Digitization in Improving the Food Supply Chain

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Digitization in Improving the Food Supply Chain

Table of Contents

Background of the Study
Literature Review
Research Method
Limitation and Future Direction
Timescale
References

Technology plays an essential role in shaping the food markets by improving the affordability, productivity, and diversity of agricultural products. Inefficient markets lead to waste in high supply areas during harvests (Köhler and Pizzol, 2020). The regions with weak markets depend on less than three food varieties and often have a core food that they depend on. When production of the main foods is low due to bad weather, these regions face shortages, and hunger is prone in these areas. The size and number of retailers and producers are essential in the food supply chain. Large retailers have the resources to adopt the latest technologies, improve productivity and cut costs. Large-scale production and food distribution have caused digitization of the food supply chain, with all stakeholders sharing the benefits.

Shorter food chains have the advantage of connecting consumers to the farmers and reducing waste along the supply chain. However, short chains work only for localized farming where the farmer sells directly to the retailer who avails it to the final consumer. However, such a chain limits the varieties available to the consumer, and companies lack resources to invest in productivity technologies. There is no incentive to invest in technologies in shorter chains since the payback period for investing in such technologies is too long (Kittipanya-Ngam and Tan, 2020). On the other hand, the small-scale farmer has no bargaining power within the longer food supply chains.

Another challenge of the food supply chain is the vulnerability to natural disasters. The COVID 19 crisis is a recent example of how the food supply chain could be affected by natural disasters. The height of the pandemic saw countries lock down and prevent the standard distribution networks. The flexibility of the supply chain was tasted by the ability to supply to essential workers and manage production during the pandemic. There were concerns on how food industries would be affected by the spread of the pandemic. The pandemic has aroused attention on the importance of food safety and its reliance on established infrastructures.

The benefit of digitization has mainly streamlined the deficiencies left by the industrial revolution by introducing shorter supply chains. Today, farmers do not need cooperatives to sell their produce. Contrary, they need to search for the best prices online and sell to the highest paying buyer. Governments have an easier task of installing infrastructure that connects farmers and their markets. According to Köhler and Pizzol (2020), digitization has eliminated information asymmetry, and the farmer can confirm the prevailing market prices before selling to a middle man. Digital technologies should provide intelligent solutions to these challenges by establishing inclusive and sustainable food markets that depend on the resilience of the communities.

Background of the Study

The global population has been growing considerably over the last decades. The Malthus theory predicted that because the population increases geometrically and the food supply boosts as an arithmetic sequence, the food supply will not be enough to meet the demand sooner or later. Consequently, the theory implies that the human population would have to be checked, maybe by diseases or hunger, before it outstrips the food supply. Since then, the challenge for the global food system has been to supply enough food to the ever-increasing demand as a result of the growing population.

The emergence of digital technologies offers unique opportunities for the global food systems to overcome this challenge. Currently, digital technologies have had a positive impact on the worldwide food supply chain. Digital transformation has changed the interactions between stakeholders in the food supply chain. The effects of digital transformation include reducing the costs of supervision, transaction, and information. Due to the significant challenges, stakeholders within the food supply chain have been under pressure to find innovative ways to adopt different digital technologies at different food production and distribution stages. Digital transformation presents an excellent opportunity to improve the operation of food systems globally. To attain the vision 2030 second Sustainable Goal of eliminating hunger, the global food supply chain must leverage digital technologies to improve the functioning of the agricultural systems (Mudda Giddi and Murthy, 2017). Hunger still remains a primary area of focus a major global target of being eliminated as underscored by the UN 2030 goals of sustainable development. The goal can be effectively realized if the food supply chain is improved and issues of nutrition, climate change and the dwindling natural resources is addressed comprehensively.

Research should establish the numerous ways in which digital technologies are affecting food supply chains. The significance of the study is to develop objective measures for the effect of digitization. This is essential because it could inform policymakers on the most effective courses of action that drive the best outcomes. The study significantly highlights how different countries are leveraging digital technologies to overcome the challenge of food production. The study will also inform current challenges in adopting digital challenges and how other regions could replicate the success stories. The central research problem is determining how the digitalization of food supply chains could solve the food challenge. The study also seeks to highlight how the food supply chain works to create efficient agricultural markets that solve hunger for all people.

Literature Review

Management of Knowledge links the demand and supply of information on behalf of learning and, therefore, enhances the organizations performance. Meihua (2018) suggests that knowledge management is related to the management of the agricultural supply chain because it provides the tools necessary for managing large amounts of information generated by the operators of the supply chain and the customers. Management of the food supply chain has been a challenging element in the food sector because it calls for advanced control systems that can handle perishable products, rigorous safety of food products, sustainability requirements, and unpredictable variations in the supply chain (Yiannas, 2018). Digitalization of supply chain management will help solve the challenges mentioned above. Technology facilitates easy monitoring of the food supply chain by the regulator, creating a market that is, controlled premeditated, and in real-time by remote augmentation through the internet instead of manual monitoring through observation.

Digital transformation creates virtual chains of supply on systems that enhance food tracing and provide the required information for tracking food products along the supply chain. Government agencies can use sensor technologies to monitor food variables such as microbiological information, temperature, and other parameters that influence the final quality of processed food (Jarka, 2019). The highlighted parameters illustrate the advanced capacities beyond tracking and tracing, such as planning and optimization functionalities and food quality deviation management. Consequently, digitalization incorporates computer intelligence into the chain of supply. For instance, the direction can receive early warnings in food incidents, reschedule in the event where the quality of food deviates and simulate the quality of products based on ambient conditions (Burke, 2019). Accuracy in planning the food distribution can be enhanced by integrating a digital supply network that guarantees visibility throughout the value chain. The success of the digital transformation process depends on applying it in the management of the food supply chain and making it shorter.

Governments have adopted various agricultural policies to safeguard farmers and avoid unfair practices like holding. The challenge is that agricultural policy is availing food to the end-users at low prices while at the same time guaranteeing farmers reasonable prices (Jarka, 2019). Cartels in the food chain rely on the information asymmetry within the market to buy at low prices and sell at high prices in areas of shortages. Some also believe in times of oversupply and hold until supply is reduced to sell at higher prices (Mudda Giddi and Murthy, 2017). Such players are essential in ensuring a sustainable food supply. However, governments play the role of limiting the margins so that the price set by the suppliers does not lock some poor income earners out of the market. Governments can also subsidize the costs without reducing the profit margins of the distributors. Importantly, technology should be integrated into the chain to reduce the prices across the board and avail different varieties to the end-user.

There is a close relationship between digitization and the food supply chain. The food supply chain consists of production and distribution. Kosior (2018) states that the government invests in scientific innovations to improve productivity at the farm level and distribution. Food production is affected by seasonal supply due to overreliance on rainfall, especially in developing countries. Even when the show is adequate, lack of appropriate information prevents oversupply from selling to scarcity areas. There is also the issue of the spread of innovations that could improve the productivity of agriculture. Food passes through retailers, processors, and producers who transform it from raw material to the finished product that reaches the end-user. The supply chain varies for different products and may entail simple tasks like repackaging. The digitization of agriculture should improve the three main stages in the supply chain: primary production, manufacturing, and processing and distribution.

Research Method

The purpose of the study is to analyze the role of digital technologies in food supply chains. Unfortunately, early adoptions of technology in agriculture resulted in increased profit margins that benefited only the middlemen due to the longer chains. This implies that the benefits of the improved productivity encouraged distributors to establish longer chains due to asymmetry of information to make huge margins by exploiting the consumers and farmers.

The research study adopts various methods in collecting data to be analyzed. A mixed approach in collecting data will ensure that sufficient information and data is collected to accurately report on the need for digitization. The methods include the use of online surveys, research questionnaires, and content analysis. Empirical data will be acquired through observations, collection of expert views, and semi-structured interviews. Quantitative and qualitative data from various studies will help in developing a high-quality research questionnaire.

The data for the study will be collected through an online survey of scholars. The online questionnaires will be prepared to enable the researcher to compile data regarding participants general information, the extent of influence of technology in improving performance and managing the supply chain, and the expected impact of digitalizing supply chains on organizations. Specifically, the research study questions seek to evaluate the technologies used at the industry level as well as the specific organizational technologies. The research questions also cover the broader issues in supply chain digitization that have been established and emergent among academics and experts. The research questions also seek to show the differences between the established and emergent technologies depending on the views of the academics and experts. Furthermore, the questions will be designed to help, from a knowledge management outlook, how supply chain academics employ knowledge management at the industry and organizational levels. This will also cover the supply chain technologies and matters that benefit the academics as well as the field experts.

To design an appropriate research questionnaire that addresses all the topics, content analysis will be the most suitable method. According to Weber (1990), content analysis is a research technique that employs various procedures to produce useable suggestions from documented and graphical and audio data. It is mainly used to compare different media and to define developments in communication content. The analysis in this study will incorporate views collected from academic journals and opinions from practitioners.

The overall research combines both qualitative and quantitative data to cover the topic as broadly as possible. Quantitative data is mainly industry data and quantitative analysis conducted by previous researchers. Qualitative data involves the opinions of industry experts and policymakers on the issue of digitization and agriculture. Quantitative data treats both variables as vectors and measures their direction over time. The output of the agricultural sector could measure the efficiency of the supply chain. An important aspect of agriculture is to reduce hunger and malnutrition. A complete lack of food causes needs, while malnutrition is caused by overreliance on various foods. Therefore, collected data on the number of people affected by hunger is a measure of progress of the agricultural markets.

Secondary data on the changes in food prices over time will assist analyze how digitization affects the food supply chain. The methodology assumes that prices are an indicator of the efficiency of markets. According to Kosior (2018), whenever there is a surplus in the market, the prices are too low to meet the farmers expenses. When there is a shortage, the prices are too high that some people cannot afford food. Digital transformation facilitates effective communication, and possible deficits or surpluses can be predicted more accurately in the market. Digitization informs farmers from different regions where the prices are maximized. Unlike closed traditional markets, digitization opens markets and balances the price of food. Another data to be collected would be the price volatilities over time. Food prices are affected by seasons, but digitization minimizes price volatilities by availing farmers with options when there are shortages and opportunities to sell when they have needs.

The collected data will be prepared by selecting the relevant data from the answered research questions. The data will be analyzed by comparing the results from various studies on the topic. Regression analysis through excel will also examine the relationship of some factors of digital transformation against the agricultural supply chain (Kosior, 2018). For example, the data can find the regression analysis for many farmers using e-commerce platforms against specific food products over time. Correlation analysis will be essential in the research in determining the strength of relationships between the two variables.

Qualitative data from the various studies will be analyzed based on textual analysis. Content analysis will help to give meaning to the quantitative findings. Content analysis involves categorizing the information from a research into various contexts (Burke, 2019). For example, volatility in prices may be caused by factors other than the lack of digital capabilities. Thematic analysis will also provide a contextual view of the various studies and establish themes and patterns that the findings imply. The analysis of the qualitative data will identify the key themes on the relationship between the variables. For example, digital transformation has a more significant positive impact on durable products than perishable foods. Also, a final regression model will help to compare the established and emerging digitization concepts among academics and experts. The modelling of knowledge management is important in providing scholarly thinking into developing research questions that are needed in interpreting budding but also narrow research area of digitizing the supply chain.

Limitation and Future Direction

The research has taken a broad look at the digitalization of the food supply chain and issues emerging in the field due to the digital disruption. The study offers a conceptual framework depending on the literature view. The exponential growth in digital technologies implies that digitalization will continue to infiltrate all the facets of business operations, more specifically in the food supply chain (Aday and Aday, 2020). Pressure from consumers and the competitive environment implies that local organizations are intensely pressured to develop proper digitization strategies. They are expected to use the internet of things to respond to consumers demands quickly and effectively.

Additionally, the digitalization of supply chains can determine the success rate in interaction with customers, resource allocation, monitoring real-time inventory, and general efficiency. Companies need to become more knowledgeable in the digital supply chain and eventually enhance performance and profitability. Another limitation of the study is in the objectives (Jarka, 2019). The agricultural chain of supply consists of many stakeholders, and the specified goals are too broad to cover the interests of specific stakeholders. Besides, there are numerous food varieties popular in the different world regions. The study will not exhaust the effects of digitization on the other food varieties in different areas. There is a need to have focused studies on digitizing the various players within the supply chain.

The study is limited by the sample size that the researcher can collect. The type of research problem requires a wide variety of information to be answered satisfactorily. The normal distribution requires a larger sample size to provide meaningful insights into the population (Kittipanya-Ngam and Tan, 2020). Since the nature of the statement problem requires information on various players within the supply chain. One, there is a need for enough samples for each type of farming. Secondly, the research question needs information on intermediaries within the supply chain. It could be wrong to assume that distributors cause price increases, yet the impact of digitization is based on that assumption. Lastly, there is a need for a sample size covering the consumers of different food varieties. In other words, the correct sample size would be a collection of various studies covering all the specific stakeholders.

Timescale

The research is expected to take three months. The following are the tasks to be conducted:

Doing a literature review to establish what has been done on the topic and gaps that need to be filled.
Based on the existing gaps, the research will propose the objectives of the study.
The third task is identifying the information needed and designing appropriate methods of data collection. This entails seeking permission for information that may be restricted.
Obtain guidance from the lecturer on the topic and the process
Data analysis
Writing draft research introducing the statement problem, research methodology and literature review, analysis, findings, and recommendations on the topic.
Edit the research, and proofread and submit.

References

Aday, S. and Aday, M.S., 2020. Impact of COVID-19 on the food supply chain. Food Quality and Safety, 4(4), pp.167-180. Web.

Burke, T., 2019. Block chain in food traceability. Springer. Web.

Kittipanya-Ngam, P. and Tan, K.H., 2020. A framework for food supply chain digitalization: lessons from Thailand. Production Planning & Control, 31(2-3), pp.158-172. Web.

Köhler, S. and Pizzol, M., 2020. Technology assessment of block chain-based technologies in the food supply chain. Journal of cleaner production, 269, 122193. Web.

Kosior, K., 2018. Digital transformation in the agri-food sector Opportunities and challenges. Roczniki (Annals), 2018(1230-2019-3703). Web.

Mudda, K., Giddi, B. and Murthy, P.V.G.K., 2017. A study on the digitization of supply chains in agriculture-an Indian experience. Journal of Agriculture and Information, 8, 45-55. Web.

Meihua, Z., 2018. Exploration on enterprise digitization management based on the empirical study of the food industry. Jiangsu Science & Technology Information. Web.

Yiannas, F., 2018. A new era of food transparency powered by block chain. Innovations: Technology, Governance, Globalization, 12(1-2), pp.46-56. Web.

Jarka, S., 2019. Food safety in the supply chain using block chain technology. Acta Scientiarum Polonorum. Oeconomia, 18(4), pp.41-48. Web.

Weber, (1990). R.P. Weber Basic Content Analysis. vol. 49, Sage Publications

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