In recent years, the agrifood sector has experienced many societal, economic and technological changes. Such transformations significantly influence the entire food processing chain from agricultural production, through food processing to the distribution of food to customers. As Supply Chain Management (SCM) emphasizes on seeing the whole supply chain as one system, Decision Support Systems (DSSs) are used to define the influence of strategic issues on logistics and to identify the most effective processes to be performed because of the strategic issues with the highest either positive or negative impact on the logistics. Managers try to deal with the current complex environment using the Strategic Information Systems Planning (SISP) process. The purpose of this paper is to propose a strategic DSS framework, which combines both the strategic management process and the SISP process to provide a holistic approach to effective decision-making in logistics in the agrifood industry.
During the last decade or so, there has been an increasing attention of researchers
in the strategic role of logistics. The strategic significance of logistics is conceived in
businesses that place special emphasis on customer service as the output of their
business
As the business environment is getting more and more complex and competitive,
an effective and timely decision-making is necessary. The implementation of
decision support technology is becoming significant and calls for reduced complexity
along with improved efficiency. Many researchers have studied the efficiency of
Decision Support Systems (DSSs)
Previous studies in this area were focused on the importance of Information
Technology (IT) to boost decision makers to make more efficient decisions.
Especially, previous researchers highlight the benefits of using computer-based
systems to support logistics management, especially in transportation and
warehousing
In recent years, the agrifood sector has experienced many societal, economic and
technological changes. Such transformations significantly influence the entire food
processing chain from agricultural production, through food processing to the
distribution of food to customers. The innovation is a crucial factor for firms in this
sector and plays an important role in sustaining and enhancing their competitiveness
The development of technology and the use of computer networks have changed
production processes, access to, transfer and use of information in the agrifood
sector. The easiest access to knowledge and the easiest sharing of information can be
achieved through the spreading of communication technologies
Despite the fact that Small and Medium Enterprises (SMEs) are considered the
main pillar of contemporary economies and have a key role to play particularly in
rural economies, few studies have focused on examining the innovation practices of
the agrifood sector SMEs
The purpose of this paper is to propose a strategic DSS framework, which combines both the strategic management process and the Strategic Information Systems Planning (SISP) process to provide a holistic approach to effective decisionmaking in logistics in the agrifood industry.
The structure of this paper is the following: A theoretical framework based on the literature review about strategic planning and DSS, as well as, strategy and DSS models in logistics are initially analyzed in Section 2. In Section 3, the steps for a framework linking the DSS and SISP process in logistics in the agrifood sector are discussed, whereas the final section summarizes the concluding remarks of the paper.
Researchers have recently focused on the strategic role of logistics. The strategic
significance of logistics is conceived in businesses that are interested in customer
service as the output of their business. Logistics is a holistic approach which includes
the management of material and information flows and it is important so as to satisfy
customers' demands. Logistics strategy must be aligned with business strategy
because it identifies the selection of products, services and markets and determines
the goals of the logistics system of the company
As managers in strategic planning define the key goals for the company in order to compete businesses in a turbulent environment, the logistics strategic planning process starts with situational analysis which contains the formulation of the vision, strategic goals, objectives, strategies and action plans. The aim of this analysis is to identify the strengths, weaknesses, threats and opportunities by analyzing both the logistic system and the business environment. Moreover, an analysis of strengths and weaknesses provides results in logistical structure and logistical costs, inventory management, transportation, Information Systems (IS), organizational structure, cooperation with other corporate functions and materials handling and transportation. The scanning of both the environment and the resources are significant to identify the long-term direction for the logistics function.
Specifically, the vision, describes a desired future situation identified for the logistics organization. The vision and the strategic objectives present the direction of the implementation of the logistics activities and the logistic vision that must both be aligned with business vision. The goals and strategies support the translation of logistics vision in specific performance measures and operating models such as customer service, transportation, order processing, inventory management, warehousing, IS and organization. The definition of goals and the formulation of strategies are aligned with other business functions such as marketing and production to increase business advantages. Moreover, action plans constitute a detailed description of the operational and short-term activities that are required for the implementation of the strategy.
Organizations use the strategic management process scan the environment, which significantly influences the logistics function. The logistics strategic management process contains three phases. The first phase is the definition of the trends and the evaluation of the impact and urgency of the identified trends, the next phase is the evaluation of priorities and the last one the development of a plan with responses to the issues.
The logistics strategic management can form strategic decision outcomes or
environmental forces. Responses to the issues may require changes in the vision,
objectives, strategies or action plans, as a result strategic issues management process
supports the periodic planning process. The process of strategic management forms
aligns the advantages of strategic planning with the flexibility of continuous strategic
management. Furthermore, it combines the business's logistics processes with the
capability to be strategically oriented and to face the external and internal
developments
The impact of innovation on business success in the agrifood sector seems to be
very much comparable to that in other industries. In the past, agrifood businesses
tended to pay attention on reducing production costs rather than delivering benefits to
the final customers. Recently, pressures arising from globalization, the need to ensure
food safety, nutritional quality and customers’ demand for convenience, variety and
quality, combined with new opportunities offered by the biotechnology revolution
have all led to a changing attitude. Hence, the agrifood sector is increasingly oriented
toward developing products that take into consideration customers’ demands
Strategic decisions imply the design of a distribution/logistics network is complex
because it involves significant commitments in resources over several years.
Strategic logistics planning, including required customer service levels, aims to
minimize the inventory-related costs which are combined with producing and storing
products from manufacturers to customers
Previous researchers in this field focused on the importance of IT to support
decision makers to achieve more efficient decisions and to enhance their
effectiveness. Specifically, previous surveys focused on the benefits of using
computer-based systems to support logistics management, especially in
transportation and warehousing
A DSS is defined as “an interactive, flexible and adaptable Computer Based
Information System which uses decision rules, models and model base as well as a
database and the decision makers apply decisions in solving problems which would
not be willing to manage visualization models per se”
Another definition is based on the view that a DSS is “an interactive and
adaptable Computer Based Information System which helps non-organized
management problems”
Table 1 summarizes different DSS and their functionalities in logistics. Then, the similarities among them are discussed in the next paragraphs. These findings are a basis for the suggested DSS model.
The first step in the strategic management process comprises the scanning of the
external and internal environment. The second step involves the estimation of the
effect and urgency of the issues, the evaluation of priorities for the previous problems
and the identification of the type of response for these issues. Finally, the last step
contains the planning of the required responses for the strategic issues. DSSs are used
to define the impact of strategic issues on the logistics and to identify the most
effective processes to be performed in coordination with the strategic issues with the
highest either positive or negative effect on logistics
Some basic features have to be considered for the development of the systems.
DSS involve many basic components as follows. Firstly, the data component usually
contains a Database Management System (DBMS). The DBMS involves modeling
tools and general programming languages. Data used can either be internal or
external, either cross-sectional data or time series. Internal data come from
organization’s internal functions and concern products and services prices, financial
data, resource allocation data, data related to costs such as payroll cost or cost per
product. The external concern is about competition market share, government
arrangements and anything that comes from external sources such as market
research, government agencies, the web. The data stored in the DSS database are
used as input to the optimization processes associated with models. The DSS
information is provided by other data files, which could be business’ internal or
external files. The next module is the model component, which includes a simulation
model, a mathematical model as well as optimization algorithms to support the
analysis of the impact of the selections on the system performances
A significant area of DSS in Logistics has been applied to perform an evaluation of supply chain. Current changes in global production had intensified supply chain complication and increased the argument that logistics strategies are significant aspects of business strategy. Recent business environment highlights the need for supplier relationship development to improve businesses sustainable management. The purpose of the supplier selection and assessment process is to limit risk and increase overall value to the customer. As supplier selection is considered to be a multiple criteria decision-making process, this process signifies an even more complicated problem. The decision-maker needs to analyze a large amount of data considering multiple factors to apply a more effective evaluation. Businesses have to pay attention to each factor to reduce the costs and to increase their profit, because of the increased globalization of trade and the expansion of competition. Businesses formulate strategies concerning the supplier selection process paying attention to the sustainability and environmental responsibility requirements, to deal with the higher level of competition. Several researchers argue that sustainability is a significant aspect which has to be considered by managers in supplier selection and performance evaluation.
Thus, the criteria taken into consideration for the supplier selection and
assessment can be categorized as follows. The first category concerns quality, the
second one is the price, the next category is related to the capability of
supply/delivery, and the fourth type involves factors about the service. Another
category sought by decision makers take into consideration for the supplier selection
and assessment is the Environment Protection. In conclusion, management system,
corporate social responsibility, and performance are the last categories
More specifically, Yoo and Digman (1987) proposed a DSS model for strategic management. This model involves four subsystems. The first one, named “Environmental Analysis Subsystem”, is used for gathering information related with inventory, production, R & D, marketing, industry, raw materials, human resources, financial resources, market, technology, economic conditions, government and culture necessary for forecasting and projecting both the external and internal business environment. This information is gathered by the staff, customers, managers, consultants as well as literature. The second subsystem is the “Goalsetting Subsystem” which involves a model base which generates alternatives models. One or more of them are selected according to identified goals and objectives as well as business’s mission and purpose. In the Goal-setting subsystem the results of the control phase should be used as an input as well as in the strategy operating subsystem. Furthermore, the results of each phase of the strategic management process can be used as an input in the strategy operating subsystem for reparative actions and future effectiveness. Moreover, the Decision Support Subsystem includes a DSS database, a DSS model base and application programs which maintain the flow of information within the system. The DSS database contains files of historical, managerial and environmental data as well as files on various transactions. The DSS model base includes models which are useful for the solution of strategic problems. The last subsystem is the “Strategy Operating Subsystem”, in which the decision maker identifies, evaluates and selects alternative strategies. Then, he implements the selected strategy, and evaluates based on information provided by the decision support subsystem. This subsystem maintains each phase of strategic management process as it has been previously presented.
The model includes four categories of subsystems, named; Environmental Analysis Subsystem, Goal Determining Subsystem, Decision Support Subsystem and SISP Subsystem (Figure 1).
The first subsystem includes the identification of the problem, for the business to make the appropriate decisions. The Situation Analysis is the first phase of SISP process and it is contained in this subsystem. Generally, in the current phase, existed business, organizational and IS are analyzed. Moreover, businesses analyze the current external IT and business environment to determine new trends in IT. Managers analyze strengths and weaknesses concerning economic conditions, logistical structure and logistical costs, inventory management, transportation, warehousing, IS and materials handling.
In times of globalization and increasing competitiveness, the determination of
threats and opportunities in the business environment is crucial for the sustainable
economic success of every company. It becomes even more important in the agrifood
industry because companies are highly interdependent. The awareness of
developments in markets, products, business partners and competitors considers as a
significant factor in economic success for businesses. The analysis of the information
needs a systematic scanning and a linkage with the needs of network companies
Information about distribution channels, economic situation of suppliers, relation
demands to product characteristics, market segments where competitors are active
and buying power, quality of suppliers are required
In the second subsystem, the Strategic Awareness phase of SISP is involved. Strategic Awareness includes key planning issues concerning the identification of goals and the development of the team which will participate in the implementation phase of the process. The main objectives which have to be identified are related to customer service, transportation, order processing, inventory management and warehousing (Figure 3).
Next, the Decision Support Subsystem includes the Database, Data Model and
Application programs. The previous two subsystems provide information to the
Decision Support Subsystem. Next, this subsystem generates an output, which is
used as input for the interacting subsystems. Thus, managers can gather, store and
reclaim the necessary information about external and internal environment and
historical data (e.g. about transportation or supplier selection and evaluation), which
will help them to create alternative scenarios. Then, managers will evaluate this
information and they will select the best choice, which will be developed in the next
subsystem. The output of this subsystem includes alternative decisions about drivers’
and vehicle transportation, KPIs, cost rate, cost per unit of material flow
Overall, several methods, models, theories and algorithms are implemented to develop and analyze the alternative decisions in DSS. Examples of these techniques are the intelligent analysis of data and the fuzzy theory (Figure 4). Fig.4. Goal Determining Subsystem
The SISP Subsystem includes the last three phases of SISP process; Strategy
Conception, Strategy Formulation and Strategy Implementation Planning. In Strategy
Conception the identification of important IT goals and objectives for
implementation are applied. The organizing team evaluates them and formulates the
technological strategy, which will be applied in the next phase. Then, there is
Strategy Formulation through which the definition of new IT architectures,
processes, projects and the priorities over them are implemented. Finally, Strategy
Implementation Planning involves activities concerning changes in management
process, such as the implementation of the opportunities, the goals, the plans and the
new processes, the action plan, its evaluation and control
The proposed model has few advantages in comparison with the previous ones, which have been presented in Table 1. Those models have been implemented for specific logistics functions such as distribution, vehicle routing and tactical decisions. The proposed framework (Figure 1) is based on the strategic process of DSSs and it involves the phases which are based on the formulation of business and IT strategy, which are excluded from the previous models. The identification of objectives, the analysis of business and IT environment, the organization of planning team, the evaluation of opportunities, the improvement of business processes and the assessment of the process, are significant phases when managers formulate IT strategy. So, the proposed framework can be implemented by decision makers in each function of logistics in agrifood sector.
The proposed model gives some benefits to decision makers. First, various strategic decision variables and steps can be considered comprehensively. Second, it can be considered as an effective strategic management system which makes easier the decision making process. Next, the system provides updated information to managers as they can scan the business and IT environment. So, the environmental uncertainty is minimized and company risk under dynamic change. Another benefit is that the evaluation process is implemented in order to examine whether the strategy is being implemented and whether the goals are being achieved. If not, corrective action may be necessary to change the implementation activities or even to change the strategy itself. Finally, system includes various levels of managers, so their participation enhances the increased use of the system and the effectiveness in decision-making.
The combination of strategic planning with DSS is a new research area. It can
significantly improve the strategic decision making effectiveness. Careful design is
critical to obtain the advantages of SDSS. Further expansions in DSS research area
and IS will provide new motivations for successful SDSS developments
DSSs are based on the needs for information of the existing organizational
functions. In the future, DSS will try to involve tools based on environmental
changes and information needs, which will facilitate decision makers so as to adapt
their working practice for future demands
A framework which combines SISP process and DSS in logistics is suggested.
The suggested framework contributes to the agrifood sector and enhances the
communication among producers and consumers, enhancing a redistribution of value
for primary producers. Furthermore, if agrifood producers use the DSS, the latter can
give customers insight into sourcing and production methods, enable producers to
monitor their customer base closely and make supply chain visibility and
transparency a sustainable competitive advantage
This paper research contribution is two fold. Firstly, it aims to bridge the gap in the literature regarding the connection between SISP processes and DSS. Furthermore, it suggests a new framework for decision making with general applicability to various industries, including the agrifood sector.
By defining the phases that support managers’ decision making, implications for future research are presented. Academics and managers should expand, visualize and test this model, to evaluate the effectiveness of SISP phases in the process of decision making. As the framework has not been tested yet, the results of an exploratory study will be summed up in an expanded conceptual model for future research.