Product quality information in supply chains: a performance-linked conceptual framework applied to the Australian red meat industry

• Pages: 697-723
• Date: 02 July 2020
• DOI: https://doi.org/10.1108/IJLM-06-2019-0157
• Published date: 02 July 2020
• Author: Yue Zhang,Derek Baker,Garry Griffith
• Subject Matter: Management science & operations,Logistics

Product quality information in

supply chains: a performance-

linked conceptual framework

applied to the Australian red

meat industry

Yue Zhang and Derek Baker

UNE Business School, University of New England, Armidale, Australia, and

Garry Griffith

UNE Business School, University of New England, Armidale, Australia and

School of Agriculture and Food, The University of Melbourne, Melbourne, Australia

Abstract

Purpose –This paper aims to address the association between the quality and quantity of information in

supply chains and the costs and benefits of generating, using and sharing it.

Design/methodology/approach –The authors’conceptual framework draws on multiple disciplines and

theories of the value and use of product information. Controllable aspects of information, its quality and

quantity, are the focus of the study as drivers of firm and chain performance. Structural equation models of

constructs at two stages of the Australian red meat supplychain are employed, using data from a survey of 81

sheep and cattle breeders and commercial producers.

Findings –Information quality influences performance more for some product attributes than others and is

more influential than is information quantity. Information sharing for many attributes generates benefits only

at high cost. Investment in measurement and transmission technologiesis supported for intrinsic and extrinsic

measures of quality. Differences in respondents’evaluation of information quality are interpreted as evidence

of persistent chain failure.

Originality/value –To the authors’knowledge, this is the first attempt at quantifying and comparing the

benefits and costs of information sharing across multiple stages of a supply chain and the first to assess

quantitatively the role played by information quality and quantity in generating costs and benefits.

Keywords Supply chain, Information quality, Information quantity, Product quality information, Red meat

Paper type Research paper

1. Introduction

Information sharing in food production processes plays an important role in sustaining

production efficiency and in reducing wastage of resources and food in the increasingly

complex food supply chain (SC). Sharing the information regarding food safety and food

quality enables SC transparency and has become a crucial element in (re)building consumer

trust in Australia (Wilson et al., 2017;Astill et al., 2019). Increases in SC transparency can be

achieved by improving the quality and quantity of this information (Haleem et al., 2019;

Behnke and Janssen, 2020). Little research attention has been paid to the practical issues of

measurement, sharing and use of product quality information in red meat SCs, particularly as

it relates to the performance of upstream SC actors.

The red meat industry in Australia is a major contributor to agricultural sector GDP and

to export revenue. In 2017/18, Australia produced 2.35m tonnes of beef and veal valued at

$A10.9bn and 731,000 tonnes of lamb and mutton valued at $A4.5bn. In total, 72% of beef and

veal was exported valued at $A9.5bn, and 66% of lamb and 96% of mutton were exported

valued in total at $A3.86bn. In addition, Australia maintains a significant live cattle and sheep

trade, worth a further $A1.7bn annually (Meat and Livestock Australia, 2019).

Product

quality

information in

supply chains

697

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 4 June 2019

Revised 18 May 2020

Accepted 31 May 2020

The International Journal of

Logistics Management

Vol. 31 No. 3, 2020

pp. 697-723

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-06-2019-0157

Sharing information vertically in red meat SCs may play a large role in driving the

performance of firms, SCs and networks. The reasons for this are threefold. First, the quality

of red meat products can vary dramatically due to breed, handling methods and processing

factors (McGilchrist et al., 2019). Information about product quality can assist consumers to

make informed decisions (Risius and Hamm, 2017), benefiting the SC by improved consumer

satisfaction and customer retention. Second, red meat products are often considered of high

value. Value addition can occur because of the measurement and sharing of this information

throughout the SC. Third, red meat SCs are complex, involving multiple stages with

numerous stakeholders. For example, a beef SC typically includes commercial breeders,

backgrounders, feedlots, saleyards and retailers. Sharing product quality information can

improve SC coordination and facilitate SC decision-makings. However, whole-of-chain efforts

in quality information distribution have been rare, due to chain failure issues.

Chain failure occurs when an SC fails to maximize the SC surplus (Griffith et al.,2015). It

suggestsobstacles to efficientlevels of generation and use of information,and internalizationof

such chain-related problems in pursuit of optimal, or at least improved, SC performance has

been addressed as the delivery of corrective “chain goods”(Griffith et al.,2015). Uncertainty

impacts incentives for sharing information amongst multiple SC actors (Buhr, 2003),

particularly amongst buyers (Caswell and Mojduszka, 1996). Inequities in allocation of costs

and revenue along the meat SC also provide differences in incentives for sharing and use of

information. Moreover, mobilization of the demand for meat quality information presents a

number of challenges. Somequality traits of meat products are difficult or costly to measure

and report(Beck er etal.,2000). Information on some attributesmay be measured at one stagein

a SC, but usedat other stages so that the qualityof information may be reducedin transmission.

The natural variation in food products’quality highlights the importance of coordination

between firmswithin the SC (Van Der Vorst et al.,1998),as buyers and sellers within the chain

may both be uncertain about the quality of the products they trade (Schlee,1996).

The Australianred meat industry–both public and private sectors–has invested heavily in

enabling information flow about product quality (Baker et al.,2016). The Meat Standards

Australia(MSA) meat quality grading systemprovides an example of a whole-of-chain quality

gradingsystem that provides eatingquality grades associatedwith meat tenderness, juiciness,

flavour and overall liking (Thompson, 2002). Beyond marketing of meat, breeders and

producersuse MSA to benchmarkanimal genetics and managementso as to enable predictions

of eating quality in the live animal (Polkinghorne et al.,2008). This development identified

incentiveincompatibilities in informationactions surrounding productquality as chain failure

(Mounter et al., 2016) and moved to correct them. The industry is also investing in new

measurement technologies such as dual-energy X-ray absorptiometry (DEXA) and computed

tomography(CT) scanning, but theyare at an early stage of developmentat the time of writing.

Ding et al. (2014) developed a conceptual model which aimed to test how various SC

practices, including information quality and information sharing, influenced food quality in

the Australian beef processing sector. Regression analysis applied to survey data found that

information quality had a significant positive relationship with food quality. They

recommended improvements in information quality and promotion of information sharing

in the Australian beef SC. Storer et al. (2015) used factor analysis and structural equation

modelling of survey data to test hypotheses about how SC relationships and SC capabilities

influence beneficial outcomes from adoption of innovations. Their results confirm some

expectations, but they also find a disconnection between SC coordination activities and SC

capabilities. From their results they propose a conceptual framework linking capabilities with

performance.

In the red meat industry, a large number of studies have successfully portrayed a process

of consumers’quality perception and the value consumers place on information (Henchion

et al., 2017). However, received research has to date not presented a systematic statement of

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