MSc

In the agrarian economy of Kerala, coconut plays a significant role. The supply
chain of an agricultural commodity consisted of the processes from its raw material
procurement to its distribution as a final product. It is a network that encompasses the
actors and activities where individuals, organizations, resources, credit, and information
flow are present. The presence of this multitude of actors and activities make the supply
chain vulnerable to risks. Risk can be defined as the possibility of the occurrence of any
loss or harm. In order to manage the supply chain risks, effective supply chain risk
management has become imperative.
The study was undertaken with this rationale to map the major coconut supply
chains, assessment and ranking of the major supply chain risks in terms of perceived
probability and severity of occurrence. Also, assessment of the risk management
behaviour of major actors along the supply chain was undertaken. A sustainable
framework for effective risk management in the coconut supply chain was also
attempted.
The study followed ex-post facto research design. Through criteria-based
random selection, the three districts of Kerala viz. Malappuram, Kozhikode, and Kannur
were selected for the study. The criteria for selection was their lead role in the area and
production of coconut and also the inclusion of coconut products as the highest ranked
district product under the One District One Product (ODOP) under Pradhan Mantri
Formalisation of Micro food processing Enterprises (PMFME) scheme of the Ministry
of Food Processing Industry (MoFPI) implemented in Kerala. The details of the micro
and small enterprises of the respective districts were collected from the District
Industries Centres (DICs), State Department of Agriculture, Coconut Development
Board (CDB), and Krishi Vigyan Kendra’s (KVKs). From the list collected, a
proportionate sample of 50 enterprises were selected from each district to form a total
sample size of 150.
The study could map and delineate the coconut supply chain by using social
network analysis (SNA) by fixing each district as the boundary of the network. From
the upstream level of supply chain (SC), procurement supply chain network (SCN) has
been delineated. The financial assistance and training and capacity-building
SCN had been mapped to represent the midstream level of SC. The downstream level
mainly consisted of activities related to the distribution of final product and thus
marketing SCN was mapped at this level. By calculating the centrality measures, the
out-degree centrality was found to be higher for coconut farmers within the district in
case of procurement SCN in all three districts. In the case of financial assistance and
training and capacity-building SCN the District Industries Centre (DIC) of the
respective districts played the key role and for marketing the final local consumers
secured the highest degree centrality. Thus, entrepreneurs with direct contact with these
actors could attain more advantages in the supply chain through the reduction of
intermediaries. For the procurement and marketing SCN, the significant presence of
informal actors with more than 90 percent of the total actors were reported in the study.
This implied the need for formal registered vendors as well as formal marketing support
functionaries at the local level.
The supply chain risks were assessed by through the estimation of risk
perception. Risk perception was operationalized as the product of the likelihood and
severity of the occurrence of risks. The obtained scores were then used to classify the
risks into different categories following the risk matrix. The production and marketing
risks scored the highest risk perception score and were grouped as the high-risk
category. The medium risks were the environmental risks and the organisational risk
while the supply risk was classified under the low-risk category. Ranking of the
identified supply chain risks were done by following the analytic hierarchy process
(AHP). The major risk dimensions selected were environmental risk, supply risk,
organisational risk, production/manufacturing risk, and market risk. The triggering
factors for each dimension were defined as sub-criteria. Pair-wise comparison between
criteria’s and sub-criteria’s within each criteria were done and the ranks were obtained.
The market risk ranked top among the major risks and the environmental risk,
production/manufacturing risk, and organisational risk followed it. The supply risk was
the least ranked risk in the supply chain of coconut. The results could obtain a
consistency ratio of less than 0.1 which implied the stability of the results.
The risk management behaviour of the entrepreneurs were found as the
behavioural outcome of risk attitude towards the risk management strategies. The
majority of the population derived were of risk-neutral type (60%). They are indifferent
to the risks. They won’t averse or seek the risks. This population must be more focussed
on the entrepreneurial ecosystem through capacity-building programs. The remaining
23.33 percent were of risk-averse nature and were highly calculated towards the risk.
The risk seekers (16.67%) had the highest risk tolerating capacity and they will take
risks in order to regain from the loss already happen. The profile attributes of the
enterprises and entrepreneurs were also delineated.
Based on the results the study formulated a framework for the effective
management of the supply chain by incorporating the four delineated components. The
components used were risk identification, risk analysis, risk evaluation, and risk
treatment. In risk identification, the actors and activities involved in the coconut supply
chain were identified. The risks identification was based on the supply chain analysis
done at the respective levels. The risk score for risks at each level was analysed and
classified as high, medium, and low according to their likelihood and severity of
occurrence. The major risks were ranked based on evaluation along the supply chain.
Mitigation practices were suggested for the upstream, midstream, and downstream level
of supply chain risk management (SCRM). The results of the study could contribute to
the sectoral policy and regulatory reform processes by apprehending the major risks and
evolving the management strategies.