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

Abstract

Purpose

The 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/approach

The 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.

Findings

This 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 implications

This 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/value

The 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.

Citation

Shanker, S., Sharma, H. and Barve, A. (2022), "Analysing the critical success factors and the risks associated with third-party logistics in the food supply chain: a case of coffee industry", Journal of Advances in Management Research, Vol. 19 No. 2, pp. 161-197. https://doi.org/10.1108/JAMR-11-2020-0307