Contract-based coordination of multi-stage fresh food supply chains to reduce food waste


Prof. Dr. Sandra Transchel (Kühne Logistics University - KLU), Nina Mayer (Kühne Logistics University - KLU)

Funded by German Research Foundation (DFG)

Brief description

Food waste, from harvest losses to consumption losses at the end consumer, happens along the whole supply chain. This project, funded by the Deutsche Forschungsgemeinschaft (DFG), is to investigate to what extent contract mechanisms between individual actors in food supply chains (e.g., farmers, food producers, and retailers) can better coordinate the trade-off between profit orientation and sustainable demand planning , by influencing company-specific planning calculations. The overarching goal is to identify contract structures that align planning decisions and reduce the amount and distribution of food waste in a sustainable way throughout the entire supply chain.

Project purpose

Food waste occurs along the entire value or supply chain, starting with harvest and post-harvest losses in agriculture, through process losses in production and processing, distribution losses at wholesalers and retailers, to consumption losses at the end consumer. Frictional losses at the cross-company interfaces of food supply chains, for example  through opportunistic decision-making of the individual companies or due to information and collaboration obstacles within the business relationship, increase the risk of ineffective planning and overstocking and thus cause unnecessary food losses. A widespread mechanism for coordinating inter-company decisions to reduce frictional losses is the contract. Contract-based coordination essentially has the aim of steering the subsequent operational planning decisions (such as production, inventory, or ordering decisions) of the individual actors in such a way that they achieve an “optimal result” for the entire supply chain.
The primary objective of this research project is to develop structural insights into the extent to which contractual mechanisms between different firms in a food supply chain influence the quantity and distribution of food waste throughout the supply chain. Knowing that contracts directly influence firms’ planning behavior (e.g. for orders), contracts thus have a direct influence on the generated food waste in the supply chain. The goal is to identify contractual mechanisms that firms can agree on and that sustainably reduce food waste throughout the entire supply chain.

 

Subjects

Food Logistics, Sustainability

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