This chapter has reviewed the concept of SCM in order to enable more understanding about its definition, theories and background. The study presented various practical examples of application of SCM in agriculture especially production, agro-processing and marketing of agri-products with reference to different countries from Africa, other developing countries and the world at large. This research work explored large practical experience in application of SCM in coffee production, processing and marketing. Since this is a case study focusing on agricultural sector in Tanzania, the researcher reviewed this sector in terms of its background, the current performance, its contribution to the economy as well as the challenges it is facing. Regarding coffee production, processing and marketing, this study has reviewed literature in many developing countries producing coffee and narrowed down to Tanzania, Kagera region in particular.
Having reviewed theoretical and empirical evidences, the most important aspects that explain the existence of the SCM include the following:
Networks of individual firms with common or different specialization;
Partnership of individual firms in provision of service to the customer or commodity; Ownership of activities and firms;
Coordination of activities along the chain; and
Governance of the process, specifications, performance, standards/quality and logistics
The study has proved that the benefits of successful application of SCM in agricultural activities include: reduced cost through specialisation;
improved synergistic performance (performance based on cooperation or integration); increased information to support joint planning;
enhanced customer services; reduced risks and uncertainty;
shared creativity, brevity, skills and enhance competitive advantage; and
quality products and standards with adherence to specifications due to governance.
The literature gathered gives an overview about theory and practice of SCM knowledge. It indicates that SCM is so rich that it can accommodate and be applied in business, law, economics, logististics as well as social aspects. The theoretical part indicates the success while a number of challenges have been encountered by the application of SCM in various disciplines. The practical side has tried to document the areas where there has been application of this model in various countries across the world, developing countries and in Tanzania. The main message and in fact a gap that has been identified on the coffee SCM in Tanzania especially in Kagera region is that coffee makes contribution to the country’s economy. However, the crop is facing serious constraints along its supply chain. There is no appropriate coordination of links so as to deliver superior customer service, safe and quality products. No collaboration between farmers and buyers of coffee in production and processing. In such a situation, the buyers of coffee cannot be sure of the safety and quality of the coffee. There is no feed back to farmers as regards to the quality of coffee produced. This situation poses a challenge and has created a gap that need further research in order to revive production, productivity and economic status of coffee in Tanzania and Kagera’s economy. The reasons and solutions for this challenge are expected to be explored in this study.
The identified literature gap is the base for assessing and proposing the appropriate CSCM for Kagera Region. The theory of SCM prescribes that there must be a coordination of individual links and all links. However, its practice has left a number of questions. A vivid example is the existence of ICO for coordination of marketing of coffee internationally, while there is no any international body for coordination of coffee production or processing. In Tanzania, there are cooperative unions responsible for buying coffee but there is no designated institution for spearheading coffee production or processing. There is no single body to govern or coordinate the three major links to the coffee supply chain. That is, there is no coordination of all links. The literature indicated several constraints facing the agricultural sector in Tanzania and those facing coffee production, processing and marketing. However, it indicates clearly the underlying factors and solutions for such dilemma. All these are the triggers for undertaking this study.
CHAPTER THREE
THEORY AND PRACTICE CONCEPTUAL MODEL DEVELOPMENT 3.1 Introduction
In Chapter Two, the theory and practice of SCM was extensively covered including coffee supply chain in the global perspective as well as coffee supply chain in Kagera Region and in Tanzania in general. Thechapter summarised and discussed various definitions of SCM and their applications. This chapter is about model development; specifically discusses the type of conceptual model to be applied to address coffee SCM challenges facing Kagera Region in Tanzania. Furthermore, it discusses the reasons and advantage of application of conceptual models. Likewise, it highlights the rationale for selecting a particular criterion for evaluating the conceptual models. Finally it presents a summary of the definitions of models, the approach adopted, a detailed presentation of various models and discussion of their advantages. Modeling provides a logical, abstract template to facilitate the analyst's thoughts. Thus, developing models for problem solving is a common practice for many disciplines. Model formulation is a complex process. Researchers have in the past approached this process from a variety of angles including planning, model structuring, model integration, and model representation, among others. Here, researchers use observations of modelers in an attempt to understand the process. The observations made in the form of protocol analysis, identified three important facets to this process: formulation tasks, control considerations, and the opportunism in the process of formulation. Using these observations, various models were constructed, based on the blackboard paradigm. Many applications in diverse disciplines such as business, engineering, and physics make use of models whereby the system design and implementation details are presented in this chapter. Therefore,, this chapter is about theory and practice of models generically as an application and extension of model variables for creation of the basis for discussing the conceptual SCMmodels. The relationship between stages of product life cycle and supply chain integration are discussed as well.