Measuring agri-food supply chain performance and risk through a new analytical framework: a case study of New Zealand dairy

Abstract

Many researchers and practitioners have long recognized the significance of measuring performance. Although general guidelines for measuring business performance are widely available, no appropriate measurement frameworks have been developed for measuring agri-food supply chain performance. Particularly, food quality and risk-related indicators have not been well integrated into existing performance measurement systems. Our research, therefore, addresses this knowledge gap by first providing an in-depth review of extant performance measurement systems and frameworks. It then develops an analytical framework by extending the Supply Chain Operations Reference (SCOR) model which has been extensively implemented across non-food industries. The analytical framework is further validated by utilizing a case study of 50 farmers and 10 dairy companies, operating in the New Zealand dairy industry.

Our pilot testing and subsequent findings show that the individual metrics interlocked with the analytical framework are in-line with the key industrial practices adapted by the New Zealand dairy industry. In addition, the framework is flexible and scalable to evaluate and benchmark other agri-food supply chains – ranging from fresh products such as fruits and vegetables to processed foods such as canned fruits. The findings further show that the detailed information required for measuring the level-3 SCOR metrics is not easily available in the industry, as researchers need to access specific company records that may be confidential. Consequently, this study provides how agri-food supply chain managers can employ our new analytical framework in-conjunction with the SCOR model for a deeper understanding of the complicated performance measurement indicators applied in their agri-food production systems and relevant supply chains.     

An analytical tool for managing environmental risks strategically

In this article, Dr. Robert Repetto and Duncan Austin of the World Resources Institute present an approach for analyzing and communicating the financial implications of a company's environmental exposures through an empirical application to companies in the U.S. pulp and paper industry. The methodology is based on a sequence of steps: A) identifying salient impending environmental issues; B) developing multiple scenarios for each issues; C) assessing the company (or facility's) exposure under each scenario; D) estimating scenario-specific financial impacts; E) constructing overall risk measures; and F) analyzing options to minimize risks or maximize advantages.Within the pulp and paper industry there are varying levels of exposure and associated risk from environmental issues. For some companies, environmental issues will have little or no impact on financial performance, while for others, they could be a source of increased value. For others, environmental issues may entail costs that approach fifteen percent of a company's current valuation. In environmentally sensitive industries, the approach presented can help companies to benchmark themselves against rivals, identify major sources of environmental risk and opportunity, assign financial values to risk-mitigating options, and communicate their environmental strategies to the investment community and other stakeholders.     

ENVIRONMENTAL PERFORMANCE AS A DRIVER OF SUPERIOR QUALITY

We explore theoretically and empirically how efforts to enhance environmental performance may enable other types of manufacturing improvements. Drawing on a unique data set comprised of detailed surveys of 42 automotive assembly plants, associated quality metrics, and in‐depth qualitative data from 17 automotive assembly plants, we show that attaining superior environmental performance can be a significant driver of superior quality. We highlight the synergistic and reciprocal nature of environmental and broader manufacturing improvement efforts, and show that environmental improvement tools and know‐how can be an important source of competitive advantage.     

Biodiversity: new trends in Environmental Management

For a variety of reasons, biodiversity is currently an important issue, and increasingly seen as a problem over which the corporate sector needs to take ownership. There are dramatic statistics about the decline of biodiversity, and the corporate sector is both partially responsible and subject to its impacts. This means that for most companies, the environmental goal posts are starting to move: having an Environmental Management System which controls waste and energy is now the lowest standard; the bench-mark of best practice is a sustainability strategy whose environmental aspect integrates biodiversity into the EMS. This can be achieved through company Biodiversity Action Plans, and an increasing body of best practice exists highlighting this approach.     

Integrated Management Systems — Opportunities and Risks for Corporate Environmental Protection

Environmental protection in companies is increasingly carried out using Integrated Management Systems (IMS). Based on empirical results, this article examines how IMS can be designed and how the integration affects corporate environmental protection. In particular, we discuss the findings of four empirical studies, which surveyed experiences of German and European companies.Our work shows, that the success of corporate environmental protection does not depend on whether the company has implemented a separate environmental management system or an IMS. What is crucial is the rank of environmental protection within the company's system of objectives. In case of goal conflicts, decision criteria in agreement with the company's system of objectives have to be formulated. Furthermore, the IMS model can have an effect on this issue. The results of a pilot project in the automobile sector are discussed to illustrate how to implement such an IMS on the basis of ISO 14001.Compared to isolated environmental management systems, IMS can even improve environmental protection, because ecological criteria can be considered from the beginning when designing customer-oriented products and processes.     

Mechanisms for environmental scanning

Over the past decade long range planning for industrial concerns has needed to take into account an everbroadening spectrum of environmental influences. Whereas at one time planning largely concerned itself with those aspects of the environment to do with the company's markets, nowadays the influence of other parts of the environment may have equal, or even greater influence than markets on the company's operation. The current environment of most industrial concerns appears to be characterized by three main components. Firstly, the environment is increasingly turbulent and uncertain. Secondly, organizations are increasingly less autonomous. Thirdly, other formal organizations are increasingly important components of a company's environment. The environment of most companies is therefore complex and uncertain. This complexity and uncertainty can only be reduced by attempting to analyse and understand the environment as an ongoing process, this process is now being called ‘environmental scanning’. The aim of this article is to describe some of the mechanisms which have been used to help companies scan their environments as a way of planning and controlling their destiny in the turbulent environment in which industry operates.     

Drivers of Corporate Social Responsibility Attitudes: The Demography of Socially Responsible Investors

Demographic characteristics of socially responsible investors (SRIs) are likely to play a significant role in shaping their perceptions and behaviour concerning corporate social responsibility (CSR). This paper identifies demographic characteristics of SRIs and explores the relationship of these characteristics with their CSR attitudes. We analyse, using generalized ordered logistic regression, the questionnaire responses of 2464 SRIs from 20 countries. The results demonstrate that younger and female SRIs are more likely to believe that a company's social and environmental performance is as important as its financial performance. Female SRIs and those with high incomes are the most likely to believe that companies should be as responsible to their shareholders as to the broader society. In addition, younger SRIs, those with high incomes and those who have attained higher education levels regard socially responsible companies as at least as profitable as other companies. The benefits which companies can derive from understanding the demographic profile of SRIs are examined, including a potentially lower cost of capital, improved CSR rankings and business policy formulation and communication consistent with CSR views held by specific groups of SRIs.     

A conceptual model for measuring supply chain's performance

In this article, a conceptual model for measuring supply chain (SC) performance is proposed which can be used for most organisations with the same class at various industries. The model has been developed according to performance metrics interdependencies and some existing shortcomings in the available literature of performance models. Furthermore, it has tried to see the key features of a performance evaluation model. The methodology which is used for solving and integrating the model is a combination of the analytical hierarchy process (AHP) and Decision Making Trial and Evaluation Laboratory (DEMATEL) methods. The DEMATEL and AHP are used for understanding the relationship between comparison metrics and integration to provide a value for performance, respectively.     

Strategic intent in the management of the green environment within SMEs: An analysis of the UK screen-printing sector

What drives the environmental behaviour of companies is an under-researched and under-developed area of study, particularly in the context of small and medium enterprises (SMEs). This article investigates to what extent the responses by UK screen-printing companies to pressures to improve their environmental performance represented a deliberate attempt by senior managers to provide their organisations with a strategic competitive advantage.Using both a quantitative and qualitative approach, the research shows that the environmental responses of this sector tended to be reactive, defensive and driven by – and frequently limited to – legislative compliance. Even though companies accepted that there were potential commercial benefits to be gained from environmental action, there was very little evidence to indicate that managerial decisions were motivated by strategic intent or that managerial mindsets were tuned to the notion that a proactive environmental response could offer a competitive edge. The article discusses the management implications of this lack of strategic orientation and highlights how a more innovative response by companies could provide both demand and supply side benefits.     

The Impact of Logistics Performance on Trade

This paper studies the impact of logistics performance on global bilateral trade. Taking a supply chain perspective, logistics performance refers to cost, time, and complexity in accomplishing import and export activities. We draw on a data set compiled by the World Bank containing specific quantitative metrics of logistics performance in terms of time, cost, and variability in time. Numerous researchers have shown that logistics performance is statistically significantly related to the volume of bilateral trade. Our research calibrates the impact of specific improvements in logistics performance (time, cost, and reliability) on increased trade. Our findings can spur public and private agencies that have direct or indirect influence over logistics performance to focus attention on altering the most relevant aspects of logistics performance to improve their country's ability to compete in today's global economy. Moreover, as our logistics metrics are directly related to operational performance, countries can use these metrics to target actions to improve logistics and monitor their progress.     

Exposure Assessment Approaches for Engineered Nanomaterials

Products based on nanotechnology are rapidly emerging in the marketplace, sometimes with little notice to consumers of their nanotechnology pedigree. This wide variety of nanotechnology products will result (in some cases) in unintentional human exposure to purposely engineered nanoscale materials via the dermal, inhalation, ingestion, and ocular pathways. Occupational, consumer, and environmental exposure to the nanomaterials should be characterized during the entire product lifecycle—manufacture, use, and disposal. Monitoring the fate and transport of engineered nanomaterials is complicated by the lack of detection techniques and the lack of a defined set of standardized metrics to be consistently measured. New exposure metrics may be required for engineered nanomaterials, but progress is possible by building on existing tools. An exposure metric matrix could organize existing data by relating likely exposure pathways (dermal, inhalation, ocular, ingestion) with existing measurements of important characteristics of nanoscale materials (particle number, mass, size distribution, charge). Nanomaterial characteristics not commonly measured, but shown to initiate a biological response during toxicity testing, signal a need for further research, such as the pressing need to develop monitoring devices capable of measuring those aspects of engineered nanomaterials that result in biological responses in humans. Modeling the behavior of nanoparticles may require new types of exposure models that individually track particles through the environment while keeping track of the particle shape, surface area, and other surface characteristics as the nanoparticles are transformed or become reactive. Lifecycle analysis could also be used to develop conceptual models of exposure from engineered nanomaterials.     

Responding to community expectations on corporate environmental performance: How to develop effective citizen advisory panels

Corporations are facing increasing pressure to improve their environmental performance. Many are turning to citizen advisory panels (CAPs) as a way improve their decision- making and enhance their public accountability. CAPs are committee of citizens who meet regularly with managers to discuss environmental and other community issues associated with their companies. These panels allow organizations to recieve the type proactive environmental decisions. CAPs also can enble a company to communicate to and receive input from the community in a more controlled and confidential mannier than many other public processes.While CAPs offer many potential advantages, there are also a number of challenges that must be met before their benefits can be realized. This article describes a number of steps that companies should take to develop effective CAPs, including: forming the panels, selecting members, conducting meetings and communicating to citizen members. In addition, the authors discuss some of the lessons learned, including how to ensure that CAPs are operated in a manner that truly serves the interests of both the community and the company.     

Lean Control for Make‐to‐Order Companies: Integrating Customer Enquiry Management and Order Release

A lead time that is short, predictable, and reliable is an increasingly important criterion in supplier selection. Although many companies may achieve this through lean implementation, high‐variety manufacturers, for example, small and medium‐sized make‐to‐order companies, have found that lean's planning and control techniques do not apply. This article outlines a planning and control concept known as workload control (WLC) that integrates customer enquiry management, including a due‐date setting rule, with order release control. Simulation is then used to assess its impact on shop performance. Results demonstrate that an integrated WLC concept can reduce the percentage of tardy jobs—so short lead times can be realistically quoted—while also reducing and stabilizing workloads. WLC can level demand and production over time when work is not standardized and it is not possible to synchronize flows on the shop floor. Results are shown to be robust to changes in routing characteristics, the mix of orders with due dates specified by the customer and proposed internally, and the strike rate (or order‐winning probability). Hence, an integrated approach to WLC represents an important step toward achieving lean in make‐to‐order companies.     

Environmental Performance as a Basis for Competitive Strategy: Opportunities and Threats

Increasingly, companies are considering environmental differentiation as a basis for their competitive strategy. As they formulate and implement their strategy, these companies must decide upon an appropriate device to signal a superior environmental performance to consumers and other stakeholders. This article examines three of these devices: Corporate environmental reports (CER), eco-labeling programs, and the ISO 14001 environmental management systems (EMS) standard. Specific challenges and limits associated with their use are discussed and insight into ways to overcome potential barriers are offered. One of these challenges relates to skepticisms, whereas another resides with the risk of imitation from competitors. Hence, companies must both build trusting relationships, and continuously maintain and develop resources and competencies that will enable them to sustain their competitive advantage over competitors.     

Environmental proactivity and business performance: an empirical analysis

This paper analyses the relationship between environmental proactivity and business performance on a sample of 186 industrial companies. This relationship is approached by studying a bundle of relationships between different dimensions or manifestations of environmental proactivity and different measures of business performance. The analysis in part supports the idea that environmental management can bring about competitive opportunities for companies, although it also reveals that some environmental practices produce negative effects. It is thus concluded that there is no one single response for the question of whether environmental proactivity has positive effects on business performance and that this relationship must be disaggregated into more specific and concrete relationships.     

Manuals for Environmental Dialogue

One of the essential factors in enhancing the motivation of companies for increasing environmental efforts is to improve their ability to conduct a positive dialogue on environmental issues with clients and other stakeholders. Efficient communication is a precondition if attention to environmental issues is to contribute to maintaining or increasing market share.But until now many companies have been focusing on putting their own house in order, and expecting that the marketing impact would more or less come of its own. Today, many Danish companies admit that a serious and targeted effort is needed in order to turn a high environmental profile into marketing advantage.The opportunity for companies gaining competitive advantage from environmental management systems and other pollution prevention activities increasingly depends on the ability to communicate attitudes and performance to the stakeholders. The responsibility for environmental communication is often assigned to the person responsible for environmental issues. They will have both the technical insight and the environmental knowledge, but will often need communication skills and, most important, tools to carry out the communication task.Requirements for communication skills on environmental issues have grown, especially because the market's and the public's interest in environmental issues concerning production and product impacts increases day-by-day.In Denmark, authorities are focusing on the fact that information on both production and products plays a key role. This focus is reflected in the Act on Green Accounts, the introduction of eco-labelling, as well as the initiatives taken by the Danish EPA under the enhanced Integrated Product Policy. These developments have caused companies in different sectors to look for tools for environmental communication.This article focuses on tools for improving environmental communications on environmental issues in general, and with different groups of stakeholders.     

Sustainability in the Construction Business — A Case Study

Skanska is among the world's five largest construction companies, with construction-related activities and project development operations in some 60 countries. A strategic approach to environment was adopted in 1995. In 1998 a decision was made to introduce certified environmental management systems. The drivers behind these steps were pressures from the market, future legislation and public opinion.By the end of 2000, all business units of Skanska had environmental management systems certified according to ISO 14001. Newly acquired companies are required to have certified systems within two years after acquisition. While environmental management systems provide the necessary framework, more technical tools are also needed. Some examples of such tools are presented in this article.ISO 14001 is an important element in focusing the attention of the organization on environmental issues, but for leadership in environment, a number of guiding principles are also presented and discussed.Finally, corporate social responsibility (CSR) can be seen as a framework for all types of issues where a company is regarded as having certain obligations toward society at large, because of direct or indirect effects from its business operations. It is only logical that Skanska, following its work with ISO 14001 and the move toward leadership in environment, now has decided to develop a CSR platform.     

Determinants of voluntary CSR disclosure: empirical evidence from Germany

Currently, companies spend a great deal of effort on Corporate Social Responsibility (CSR) disclosures. CSR disclosure relates to the provision of information on companies’ environmental and social performance. From an economic perspective, companies might disclose this information to avoid or decrease potential political costs. We construct a CSR disclosure index based on the Global Reporting Initiative (GRI) guidelines. Using content analysis, we analyze 130 listed German companies’ CSR disclosures (470 firm-year observations) to investigate the determinants of these voluntary disclosure activities. Our results show that, consistent with the political cost theory, German companies’ disclosures of all CSR issues are affected by their visibility, shareholder structure, and relationship with their US stakeholders. In addition, higher profitability is associated with more environmental disclosures. Finally, size and industry membership affect the amount of CSR disclosure.     

Selecting human health metrics for environmental decision-support tools.

Environmental decision‐support tools often predict a multitude of different human health effects due to environmental stressors. The accounting and aggregating of these morbidity and mortality outcomes is key to support decision making and can be accomplished by different methods that we call human health metrics. This article attempts to answer two questions: Does it matter which metric is chosen? and What are the relevant characteristics of these metrics in environmental applications? Three metrics (quality adjusted life years (QALYs), disability adjusted life years (DALYs), and willingness to pay (WTP)) have been applied to the same diverse set of health effects due to environmental impacts. In this example, the choice of metric mattered for the ranking of these environmental impacts and it was found for this example that WTP was dominated by mortality outcomes. Further, QALYs and DALYs are sensitive to mild illnesses that affect large numbers of people and the severity of these mild illnesses are difficult to assess. Eight guiding questions are provided in order to help select human health metrics for environmental decision‐support tools. Since health metrics tend to follow the paradigm of utility maximization, these metrics may be supplemented with a semi‐quantitative discussion of distributional and ethical aspects. Finally, the magnitude of age‐dependent disutility due to mortality for both monetary and nonmonetary metrics may bear the largest practical relevance for future research.     

Strategies for Environmentally Sustainable Products and Services

Industry leaders are setting the goal of sustainable products and services. The question is how this necessary but ambitious goal can be met. The author focuses on the environmental aspect of the expression “sustainable”. Strategies like eco-innovation, re-designs, and product improvements are discussed using examples such as the development of fuel cell vehicles, and the use of renewable and recycled materials. Major single actions (e.g. the development of new propulsion systems) as well as small improvements create a significant environmental benefit in total if “environmental economies of scale” are reached through mass production. Life cycle strategies, service instead of product strategies, as well as the link between “old” and “new” economy are described. The opportunities and challenges of these strategies for sustainable products are discussed. The author believes that it is necessary to look at a combination of all these strategies in order to reach the goal of sustainable products and services. In future, increasing numbers of life cycle stakeholders may have to be involved in these efforts, as their involvement is key to providing very efficient and effective additional positive effects.