Information Technology Reference
In-Depth Information
To complicate matters, the agricultural food industry is dominated by compli-
ance requirements and regulations, including Good Agricultural Practices (GAP),
minimum chemical residue level control, hazard analysis and critical control
point, food safety laws, supermarket industry regulations, article numbering, air
cargo handling regulations, environmental requirements, packaging restrictions,
phytosanitary inspections and food safety issues, traceability requirements, controls
on genetic engineering, cold chain handling and consumer laws (IGD 2009).
Emerging trends and credence factors influencing the costs of major food supply
chains are animal welfare, poverty alleviation, contractual fairness, sustainability
and corporate social responsibility. With globalisation, the industry is now domi-
nated by major supermarket and food-service organisations that make many of the
decisions regarding how to optimize and synchronize the end to end supply chain
process. This in turn results in supermarkets taking greater responsibility for estab-
lishing contract farming and operational synergies to control costs and maintain a
regular supply of products.
In addition to that, consumers nowadays force structural changes in food produc-
tion and delivering processes. Due to the trend of individualised and ubiquitous
food, retailers are asked to offer special food in very small quantities (see table
11.1). Consumers increasingly demand food, which respects their way of life or
their state of health. Examples are competitive athletes, brain workers, vegetarians,
allergic persons or the rising number of so called LOHAS (Lifestyle On Health
And Sustainability, Schommer at al. 2007) consumers - a very promising customer
segment for the next years.
Table 11.1:
Changing consumer demands (Wijnands et al. 2006)
Year
Consumer
demand
Management
concern
Management
technique
Performance
agri-business
Organisational
focus
1960s
price
efficiency
just in time
efficiency
firm
1970s
quality
quality
material
requirements
planning
quality
firm
1980s
variety
quality
supply chain
management
flexibility
bi-lateral
1990s
delivery time
flexibility
efficient
consumer
response
velocity
chain
2000s
uniqueness
innovation
-
innovation
power
chain
network
As a result of these characteristics and trends in the food retail industry, the highly
competitive environment in the retail markets drives innovation and creates a
favourable business environment for optimized food chain management solutions
supported by ICT (Information and Communication Technology). But contempo-
rary solutions in this area are facing a lot of problems traditional software cannot
