Home-Delivery-Oriented Agri-Food Supply Chain Alliance: Framework, Management Strategies, and Cooperation Stability Control

Abstract

The high cost of operation and severe competition in the agri-food e-commerce market make it hard for the small and medium agri-food enterprises (A-SMEs) to operate cost-efficiently and in a sustainable manner. This paper seeks to organize A-SMEs to develop a cooperative organization via collaborative strategies and alliance structures, named as the home-delivery-oriented agri-food supply chain (HASC) alliance, to form a substantive relationship to gain a stable foothold in the emerging e-commerce market. A theoretical framework of the HASC alliance is built with its organizational structure and schematics of the process of implementation strategies that cover the aspects of last-mile chain extension, food transportation, and production/distribution control. Furthermore, a three-step analytical method is proposed to analyze the performance of the alliance with the aim to provide appropriate strategies to hedge against the potential risks of cooperation instability. A hypothetical case is conducted, and the results show that: (1) the performance of the hypothetical HASC alliance with time shows significant variation in the beginning, but it gains stability with the application of stability control strategies; (2) the cooperation stability of HASC alliance is very sensitive to the performance of the strategies that control the customer and environment variations; (3) the factors of trust and market fluctuation have higher effects on membership and environmental stability, respectively; (4) the minimum and maximum cost ranges of control strategies at which the alliance can maintain its stability and performance are 5% and 29%, respectively, of the total operation cost.