Impact of knowledge management and inter-organizational system on supply chain performance : the case of Australian agri-food industry

Abstract

Motivated by the problems of cost competitiveness, profitability and market development issues in the Australian agri-food industry, this study was designed to addresses research questions as to how levels of knowledge asset management, inter-organizational systems (IOS) and relationship structures impact on the performance of a supply chain and differentiate the performance of the industry. Supply chains in the Australian agri-food industry have been based mainly on market arrangements with operation production pushed and, often, adversarial, resulting in profitability problems and a lack of innovative actions in developing products and a business based on insights from customers.With the main objective of investigating sources of supply chain performance in the Australian agri-food industry, five specific objectives were investigated. The preliminary conceptual model were developed principally using supply chain management and marketing literature in agribusiness and concepts from resource-based view (RBV), knowledge-based view (KBV) and transaction cost economics (TCE). The study objectives were addressed by a mixed method research methodology through a pragmatist approach that involved a first phase of qualitative data collection to enhance the theoretical model and develop survey instruments, followed by a second phase of quantitative data collection and analysis to test the research hypotheses.The qualitative first phase was based on in-depth interviews with eight agri-food firms to explore the research questions in real-world conditions. Content analysis of the interview transcripts helped identifying important factors and variables related to the performance of the supply chain which, later, were aligned with the literature and enhanced the initial theoretical research model and hypothesized relationships. The second phase involved finalizing the research model that used 22 hypotheses targeting factors of supply chain performance in the specific agri-food industry; viz., the Australian beef industry. A questionnaire was developed and pretested, followed by a pilot study of 68 participants. Finally, data were collected through a random telephone survey of 315 firms including input suppliers, producers, processors and retailers in the beef industries of Western Australia and Queensland. The data were analyzed using partial least square (PLS) based structural equation modelling (SEM).Assessment of the research model demonstrated that 18 of the 22 hypotheses, made up of 11 primary factors and 15 sub-factors, were supported. Results indicated that, among the predictive factors, knowledge asset management was the strongest predictor of supply chain performance, followed by negotiation power, price uncertainty, inter-firm relationship strength and environmental management practices. Competition intensity, vertical coordination and transaction climate were significant antecedents of knowledge asset management, IOS use and inter-firm relationship strength in the Australian context. Results established that relationship strength in the supply chain depends on the level of commitment, mutual investments, trust and interdependence of the firms. The non-significant relationship between IOS and supply chain performance indicated that IOS, by itself, cannot produce sustained performance advantages unless pre-existing complementary human and business resources are exploited in an integrated way. Finally, statistical evidence proved that the supply chain is a source of competitiveness in the industry and that competitive advantage lies in system efficiencies in the performance of the supply chain.Finally, the study provides frameworks for developing the strategies of inter-firm relationships, knowledge asset management and the use of electronic systems in the supply chain to align the best principles of value-creating strategy in firms and in the industry, for competitive advantage. Thus, the results have provided a comprehensive, reliable and valid model of supply chain performance that contributes to knowledge at the strategic level for appropriate planning and benchmarking to improve performance of the agri-food industry. Finally, although the hypothesized relationships in the model have been tested in the beef industry in Australia, the issues can be examined not only in other sectors of the Australian agri-food industry supply chain but also in other agricultural sectors within Australia and overseas.