Agrofood supply chain management performance does intermediaries matters?

Abstract

Agriculture industry contributes 8.2 percent of Malaysia’s Gross Domestic Product (GDP), and agro-food sector is one of the main contributors. Empirical finding share consensus that the main challenge for agro-food industry is to ensure agro-foods are delivered from its original source, through intermediaries, and reaches retailers effectively, or namely the management of agro-food supply chain (ASC). The performance of ASC management is dependent on the performance of intermediaries and the number of intermediaries involved along the supply chain network. Hence, this research aims to identify the involvement level of agro-food intermediaries within ASC in Malaysia. The research also aims to assess the impact of agro-food supply source on retailers’ supply chain management (SCM) performance. Four categories of intermediaries identified from literature review, which are agent, wholesaler, importer and shipper. Finding from empirical review also reveals that economic and operation performance are the most common measures form SCM performance. The research is quantitative based, focused on argo-food retailers in Malaysia as the targeted population. Self admin questionnaire was distributed to 200 agro-food retailers in Malaysia to collect their demographic detail, to assess the involvement level of intermediaries along the ASC, and to gauge the level of SCM performance. Data gathered from 144 retailers were analysed via descriptive analysis, and independent t-test. Finding from the research reveals that within the context of ASC in Malaysia, the involvement level of “wholesalers” and “importers” are relatively higher than the other intermediaries. Furthermore, most of the retailers are not depending on single source of supply, on top of wholesaler, importer is one of the common alternate sources. Additionally, the source of agro-food supply implies a significant impact on the performance of SCM. Retailers who procure agro-food beyond the local source implies a higher performance versus retailers who only dependent on local sources. Hence, the main implication of this study is the improvement of agro-food SCM performance could be enhanced by expanding the source of agro-food supply.