Supply Chain Management: An International Journal

Innovative adoption of hybrid supply chain strategies in urban local fresh food supply chain
Dilupa Nakandala, H.C.W. Lau,
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Dilupa Nakandala, H.C.W. Lau, (2018) "Innovative adoption of hybrid supply chain strategies in urban local fresh food supply
chain", Supply Chain Management: An International Journal, https://doi.org/10.1108/SCM-09-2017-0287
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 Innovative adoption of hybrid supply chain
strategies in urban local fresh food supply chain
Dilupa Nakandala and H.C.W. Lau
School of Business, Western Sydney University, Penrith, Australia

Abstract
Purpose – This paper aims to investigate the characteristics of demand and supply in relation to the real-world supply chain strategies of local
urban fresh food supply chains (FFSC). It generates insights into how a range of strategies is adopted by urban retailer businesses in attempting to
cater for the particular requirements of food-literate urban consumers and small-scale local growers.
Design/methodology/approach – Using a multiple case study method, 12 urban local fresh food retailers in Sydney were studied and interview
data were analyzed using thematic analysis.
Findings – Local fresh produce has characteristics of both functional and innovative products. Retailers with strong upstream and downstream
collaborations adopt hybrid strategies for increased time efficiency and product variety. The dominance of strategies for time efficiency in
downstream activities is aimed at maximising the product’s freshness and taste, while product range improvement strategies mean innovative
retailers are working with growers to introduce new product types and offering new recipes to consumers that encourage a wider use of products.
Urban retailers of local fresh produce leverage on their relationships with upstream and downstream supply chain entities in implementing hybrid
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strategies.
Implications – Policymakers will make use of the new knowledge generated about the real enablers of contemporary urban food systems in
designing developmental policies; findings will inform urban FFSC retailers about how harmonious relationships can be leveraged for
sustainability.
Originality/value – The study generates new knowledge on the implementation of a leagile approach by studying the adoption of innovative hybrid
strategies by urban local FFSCs in relations to demand and supply characteristics and the utilization of strong vertical relationships in a short supply
chain.
Keywords Efficiency, Supply chain management, Agility, Supply chain strategy, Trust, Leagility, Local fresh food, Collaboration and relationships,
Urban food systems
Paper type Research paper

1. Introduction et al., 1999). It governs the managerial choices organizations

make in response to the diverse requirements of supply chain
While the existence of global supply chains is justified by the entities and the dynamics of the business environment.
expectations of the year-round availability of seasonal fresh Conventional knowledge on supply chain strategy is dominated
food products and the comparative advantage of some by improved efficiency and responsiveness to supply and
geographies for specific produce types (Ahumada and
demand characteristics (Fisher et al., 1997; Lee, 2002). The
Villalobos, 2009; Monteiro et al., 2010), the increasing
adoption of distinct strategies at different stages of the supply
geographic distances between food production and food
chain creates opportunities in meeting supply chain challenges.
consumption is a growing concern for consumers (Monteiro
The concept of leagility combines Lean and Agile approaches
et al., 2010). In response, innovative urban and peri-urban local
to supply chain management based on decoupling and
fresh food supply chains (FFSCs) are emerging to do two
postponement approaches; the adoption of leagility requires
things: they meet the increasing demand from contemporary
considering a complex combination of supply chain
urban consumers for locally grown fresh produce and they
characteristics (Naylor et al., 1999; Naim and Gosling, 2011;
address the drive for sustainability of all local food systems’
Chrisptopher and Towill, 2000).
stakeholders.
The need to move away from conceptual studies to
Supply chain strategy underpins how each organization
empirical approaches in research on leagility has been
within the chain deals with the other entities in that supply
highlighted (Naim and Gosling, 2011), whereas previous
chain in their attempts to achieve their individual
research investigating how such hybrid strategies are adopted
organizational strategic objectives (Harland, 1996; Harland
in the food sector is limited. For food supply chains, the need
to consider the rate of perishability, along with the impact
The current issue and full text archive of this journal is available on product degradation has on product value in different parts of
Emerald Insight at: www.emeraldinsight.com/1359-8546.htm

Received 7 September 2017

Revised 9 January 2018
Supply Chain Management: An International Journal 16 June 2018
© Emerald Publishing Limited [ISSN 1359-8546] 15 August 2018
[DOI 10.1108/SCM-09-2017-0287] Accepted 16 August 2018
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

the supply chain, has been identified as having a significant agreed that local food should be produced within a 100-mile or
role in formulating food supply chain strategy. A mix of Lean 100-km radius (Durham et al., 2009), there is a great variation
and Agile strategies, deployed at various points along the in the consumer’s definition of local food; this variation arises in
supply chain, has been suggested in preference to a single part on the basis of different food types such as fresh and
strategy for the whole supply chain, but the challenges in processed products. According to US Food Conservation and
applying the leagility approach have been indicated where a Energy Act 2008, locally and regionally produced food means
universal approach is not possible (Blackburn and Scudder, that it is raised, produced and distributed within a local area
2009; van der Vorst et al., 2001). with a total transport distance that is less than 400 miles from
The dominance of studies on local food systems has been on the origin to the consumption. The definition can also depend
investigating rural food systems and consumer behaviour and on political boundaries: for example, within the country of the
perceptions in local food systems with little being done on consumer (Schneider and Francis, 2005), within the state
investigating urban local FFSCs to understand the supply (Darby et al., 2008; Giraud et al., 2005; United States
chain strategies adopted by retailers to cater for supply and Congress, House of Representatives, 2008) or regional
demand requirements (Bloom and Hinrichs, 2011; Brown, definitions of local (Brown, 2003).
2003; Brown et al., 2009; Darby et al., 2008; Schneider and The degree of connectivity between the place of production
Francis, 2005; Kneafsey et al., 2008). Hence, this paper adds to and the place of consumption has also been used to define what
the prior literature by empirically examining a local urban is local for food supply chains. This connectivity, which
FFSC from the perspectives of contemporary urban local fresh involves a direct interaction between consumers and producers,
produce retailers to understand how different supply chain as well as those food supply chains that have additional local
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strategies are implemented for achieving operational and intermediaries connecting local producers and consumers
relational outcomes. Retailers such as food co-operatives, (Hand and Martinez, 2010), sees these local food supply chains
fruit and vegetable box schemes and others that have are referred to as short food supply chains (Marsden et al.,
explicitly identified themselves as sellers of locally sourced 2000). The urban and peri-urban local FFSCs align strongly
produce were empirically investigated by adopting a with spatial proximity characteristics of short food supply
multiple case study approach in this study to understand chains (Marsden et al., 2000) supported by technological
how urban local FFSCs are strategically managed to meet developments that provide efficient connectivity between
demand and supply requirements. We focused on consumer growers, retailers and consumers. In the literature on local food
requirements and supplier characteristics – all from a retailer systems, local foods are considered to be those sourced from
perspective and looked at the strategies adopted by these direct market venues such as farmers’ markets, community-
retailers for achieving their desired operational and supported agriculture, fruit and vegetable box schemes and
relational outcomes. other cooperative distribution and delivery programs
The study identified the presence of both innovative and (Hinrichs, 2000). Even though local food sourcing strategies
functional characteristics in urban local FFSC and found that have been adopted by supermarket chains such as Woolworths
retailers who have strong collaborations with upstream and in Australia (Woolworths Group Limited, 2013), this study
downstream entities adopt hybrid strategies for increased focuses only on short food supply chains in local food systems
efficiency as well as product variety. Deviating from the in urban areas. Hence, in this study, local food is defined as
conventional adoption of Lean and Agile strategies sequentially those available in local food markets such as farmers’ markets,
(Feitzinger and Lee, 1997; Argelo, 1992; Naylor et al., 1999), food co-operatives, fruit and vegetable box schemes and other
innovative urban local FFSC retailers focus on time-efficient sources as defined by Hinrichs (2000) and adopted by Meyer
strategies from the farm gate to customer delivery for product
et al. (2012).
freshness and quality requirements and innovatively increase Previous research has primarily focussed on the rural
their product range and use by leveraging on trust-based
implications of local food systems with particular regard to food
relationships with suppliers and consumers to respond to
security through increased access to food for low-income
market requirements. The relational approach to collaboration
consumers in developing economies (Tregear, 2011; Kneafsey
and integration underpins a harmonious system that enables
et al., 2008), with some studies attempting to link with
sustainable supply chain strategies in the urban local fresh
contemporary urban food systems. Beyond freshness and other
food system. The paper is organized as follows. Section 2
quality benefits, there is strong support for locally produced
reviews the relevant literature on local food systems and
food and local food markets, as consumers have recognized that
supply chain strategy. The methodology adopted by the study
there are benefits to the community in buying from a local farm
is presented in Section 3, followed by a discussion of the
(Eurobarometer, 2011; Entrup, 2006). In a study on Australian
findings of the data analysis in Section 4. Finally, conclusions
consumers, Meyer et al. (2012) found that the lack of food
are drawn and possible opportunities for further research
production information for urban consumers suggests their
noted in Section 5.
reliance on regulations to increase the safety and quality of
food, whereas rural consumers find their direct experience in
2. Literature review food production and processing as useful in providing
2.1 Local food supply chains assurance and confidence in food quality and integrity. Thus
The term “local food” has been defined in a multitude of ways. connectedness between food consumers and production and
Most definitions relate to the geographic distance between the consumer experience in food production impacts their trust in
production and consumption of food, and while it is broadly food where urban food consumers who are away from food
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

production lack trust in food production thus depend on innovative products that are dynamic and highly profitable with
government food regulations for quality and safety assurance. high demand unpredictability and short life cycles. Functional
The local food systems literature is dominated by a focus on products require cost-efficient supply chains, but innovative
alternative food movements which has origins in the “slow products are better supported by market-responsive supply
food” movement that argues for the relocalization of food chain strategies. In testing Fisher’s model (1997) on efficiency
systems (Hand and Martinez, 2010). The focus on local food and responsiveness strategies based on product demand
system literature continues to relate to rural development with characteristics, Selldin and Olhager (2007) found some
only limited attempts to capture contemporary dynamics in the support for the influence of product type on supply chain
urban context and the involvement of management researchers design and claimed that the integration of both efficiency and
in local FFSC studies to investigate the effects of market and responsiveness strategies creates a more competitive
supply conditions on supply chain management strategies and performance (Aitken et al., 2003; Khan et al., 2012; Wong
practices. The ever-increasing growth in demand for local food et al., 2006).
in urban communities demands more research into Supply chain strategy is shaped by both the supply and
understanding the differences between local FFSCs and the demand characteristics of the product. Supply uncertainty
conventional mainstream supply chains. It must take into impacts supply chain design – mitigating uncertainty improves
account the differentiated characteristics of fresh food supply chain performance. Lee (2002) argued that a product
consumers in urban areas and small-scale growers from urban with a stable demand and stable supply should be supported by
and peri-urban areas and how innovative urban retailers in a supply chain strategy that may not perform well for a product
alternative FFSCs for local produce strategically manage their with supply uncertainties and unpredictable demand. High
operations and supply chains. Thus there is a need for empirical stability of supply is underpinned by the maturity of processes
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research to understand how contemporary alternative FFSCs and the use of established technologies, the availability of long-
are strategically managed to cater for the requirements of urban term contractual agreements with suppliers and low complexity
consumers and growers. of supply processes. Confirming the effects of supply
characteristics, Agile supply chain strategies known to be
2.2 Supply chain strategies for increased efficiency and designed for increased responsiveness, can even support
responsiveness functional products in conditions when high uncertainty
Effects of supply chain strategy on supply chain performance prevails, such as a period of bad weather (Lee, 2002). Food
are primarily bifold: operational efficiency and agility (Tipu and supply chains are considered to be supply-driven when there is
Fantazy, 2014; Vickery et al., 2003; Qrunfleh and Tarafdar, high supply uncertainty owing to changing weather conditions
2014; Fisher, 1997; Christopher, 2000; Lee, 2002; Mason- and consequent price sensitivity. Demand-driven strategies
Jones et al., 2000; Yusuf et al., 2014; Huo et al., 2014). could be disruptive when superimposed on supply-driven
Efficiency-driven strategies aim to achieve cost-effectiveness supply chains such as food supply chains; the heterogeneity of
through cost reduction, waste reduction and resource consumer characteristics of the food supply chain and the
optimisation approaches (Fisher et al., 1997; Christopher, perishable nature of food products requires hybrid strategies
2000; Lee, 2002; Mason-Jones et al., 2000; Yusuf et al., 2014; (Blackburn and Scudder, 2009).
Huo et al., 2014). Lean principles predominantly adopted in The adoption of strategies from both operational and
manufacturing as an efficiency-driven stratgey are directed relational dimensions is directed towards effective supply chain
towards specifying value, identifying value stream, avoiding management for improved organizational performance.
interruptions in value flow, letting customers pull value and Operationally, with a competitive advantage in mind, strategies
starting pursuing perfection (Womack et al., 1990) to become are directed towards the outcomes of improved cost-efficiency,
streamlined value creators that are more flexible in responding quality of goods and services, customer service and minimised
to differing customer needs (Hurriyet and Nakandala, 2016). waste (Koufteros et al., 2002). Relationally, also with a
On the other hand, improving supply chain agility to effectively competitive advantage in mind, firms build strong relationships
respond to changing customer requirements in a dynamic and develop networks that include other firms in the supply
market environment is the focus of responsive strategies chain. The relational outcomes are trust, credibility and
(Christopher, 2000; Naylor et al., 1999; Naim and Gosling, effectiveness (Zacharia et al., 2009). Leveraging such
2011). Both Agile and Lean approaches focus on responding to relationships with external partners for increased
customer requirements; leanness targets on efficiency and cost competitiveness requires strategic approaches underpinned by
reduction by eliminating waste in operational processes, where systematic decision-making systems and structures, as
agility is about trade-offs between time, information and serendipity is not sustainable in an increasingly complex and
knowledge in an Agile, innovative business environment (van competitive environment in the fresh food industry (Bonney
Hoek et al., 2001; van der Vorst et al., 2001; Aitken et al., et al., 2007). There are various factors at play in vertical
2003). collaborations with suppliers in food supply chain; therefore,
The relationship between supply chain strategy and product investments in both formal relationship building mechanisms
type dominates the literature on strategy formulation. Fisher and trust development become beneficial for increased
et al. (1997) argued that the type of product should match the collaborations through time (Touboulic and Walker, 2015).
type of supply chain for improved supply chain performance. The literature identifies the importance of supply chain
Supply chain strategies for primarily functional products which collaborations, especially for organic food supply chain
are static, have a low-margin, stable demand and long life cycles management, as collaboration is rooted in both principles and
should be quite different from those that cater for primarily management practices (Rota et al., 2018).
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

The relational view of supply chain management considers identifying a decoupling point that separates the forecast-driven
collaboration, integration and transformation strategies. section from the order-driven section enables the adoption of a
Collaboration has been defined as cooperative behaviour Lean approach to the forecast-driven segment and agility to the
between firms led by the willingness of firms not as a order-driven segment (Naylor et al., 1999; Naim and Gosling,
requirement (Crum and Palmatier, 2004). The three 2011). It has been argued that the adoption of agility
dimensions of collaboration include coordination, adaptation downstream of the decoupling point that is oriented towards
and relationship building, and are supported by information customer orders can generate benefits to all the members of the
sharing, joint decision-making, coordinated operations, supply chain (Argelo, 1992; Naylor et al., 1999). A
knowledge sharing and open communication (Min et al., 2005; postponement strategy intends to delay product differentiation
Zacharia et al., 2009; Omar et al., 2012). Integration involves because of a reduced variety of the product in the early stages of
process integration with upstream and downstream partners the supply chain, thus improving efficiency at early stages and
and the involvement of partners in supply chain strategy increasing variety at later stages for improving responsiveness
formulation (De Brito et al., 2008). In external supply chain (Feitzinger and Lee, 1997). Such a sequential Lean and Agile
integration, relationships with downstream and upstream process is not feasible for all supply chains, and various
entities are managed through trust, credibility and reputation of alternative sequential and concurrent forms that include
the supply chain partners (Wolf, 2011). Supply chain parallel, temporal and decoupling forms have been identified in
transformation has been defined as a higher-order construct previous studies (Naim and Gosling, 2011). High demand-
based on collaboration and integration for increased and-supply uncertainty and inflexibility in production, as well
organizational performance driven by the supply chain as quality requirements of food products affected by food
members’ values (Arora et al., 2016). Relational networking in perishability, create challenges in identifying information and
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both formal and informal modes enables the assurance of food material decoupling points for implementing a leagile approach
safety through the generation of industry and supply chain in the food supply chain compared to a typical manufacturing
knowledge (Schoenherr et al., 2015) and for integrated supply supply chain (van der Vorst et al., 2001).
chain strategies for increased leanness and agility (van Hoek Concerning the specific characteristics of food and the
et al., 2001; van der Vorst et al., 2001). relationships between quality of raw materials and products in
The integration of Lean and Agile paradigms in the form of the food industry and supply chain logistics, the limited
leagility was first proposed for manufacturing supply chains possibility of adoption of the leagilty approach in food supply
(Naylor et al., 1999). They defined leanness as “developing a chain has been recognized (van der Vorst et al., 2001).
value stream to eliminate all waste and to ensure a level Postponing final processing in manufacturing allows
schedule” and agility as “exploiting profitable opportunities in a customization with reduced cost impact on inventory and be
volatile market place”. The use of market knowledge, virtual responsive to the changes in demand from different markets.
cooperation, value stream/integrated supply chain and lead However, in a comparative study by van Hoek et al. (2001),
time compression are found to be equally important for both food supply chain was found to be different from typical
paradigms (Naylor et al., 1999). Table I presents the key supply manufacturing supply chains with the lowest application of
chain characteristics that agility and leanness paradigms postponement in food supply chain in comparison with other
identify as highly important at varying degrees of importance. manufacturing industries. Supply uncertainty is a major factor
However, the selection of supply chain strategy is not a clear- in food supply chain where demand uncertainty is the
cut approach and requires considering a complex combination dominant focus of research on manufacturing thus food
of multiple characteristics in play. For example, as Christopher products are conventionally considered to be functional
et al. (2006) stated for supply chains with high demand products (Simangunsong et al., 2011). However, according to
predictability, the Lean strategy works the best irrespective of van der Vorst et al. (2001), there is a great degree of demand
the lead time requirements, but if demand is uncertain, agility is uncertainty in food supply chains that requires high
preferred only when the lead time is short, but Lean works responsiveness. In adopting a leagile approach, quality
better otherwise. requirements of food products limit the postponement strategy
The concepts of decoupling and postponements have been of delaying the final packaging and labelling in the very final
used in the leagile approach. Segmenting the supply chain by stages of the food supply chain (van der Vorst et al., 2001; van
Hoek, 1999; van Hoek et al., 2001). Firms in food supply chain
Table I Importance of characteristics for different supply chain strategies tend to seek for external partnerships when they operate in
environments with high demand uncertainty, and thus the need
Characteristics Lean Leagile Agile
for structured approaches for supply chain strategies to leverage
Eliminate waste  external partnerships has been emphasised as beneficial in
Rapid reconfiguration  previous studies (Hsiao et al., 2010; Bonney et al., 2007).
Reducing demand and supply uncertainty  Hence, complexities in food supply chain need to be considered
Coping with demand and supply uncertainty  in evaluating the possibility of strategic adoption decisions of
Robustness  postponement and partnership strategies.
High product variety  There is a high degree of variation in quality deterioration
Sensitivity to customer needs  across fresh produce types and the storage and transportation
Source: Compiled from Naim and Gosling (2011), Naylor et al. (1999), Lee conditions required. With regard to deterioration in the quality
(2002), Simangunsong et al. (2011) of fresh produce, the effective selection supply chain strategy
depends on more than product functionality and
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

innovativeness (Shukla and Jharkharia, 2013; Blackburn and produce and the importance of developing consumer trust on
Scudder, 2009). Wastage, as a consequence of food food production (Meyer et al., 2012; Entrup, 2006; Bloom and
perishability, is a major concern for FFSC, where misalignment Hinrichs, 2011) with little being done on investigating urban
of demand and supply is caused by a weak integration of data local FFSCs to understand the supply chain strategies adopted
and information between growers and retailers; the critical role by retailers to cater for supply and demand requirements
of retailers in reducing food waste has been emphasised, (Bloom and Hinrichs, 2011; Brown, 2003; Brown et al., 2009;
including stronger partnering with growers and teaming up Darby et al., 2008; Schneider and Francis, 2005; Kneafsey
with consumers (Taylor and Fearne, 2009; Shukla and et al., 2008). Hence, the resulting research question is:
Jharkharia, 2013; Kor et al., 2017). Changes in the product
value over time as products reach consumers from producers RQ. How local urban FFSCs are strategically managed and
have been emphasized as a critical factor that shapes supply how hybrid approaches for increased efficiency and
chain strategy (Blackburn and Scudder, 2009). When the cost responsiveness are adopted by urban local FFSCs taking
of a unit time delay in the supply chain remains relatively stable into consideration the demand and supply
over time in the supply chain, a selection of a single design characteristics?
choice between responsiveness and efficiency is appropriate. By
analysing the melon supply chain, they showed that the
harvesting to cooling shed segment requires high levels of 3. Research methodology
responsiveness, whereas the cooling shed to retailers segment is This research asks how urban retailers in the local FFSC in
efficiency-driven. Consequently, a hybrid of efficiency and Sydney strategically manage their supply chains to respond
responsiveness is required for an optimum strategy. The high effectively to the demands of their food-literate consumers and
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diversity of perishability rates of fresh produce demands the requirements of urban and peri-urban growers. The
different strategies for different types of food products (Shukla presence of limited management research on local urban
and Jharkharia, 2013). FFSCs that have different characteristics from conventional
The utility of the leagility concept in inherently inflexible long FFSCs calls for a qualitative study that suits explorative
food supply chains is not universal, but it provides investigations by collecting rich data to better understand the
opportunities to meet the challenges created by both demand issues being explored (Yin, 2013; Silverman,, 2006). A
and supply uncertainties (van der Vorst et al., 2001). The multiple case study method was adopted with samples selected
literature on FFSCs is driven by the challenges created by the based on the need to reflect a mix of diverse firms, allowing
perishable nature of food and identifies the complexities in theoretical replication through the production of contrary
adopting postponement and decoupling strategies for leagility results (Eisenhardt, 1989; Yin, 2013). Consequently, case
(van der Vorst et al., 2001; van Hoek, 1999; van Hoek et al., firms representing different stages of the business life cycle,
2001). Local FFSCs are shorter compared to conventional long both organic and non-organic types, and those with different
food supply chains and the product freshness and minimization business modes such as fruit and vegetable box schemes,
of the time between harvest to consumption are the foci of farmers’ market sellers and food co-operatives were selected. In
retailers operating in local food systems. Consumers rate local the case selection process, the case firms were identified using a
produce available in local markets such as farmers’ markets as thorough Web search for firms selling local fresh produce in
fresher and more flavourful as the time between harvesting and Sydney, in particular, fresh food businesses in Sydney that have
consumption is significantly shorter (Brown, 2003; Pearson explicitly stated on their websites that their products are locally
et al., 2011). Therefore, narrowly concentrated strategies may sourced, were invited to participate in the study. Beyond
not fit with dynamic and diverse market and supplier commercial websites, user blogs and news articles were the
conditions in local FFSCs. While we know that hybrid supply other main sources of information for case firm selection.
chains with distributed functional and responsive foci across All the firms identified by the research team were invited to
the supply chain are beneficial, there is limited knowledge participate, with the majority of firms that were accepted being
about how hybrid approaches are implemented in different invited via telephone. Data were collected in semi-structured
sectors (Lyons and Ma’aram, 2014; Naim and Gosling, 2011). face-to-face interviews with 12 local fresh food retailers in
Hence, this study investigates local urban FFSCs to gain Sydney during October 2015 to February 2016. These case
insights into how urban retailers strategically manage their retailers included a mix of fruit and vegetable box schemes,
short supply chain for integrated efficiency and market farmers’ market sellers and food co-operatives, as well as both
responsiveness to cater for the requirements of contemporary organic and non-organic providers. The study included the
food-literate consumers and small-scale urban grower largest fruit and vegetable box scheme and food co-operative
suppliers. operating in the local FFSC in Sydney. An overview of the
The literature on supply chain strategies identifies the effects participants of the study is given in Table II. The interviewees
of demand and supply characteristics on the selection of supply were carefully selected to be persons who have the capacity to
chain strategies and the use of a leagile approach through the provide comprehensive details on the firm’s strategic direction
decoupling and postponement approaches for integrated and overall operation, including order processing, inventory
outcomes (Naylor et al., 1999; Chrisptopher and Towill, 2000; management, customer relationship management and
2001), including additional challenges caused by product operational issues, as well as competition and other challenges.
perishability when adopted in FFSCs (van der Vorst et al., A total of 14 in-depth interviews with senior managers or
2001). The limited literature on urban local FFSCs identifies founders were conducted, and the interviews lasted about 90
the specific requirements of urban consumers of local fresh min on average. All interviewees were provided with a
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

Table II Overview of case firms

Business
# Type of business structure Type of product Interviewees Secondary data sources
1 Fruit and vegetable box online Partnership Organics only Founder Corporate website, social media
retailer sites, online articles, online user
reviews, YouTube video
2 Seller of local produce Food co- Organics only Supply manager and Corporate website, social media site,
operative the store manager online user reviews, twitter posts
3 Seller of local produce Food co- Organics only Store manager Corporate website, social media
operative sites, online user reviews, community
blogs
4 Seller of local produce Food co- Organics only Store manager Social media site, online article
operative
5 Fruit and vegetable farm/ on-site Partnership Manager (Founder) Corporate website, social media
retailer/seller at farmers’ markets/ sites, online articles
supplier to food co-operatives and
fruit and vegetable box schemes
6 Fruit and vegetable box online Sole trader Both organics and Manager (Founder) Corporate website
retailer non-organics
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7 Fruit and vegetable box online Partnership Both organics and Manager (Founder) Corporate website, social media
retailer for institutional buyers non-organics sites, online articles, twitter posts
8 Fruit and vegetable box online Family business Organics only Manager (Founder) Corporate website, social media site
retailer
9 Fruit and vegetable box online Family business Organics only Two founder Social media site, Instagram site
retailer managers
10 Fruit and vegetable box online Family business Both organics and Manager (Founder) Corporate website, social media site
retailer non-organics
11 Fruit and vegetable farm/ seller at Family business Organics only Manager (Founder) Corporate website, social media
multiple farmers’ markets/supplier to sites, newspaper articles, online
food co-operatives and fruit and articles, YouTube videos
vegetable box schemes
12 Vegetable farm/ seller at multiple Family business Organics only Manager (Founder) Corporate website
farmers’ markets

participant information sheet and a participation consent form collecting data from multiple sources: interviews as a primary
in advance. The participant information sheet provides the source and consumer reviews and case firm-related information
project information including the purpose and objectives of the available on the internet as secondary sources. When there is
study, the nature of participant’s involvement including more than one key person in the firm, multiple interviews were
benefits and risks and the dissemination mechanisms of project successfully sought to acquire data from different perspectives.
findings. Prior to the interviews, publicly available online Moreover, all case firms have an online presence, with some of
information about the firm was collected by the research team them featuring in media reports and consumer blogs;
for a preliminary analysis that informed the interviews with case information on the business, products, customer relationships
firms. and customer feedback was accessible for some case firms as
For increased reliability of data, questions were repeated in identified in Table II.
different forms in interviews, and in-depth answers were sought The transcribed verbatim of recorded interviews, data
from interviewees by using open-ended questions and probing collected from secondary sources and the researcher’s journals
questions leading to in-depth answers. The interview on observations were coded using Nvivo and then analyzed
questionnaire was designed to explore the case firm’s definition using the thematic analysis method, to develop a theoretical
of local food, the business value proposition, market and framework for how firms operating in the local FFSC
supplier characteristics, operations and supply chain strategically manage their supply chain to cater for their specific
management focusing on how decisions are made and what supply and demand dynamics. In the start of the analysis,
challenges are experienced. One researcher conducted all field interview transcripts were repeatedly read by two researchers
interviews for consistency. Interviews were usefully extended to for a minimum of two times for each transcript, and then the
operation visits in some case firms, where open discussions two researchers discussed their personal views of interview data
enabled the collection of rich data and observations with high and themes that are potentially extractable. It was observed that
reliability. All interviews were transcribed and checked for only a few case firms have explicitly identified supply chain
accuracy. For ensuring construct validity, triangulation management strategies by using the term “strategies”, but the
between different sources of evidence was achieved by data showed their understanding on strategic management of
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

supply chains and the practices for increased cost-effectiveness, with a conventional retailer store model has started online box
time efficiency and flexibility, as well as relationships with schemes, thus expanding their customer bases and minimising
customers and suppliers. product wastage. On the other hand, there is a significant
Coding of data was first conducted by the researcher who demand for product variety where customers tend to accept
conducted the interviews and then reviewed by the second seasonal fresh produce but prefer variety of types of fresh
researcher for reliability. The coding process followed Miles produce in their order. Beyond the subtle market requirements
and Huberman (1994). A list of nodes was first created based of product variety, an important differential characteristic is the
on the literature and in alignment with the questionnaire design high levels of freshness and resulting natural taste of the
as guided by the objectives of the study. Nodes included product as a consequence of the shorter period between
demand characteristics, supply characteristics, supply chain harvesting and consumption. As all, except Case Firm 10,
strategies and operational and relational outcomes. Coding was pointed out, consumer preference for freshness over cost drives
first done for each case firm using the initial list of nodes, and their businesses towards eliminating time waste in the process
then new nodes were added inductively as new categories to efficiently deliver products from the farm gate to consumers.
emerged in the analysis. The data collected from secondary Moreover, Case Firms 1, 2, 6 and 7 identify the customer need
sources were then coded into the same node structure, but no for knowing more about the origin of food in terms of the
new categories emerged at this stage. Second, all the nodes details of the farmer and production methods and they provide
from the analysis of all case firms were consolidated, and similar such information to the customer base in their online ordering
nodes were combined to search for emerging themes. The systems, in-store information and corporate websites. For
themes emerged in the coding process included trust-based example, Case Firm 1 has the highest level of information
transparency where customers are informed of the grower
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relationships, innovativeness, freshness over cost, strategies for

time efficiency and strategies for market responsiveness. In this declaration of production methods and organic certification
cross-case analysis stage, similar themes and links across case details.
firms were investigated to identify patterns for the purpose of The market entry cost for urban growers is low and
developing the conceptual framework. maintained at this level, compared to the mainstream market
where large growers supply big supermarkets under long-term
4. Discussion contracts. Trust-based relationships between retailers and
growers as demonstrated in all case firms except the grower-
4.1 Product, demand and supply characteristics in retailers and small-scale fruit and vegetable box schemes are
urban local food systems built over time based on multiple business transactions and
Informed by Fisher’s (1997) approach for formulating supply through the development of person-to-person connections;
chain strategies to be market-responsive for innovative product waste is reduced through minimum product rejects as
products and physically efficient for functional products, and a consequence of these relationships with grower suppliers. As
subsequent studies on hybrid approach by Lee (2002) and reported by all case firms, suppliers in local FFSCs are urban
Lyons and Ma’arm (2014), the demand and supply and peri-urban growers producing small volumes of products,
characteristics of urban local FFSCs were found to be a and thus, a large number of small growers in the supplier
composite of both functional and innovative products. Case database is common across the case firms – this accommodates
firms confirmed that their customers are health-conscious and the size of demand. A high number of small growers also allow
committed to ecological sustainability and very sensitive to the retailers to reduce supply uncertainty and benefit from the
quality and freshness of food but have a low sensitivity to price. flexibility of having a pool of suppliers of high-quality produce
Almost all the case firms focus on the freshness of product as and the ability to dynamically manage the grower base. For all
their principal qualifier for participation in the local food case firms, there was no hesitation in dropping growers who did
system, where high product quality is the prime factor of not meet the primary freshness standards of products and
competitiveness in the market and in retaining customers. ethical behaviour required by consumers and, equally, to add
Except for Case Firm 10, a fruit and vegetable box scheme that new acceptable growers as they enter the market. The balance
identifies increased consumer convenience as their value of power resting with farmers in price decisions has created an
proposition, other case firms are driven by the market environment where customers with low price sensitivity
requirements of local fresh produce for shortened local grower– dominate the local food system and see growers receive a fair
consumer connections. The emphasis on building the customer price for their products. Large case firms such as Case Firm 1
base through a strong online presence with the power of have a higher number of local growers in their supply bases,
positive user reviews is explicit for market-sensitive fruit and causing low supply uncertainty; relatively smaller case firms
vegetable box retailers. either use regional food wholesalers to supplement their narrow
The active participation of consumers in the ordering system local grower base or work with other local large retailers to get
makes demand forecasting convenient for online fruit and supplies when their supplies are not adequate to meet demand
vegetable box retailers as shown in their corporate websites; requirements. For example, Case Firms 2 and 5 laterally source
customers place orders only when the availability of products from Case Firm 1 when they encounter interruptions to their
for each week is known. For these case retailers, demand is supplies.
stable and predictable. Case food cooperatives without a The mutual understanding between case retailers and their
customer subscription scheme deal with market demand local grower suppliers and local food consumers nurtures a
uncertainty, but they report solid demand volumes for their system that tolerates variations in demand and supply and is
products without major concerns. Case food co-operative 2 supported by the high food literacy of the consumers, their low
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

price sensitivity, the managed expectations for better freshness management software to match supplies with demand. Case
and taste of products over appearance and packaging of Firms 7, 8, 9 and 12 have adopted streamlined inventory
products and the acceptance of less product variety. Increased management and packing processes for time minimisation,
process efficiency with the active participation of suppliers is while some, including Case Firms 7, 8 and 9, have in-house–
identified as the key to success by meeting product freshness developed information technology systems to support their
and quality with the product having been harvested after operation. Case Firms 2 and 3, which are food co-operatives,
naturally maturing in the farm and then delivering to the use consumer buying patterns’ data, derived from sales data, to
consumers within the shortest time possible. Even though determine order quantities:
consumer demand in urban local FFSCs is stable, as We have designed our packing and delivery process in the most time
commented in Google user reviews for case firms and as case efficient manner to reduce the idling time and to make sure the quality is not
retailers identified in the interviews, there is a consumer traded for efficiency. (Case Firm 8)
preference towards increased product variety. Some including
We have a well-developed IT system that allows us to plan the orders and
Case Firms 1, 7 and 9 are actively responding to customer supplies. Our operation is Lean and very efficient as it is supported by a well-
demands for product variety by working together with the designed IT system, developed by one of the partners. It is like a system used
suppliers and consumers. Therefore, in analysing demand and by large organizations. We have our own solid system supporting the
operation. (Case Firm 1)
supply characteristics, urban local FFSCs possess the
characteristics of both functional and innovative products when We tell them (urban and peri-urban growers) what we need on a Sunday
demand predictability, demand stability, supplier diversity and morning. They pick it and deliver it on Monday morning and then we put it
straight into the customer’s box on Monday morning so it’s very fresh. The
uncertainty, product life cycle, product variety, profit margin zucchinis still have the flowers on them; the cucumbers have the little
and product wastage are considered and have a mix of flowers on them. (Case Firm 7)
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characteristics that are important for both Lean and Agile

Some case retailers have adopted innovative approaches to
strategies (Fisher et al., 1997; Lee, 2002; Lyons and Ma’arm,
respond to market requirements for product variety. Case
2014; Naim and Gosling, 2011; Naylor et al., 1999). Both
Firms 2 and 5 use lateral sourcing of products from Case Firm
market responsiveness and efficiency are focused by case firms
1 when they require more stocks or an increased variety of
at different degrees of importance; thus, a uniform adoption of
products. In the upstream, there have been explicit efforts to
a single strategy may not provide the benefits case retailers find
develop urban grower capacity through loan schemes, training
important in managing their supply chains (Lyons and
programs and the introduction of new product varieties. For
Ma’aram, 2014; Argelo, 1992; Naylor et al., 1999; Feitzinger
example, Case Firm 1 has reinvested their profits to support
and Lee, 1997; van der Vorst et al., 2001; van Hoek, 1999; van
growers to get loans for projects that will enhance local food
Hoek et al., 2001).
production. Case Firm 6 is involved in a community-based
program where local farms share their knowledge and
4.2 Adoption of hybrid supply chain strategies:
experience regarding farming practices and retailers share
increased efficiency and product variety
market information. Case Firms 6, 7 and 9 work in close
Conventional knowledge on supply chain strategy identifies the
cooperation with urban growers to increase the variety of
adoption of sequential hybrid strategies for long supply chains
products. While the seasonality of fresh produce limits variety,
of product with innovative and functional characteristics
some retailers respond to the limitation by actively introducing
(Fisher et al., 1997; Blackburn and Scudder, 2009; Naim and
new types of fruit and vegetables to their growers. Such leads
Gosling, 2011; Naylor et al., 1999). However, for food supply
for new product types are based on their own search for new
chain, adopting sequential Lean and Agile processes following
varieties, suggestions from consumers and new products
decoupling and postponement strategies is challenging
introduced by migrant growers, which are then transferred to
considering food perishability and food safety and quality
other growers in the local community who are interested in
requirements (van der Vorst et al., 2001). For urban local
trying new types:
FFSCs, challenges in inflexibility and instability in supplies and
considerably short time between the point of harvest and But when there’s something like 200 different types of onions and you can
go to the supermarket and only buy three, you scratch your head and go,
delivery to customers to meet product freshness and quality why? What’s happened to the other 197? So that’s what we do. My clients
requirements make identifying a decoupling point further will go, well, what about the other 197 varieties of onions. I’m just using
difficult; local urban FFSC case firms have a strong focus on onions as an example. So we’ll go, who can grow onions? Who’s got the
capacity to do that? (Case firm 7)
time-efficient strategies rather than cost-optimization
strategies. Local growers harvest the produce at peak ripening In the downstream, some retailers educate customers on new
times to ensure maximum taste, whereas growers participating food varieties, especially exotic varieties from migrant growers,
in extended supply chains harvest the produce at very early recipes on how to use locally available products in new ways,
stages of maturity to increase the ultimate product shelf life and health benefit information on uncommon fresh food types.
(Guerra and Casquero, 2008). As the post-harvest quality Such knowledge sharing has become an enabler that reduces
degradation of fresh produce is exponential, all case firms the distance between consumers, retailers and growers. As the
attempt to minimise the time between stock receipts and participant from Case Firm 9 stated, what is needed is a
customer delivery. Case fruit and vegetable box schemes add perspective shift where product variety is understood by the
the products to the weekly product list as they become number of ways it can be used; innovative recipes for
available, and the list is shared with the subscribed clientele, consuming the locally available fresh produce is an approach
allowing weekly order placement in online fruit and vegetable taken by local produce retailers to help foster user satisfaction
schemes. Case Firm 1 uses sophisticated supplier and inventory with regard to food variety:
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

It is not the conventional market model. So we also offer recipe ideas. We product types and new recipes for innovative use of products,
also say to people; if we give you something like kohlrabi, or corn salad, or
red veined sorrel, and you don’t know what to do with it, ask me. You ask respectively.
us. We’ll post a recipe, we’ll talk about it. We’ll talk about it from either a This finding deviates from the generic adoption of responsive
nutritional storage perspective or a food recipe creating perspective. The strategies in the downstream supply chain and identifies that a
relationship doesn’t start or stop when I give you a box and when you take it.
It’s ongoing. (Case firm 9) short food supply chain aiming to reduce the time duration
between the point of harvest and delivery to customer adapt
If you get a box that has a kilo of lemons, you’re doing something with efficient strategies in the downstream supply chain (Naylor
lemons. So its produce based. So I think it very much is a challenge, because
it’s a perspective shift. (Case firm 9) et al., 1999). This difference in the application of the leagility
concept aligns with the argument by van der Vorst et al. (2001)
As shown in Figure 1, Case Firms 1, 6, 7, 8 and 9 (Group 4) on the absence of the universal adoption of a leagile design in
have adopted a hybrid strategy for increased efficiency and food supply chains and diversity in applications (Naim and
product variety, whereas the other case firms have put more
Gosling, 2011). There is rapid product quality degradation in a
emphasis on time-efficient strategies. Table III provides a
local FFSC from the point of harvest until delivery to the
summary of firm-level demand and supply characteristics for
customer where the product value changes with the decline of
different groups of case firms. There is a dominance of time-
freshness and quality over time. For products with considerably
efficient strategies in downstream activities from harvest to
short product life cycles like local fresh produce, hybrid
delivery to customers, as these minimise the quality
approaches for increased efficiency and responsiveness fit well
degradation of fresh produce after harvesting, and the use of
for meeting demand and supply characteristics (Bruce et al.,
product variety improvement strategies adopted by some
2004); this study shows the range of ways strategies are
retailers at the grower and consumer ends by introducing new
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implemented in a short supply chain in an urban local food

system.

Figure 1 Adoption of strategies for product variety and increased 4.3 Towards a conceptual model of supply chain
efficiency strategies based on upstream and downstream
relationships
Trust-based relationships have been dominant in the local food
system where contractual agreements between retailers and
growers are absent. Even though there are no contractual
obligations to supply to a specific retailer or buy from a
particular supplier, relationships built over time are strong
enough to support the current system. This behaviour in urban
local FFSC aligns with the thinking that trust refers to the
extent to which a firm believes that the other party is honest and
benevolent and they tend to confidently rely on the other party
in a supply chain context (Wuyts and Geyskens, 2005; Kwon
and Suh, 2005). From the case firms’ perspective, trust-based
dependencies are mutual with both suppliers and consumers.
Suppliers depend on retailers to sell their small volumes of

Table III Supply and demand characteristics of case firm groups

Group Demand characteristics Supply characteristics
1 Variable but stable demand; small-scale operation; low inventory A limited base of small-scale growers; uses fresh produce wholesalers
costs; some price sensitivity; reasonable profit margins; high customer as suppliers; reliable long term relationship with whole sale suppliers;
loyalty faces a few quality problems; vulnerable to FFSC risks; availability of
potential suppliers but potential quality problems in supplier
expansions
2 Variable demand; small volumes sold through multiple market A very limited supplier base; supplies from own farms; limited variety
mechanisms; some price sensitivity; reasonable profit margins; limited of products
customer loyalty
3 Variable but stable demand; relatively high inventory costs; some price A large base of small-scale growers; uses fresh produce wholesalers;
sensitivity; reasonable profit margins; product variety for increasing reliable long term suppliers and a few quality problems; vulnerable to
the consumer base; limited customer loyalty FFSC risks; availability of potential suppliers but potential quality
problems in supplier expansions
4 Predictable and stable demand; low inventory costs; low price A large base of small-scale growers; small and variable volumes but a
sensitivity and high purchase capacity of consumers; good profit considerable volume of supplies; flexible; vulnerable to FFSC risks;
margins; high flexibility of consumers for product variance; increasing reliable long term suppliers and a few quality problems but strong
preference for product variety; high customer loyalty relationship based dependency on suppliers; availability of potential
suppliers but potential quality problems in supplier expansions
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

produce and the acceptance of variations due to unpredictable communication with both upstream and downstream suppliers
weather conditions and contagious diseases and retailers to develop a productive working relationship. The key drivers
depend on growers for on-time delivery and the use of declared of their behaviour are the acceptance of social responsibility
farming practices. Consumers depend on retailers for high- and the desire to be fair and ethical, supported by the
quality supplies sourced from local growers and retailers availability of information sharing systems. These case firms
depend on consumers for constant demand. Such relationship connect customers with growers by making grower-related
based dependencies are exemplified by the quotes below: information including grower or farm profile, farming methods
I know these farmers. I know them by face. I have a relationship to them. I
and harvesting times available for customers. They also adopt
know which ones I want and which ones I’m less inclined to buy from I fair mechanisms in distributing orders among growers deviating
know that the lettuce that’s arriving tomorrow morning they’re (my grower) from purely cost-driven approaches and therefore develop
packing in the sheds now and keeping cool. (Case firm 2)
strong relationships with growers by sharing customer feedback
“My customers identify with us, we’re a family, we’re a busy and demand characteristics that assist the growers to make
family and so are they. We know what families need so we’re planning decisions on crop types and quantities. The behaviour
providing that personalised service” (Case firm 8): of these innovative case firms aligns with the findings of Hsiao
My customers trust me to buy for them, they haven’t got the time to go to
et al. (2010) and Bonney et al. (2007), where firms in food
the supermarket or the fruit shop to pick their own apples, and they trust me supply chain actively develop and leverage on external
to do it for them. If I’m going to send them something dodgy maybe once partnerships in dealing with demand and supply uncertainties.
they’re not going to trust me to send it again. (Case firm 10)
Case firms in Group 4 are not only innovative integrators of
Because consumers of urban local FFSCs do not directly the urban local FFSC but also adopters of hybrid supply chain
interact with local growers except in farmer’s markets, strategies as shown in Figure 1 in Section 4.2. Beyond time-
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intermediary retailers of fruit and vegetable box schemes and efficiency strategies to minimise the time from harvesting to
food cooperatives have become the cornerstone of urban food customer delivery that are embedded in the supply chain
systems with their supply chain strategies governed by shared strategies, they adopt responsive approaches to improve
values of fairness, mutual trust and sustainability. Information product variety. These case firms work closely with customers
transparency, frequent communication, trusts-based and growers to introduce new product types to farms and the
relationships among actors, fairness and social equity were diverse use of available local fresh produce types. For example,
found to govern the retailer decisions. Besides, there is a Case Firm 1 supports urban migrant growers to introduce their
tolerance to the consequences of uncertainties and technology authentic product types to customers and provides product
with sophisticated solutions in some retailers to support data with recipes to introduce new consumers to these less
communication and coordination. These enablers have made familiar products. Case Firm 7 makes deals between growers
urban food systems similar to a traditional rural food system and potential buyers before introducing a new idea for a new
where direct relationships between grower and consumer product that is conventionally not grown in the area. Such
occur, as identified by Hand and Martinez (2010). assurance of a potential market with the consent of an
Figure 2 presents the strength of trust-based relationships of institutional buyer enables local growers to try out new
case firms with upstream and downstream entities. Case firms products and be market responsive by diversifying the product
in the first quadrant (Group 4) have developed the strongest range.
level of relationships with their upstream and downstream Case Firms 2 and 3 in Group 3 in the second quadrant are
entities, whereas other case firms (Groups 1, 2 and 3) have a established food cooperatives with a large scale of operation
lower level of relationship either with suppliers or consumers. and have reserved resources for supplier management focusing
Group 4 possesses in-house–developed communication and on product quality assurance, delivery reliability and
coordination system to support efficiency in supply ordering relationship development with upstream entities. However, the
and demand receipt processes and uses constant non-subscription service model does not allow ongoing
relationships with customers beyond transaction-based
customer service. The integration of customers into supply
Figure 2 Supply chain relationships and the adoption of hybrid
chain strategies is based on ad hoc attempts to integrate
strategies
customer preferences into sourcing decisions and operational
outcomes, such as time efficiency and product quality, that
drive their supply chain strategies. The three case firms in
Group 2 are urban growers that have become retailers who use
extended market mechanisms such as online box schemes and
farmers’ markets. None of them has shown strategic
approaches of collaborating with other growers and their
customers. Internal operational efficiency improvements are
mainly focused on limited collaboration with external partners.
Case Firms 4 and 10 in Group 1 focus on customers who prefer
home delivery of fresh produce boxes to fit with their busy
lifestyles. These case firms have not explicitly attempted to
develop relationships with local growers and customers beyond
adopting strategies for time efficiency and reliability. Except for
the case firms in Group 4, supply chain strategies driven by
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

time-efficient operational outcomes outweigh relational whereas others adopt a hybrid strategy model with upstream
strategies. actors to minimise the time between product harvesting to
Innovative integrators in Group 4 capitalise on their strong consumption and with both upstream and downstream actors
upstream and downstream relationships to innovatively to increase product variety representing the market preferences.
develop the urban local FFSCs by broadening the range of These findings extend our knowledge of hybrid strategy for
product types and the uses of available products for increased perishable produce that includes adopting a responsive model
market responsiveness; they also adopt time-efficient from post-harvest to cooling, followed by an efficient model in
operational strategies to meet the freshness requirements of the remainder of the chain. It minimises the loss of product
local food consumers (Pearson et al., 2011). Some of them value of perishable food, as the quality deteriorates
provide their growers with a market assurance when they trial exponentially post-harvest until the product is cooled to reduce
new varieties, providing marketing service for new products the rate of deterioration (Blackburn and Scudder, 2009).
when the new products yield a harvest. They also share The conceptual model proposed in this study as shown in
knowledge with urban customers on innovative uses of local Figure 2 identifies that innovative retailers with strong
produce types to dampen the need for non-seasonal fresh relationships with both upstream and downstream supply chain
produce. Upstream relationships developed by innovative case entities adopt hybrid supply chain strategies of time-efficient
firms are driven by a high level of trust, retailer commitment to model from the harvest to customer delivery and responsive
protect local small-scale growers and sharing information and model underpinned by strong relational strategies to connect
risks (Ellram, 1990; Heide and John, 1990) in the absence of with both downstream and upstream entities. Retailers with
contracts or formal partnering mechanisms. weak ties with either or both upstream and downstream entities
The study finds that innovative case firms with strong vertical focus on time-efficiency strategies for the best product value.
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linkages with suppliers and customers have the strategic The behaviour of retailers in local FFSC emphasises the
capability to adopt hybrid strategies to be more responsive to importance of integrating relational strategies with efficiency
customer requirements and improve operational efficiency. and responsive model of strategies. The findings of this study
Upstream and downstream relationships are important, as shed light on the missing link between strategies for relational
firms with supplier and customer relationships are strategically and operational outcomes and how firms innovatively integrate
capable of outperforming the competition (Stank et al., 2001; these strategies in practice to meet supply chain stakeholder
Fredriksson and Liljestrand, 2015; Martens and Dooley, 2010; requirements. This study strengthens arguments on the
Vickery et al., 2003; Huo et al., 2014). The new knowledge importance of relationships with supply chain partners and the
created in this study linking the relationship between supply need of conscious efforts in relationship building and trust
chain relationship and the adoption of hybrid supply chain development across food supply chain (Bonney et al., 2007;
strategies extends the argument on the importance virtual Touboulic and Walker, 2015) and explains how retailers in
cooperation and long-term supply chain relationships for both urban local FFSCs develop and leverage such relationships in
Agile and Lean paradigms in manufacturing to FFSC reality. The integrative perspective of supply chain strategy
management (Naylor et al., 1999; Krishnamurthy and Yauch, recognizes that integrated business processes and systems
2007). beyond the boundaries of the business create value for their
customers via vertical relationships with suppliers and
5. Conclusion customers. Such strategically developed vertical linkages enable
operational efficiencies and proactive responsiveness to
This study investigated the local FFSC in urban Sydney to gain customer requirements, leading to competitive advantage
insights into supply chain strategies adopted by intermediary (Powell, 1995). Integrated supply chain relationships via
retailers such as fruit and vegetable box businesses, food co- mutual relationships enable improved customer service
operatives and sellers in farmers’ markets. The conventional (Vickery et al., 2003), and firms with a higher degree of
knowledge on supply chain strategy identifies the need for integration across the supply chain perform better than others
selecting an effective supply chain strategy that is based on its without such linkages (Johnson, 1999; Frohlich and
suitability to incorporate product characteristics, caters to Westbrook, 2001).
specific consumer needs and understands the supply and While the concept of leagility has acquired the significant
demand characteristics (Lee, 2002; Fisher et al., 1997). This attention of researchers addressing the issues of “what” and
study identifies the presence of blended innovative and “why”, a major limitation has been the lack of research
functional characteristics in urban local FFSCs with high addressing “how” leagility has been applied (Naim and
supplier uncertainty, moderate demand uncertainty and Gosling, 2011). Thus, this study is an addition to the
tolerance for supply uncertainties, low product variety, short knowledge base about the utility of the leagile approach by
product life cycle and preference for freshness to low price and exploring how firms operating in a contemporary short
high-profit margins for growers. supply chain have implemented hybrid strategies for
The extant literature on food supply chains lacks studies that increased time efficiency and responsiveness by capitalising
look beyond the concept of product perishability and do not on their vertical relationships with suppliers and customers.
include the variety of effects that particular stakeholder The usefulness of a combined approach for supply chains
requirements have on strategies; therefore, there is a limited with very short product life cycles has been identified in a
investigation on how supply chain strategies for operational and study of high-quality fashion products, but empirical
relational outcomes are interlinked in FFSCs. This study finds knowledge on how a combined approach can be
that some retailers solely focus on time efficiency strategies, implemented in such environment has been limited
 Innovative adoption Supply Chain Management: An International Journal
Dilupa Nakandala and H.C.W. Lau

(Bruce et al., 2004). The implementation of a hybrid References

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Zacharia, Z.G., Nix, N.W. and Lusch, R.F. (2009), “An
analysis of supply chain collaborations and their effect on Corresponding author
performance outcomes”, Journal of Business Logistics, Vol. 30 Dilupa Nakandala can be contacted at: D.Nakandala@
No. 2, pp. 101-123. westernsydney.edu.au

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