Perceived Environmental Uncertainty Along the Thai Rice Supply Chain: An Empirical Approach

Phatcharee Toghaw Thongrattana
University of Wollongong, Australia

Nelson Perera
University of Wollongong, Australia

Uncertainty generates unstable processes along supply chains, which in the end worsen their performance. Some sources of uncertainty in agri-food supply chains are distinct from those affecting general supply chains. These include issues such as variable harvest and production yields, and the huge impact of climate conditions. Thus, a deep understanding of which uncertainty factors mostly affect on agri-food supply chain management and its performance is vital for allow agribusiness to deal with them effectively. The purpose of this study is to discuss the perceived environmental uncertainties in the context of the rice supply chain in Thailand. A review of the literature indicates that perception of seven factors --supply, demand, process, planning and control, competitor behavior, government policy, and climate uncertainty-- are all potential causes of uncertainty and hence instability in the Thai rice supply chain. The research method used in order to confirm these factors is a survey with mail-out questionnaires to rice millers and rice exporters in Thailand. Descriptive statistics are employed to review which uncertainty factors within the rice supply chain are perceived as the greatest. Major findings show that planning and control, competitor behavior, government policy and climate uncertainties are the most influential factors. Because they depend upon information availability, accuracy, and throughput times, planning and control remain highly uncertain because information technology is rarely used in the Thai rice industry. Thus, lack of appropriate IT tools means that environmental uncertainties cannot be dealt with effectively. In addition, there is high competition in both the domestic and international rice market, leading to highly unpredictable competitor behaviors. As is the case in many developing countries, Thai government policies are turbulent, and the new factor of climate uncertainty in agri-food supply chain management is becoming more and more important in the Thai rice industry.

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