Collaborative risk management in decentralised multi-tier global food supply chains: an exploratory study

• DOI: https://doi.org/10.1108/IJLM-07-2020-0278
• Published date: 28 June 2021
• Date: 28 June 2021
• Pages: 1050-1067
• Subject Matter: Management science & operations,Logistics
• Author: Shoufeng Cao,Kim Bryceson,Damian Hine

Collaborative risk management in

decentralised multi-tier global food

supply chains:

an exploratory study

Shoufeng Cao and Kim Bryceson

School of Agriculture and Food Sciences, The University of Queensland,

Brisbane, Australia, and

Damian Hine

UQ Business School, The University of Queensland, Brisbane, Australia

Abstract

Purpose –The aim of this paper is to explore the value of collaborative risk management in adecentralised

multi-tier global fresh produce supply chain.

Design/methodology/approach –This study utilised a mixed methods approach. A qualitative field study

was conducted to examine the need for collaborative risk management. The simulation experiments with

industry datasets were conducted to assess whether risk-sharing contracts work in mitigating joint risks in

parts of and across the supply chain.

Findings –The qualitative field study revealed risk propagation and the inefficiency of company-specific risk

management strategies in value delivery. The simulation results indicated that risk-sharing contracts can

incentivise various actors to absorb interrelated risks for value creation.

Research limitations/implications –The research is limited to risks relevantto supply chain processes in

the Australia–China table grrape supply chain and does not consider product-related risks and the risk-taking

behaviours of supply chain actors.

Practical implications –Collaborative risk management can be deployed to mitigate systematic risks that

disrupt global fresh produce supply chains. The results offer evidence-based knowledge to supply chain

professionals in understanding the value of collaborative risk assessment and management and provide

insights on how to conduct collaborative risk management for effective risk management.

Originality/value –The results contribute to the supply chain risk management literature by new

collaborative forms for effective risk management and strategic competition of “supply chain to supply chain”

in multi-tier food supply chains.

Keywords Global supply chain, Fresh produce, Risk-sharing contracts, Collaborative risk management,

Field study, Simulation modelling

Paper type Research paper

1. Introduction

Previous research has revealed the escalation of risk exposure and relevant operational

dysfunctions due to inter-firm dependencies (Wu et al., 2007), and accordingly suggests firms

undertake systematic risk management for supply chain competitiveness (Oehmen et al.,

2009). This approach has been evidenced in mature companies, known for excellence, which

have widened their supply chain risk management (SCRM) efforts not only at the firm level,

but across the entire supply chain (Revilla and Saenz, 2017). However, with conventional

SCRM techniques not effective in capturing risk propagation within and between firms

IJLM

32,3

1050

The authors would like to thank the editor, Dr Britta Gammelgaard, the associate editor, Dr Sander de

Leeuw, and two anonymous reviewers for their valuable comments and suggestions, which greatly

helped us improve the quality of this manuscript.

This study was supported by an “Australian Government Research Training Program Scholarship”.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 28 July 2020

Revised 3 January 2021

4 April 2021

4 June 2021

Accepted 9 June 2021

The International Journal of

Logistics Management

Vol. 32 No. 3, 2021

pp. 1050-1067

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-07-2020-0278

(Revilla and Saenz, 2017), academics and professionals p redominantly conduct risk

management in a firm’s or dyadic supply chain (Cao et al., 2020).

This is especially true in global agri-food supply chains as these chains traditionally have

a lower inter-firm visibility due to their dynamic and non-transparent structures (Roth et al.,

2008). These characteristics make it difficult to see how a risk event at one point may impact

other parts of the chain (Wu et al., 2007). Consequently, agri-food firms that implement

company-specific risk management strategies often do not achieve the desired performance

(Srivastava et al., 2015).

Collaborative risk management (CRM) is defined as “an interactive process based on

mutual commitments between firms with a common objective to join efforts and mitigate

supply chain risks (SCRs) and related disruptions through co-development of strategic

relational capabilities and sharing of resources”(Friday et al., 2018). Early research (e.g. Chen

et al., 2013) has found that collaborative efforts and communication between supply chain

firms help to reduce SCRs. Accordingly, CRM could be a solution for multi-tier supply chains,

particularly global fresh food supply chains, as it extends a firm’s capability to mitigate and

control SCRs.

The premise of CRM is the understanding of risk ripple effects or risk propagation within

a system. Built on complex adaptive system theory, the SCRM literature has confirmed that

risk dependency and propagation exist in supply chains (e.g. Ivanov, 2017;Trucco et al., 2018;

Birkie and Trucco, 2020), with some studies (e.g. Diabat et al., 2012;Chaudhuri et al., 2016;

Prakash et al., 2017;Cao et al., 2019) focussing on food supply chains. However, the value of

CRM remains largely unexplored in the supply chain and logistics context, with SCRM

models and frameworks focussing on individual risk events and mitigation actions.

Examples are Breuer et al. (2013), who developed a CRM framework for reducing the loss of

unforeseen disruption events in sensitive logistics nodes, and Friday et al. (2018), who defined

CRM and identified its theoretical foundations and collaboration capabilities in SCRM.

Due to limited empirical investigations of CRM in the supply chain context, most supply

chain firms have limited knowledge of joint risk management (Li et al., 2015). This risk

knowledge gap discourages firms from incorporating shared responsibilities, risks and

rewards into theirrisk management planning. Considering the issue of interdependencies and

propagation in evolving supply chain systems, it necessitates a full account of the practice of

multi-tier supplychains and the risk ripple effects to develop fit-for-purpose CRM models.

This paper specifically investigates a multi-tier global food supply chain because the

evolving nature of such supply chains requires systematic risk management approaches. The

overall objective of this paper is to contribute to CRM in a multi-tier global supply chain

context through industry-specific and supply chain–oriented insights. To assist with this

objective, our study initially explores the value of CRM through a qualitative field study, and

then evaluates one of the CRM mechanisms –risk-sharing contracts –with a simulation

model from a comparable supply chain setting.

This paper is structured as follows: Section 2 reviews prior research that offers theoretical

and methodological foundations. The mixed-methods approach used in this study is depicted

in Section 3. The key findings from both the field study and empirical simulation are

presented in Section 4. The discussion of our findings, and theoretical and managerial

implications are presented in Section 5, followed by conclusions, limitations, and research

directions in Section 6.

2. Literature review

2.1 Supply chain risks (SCRs)

The SCRM literature has identified a wide range of SCRs, the most recognised of which

include strategic and operational risks (Harland et al., 2003), operational and disruption risks

Collaborative

risk

management

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