How Best Practices Influence Supply Chain Performance: Case from Indonesian Cocoa Sector
Posted: 22 Oct 2012
Date Written: September 17, 2012
Sustainability has become an important issue for the global supply chain including agricultural supply chain. In the last decades, most of the fresh agricultural food such as fruits and vegetables has been moved from tropical and sub-tropical regions to the processing facilities in the northern America and European regions, and then, distributed to all corner of the world. Nowadays, food companies start to expand their purchasing activities by constructing their processing facilities near to natural resources. This movement of raw materials either globally or glocally is being highlighted in the recent decade following the global concerns on environmental degradation and critical social issues such as child labor and unfair trade treatment, there are rising awareness on the implementation of sustainability in the agricultural supply chain.
Beside the movement of the materials, different practices (such as production and manufacturing practices) have become more transparent starting from the initial stage of the supply chain to the end consumers. Particularly in agricultural sector, good agricultural practices have been the standard in producing high-quality products. This ever-expanding approach has been widely acknowledged, accepted and implemented and has been the requirement of agricultural and food companies. As one of the agricultural commodity and part of the agri-food chain, cocoa industry implement different practices at different stage of the supply chain, which can affect the sustainability performance of the chain. Hence, this research presets how different practices in each stage in the supply chain enhance and affecting the performances of the cocoa supply chain. In this paper, we adopted case study approach supported by surveys and in-depth interviews on the sample. The surveys and interviews were administered at farmers, traders and processors level of the cocoa supply chain enabling us to understand the impact of practices on performance holistically. The results show that not all practices bear positive impact to the performance of each echelon whereas the practices that has positive impact at the initial echelon will affect the performance of the final stage of the cocoa supply chain. Moreover, results show that the contingencies such as mutual trust and affiliation play important roles in the adoption of practices.
Keywords: Sustainability, Best Practices, Performances
JEL Classification: Q10
Suggested Citation: Suggested Citation