Analysing the critical success factors and the risks associated with third-party logistics in the food supply chain:a case of coffee industry

Abstract

PurposeThe purpose of this study is to analyse various risks associated with third-party logistics (3PL) in the coffee supply chain and to present a framework that computes the influence of these risks on the critical success factors of the coffee supply chain.Design/methodology/approachThe risks have been identified through a comprehensive literature review and validation by industry experts. The paper utilises an interpretive structural modelling (ISM) methodology for developing a hierarchical relationship among the CSFs. Furthermore, fuzzy MICMAC analysis is carried out to categorise these CSFs based on their driving power and dependence value. The fuzzy technique for order preferences by the similarity of an ideal solution (fuzzy-TOPSIS) approach has been applied to prioritise the risks associated with 3PL based on their ability to influence the CSFs of the coffee SC. Furthermore, we performed a sensitivity analysis to analyse the stability of the results obtained in this study.FindingsThis study illustrates ten risks associated with 3PL and five CSFs in the coffee supply chain. The analysis revealed that coffee enterprises need to develop a balanced pricing strategy to ensure a sustainable competitive advantage, whereas the lack of direct customer communication is the most dominant 3PL risk affecting the CSFs.Practical implicationsThis research provides coffee enterprises with a generalised framework with set parameters that can be used to attain a successful coffee supply chain in any developing nation.Originality/valueThe study contributes to the literature by being the first kind of study, which has used fuzzy ISM-MICMAC to analyse the CSFs of the coffee supply chain and fuzzy-TOPSIS for analysing the impact of various risks associated with the 3PL in the coffee supply chain. Thus, this work can be considered a benchmark for future research and advancement in the coffee business field.

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“…Internal integration is crucial for ensuring that a company's internal departments and functions work together efficiently (Ramirez et al, 2021). The cooperation between different departments within a company, such as purchasing, operations, logistics, marketing and sales department, is necessary to attain the goals of the supply chain (Ramirez et al, 2021;Shanker et al, 2022). Key activities within internal integration involve integrating enterprise applications across internal departments, employing cross-functional teams for progression enhancement and real-time integration of internal processes from resource management to manufacturing, delivering and retailing (Shukor et al, 2021).…”

“…It involves breaking down barriers between cross-functional teams to ensure smooth resource and information flow (Seo et al, 2014). When intra-company departments work together as a team, it ensures collaboration and knowledge sharing, leading to more efficient workflows and better decision-making (Shanker et al, 2022). On the other hand, a lack of internal integration may lead to excessive work and lost resources, affecting quality and performance (Khanuja and Jain, 2022).…”

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