of consumers and retailer customers, the entire vertical chain of a fruit industry must perform effectively and efficiently.
For a fresh fruit commodity, this means that the operations of growers, packers and shippers, and other marketing chain firms must be coordinated and effectively meshed together in order to have the needed competitive results for customer satisfaction.
For processed fruits, effectively coordinated operations of growers, initial processors and remanufacturers are essential for competitiveness.
The vertical marketing and supply chain of a fruit industry in one region or country increasingly must compete with the supply chains of fruit industries in other regions and countries.
For example, the Michigan apple industry’s supply chain competes for customers with several other apple industries, including the state of Washington in the U.S. and with apple industries in countries such as New Zealand and Chile.
The relative competitiveness of these supply chains is especially important when measured from the perspective of the retailer and consumer customers, and is based upon the overall results from the entire vertical chain of these competing industries.
The current trends toward increased globalization of markets means that the competitiveness of fruit industries in various regions and countries, as affected by the performance of their supply chains, are becoming increasingly important, and will be even more so in the future.