The trade-off between chain performance and fragility considering coordination strategies of agri-food chains : a South African egg chain’s case study

Abstract

The mainstream strategy in the coordination of agri-food chains has traditionally focused more on the enhancement of chain performance by adopting lean and highly integrated strategies. These strategies are premised on the principle that governance structures are the result of tactics that economize on transaction costs in exchanges in chains. Due to existing interdependencies between chain players such strategies expose these chains to detrimentally disruptive uncertainty. This paper adopted a heuristic stress-testing approach to measure the fragility of South African egg value chain and performed a comparative fragility analysis of two coordination approaches in the egg chain. Additionally, the analysis of results indicated that the egg chain strategy with high levels of interdependencies between its chain players as significantly fragile. Precisely, the difference between the chain strategies was associated with a variety of differences at the factor and chain player levels that led up to a higher overall chain fragility of the chain with higher levels of interdependency. Inevitably, the paper propositions that there is a trade-off between chain performance and fragility. The results of the study affirmed that there is a trade-off between chain performance and fragility which needs to be balanced.