In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
DOI: 10.5121/ijm sc.2015.6401 1
FOOD SUPPLY CHAIN INTEGRATION:
LEARNING FROM THE SUPPLY CHAIN
SUPERPOWER
In anMa zi aSaidon
1
, Ra isah Ma Radzi
2
and Nadz i Ab Ghani
3
1
Facul y o Accoun ancy, Uni e si iTeknologi MARA (UiTM) Kedah, Malaysia
2
School o Dis ance Educa ion, Uni e si iSains Malaysia, Malaysia
3
Facul y o Accoun ancy, Uni e si iTeknologi MARA (UiTM) Kedah, Malaysia
ABSTRACT
Supply chain in eg a ion is pos ula ed as he key o achie e supply chain managemen excellence. The e is
an equi ocal claim ha Japanese companies a e be e a managing hei supply chains. Ye , li le is known
abou he Japanese ood supply chain. Ten in e iews wi h supply chain manage s we e conduc ed using an
open ended in e iew app oach. These companies we e andomly selec ed based on Japan Ex e nal T ade
O ganiza ions (JETRO) lis ing. Using a quali a i e app oach, he indings indica e ha a sho and simple
s uc u e is a pla o m o he ood supply chain. Fu he mo e, he companies ex emely in e ace wi h
supplie s o aw ma e ials (backwa d in eg a ion) and se iously conce n abou coo dina ing and
in eg a ing c oss unc ional p ocesses wi hin he companies (in e nal in eg a ion). In addi ion, hese
companies po ay o ha e a mode a e le el o in eg a ion wi h hei cus ome s ( o wa d in eg a ion).
Finally, he Japanese managemen s yles appea o be a pi o al suppo ing elemen in managing he
in eg a ed ood supply chain.
KEYWORDS
Food Supply Chain, Supply Chain In eg a ion, Japanese Companies, Malaysia, Supply Chain Managemen
1. INTRODUCTION
S e ens[1]de ined supply chain in eg a ion as he mu ual coo dina ion wi hin o ac oss
o ganiza ional bounda ies. Mo e speci ically, supply chain in eg a ion in ol es he collabo a ion
o ac ical, ope a ional and s a egic le el ac i i ies o he companies in he chain[2]. Supply chain
in eg a ion is posi ed by many esea che s as a key o achie e supply chain managemen
excellence [3, 4]. A well in eg a ed supply chain may help companies o expe ience a seamless
low o ecei ing aw ma e ials om supplie s ill deli e ing he inal p oduc s o cus ome s.
Thus, companies' pe o mance would be imp o ed h ough e enue enhancemen , cos educ ion
and inc ease ope a ional lexibili y [5].
Al hough c ea ing alue o he end cus ome s is he common objec i e o ha ing a good supply
chain o e e y company[6, 7], each supply chain may a y g ea ly om one indus y o ano he
[8]. The ulne abili y o ood supply chain is g ea e compa ed o o he indus y due o he na u e
o ood p oduc s which a e sensi i e o empe a u e and de e io a e easily. Thus, ha ing an
e icien and e ec i e supply chain is no an op ion o he ood manu ac u e s. Any b eakdown
in he ood supply chain such as con amina ions would b ing abou se ious consequences
endange ing bo h consume s and company image.
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In esea ching he opic, he e idence sugges s ha exis ing s udies in he a ea o ood supply
chain in eg a ion a e limi ed. Fi s , a subs an ial amoun o supply chain esea ch was done unde
posi i is on ology applying a quan i a i e me hodology. Fo example, 50 pe cen o he a icles
published in he Jou nal o Business Logis ics be ween 1978 and 1993 employed su ey me hod
[9]. Second, he majo i y o published esea ch in supply chain in eg a ion in es iga es he
ela ionship be ween in eg a ion and pe o mance, e.g. [10, 11]. Thi d, many p e ious s udies in
he s eam choose o in es iga e a speci ic ac o in he in eg a ion such as he use o in o ma ion
echnology (IT), e.g. [12, 13]. Finally, mos o he p e ious s udies use da a om he wes e n
coun ies, e.g. [14, 15], hus, limi s he unde s anding o ood supply chain in he wes e n con ex .
Wi hou doub , hese p e ious esea ches help o enhance unde s anding o ood supply chain bu
hei con ibu ions a e s ill limi ed. Acknowledging hese limi a ions, his s udy aims o make ou
con ibu ions o he li e a u e. Fi s , his s udy employs an al e na i e esea ch me hods by
employing a quali a i e me hodology in analyzing he da a. Second, as mos o he p e ious
esea ch was based on he wes e n con ex , his s udy expands he on ie by u ilizing da a om
Malaysia, a coun y loca ed in he Sou h Eas Asia egion. Thi d, al hough Japan is claimed o be
a supply chain supe powe [16], li le is known abou hei ood supply chain in eg a ion.
The e o e, his s udy is deemed necessa y o ill his gap. Finally, supply chain in eg a ion
esea ch is gene ally hea ily weigh ed owa ds in es iga ing a ela ionship wi h i m
pe o mance. In con as , his s udy a emp s o s eng hen he basic unde s anding o ood supply
chain in eg a ion by explo ing he in eg a ion p ac ices employed by he Japanese ood and
be e age companies.
This pape is s uc u ed as ollows. The ollowing sec ion p o ides a b ie e iew o li e a u e,
including a ionales o choosing Japanese ood and be e age companies. The esea ch
me hodology employed is hen desc ibed. Finally, he esul s o his s udy a e p esen ed and
discussed. I is hoped ha he indings o his s udy will enhance unde s anding abou Japanese
ood supply chain in eg a ion and ac as a sou ce o e e ence o o he domes ic ood
manu ac u e s.
2. LITERATURE REVIEW
2.1 Why Japanese ood supply chain?
The de elopmen o he ood indus y in he de eloping coun ies may be iewed as s a egic in
he sense o p o iding sou ces o e enue as well as gene a ing employmen . I has been claimed
ha ood indus y con ibu es abou 10 o 30 pe cen o de eloping coun y's weal h and
gene a es app oxima ely 15 o 50 pe cen employmen oppo uni ies[17]. Mo eo e , he
pe cen age o ood p ocessing expo s escala e om 6.6 pe cen in 1991 o 10.6 pe cen in 2006;
e lec ing a signi ican con ibu ion o he ood indus y o he economy o de eloping coun ies
[18].
As o Malaysia, he ood p ocessing sec o accoun s o abou 10 pe cen o manu ac u ing
ou pu [19]. This sec o gene a es mo e han RM 13 billion annual expo alue which amoun s o
wo- hi ds o he o al ood expo s in 2012[19]. In 2011, i was epo ed ha Malaysia has a
packaged ood indus y wo h US$5. 5 billion, which is o ecas ed o g ow o US$5.9 billion by
2016[20]. Realizing he signi ican con ibu ion o he ood indus y o he Malaysian economy,
he go e nmen se s an in es men a ge o RM 24.6 billion in his indus y[21].One o he
aspi a ions o he go e nmen is o posi ion Malaysia as a p ime ood p oduce and ade in
Asian egion as well as o becoming a cen e o in e na ional halal ood [22].
In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
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In esponse o his call, ood p ocessing companies in Malaysia should ind ways o gain be e
con ol o e p oduc ion, ade and dis ibu ion o hei ood p oduc s. Fo ins ance, ex ended
s o age du a ion may ha e a nega i e impac on he quali y o he ood p oduc s. Coo dina ing he
business p ocesses and wo king closely wi h he chain membe s would help o p ese e he
quali y o ood p oduc s. Appa en ly, ha ing ime e icien and good in eg a ion in he supply
chain is manda o y o ood p ocessing companies.
Japanese ood and be e age companies we e chosen o se e al easons. Fi s , Japanese
companies a e well known and closely a ached o he Jus in Time (JIT) philosophy, and
esea che s a gued ha JIT is he basis o supply chain managemen [23]. The e o e, he e is an
equi ocal claim ha Japanese companies a e be e a managing hei supply chains. Second, as a
p og essi e islamic coun y, Malaysia is e y conce n abou halal compliance in he p oduc ion o
ood p oduc s. The Malaysian Halal S anda d MS1500:2004 is es ablished o p o ide gene al
guidelines ega ding he p oduc ion, p epa a ion, handling and s o age o halal oods[24]. Halal
ce i ica ion p o ides assu ance o he Muslim consume s ha p oduc ion o he ood p oduc s
con o ms o he Sya iah law. As o he non-Muslim, halal ce i ica ion may e lec he quali y o
he p oduc sbecause halal ce i ied p oduc s need o comply wi h good manu ac u ing p ac ices
(GMP) and good hygiene p ac ices (GHP).Al hough Japanese ood and be e age companies a e
conside ed as o eign in es men in Malaysia, almos all (83%) o hese companies a e halal
ce i ied[25].The e o e, explo ing he ood supply chain in eg a ion and lea ning he bes
p ac ices om hese companies appea o be aligned wi h he go e nmen aspi a ion o posi ion
Malaysia as a global halal hub.Finally, he bila e al ela ions be ween Japan and Malaysia has
been g adually de eloped since he in oduc ion o he “Look Eas Policy” in 1982. This policy is
an ini ia i e aken by he go e nmen o lea n om he expe iences o Japan in he na ion building
o Malaysia. I is well known ha he ema kable de elopmen o Japan depends hea ily in i s
labo e hics, mo ale and managemen capabili y.Thus, his s udy is an e o o u he enhance he
bila e al ela ions be ween Japan and Malaysia.
2.2 Supply chain in eg a ion
The p ima y objec i e o a supply chain is o c ea e alue in e ms o quali y, cos , speed and
lexibili y o he end cus ome s as well as companies in he chain [6, 7, 26].Implemen ing supply
chain in eg a ion is one o he c ucial ways o achie e his objec i e. An in eg a ed supply chain
may help o ie he whole ne wo k oge he , which could e en ually help o educe pe ennial
supply chain challenges [27]such as poo demand managemen and o ecas ing as well as
inadequa e o ma ion o cus ome and supplie ela ionships. As such, supply chain in eg a ion
helps companies o in eg a e p ocess ac i i ies in e nally as well as in eg a ing ex e nally wi h
cus ome s and supplie s [28]. The li e a u e desc ibes ha supply chain in eg a ion may enhance
he pe o mance o he business[28, 29].In eg a ion o supply chains could ake place a bo h
s a egic and ope a ional le els[30, 31]. The in eg a ion could be in he o m o ha ing a long-
e m ela ionship, open communica ions, mu ual bene i s and us and sha ed isk and ewa ds
[32].
The e a e a ious ways in desc ibing he in eg a ion p ocesses in he li e a u e. S e ens[1] and
Giménez and Ven u a[33]sugges ha i ms i s in eg a e in e nally (coo dina ing supply,
p oduc ion and dis ibu ion) , and hen ex end he in eg a ion o i s supply chain membe s. In a
simila s udy, Sco and Wes b ook [34] sugges ed h ee s ages in achie ing an in eg a ed supply
chain. The s ages a e: (i) he mapping s age, o analyze lead imes and in en o y le els
h oughou he supply chain, and hus indica e he cu en compe i i e ad an age o he chain and
po en ial imp o emen s; (ii) a posi ioning s age, o iden i y oppo uni ies o collabo a i e
ac i i ies be ween chain membe s and (iii) a selec ion o ac ion s age, o inc ease he
In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
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compe i i eness o he chain. Al e na i ely, F ohlich& Wes b ook[10] classi ied supply chain
s a egies in o a ious ypes based on he di e en a cs o in eg a ion. They ound ha he wides
a cs o in eg a ion had he s onges associa ion wi h pe o mance imp o emen .
Ea lie ,S e ens [1] s a ed ha he de elopmen o an in eg a ed supply chain equi es
hemanagemen o ma e ial low o be iewed om h ee pe spec i es; s a egic, ac ical and
ope a ional. A each le el, he use o acili ies, people, inance and sys ems mus be co-o dina ed
and ha monized as a whole. Indeed, he e a e so many ope a ional and s a egic
ace so in eg a ion in supply chain managemen . Any gi en implemen a ion can ake an in ini e
a ie y o o ms, p og ess h ough adically di e en s ages, and esul in se e al di e en
ou comes[35].Ye , he me hodologies and amewo ks o e ec i e supply chain and sus ainable
supply chain pe o mance e alua ion and benchma king a e no well ad anced in he li e a u e.
As a consequence, he e is a consensus ha he e is no “p o en pa h” in implemen ing supply
chain in eg a ion.
Globaliza ion u ged he need o implemen supply chain in eg a ion becausei may inc ease
demand o p oduc a ie y and a he same ime educe p oduc li e cycles.Supply chain
in eg a ion helps sol ed his issue by enabling p oduc s o be designed as e wi hou
comp omising he quali y and cos s [36] because in eg a ion helps o con ol he cos o
p oduc ion[37]. Fo ins ance, cos s can be minimized h ough es ablishing consis en and
p edic able demand/-supply pa e n[38]. In a simila ein, supply chain in eg a ion is claimed o
enhance se ice e ec i eness and imp o e cos e iciency [13, 39].In addi ion, supply chain
in eg a ion is claimed o helps eng hen he o ganiza ional compe i i eness and imp o e cus ome
sa is ac ion [40]. On he o he hand,supply chain ine iciencies could was e as much as 25 pe cen
o an o ganiza ion’s ope a ing cos s[35].
Al hough he bene i s o in eg a ion has long been gaze ed in he li e a u e, he e exis s a
signi ican gap be ween supply chain heo y and p ac ice. I supply chain in eg a ion would be a
p e equisi e o winning pe o mance [41], why onlya ew companies engage in ex ensi e o
ad anced supply chain in eg a ion p ac ices?[31, 42-45].This could possibly due pa ly o he lack
o knowledge as o how in eg a ion can be implemen ed. Mind ul o his, his s udy in ends o
e eal Japanese ood supply chain in eg a ion p ac ices in an a emp o p o ide u he insigh s
abou his issue.
3. RESEARCH METHOD
Aligned wi h he main objec i e o explo e he supply chain in eg a ion o Japanese ood and
be e age companies, a quali a i e me hodology is employed. B and[46]emphasizes he alue o
quali a i e me hodology in gaining a g ea e unde s anding o he “how” and “why” o he
esponden s’ pe cep ions which canno be elici ed easily om la ge-scale ques ionnai es.
Fu he mo e, his me hod allows esea che s o ge in o he dep h a he han he b ead h o he
issue [47].
A o al o en (10) in e iews wi h he supply chain/logis ic manage s wo king wi h he Japanese
ood and be e age companies we e conduc ed using an open-ended in e iew app oach. These
companies we e andomly selec ed based on Japan Ex e nal T ade O ganiza ions (JETRO) lis ing.
The numbe o in e iews is deemed app op ia e because he in e iews we e conduc ed wi h
people who a e conside ed expe s in he ield [48]. In e iews las ed be ween 1 hou and 1 hou
30 minu es. Each in e iew was conduc ed by wo esea che s and he main esea che
pa icipa ed in all in e iews. In e iews we e ape- eco ded and ansc ibed in hei en i e y.
Added in o ma ion was collec ed om seconda y da a sou ces such as company epo s and o he
In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
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ma e ial ha companies we e willing o sha e. The p ima y and seconda y da a we e iangula ed
o inc ease eliabili y and in e nal alidi y o esea ch indings [49].
Following s anda d p ac ice o quali a i e esea ch [50], he da a ob ained om he in e iews
we e ead ei e a i ely and analyzed igo ously h ough an induc i e p ocess o iden i ying he
common and salien hemes. The p ocess o da a analysis was aided wi h he use o NVi o10, a
so wa e used o analyze quali a i e da a. A inal s ep in he induc i e app oach equi es an
assessmen o he us wo hiness. As a means o assess alidi y, he o he esea che s
independen ly made he coding p ocess and compa ed he indings wi h he ini ial esul s. Should
he e be any obse ed disc epancies, he esea che s collabo a e o esol e he anomalies.
4. RESULTS AND DISCUSSION
The e a e 18 (Table 1) Japanese ood and be e age companies ep esen ing 2.5% o o al
Japanese manu ac u ing companies in Malaysia[51]. The majo i y o hese companies (61%) is
loca ed in Joho and Selango whils he emaining a e in Kuala Lumpu , Penang and Pe ak
(Figu e 1).
A o al o 10 in e iews was ca ied ou wi h he supply chain/logis ic manage s in ol ing i e
andomly selec ed companies. All he manage s ha e mo e han 10 yea s wo king expe ience.
The designa ions and expe iences o he manage s e lec hei as knowledge and managemen
skills in handling supply chain issues in hei companies.
To ei e a e, his s udy sough o explo e ood supply chain in eg a ion p ac ices in Japanese ood
and be e age companies ope a ing in Malaysia. Van De Vo s e al. [52]desc ibe a ood supply
chain as a low o ans o ming ag icul u e o ood p oduc s om he poin o p oduc ion o he
poin o consump ion. In e es ingly, indings indica e ha all he i e andomly selec ed
companies main ain a sho and simple ood supply chain i espec i e o company size.
Childe house and Towill[53] a i med he posi i e e ec o ha ing a simple ma e ial low on
alue s eam pe o mance.
Table 1:Japanese Rela ed Companies (Manu ac u ing) in Malaysia
Manu ac u e s
To al
Food & Be e age
18
Tex ile &Tex ile P oduc s
16
Wood & Wooden P oduc s
26
Pe oleum & Chemical P oduc s
89
S eel & Non Fe ous M l. P oduc s
76
Machine y
25
Elec onic & Elec ical P oduc s
273
T anspo Mach. & Pa s
61
O he Manu ac u ing
146
To al Manu ac u ing companies
730
Sou ce: Je o- in o ma ion as a 18 Ap il 2011.
In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
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Figu e 1: Loca ion o Japanese Food and Be e age Companies in Malaysia
Figu e 2 illus a es he gene al s uc u e o ood supply chain o he companies. The sho and
simple chain consis s o supplie s o aw ma e ials, ood manu ac u e s and ood e aile s. The
Japanese ood and be e age companies ac as he ood manu ac u e s in he chain. All he
manage s in e iewed unanimously ag eed on ha ing a sho and simple ood supply chain
s uc u e is he ounda ion o designing a ime-e icien supply chain. This is explici ly exp essed
by he ollowing manage s;
“Be o e discussing abou in eg a ion….ha ing a sho and simple supply chain is
a mus ..Easy o moni o …We need o know all aspec s o main ain he quali y o
ou p oduc s.”……………………. Manage 5
“We ha e simple p ocedu es…. om p ocu emen ill inished p oduc s… all e y
simple…. a as low”…………………… Manage 1
“E e y hing e y simple… om supplie ill comple ed p oduc … managing he
low is he main issue”…………………… Manage 8
Based on Figu e 2, mos o he aw ma e ials (80%) used in he p oduc ion p ocess in hese
companies a e supplied by local supplie s. Only wo companies epo ed o use a small po ion o
impo ed aw ma e ials (20%) om Indonesia and Thailand in he p oduc ion o hei ood
p oduc s. The p oximi y o he supplie s help in main aining he quali y o he aw ma e ials
because he aw ma e ials a e exposed o a high isk o being con amina ed. Fo ins ance, ailu e
o main ain app op ia e empe a u e in he s o age sys em o p oduc ion p ocess could nega i ely
a ec he p oduc li e span and igge ood sa e y issues[54].
Selango &
Joho
61%
Kuala
Lumpu ,Penang
& Pe ak
39%
Loca ion o Japanese Food and Be e age Companies
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Figu e 2: Japanese Food Supply Chain
Fu he mo e, he companies implemen a unc ional o ganiza ional s uc u e whe e employees a e
g ouped in o se e al unc ional a eas such as p ocu emen , human esou ce, inance, p oduc ion
and sales; managed h ough clea lines o au ho i y and need o epo o he op managemen .
Appa en ly, he unc ional o ganiza ional s uc u e en o ces a clea chain o command wi h he
company’s op le el managemen and encou age in o ma ion sha ing ac oss he company as well
as wi h ex e nal pa ies o he supply chain such as supplie s o aw ma e ial and ood e aile s.
Ea lie , in o ma ion sha ing is claimed as a c i ical elemen in he supply chain in eg a ion [55]
because i se es as a pla o m h ough which all pa ies in he chain can engage in coo dina ion,
join ac ion and p oblem sol ing ac i i ies[56]. In sho , he unc ional o ganiza ional s uc u e
helps in managing he supply chain by allowing a seamless low o goods as well as in o ma ion
h ough he chain. Bo h elemen s (goods and in o ma ion) a e posi ed o be equally impo an in
in eg a ing he supply chain [56, 57].
As he ood manu ac u e , he companies will p ocess aw ma e ials om supplie s o p oduce a
highe alue added p oduc . Fo example, spices such as black peppe , co iande and cinnamon
a e ans o med in o chicken seasoning. Skilled wo ke s we e employed and ad anced ood
manu ac u ing echnology was applied o help ensu e a smoo h p oduc ion p ocess. These
indings esona e wi h hose o Mohamed A shad, Mohamed and La i [58], which s a es ha
bio echnology and o he ood p oduc ion echnology a e o en applied du ing he ood
manu ac u ing p ocess in o de o p oduce quali y p oduc s which mee cus ome p e e ences.
The inal ac o in he chain is he ood e aile s ha help ma ke he inished p oduc s o he end-
consume s.Aligning wi h he desc ip ion gi en byT ienekens e al. [59], his chain le el
conce ned wi h he dis ibu ion o inished p oduc s. Ca ons o ood p oduc s we e unloaded a
he wa ehouse and eloaded on o a uck. Some o he ood p oduc s need o be kep in he cold
s o age in o de o main ain he quali y. As such, mos o he wa ehouses and ucks a e equipped
wi h he cold oom o s o age.
When e lec ing abou supply chain in eg a ion, almos all o he manage s admi ed hei
companies ha e a high le el o in eg a ion wi h he supplie s o aw ma e ials. The companies
Local Supplie s (80%)
Supplie s o Raw
Ma e ials
Food Manu ac u e s
(Japanese Food &
Be e age
Companies)
Food
Re aile s
In e na ional Supplie s (20%)
Consume s
Japanese Managemen S yles
In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
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pu posely ha e only a ew numbe s o selec ed supplie s o aw ma e ials o ease hem in
main aining close ela ionships. Ea lie , Jan an e al. [71] posi p ope selec ion and managemen
o he igh supplie s may help he company o le e age i s compe encies and capabili ies which
could e en ually e ine i s supply chain lexibili y. In ac , hese companies could be conside ed
o ha e eached a “ ull in o ma ion sha ing” le el wi h hei supplie s. A his le el, he supplie s
no only ecei e ac ual o de s om he companies, bu also u nish wi h o he in o ma ion such as
p oduc ion s a us, anspo a ion a ailabili y and demand da a[60]. This is qui e an achie emen
because in o ma ion sha ing is o en claimed o be a gene ic cu e o supply chain ailmen s [61,
62].
Ano he in e es ing ac is ha almos all companies do no ha e any o icial con ac wi h hei
supplie s. To quo e one o he in e iewees (Manage 2), “ no signed con ac … mu ual
ag eemen .. we ha e been wo king wi h some o abou 16 yea s”; his signi ies ha he
companies do no ha e any o icial con ac and ha e success ully managed o es ablish a long
e m ela ionship wi h hei supplie s based on mu ual ag eemen . Al hough he companies appea
o unanimously ag ee wi h he a gumen made by Ba [63] ha a long e m business ela ionship
may ep ess ma ke unce ain ies, bu no be good enough o p o ide p ice ce ain y, hey seem o
be in con ol ega ding he p ice o aw ma e ials as disclosed by one o he in e iewees
(Manage 6)“ no doub p ice hike is ou p oblem…bu so a we managed o come in o e ms wi h
ou supplie s”.
The companies a e ex emely in e aced wi h hei supplie s h ough a ious me hods. Some o
he companies placed he o de o aw ma e ials h ough phone and o he s placed he o de by
emailing ele an o ms o he supplie s. Rega dless o o de ing me hods, all companies admi o
ha ing daily elephone communica ion wi h hei supplie s. In addi ion, hey will ha e mee ings
wi h he supplie s whene e necessa y. On he o he hand, supplie s some imes in i e hem o
a end semina s o explain abou new echnologies o o in oduce hem wi h new aw ma e ials
which migh be use ul in manu ac u ing hei inished p oduc s. Acco ding o S ock e al. [64],
equen communica ion and he coope a i e e o s be ween he companies and hei supplie s
may p o ide an indica ion o ha ing a high le el o in eg a ion. All hese in eg a i e e o s a e
done o es ablish mu ual unde s anding in doing business wi h each o he . Once his is
es ablished, managing supplie s and ensu ing he co ec quan i y and quali y o aw ma e ials
we e deli e ed o hem a e no longe a majo p oblem o he companies. This is explici ly
a icula ed by hese manage s;
“ We communica e wi h hem daily… phone, emails… e y impo an o upda e
hem wi h wha we wan ”…………………. Manage 10
“ So a no p oblem… hey unde s and wha we wan … i hey don’ , hey will
con ac us and cla i y”………………………… Manage 7
“ Raw ma e ial is e y impo an … he quali y… he supplie s know, we always
communica e wi h hem..almos daily”………….Manage 4
“ Some imes we need new ing edien s ( aw ma e ials)… hey ha e new
echnologies… hey in i e us o hei semina s”…………… Manage 9
All companies appea o be se iously conce ned abou coo dina ing and in eg a ing c oss
unc ional p ocesses wi hin hei companies; indica ing he exis ence o in e nal in eg a ion [65].
They ely hea ily on hei in o ma ion echnology (IT) acili ies o sha e key in o ma ion ac oss
he depa men s in hei companies. The main pu pose is o achie e eal- ime ansmission in
In e na ional Jou nal o Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 4, Decembe 2015
9
p ocessing in o ma ion h oughou he supply chain [56]. In a way, in o ma ion sha ing could
help expedi e and ensu e accu acy in supply chain decision making, such as lowe ing cos s
h ough educ ions in in en o ies and sho ages [66].Fo ins ance, one o he manage s
consis en ly highligh ed
“ Wea e ope a ing in a ully (80%) compu e ized en i onmen … we used he SAP sys em o
manage ou in en o y… we also ha e compu e ized sys em o help moni o ou p oduc ion
p ocess”…………….Manage 1
P ope planning and accu acy in o ecas ing a e he wo impo an elemen s in ensu ing a
seamless low o ma e ial ac oss he depa men s wi hin he companies. The p oduc ion planning
depa men plays an impo an ole in coo dina ing in o ma ion om a ious depa men s. All
companies do hei yea ly planning and some o he companies e en ha e a mon hly p oduc ion
plan. Mee ings among he depa men al manage s o discuss a ising issues could be conside ed as
common daily e en s. On op o ha , he depa men al manage s will ha e mon hly mee ings
wi h he di ec o .
Again, in o ma ion echnology (IT) back up he daily ope a ions o he companies as well as
acili a es he alignmen o o ecas ing and allows be e in e -depa men s coo dina ion. P e ious
s udies show ha e ec i e IT connec ion, imp o es he in eg a ion le el o supply chain in e ms
o ma e ial low [67] and suppo key p ocesses in he chain such as p ocu emen and o de
ul illmen [68, 69].
Ano he common ype o in eg a ion desc ibed in he li e a u e is he o wa d in eg a ion, which
in ol es coo dina ion be ween he ood manu ac u e and i s downs eam chain membe s[10, 65].
All he manage s in e iewed e eal hei companies ha e mode a e le el o in eg a ion wi h he
end-consume s and e aile s as compa ed o he supplie s. The p ima y eason is because mos o
he companies a e ha ing hei a ilia ecompanies ac as hei e aile s and a ew ha e a join
en u e ag eemen s wi h Malaysian companies o ma ke hei p oduc s. The e o e, he e aile s
and no he companies ha deal di ec ly and ha e close ela ionships wi h he end-consume s o
cus ome s.
A i ming he signi ican in luence o e aile s-consume s ela ionship, Cox and Mowa [70] posi
ha he e a e cases whe e some e aile s may ha e g ea e powe ela i e o he manu ac u e and
a e able o coe ce and coo dina e he chain h ough hei con ol o e consume in o ma ion.
Su p isingly, his is no an issue o conce n o all companies in his s udy because hey a e
con iden wi h he commi men gi en by he e aile s o ma ke hei ood p oduc s acco dingly.
In ac , all o he companies a e e y con iden o ha ing hei loyal cus ome s. Ne e heless, all
he manage s in e iewed ag eed o he ac ha p o iding a good logis ics sys em suppo ed by
ad anced echnology play an impo an ole in ensu ing quali y ood p oduc s a e ecei ed by he
e aile s and consequen ly eached he end-consume s. These issues we e con i med by he
ollowing s a emen s;
“ We a e no wo ied oo much abou ma ke ing… we ha e join en u e
ag eemen s”……………………………………………..Manage 9
“ Mos o he imes we supply ou p oduc s o ou a ilia es”…Manage 2
“ So a we do no ha e p oblems selling ou p oduc s. The cus ome s a e he e…
main aining he quali y is he ocus”……….. ……Manage 6
