Chain coordination is growing in importance for those in the food industry to maintain access to global markets and competitive advantage. Information communication facilitates coordination and is seen as the glue that holds organisational chain relationships together. This paper describes how Australian food processors have been exchanging information to coordinate customers and suppliers in their chains along with changes over time. The most frequent information exchanged was to resolve problems. Operational issues were only discussed when exceptions arose and this was decreasing over time, as problems were resolved and processes improved. For the organisations studied, they were increasingly formalising processes to review progress and performance. A wide range of organisational departments were involved in communications with customers and suppliers, especially to resolve problems and develop new products. While the traditional telephone and face-to-face communication methods were the most popular, e-mails were replacing faxes. There were also moves to increasing use of reports, electronic data interchange and intranets for more well developed relationships with larger customers and suppliers. These changes in communication systems were the source of some increased satisfaction with information systems by improving timeliness and depth of information shared. However, there was perceived to be some room for further improvement.
Introduction
Chowdhury, Shyamal (author), Negassa, Asfaw (author), and Torero, Maximo (author)
Format:
Research report
Publication Date:
2005-10
Published:
International: International Food Policy Research Institute, Washington, D.C.
Location:
Agricultural Communications Documentation Center, Funk Library, University of Illinois Box: 102 Document Number: D10927
Notes:
Food Consumption and Nutrition Division Discussion Paper 195 and Markets, Trade, and Institutions Division Discussion Paper 89. 44 pages., This paper examines how market institutions can affect links between urban and rural areas with specific emphasis on goods market integration in the national context. Traditionally, development researchers and practitioners have focused either on rural market development or on urban market development without considering the interdependencies and synergies between the two. However, more than ever before, emerging local and global patterns such as the modern food value-chain led by supermarkets and food processors, rapid urbanization, changes in dietary composition, and enhanced information and communication technologies point to the need to pay close attention to the role of markets both in linking rural areas with intermediate cities and market towns and promotion of economic development and poverty reduction. This paper begins with a presentation of a conceptual framework of market integration and then identifies five major factors that increase the transfer costs that subsequently hinder market integration between rural and urban areas: information asymmetry, transaction costs, transport and communication costs, policy induced barriers, and social and noneconomic factors. Five specific cases in five developing countries are examined in this study to demonstrate the primary sources of transfer costs and the aspects of market institutions that are important to market integration and promotion of rural-urban linkages. While emerging institutions such as modern intermediaries linked to supermarkets and food processors can reduce information asymmetries between rural producers and urban consumers, existing institutions such as producers’ cooperatives can pool the risks, increase the bargaining power of small producers, reduce enforcement costs, and thereby reduce transaction costs. In addition, new types of partnerships between businesses and NGOs, and between public and private sectors, can improve infrastructure provision which, in turn, can reduce transport and communication costs. To the contrary, the presence of inappropriate policies or noneconomic factors such as those that involve social exclusion take on a negative role in linking urban and rural markets.
