UNIVERSITY OF GHANA THE IMPACT OF SUPPLY CHAIN STRATEGIES ON THE OPERATIONS PERFORMANCE OF RETAIL FIRMS IN THE FOOD AND BEVERAGE INDUSTRY IN GHANA BY PROSPER BIAKA KONLAN (10808638) A THESIS SUBMITTED TO THE DEPARTMENT OF OPERATIONS AND MANAGEMENT INFORMATION SYSTEMS (OMIS), UNIVERSITY OF GHANA BUSINESS SCHOOL, LEGON, IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF A MASTER OF PHILOSOPHY (MPHIL) DEGREE IN OPERATIONS MANAGEMENT OCTOBER, 2021 University of Ghana http://ugspace.ug.edu.gh University of Ghana http://ugspace.ug.edu.gh iii DEDICATION This work is dedicated to my late mother, Mrs. Tanjon Konlan. University of Ghana http://ugspace.ug.edu.gh iv ACKNOWLEDGEMENT My utmost appreciation goes to Dr. Joshua Ofori-Amanfo and Dr. Francis Yaw Banuro, my thesis supervisors for their time and productive criticisms which contributed immensely to the success of this study. I actually learned a lot under all your encompassing wisdom and knowledge. I cannot be oblivious of the effort of other lecturers who constructively criticized the work behind the scene. May God almighty richly bless you all. To my lovely wife, MERCY and my three lovely kids; THEOPHILIA, GABRIEL and KEZIAH who morally and physically supported me throughout my absence, I am most grateful. I equally appreciate the support and comradeship of my course mates for their mature and selfless endurance we went through together to get to this stage of our academic endeavours. University of Ghana http://ugspace.ug.edu.gh v ABSTRACT The Food and Beverage (F&B) industry contributes greatly to the development of the economy under the manufacturing sector. However, the F&B subsector of the manufacturing sector has received little attention in literature although, it provides both direct and indirect employment opportunities. This sector needs to be coordinated and integrated properly through its supply chains to create value and competitive edge to enhance retail operations performance. This study therefore, sought to assess the impact of supply chain strategies on the operations performance of retail firms in the F&B industry in Ghana. The supply chain strategies identified in the study are the lean, agile and Leagile. The retail operations performance is a dependent variable which was measured by efficiency and responsiveness. The study also sought to determine if the financial position of a firm mediates the supply chain strategies and the operations performance of the retail firms. Quantitative method and a cross-sectional survey research design were used. The study adopted a simple random and purposive sampling techniques for the study. A total of 300 responses out of the 363 retail firms issued with the questionnaires were received. The study used Structural Equation Modelling to analyze the data with the aim of drawing relationships between the independent and dependent variables. The study found that retail operations challenges such as stiff competition and stock out were the major challenges confronting retail operations in the F&B industry in Ghana. It also discovered that while lean supply chain strategy influences efficiency, it does not influence responsiveness. Again, the study revealed that while agile supply chain strategy influences responsiveness, it does not influence efficiency. The study further discovered that, leagile supply chain strategy influences both responsiveness and efficiency. The study again revealed that financial position of a firm has no mediation effect on the relationship between supply chain strategies and retail operations performance. The study ends by examining key contributions to policy, theory and practice on how supply chain strategies can be used to achieve maximum retail operations performance. University of Ghana http://ugspace.ug.edu.gh vi TABLE OF CONTENTS CONTENTS PAGES TITLE PAGE....................................................................................................................................... i DECLARATION ................................................................................................................................ ii DEDICATION ................................................................................................................................... iii ACKNOWLEDGEMENT ................................................................................................................ iv ABSTRACT ........................................................................................................................................ v TABLE OF CONTENTS .................................................................................................................. vi LIST OF TABLES ............................................................................................................................ ix LIST OF FIGURES ........................................................................................................................... x LIST OF ACRONYMS AND ABBREVIATIONS ........................................................................ xi CHAPTER ONE: INTRODUCTION .............................................................................................. 1 1.0 Background of the Study ......................................................................................................... 1 1.1 Problem Statement ................................................................................................................... 7 1.2 Purpose of the Study............................................................................................................... 10 1.3 Objectives of the Study ........................................................................................................... 10 1.4 Research Questions................................................................................................................. 10 1.5 Significance of the Study ........................................................................................................ 11 1.5.1 Contribute to Theory ........................................................................................................... 11 1.5.2 Contribution to Policy ......................................................................................................... 11 1.5.3 Contribution to Practice ..................................................................................................... 12 1.6 Scope of the Study................................................................................................................... 13 1.7 Structure of the Research ...................................................................................................... 13 CHAPTER TWO: CONTEXT OF THE STUDY ......................................................................... 15 2.0 Introduction ............................................................................................................................ 15 2.1 Overview of the Study Area ................................................................................................... 15 2.2 Historical Background of F&B Industry in Ghana ............................................................. 15 2.3 Contributions of F&B Industry in Ghana ............................................................................ 20 2.4 Challenges of F&B Industry in Ghana ................................................................................. 22 2.5 Opportunities of F&B Industry in Ghana ............................................................................ 24 2.6 Policies Implemented to Support F&B Industry in Ghana ................................................ 24 2.7 Major Players in the F&B Industry ...................................................................................... 26 CHAPTER THREE: REVIEW OF RELATED LITERATURE ................................................ 30 University of Ghana http://ugspace.ug.edu.gh vii 3.0 Introduction ............................................................................................................................ 30 3.1 Theoretical Foundations of the Study ................................................................................... 30 3.1.1 Resource-Based View (RBV) .............................................................................................. 30 3.1.2 Dynamic Capabilities Theory ............................................................................................. 33 3.1.3 Theoretical Implications on Supply Chain Strategies and Firm’s Performance........... 35 3.2 Conceptual Framework ......................................................................................................... 37 3.2.1 Supply Chain Strategies ...................................................................................................... 38 3.2.2 Lean Supply Chain .............................................................................................................. 39 3.2.3 Agile Supply Chain .............................................................................................................. 41 3.2.4 Leagile Supply Chain .......................................................................................................... 43 3.3 Firm’s Operations Performance ........................................................................................... 45 3.3.1 Supply Chain Responsiveness............................................................................................. 46 3.3.2 Supply Chain Efficiency ...................................................................................................... 48 3.4 Firm’s Financial Position ....................................................................................................... 49 3.5 Empirical Review .................................................................................................................... 51 3.5.1 Lean Supply Chain Versus Responsiveness and Efficiency ............................................ 51 3.5.2 Agile Supply Chain Versus Responsiveness and Efficiency ............................................ 52 3.5.3 Leagile Supply Chain Versus Responsiveness and Efficiency ......................................... 53 3.6 Conclusion ............................................................................................................................... 55 CHAPTER FOUR: METHODOLOGY......................................................................................... 56 4.0 Introduction ............................................................................................................................ 56 4.1 Research Design ...................................................................................................................... 57 4.2 Research Population ............................................................................................................... 57 4.3 Sample Size .............................................................................................................................. 58 4.4 Sampling Procedure ............................................................................................................... 59 4.5 Data Collection Tool ............................................................................................................... 60 4.6 Pilot Study ............................................................................................................................... 61 4.7 Data Collection ........................................................................................................................ 62 4.7.1 Reliability ............................................................................................................................. 62 4.7.2 Validity ................................................................................................................................. 63 4.8 Data Analysis........................................................................................................................... 63 4.9 Ethical Issues ........................................................................................................................... 64 CHAPTER FIVE: DATA ANALYSIS AND DISCUSSION OF FINDINGS ............................. 66 5.0 Introduction ............................................................................................................................ 66 University of Ghana http://ugspace.ug.edu.gh viii 5.1 Response Rate ......................................................................................................................... 66 5.2 Demographic Characteristics of the Retail Firms ............................................................... 67 5.3 Analysis of Operational Challenges of Retail Performance in F&B industry in Ghana . 68 5.4 Assessment of PLS-SEM Model ............................................................................................ 70 5.4.1 Measurement Model Assessment ....................................................................................... 70 5.4.1.1 Indicator Reliability ......................................................................................................... 70 5.4.1.2 Internal Consistency ......................................................................................................... 72 5.4.1.3 Convergent validity .......................................................................................................... 73 5.4.1.4 Discriminant validity ........................................................................................................ 73 5.4.2 Structural Model Assessment ............................................................................................. 74 5.4.2.1 Multicollinearity Assessment ........................................................................................... 74 5.4.2.2 Direct Relationships ......................................................................................................... 75 5.4.2.3 Coefficient of Determination (R 2 ) ................................................................................... 76 5.4.2.4 Mediation Analysis ........................................................................................................... 77 5.4.2.5 Model Predictive Relevance ............................................................................................. 79 5.4.2.6 Model Fitness .................................................................................................................... 80 5.4.3 Discussions of findings......................................................................................................... 80 5.4.3.1 Operational Challenges affecting Retail Supply Chains in the F&B Industry in Ghana ............................................................................................................................................. 80 5.5.3.1 Relationships between Supply Chain Strategies, Efficiency and Responsiveness ...... 82 5.5.3.2 Lean Supply Chain Strategy and F&B Firms Efficiency ............................................. 82 5.5.3.3: Lean Supply Chain Strategy and F&B Firms Responsiveness ................................... 83 5.5.3.4: Agile Supply Chain Strategy and F&B Firms’ Efficiency ........................................... 83 5.5.3.5: Agile Supply Chain Strategy and F&B Firms’ Responsiveness ................................. 84 5.5.3.6: Leagile Supply Chain Strategy and F&B Firms’ Efficiency ....................................... 85 5.5.3.7 H6: Leagile Supply Chain Strategy and F&B Firms’ Responsiveness ........................ 85 5.5.3.8: Mediation Analysis .......................................................................................................... 86 CHAPTER SIX: SUMMARY OF FINDINGS, CONCLUSIONS AND CONTIBUTIONS OF THE STUDY ..................................................................................................................................... 87 6.0 Introduction ............................................................................................................................ 87 6.1 Summary of Findings ............................................................................................................. 87 6.2 Conclusions.............................................................................................................................. 89 6.3 Contributions of the Study..................................................................................................... 90 REFERENCES ................................................................................................................................. 93 University of Ghana http://ugspace.ug.edu.gh ix LIST OF TABLES Table 4.1 Variables and Measurement Items Sources .............................................................. 61 Table 5.1 Response Rate .............................................................................................................. 66 Table 5.2: Respondents Demographics ....................................................................................... 67 Table 5.3: Indicator Reliability .................................................................................................. 70 Table 5.4: Reliability Tests ......................................................................................................... 72 Table 5.5: Discriminant Validity ................................................................................................. 71 Table 5.6: Multicollinearity Test ................................................................................................. 71 Table 5.7: Hypothesis Testing...................................................................................................... 75 Table 5.8: R 2 and R 2 Adjusted Results ........................................................................................ 76 Table 5.9: Indirect paths significance test .................................................................................. 78 Table 5.10: Results of Q2 values.................................................................................................. 79 Table 5.11: Model fit Results ....................................................................................................... 80 University of Ghana http://ugspace.ug.edu.gh x LIST OF FIGURES Figure 3.1: Conceptual Framework ........................................................................................... 38 Figure 3.2: Characteristics of Lean, Agile and Leagile ............................................................. 44 Figure 5.2: Indicator outer loadings ........................................................................................... 72 Figure 5.3: Bootstrapping Output with Mediator ..................................................................... 79 University of Ghana http://ugspace.ug.edu.gh xi LIST OF ACRONYMS AND ABBREVIATIONS ABL – Accra Brewery Limited ASC – Agile Supply Chain AVE – Average Variance Extracted DCs – Dynamic Capabilities E – Efficiency ERP – Economic Recovery Program F&B – Food and Beverage FP – Financial Position GBL – Ghana Brewery Limited GDP – Gross Domestic Product GIC – Ghana Investment Centre GIPC – Ghana Investment Promotion Centre GSA – Ghana Standard Authority GSS – Ghana Statistical Service ISSER – Institute of Statistical, Social and Economic Research ISSP – Industrial Sector Support Program KCL – Kassapreko Company Limited LASC – Leagile Supply Chain LSC – Lean Supply Chain MoFEP – Ministry of Food and Economic Planning MoTI – Ministry of Trade and Industries NQA – National Quality Awards OECD – Organization for Economic Operation and Development PLS – Partial Least Squares PNDC – Provisional National Defence Council R - Responsiveness RBV - Resource-Based View SAP - Structural Adjustment Program SEM – Structural Equation Model SPSS – Statistical Package for Social Science TIP – Trade and Investment Program VRIN – Valuable, Rare, Inimitable and Non-substitutability University of Ghana http://ugspace.ug.edu.gh 1 CHAPTHER ONE INTRODUCTION 1.0 Background of the Study The contribution of retail supply chains to national economies by making products and services available to the citizenry to support everyday living has been very great. Retail supply chain involves the ―process of purposefully managing the procurement, movement and storage of materials, parts and finished inventory via the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfilment of orders‖ (Basu & Wright, 2010, P.356). However, retail supply chains have become more sophisticated due to the emergence of disruptive technologies, e-commence and the continual changes in the taste of consumers, as well as the increasing global competitions (Ross, Weston & Stephen, 2010). Li (2014) posits that, organisations must begin to manage and coordinate their retail supply chains in ways that are responsive and efficient than only concentrating on the mere practice of the flow of goods from one point to the other. Again, the retail supply chain has become more dynamic and a competitive weapon through which organisations adopt and ensure that, all facets of the retail operations linkages are integrated and coordinated in a quest to achieving optimal customer satisfaction and a business value. This makes supply chain and logistics management especially in the F&B industry of the manufacturing sector more important than ever before (Li, 2014). University of Ghana http://ugspace.ug.edu.gh 2 Wu and Pagell (2011) argue that, the F&B industry faces perennial and complex challenges in its logistical management due to poor coordination in supply chain linkages. Kaipia, Dukovska- Popovska and Loikkanen (2013) postulate that, managing retail supply chains in the F&B industry has numerous hindrances such as perishability of products, stock forecasting challenges, quality management, returns management, and the influx of unregistered products into the mainstream markets. Mena and Stevens (2010) further indicate that, in the F&B industry, the products are fragmented and pose grave concerns on the ability of the retail firms to coordinate the systems properly ultimately affecting supply chain efficiency and responsiveness. Firms must therefore improve on their operations performance to become more competitive and remain relevant in the industry within which they operate. Sánchez & Pérez (2005) defined operational performance as the unique and strategic dimensions employed by competing firms and comprises of operational indicators like flexibility, efficiency, responsiveness and delivery. Many studies revealed that, in measuring firm‘s operational performance, delivery, flexibility, cost, efficiency, inventory and responsiveness are commonly used as optimal strategies (Gaiardelli, Saccani, & Songini, 2007). Better and efficient operational performance increases customer satisfaction through effective delivering and supply of high-quality products as well as services (Kumar & Motwani, 1995). Generally, there are no commonly agreed firm operations performance measurement indicators. Nevertheless, Theodosiou, Kehagias & Katsikea (2012) state that, some multidimensional variables encompassing both financial and non-financial indicators are often adopted in assessing firm‘s operations performance. Studies that generally assessed how variables impact the firm‘s University of Ghana http://ugspace.ug.edu.gh 3 operations performance normally adopt some financial indicators including ratios, earning per share, return on equity, return on assets and profit margin among other indicators (McMahon, 2007). Non-financial measures of firm‘s operations performance such as flexibility, productivity customer satisfaction, product reliability, employee satisfaction and quality have also been employed to assess performance in literature. In Imran, Arif, Cheema and Azeem (2014) observation, firm performance is affected by efficiency in production, quality, turnover, lead time, effective relationship with key stakeholders, improvement of processes, innovations and new approaches. Organisations are therefore expected to offer quality products and maintain a well-coordinated retail operation to achieve a competitive edge (Leat & Revoredo-Giha, 2013) through minimised cost and organisational efficiency. In this respect, Ross, Weston and Stephen (2010) claim that, in an attempt to meet customer‘s demands in this highly competitive, dynamic and environmental uncertainties, more emphases should be paid to retail supply chain strategies such as leanness, agility and leagile. To be responsive and efficient as part of achieving outmost retail operations performance and competitive edge, retail firms must be adaptive, flexible and cost conscious by adopting appropriate retail supply chain strategies (Kumar & Nigmatullin, 2011). Bourlakis and Matopoulos (2010) maintain that, understanding the impacts of leanness and agility on retail operations performance (responsiveness and efficiency) helps organisations to remain relevant in this highly competitive market environment. University of Ghana http://ugspace.ug.edu.gh 4 From the aforementioned literature, the importance of leanness, agility and leagile in retail supply chains cannot be underestimated. Lean refers to a supply chain strategy which produces exactly the quantity that is demanded by the customer at the right time and at the right place (Stavrulaki & Davis, 2010). Cohen and Roussel (2013) advises that, the lean supply chain strategy should not only be based on reducing waste in the supply chain system, but it must be a value-added activity. There is the need therefore, to understand activities which create value and those which create wastes. In lean supply chain, the speed and responsiveness to customer demands, reduction in inventories and cost, enhanced customer satisfactions are key competitive weapons that can be tapped by the retailer (Azevedo, Carvalho, & Cruz-Machado, 2011). Again, the lean strategy assists organisations to identify and eliminate activities which are not adding values such as excess times, labour, equipment, spaces, and inventories across the supply chain (Qrunfleh & Tarafdar, 2013). This strategy helps firms to improve quality, reduce costs, and enhance service delivery to customers (Stavrulaki & Davis, 2010). The overall essence of the lean supply chain strategy is to reduce waste and maximise output at the least cost possible while meeting exactly the requirements of the end user (Carvalho, Duarte, & Machado, 2011). According to the Japanese concept of production management, lean targets the reduction of types of waste (inventory, unused capacity, poor quality, obsolete items, etc.) in order to minimize costs. Notwithstanding the numerous benefits of lean supply chain strategies, the practice is becoming continuously difficult to implement and sustain as retail supply chain and logistics management are becoming complex due to challenges such as unreliable power supply, instability in University of Ghana http://ugspace.ug.edu.gh 5 production, and increased in supply chain linkages. Another challenge with the lean supply chain is the inability of the system to continuously satisfy customer demands at the least cost possible at all times ( Kumar & Nigmatullin, 2011) An alternative retail supply chain strategy relevant to the F&B industry is agility. The agility concept is a competitive supply chain strategy which emphasizes more on the availability of goods and services at the right place and at the right time with competitive prices (Basu & Wright, 2010). The Agility Forum at the Iacocca Institute defined agility as ―the ability of an organization to thrive in the competitive environment of continuous and unanticipated change and to respond quickly to rapidly changing markets driven by customer-based valuing of products and services‖ (Mena & Stevens, 2010, P. 1-15). This definition encompasses ―four principal dimensions of agility thus; enriching customers with total solution products, mastering change and uncertainty, cooperating to enhance competitiveness and developing the knowledge-driven enterprise. Agile systems are built around flexibility, emphasizing flexible lot sizes, quick changeovers, and/or manufacturing products to specific customer orders. Agile systems are often deployed in companies where there are very short product life cycles (such as electronics, foods and beverages) or very erratic customer‘s demand‖ (Kimani, 2013, P.137-143). An agile capability enables a firm to cost effectively and rapidly ―respond to, and create new windows of opportunity in a turbulent market environment driven by individualized customer requirements. These requirements must be met at the right price, with the right quality and at the right time‖ (Al-Aomar & Hussain, 2018, P. 553-565). A third strategic option for retail supply chain strategies is the concept of leagile strategy. University of Ghana http://ugspace.ug.edu.gh 6 leagile supply chain strategy combines the lean and agile strategies by seeking to reduce waste and maximise output whilst emphasizing more on the availability of goods and services at the right place and at the right time at competitive prices (Mor, Singh, & Bhardwaj, 2015). This paradigm involves both lean and agile supply chain strategies which create a virtually brand-new management framework. The leagile framework allows firms and networks to shape an appropriate profile to face successfully the volatility of markets and fight to gain competitive advantages (Christopher, Lowson, & Peck, 2004). This strategy is particularly important in the cases of firms exploiting markets in terms of cost, quality, response time and service level where the client seeks for better responsiveness to meet their demands and for optimizing the management of the supply chain (Mikkola & Larsen, 2004). The typical logistics goals of a leagile supply chain are to realize short response, feasible deadlines, ability to change the volume and production mix (Hobelsberger, 2021). "Being leagile means using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile market" (Kisperska-Moron & Swierczek, 2009, P. 217-224). The supply chain needs to be flexible and focus not only in the efficiency but also in the effectiveness. The ultimate measure of retail supply chain success rests on the ability of the system to be responsive and efficient in optimizing business value (Mikkola & Larsen, 2004). Tillman (2020) asserts however that, most of the literatures dealing with operations planning problems in manufacturing operations are emerging while nothing is done on integrated retail operations performance and capacity management among retail firms in the F&B industry. There University of Ghana http://ugspace.ug.edu.gh 7 is the need therefore to examine the appropriate supply chain strategies which contribute better to the responsiveness and efficiency in retail operations. Again, based on the general lack of research on the operations performance of retail supply chains particularly in the F&B industry, this study attempts to contribute to the operations management literature by enhancing understanding of the operations performance of retailers in the food and beverage industry. 1.1 Problem Statement Managing retail supply chains in the F&B industry is extremely a daunting task. This is because, most of the products in the food and beverage industry have shorter life span (Saha, Gregar, & Sáha, 2017). Again, with the emergence of e-commence, the industry is under upsurge with influx of unregistered goods which are fragmented and difficult to regulate (Abideen & Mohamad, 2019). These create grave concerns to retail firms within the F&B industry and pose extra cost and reliability issues to organisations in a quest to be responsive and efficient to customer demand (Saha et al., 2017). Again, as organisations struggle to adopt better supply chain strategy, it creates fluctuations in demand, order quantities, shelf space, and elusion in pricing decisions (Orheim & Utvær, 2021). Retail firms in the F&B industry need to choose appropriate supply chain strategies to maximise operations efficiency and responsiveness to customer needs in order to remain competitive in this turbulent environment. Johnson (2016) indicates that responsiveness and efficiency are the primary variables which determine the success or otherwise of retail operations performance. It appears however, that literature in retail supply chains focuses on storage and order picking while research on University of Ghana http://ugspace.ug.edu.gh 8 responsiveness and efficiency in managing an integrated and holistic retail operations performance in the beverage industry appears to be lacking. The deficiency of current reviews with respect to the gaps in literature on leanness, agility and leagile and their impacts on responsiveness and efficiency and design in the F&B industry has also been accentuated in the literature (Orheim & Utvær, 2021). Christopher, Lowson and Peck (2004) claim that, demand fluctuations tend to have a stronger impact on retail supply chain management which include delivery and capacity utilization. A bigger challenge for retail operations is to be responsive to customers‘ demand and still be able to meet both quantity and quality requirements in order deliveries in a way that is cost efficient (Almahamid, Awwad, & McAdams, 2010). These issues are more wobbling where the supply chain linkages are not properly coordinated and integrated with the aim of achieving a competitive advantage in a wake of this global competition (Mor et al., 2015). This makes the current study useful as it attempts to identify appropriate supply chain strategies that are responsive and efficient in meeting customer demand just in time to enhance profitability of the retailers. The key strategies for managing the supply chain are lean, agile and leagile. These strategies have received some attention in the literature but largely in manufacturing operations. For instance, on lean strategy, a lot of work has been done on green supply chain and the need to minimise the negative impacts of firms on the natural environment (Saha et al., 2017). Also, on agility, there have been extensive works on sustainable competitive strategies of firms to remain resilient in the manufacturing operations (Bhasin, 2015). University of Ghana http://ugspace.ug.edu.gh 9 The leagile supply chain strategy has always been discussed as an interface of both lean and agile strategies which seek to reduce waste to make firms remain competitive and responsive to customer‘s demand (Christopher et al., 2004). The contribution of supply chain strategies in enhancing retail operations performance cannot be underrated. However, literature seems to be silent on the usefulness of these strategies to retail supply chains thereby creating a knowledge gap especially on how each of these strategies affect the retail operations performance in the F&B industry (Palevich, 2011). Also, Ambe (2009) posits that, literature remains silent on whether the financial position or size of the firm mediate between the supply chain strategy adopted and the firm‘s retail operations performance. Consequently, it is of interest in this study to examine whether the financial position of the firm is a mediator between supply chain strategies and operations performance of retail firms. Research on retail supply chains have largely focused on storage and order picking in the general framework of supply chain management while study on responsiveness and efficiency in managing an integrated and holistic retail logistics in the beverage industry is lacking (Palevich, 2011). For instance, in F&B industry, price discrimination and order management and the appropriate supply chain strategy that the industry uses remain elusive. Abideen and Mohamad (2019) claim that, most of the literature dealing with individual operations planning problems are emerging while there is still a lack of research focusing on integrated retail logistics operations and capacity management in food and beverage industry. These events make the current study relevant and timely. University of Ghana http://ugspace.ug.edu.gh 10 In F&B industry for example, there are no clear timelines for order deliveries, price stabilisation, and responsiveness to customer demands although, some of the companies in the industry like Accra Brewery Limited (ABL) try to maintain the same prices across their regional depots despite differences in distance and geographical locations of suppliers. This practice is at variant with the assertion by Al-Aomar and Hussain (2018) that, the cost of delivering orders, warehousing, and transportation must differ depending on the channel and distance in terms of mileage covered in a typical retail supply chain management system. These aforementioned gaps are relevant to the current study as they impact on determining the appropriate supply chain strategies for the retail operations performance. 1.2 Purpose of the Study The overall purpose of this research is to determine the impact of lean, agile and leagile supply chains strategies on retail operations performance of retailer in the Ghanaian Food and Beverage Industry. 1.3 Objectives of the Study The specific objectives of the study are to: 1. Examining operational challenges of the food and beverage supply chains in Ghana; 2. Examining the impact of lean, agile and leagile supply chain strategies on the efficiency and responsiveness of the food and beverage supply chains 3. Determine if the financial position of the firms mediate the impact of supply chain strategies on operations performance of retailers 1.4 Research Questions In response to the above-mentioned objectives, the research sought to answer the following questions: University of Ghana http://ugspace.ug.edu.gh 11 1. What are the operational challenges of food and beverage retail supply chains in Ghana? 2. To what extent does lean, agile and leagile supply chain strategies impact on the responsiveness and efficiency of retail supply chains in Ghana? 3. To what extent does the financial position of firms mediate the impact of supply chain strategies on the operations performance of retailers in Ghana? 1.5 Significance of the Study The study sought to provide empirical evidence on the impact of supply chain strategies (lean, agile and leagile) on retail operations performance of retail firms in the F&B industry in Ghana. The study further sought to examine whether the financial position of a firm mediates its supply chain strategies and its operations performance. The research outcomes therefore contributed to theory, policy and practice. 1.5.1 Contribute to Theory The outcome of this study contributed to theory by examining the usefulness of supply chain strategies in promoting retail operations performance thereby closing a knowledge gap on how lean, agile and leagile supply chain strategies affect the retail operations performance of retail firms in the F&B industry (Bhasin, 2015). Also, the study contributed to theory by conducting a mediation analysis to examine whether the financial position of the firm mediate between the supply chain strategy adopted and the firm‘s operations performance in the F&B industry (Almahamid et al., 2010). 1.5.2 Contribution to Policy The study sought to inform the policy decisions on the development of sustainable supply chains strategies to minimize price discrimination across wholesale depots, ensure strict adherence to order timelines and improve on the efficiency and responsiveness to customer demands among University of Ghana http://ugspace.ug.edu.gh 12 retailers in the retail industry. Again, it provided real time information on parameters to ensure proper integration and coordination of supply chain operations performance to government and other policy makers in the retail industry. The study is useful to stakeholders in the F&B industry to implement pragmatic policy decisions to mitigate complexity and fragmentation of retail supply chains in the food and beverage sector to enhance global competition. Again, the direction of supply chain has evolved especially with the advent of e-commence and other on-line services. This needs coherent policy frameworks and deliberate attempt by the policy makers to enhance efficiency and responsiveness of retail operations performance. 1.5.3 Contribution to Practice This contributed to practice by guiding the stakeholders in the food and beverage industry such as managers and practitioners to select appropriate supply chain strategies that enhance operations performance of retailers in the industry. The study also sought to equip and strengthen the stakeholders in the F&B industry with adequate knowledge on retail supply chain integration and coordination to attain competitive edge. The study provided insights to guide practitioners on the better roadmap in retail supply chain management for improved performance. The study also contributed to practice by helping the stakeholders in the industry to identify strategic options to address challenges and ensure sustainable alternative options to improve retail operations performance in the F&B industry of the manufacturing sector. University of Ghana http://ugspace.ug.edu.gh 13 1.6 Scope of the Study The study sought to examine the impact of lean, agile and leagile supply chain strategies on the operations performance of retailers in the Ghanaian food and beverage industry. Specifically, the study examined 363 firms out of 3,913 registered F&B firms across the sixteen (16) regions in Ghana as reported by (GSS, 2006). These firms are into the production and distribution of different kind of foods and beverages. A minimum of 23 F&B firms were considered in each region. These firms include Accra Brewery Limited, Guinness Ghana Limited, Kasserpreko Limited among others. 1.7 Structure of the Research The study is organized into six chapters. Chapter one considered the background of the study, problem statement, purpose of the study, research objectives, research questions, significance of the study, scope of the study and ended with the structure of the research work. Chapter Two looked at the context of the study with major considerations on brief overview of the study area, historical background of F&B industry, challenges of F&B industry, contributions of F&B industry to the economy, opportunities of F&B industry in Ghana, and evaluate policy supports and other supports by Ghana Standard Authority (GSA) in the F&B industry of the manufacturing sector. Chapter Three covered the review of related literature. This is done in three dimensional approaches which include theoretical framework, empirical studies and the conceptual framework. Chapter Four covered the methodology employed for the study and examined the approach for the study, research design, population of the research, sampling size determination, instruments for sample selection, procedure for sample selection, ethical consideration and data analysis tools. Chapter Five considered data presentation and analysis, and discussion of the University of Ghana http://ugspace.ug.edu.gh 14 research findings. Chapter Six detailed the summary of research findings, conclusions and key contributions of the study. University of Ghana http://ugspace.ug.edu.gh 15 CHAPTER TWO CONTEXT OF THE STUDY 2.0 Introduction The context of the study encapsulates brief overview of the study, historical background of F&B industry, examines the challenges of F&B industry, contributions of F&B industry to the economy, opportunities of F&B industry in Ghana, and evaluate policy and other supports initiatives by the Ghana Standard Authority (GSA) in the F&B industry. 2.1 Overview of the Study Area The study is conducted in Ghana which is among the few African continent to become a sovereign country around 1957. Ghana is bordered with Burkina Faso to the North, Togo to the East and Côte D‘Ivoire to the West. Ghana has approximately 239 thousand square kilometres of the total land space with a population of 30.8 billion people (GSS,2021). Ghana is currently described as a middle-income economy with a lot of prospects both in service and manufacturing sector of the economy. The country is rapidly becoming industrialized with much focus on manufacturing, service and commerce. However, the country is faced with issues of rapid urbanization and housing deficits as a result of rapid population growth and migration (GSS, 2010). The country has most of its people engage in petty trading, manufacturing, foods processing, agricultural productions, and service provisions. 2.2 Historical Background of F&B Industry in Ghana The historical antecedent of F&B industry appears to be as old as the existence of man. The contribution of F&B to GDP in Ghana has been varied across several decades. For instance, University of Ghana http://ugspace.ug.edu.gh 16 recent estimates show that the manufacturing sector contributes 4.6 percent of GDP (GSS, 2017) and employs 9.1 percent of the labour force (GSS 2014). The F&B processing subsector added US$812 million to the national economy and constitute the largest share of manufacturing sector to GDP at 30 percent in 2013 (Frazer, 2015) . However, it is observed that since the 1957s, F&B industry has remained a key indicator for the Ghana‘s development and transformation (Ackah & Aryeetey, 2012). The F&B industry together with the manufacturing sector historically were state-owned and depended largely on state partnership and government control in their production and daily operational processes (Owusu & Oteng-Ababio, 2015). In the early 1970s, significant increase and growth in outputs was experienced by the F&B industry (Oteng-Ababio & Grant, 2019). Nevertheless, within few years, diverse realities arose which resulted to a significant decline in the growth and productivity of the food and beverage sector. Rodrik (2015) observed that external factors coupled with unsuitable internal policies between the period 1970s and early 1980s drastically affected the F&B industry. This negatively impacted the export earnings and financial stability of the sector. The F&B industry in Ghana, encompass both global, local, private, public corporations and multi-national firms that are into one or both products for the domestic market and exportation. Economic uncertainty and constant decline in the F&B industry as well as decline in the manufacturing sector performance resulted in the development of some industrial policies such as the Structural Adjustment Programme (SAP) around 1983. In the opinion of Tetteh-Ossom (2013), the SAP initiative constituted the deregulation and privatization of domestic market and the restructuring of government-owned firms. University of Ghana http://ugspace.ug.edu.gh 17 Tetteh-Ossom (2013) emphasized that other initiatives like the Economic Recovery Programme (ERP) were also adopted in 1983. The objective of this initiative was to complement the SAP in restoring the ruined productive and social infrastructure to boost performance in all sectors of the economy. Tetteh-Ossom (2013) postulated that, the F&B sector started displaying positive and strong up-trends as a result of the novel reform initiatives that were adopted. However, this positive up-trends within the F&B industry was not sustainable in the long-run. The economy began to experience depreciation of the domestic currency, severe high-interest rates and rivalry from external markets which affected the F&B industry (Boateng & Ganu, 2012). Bamfo (2012) states that, as a measure to overcome those challenges, several policy interventions were implemented. An example was the Ghana Investment Promotion Centre (GIPC), Act 2013 (Act 865). Before GIPC was promulgated, there was Ghana Investment Centre (GIC) which was established under the Ghana Investment Code 1985 (PNDC Law 116) and mandated to formulate policies to assist both production and manufacturing organizations that were seriously struggling for survival to the prevailing economic developments (Frazer, 2005). Several other policies and initiatives including the Trade and Investment Program (TIP) were adopted to offer the desired funds to enhance industrial production. The declaration of the new investment code (GIPC Act of 1994 to PNDC Law 116) together with the creation of the Ghana Investment Centre institutional and regulatory reforms were implemented (Ministry of Trade and Industry, 2016). Another area of relevance which projected the F&B industry into the limelight was the advent of hospitality industry and e-commerce as people attempted to explore the industry for the purposes of trade (Luther & Debrah, 2012). The University of Ghana http://ugspace.ug.edu.gh 18 traditional view of F&B was seen as a necessity to satisfy basic human needs as espoused by Abraham Maslow‘s Hierarchy of needs. Buatsi (2002) posits that, with the commercialization of F&B industry as a niche of manufacturing sector, F&B industry now contribute significantly to the Gross Domestic Product (GDP). Buatsi (2020) observed that F&B industry contributed approximately US$125m to the GDP of Ghana in 2014 and plays a critical role in the economy by providing several thousand direct and indirect employment opportunities across the value chain. Alternative area worth mentioning is the upsurge in demand for carbonated soft drinks, energy and sports drinks, bottled and sachet water and branded alcoholic beverages which is being driven by population growth, rising urbanisation, the growth of the Ghanaian middle-class and tourism (Blankson, Owusu-Frempong & Mbah, 2004). These factors as aforementioned have gained value as a result of explosion in trade (Odonkor & Odonkor, 2020) contrary to the traditional understanding of the production of food and beverages for mere consumption by peasant farmers. The contemporary view on F&B industry is that, it is one of the few growing industries in consumption-oriented economies like Ghana (Nordhagen, 2020). It is observed that, every year, $120bn to $150bn in value are realized through the use of big data in food consumption although, there is dearth of empirical research on effects of data-specific capabilities on firm performance (Irfan & Wang, 2019). Odonkor and Odonkor (2020) also revealed that, F&B industry until the explosion of e-commerce, did not receive much attention on innovation with regards to proper packaging and coordinated supply chain linkages in the past. Most of these firms only limited their product innovations to internal practices, University of Ghana http://ugspace.ug.edu.gh 19 technologies, and processes that offered them sustainable competitive returns (Blankson, Owusu- Frempong & Mbah, 2004). These limitations exclusively based on internal activities made a lot of firms in the F&B industry become redundant in knowledge and technological expertise outside their boundaries (Nordhagen, 2020). The F&B industry have been regarded as basic, conservative and poor innovative sector (Bigliardi & Galati, 2013) which are susceptible to global technological advancement, altering and face with unstable market environment which are solely dependent on the production processes with uncontrollable factors such as perishability of products and raw materials. The industry has recently received much attention and innovations which are characterised by vertical integration along the industry value chain and relatively better coordinated supply chain linkages in different areas with variety of networks, and fast-paced industrial changes which favour collaboration and expansion in the industry (Bigliardi & Galati, 2013). In this regard, Bigliardi and Galati (2016) indicate that F&B companies are trying to improve their innovation capacity by pursuing an open approach to innovation by exploiting external knowledge paths to market. The F&B sector has become more prominent when we consider its traditional role and contribution to the development of rural areas within the local economies (Bigliardi & Galati, 2013). Again, the F&B industry has the capacity to overcome shocks relative to other productive sectors. In Ghana, F&B industry is a fragmented industry with more than 280,000 firms with research and development investment of 0.53 per cent in terms of turnover (OECD, 2009). In this sense, Forth, Bewley and Bryson (2006) indicate that, the F&B industry is a mature and relatively low-technology sector subjugated by small enterprises. University of Ghana http://ugspace.ug.edu.gh 20 2.3 Contributions of F&B Industry in Ghana The F&B industry in Ghana is noted for its significant contribution to job creation in the country. The majority of lucrative jobs for both skilled and unskilled workforces are deemed to emanate from the food and beverage industry (Grant, Oteng-ababio, & Sivilien, 2019). The F&B industry has over the years addressed Ghana‘s poverty challenges and offered new areas of opportunities for the majority of job seekers in Ghana (Buatsi,2002). Buatsi (2002) argues that the F&B industry through its supply chain which links suppliers, distributors, customers and business service providers provides job opportunities to many Ghanaians. Food Drink Europe, 2013-2014 report avers that, although, F&B industry is fragmented, it is the largest manufacturing sector across several continents in terms of turnover (14.9%) and value added (12.9%). Furthermore, this sector specifically accounts for the top manufacturing activity in terms of turnover in several countries (Wambugu, 2016). In Spain, it accounts for 9.6 per cent of total manufacturing turnover. In terms of structure, it is heavily weighted towards micro-firms (78%). Small companies represent 18 per cent and the remaining 4 per cent are medium and large ones (Forth, Bewley, & Bryson, 2006). The F&B industry provides opportunities for employment and supports a large labour force (Buatsi, 2002). The support provided by the food and beverage industry takes the form of poverty alleviation as those employed by this sector are able to sustain their livelihood. Domie (2013) claims that, Ghana is regarded as being an industrial center where consumer products and industrial activities are carried out within West African sub-regions. Thus, the F&B sector among other sectors constitutes the vast majority of businesses and has over the years expanded to become major contributor to economic growth and development (GSS, 2019). University of Ghana http://ugspace.ug.edu.gh 21 The Ghana Statistical Service (2018) reported that in the year 2019, the manufacturing sector contributed about one-third of total industry revenue generation (GH¢128.4 billion) which represents about (GH₵45.0 billion). Apart from other sectors such as the mining and quarrying sector, the F&B industry is the largest sub-sector in terms of its contribution to Ghana‘s economic growth (GSS, 2019). Again, the Institute of Statistical Social and Economic Research (ISSER, 2017) stated that, the F&B industry through the production of quality goods and services and the payment of taxes remain a key contributor to government revenue in Ghana. Mose et al. (2013) emphasized that notwithstanding the size of the food and beverage industry, the industry has gradually become the number one agent of economic growth, job creation and export income expansion in Ghana. Mose et al. (2013, P375-401) avers that F&B industry has the capacity to ―produce for both the local and international markets, as such it constitutes a significant sector of the Ghanaian economy by adding to foreign exchange and sustainable development dimension‖. The industry also enhances the ―productivity of local markets and effectively utilize productive resources, thereby improving long-term development and economic growth‖ (Mose et al., 2013 P. 375-401). The majority of the F&B firms are found in the urban-towns (Korankye et al., 2016). These firms with the benefits of the existence of already developed infrastructures and ready market accessibility give them competitive edge. Most of the retailers who easily transform into larger scale firms in Ghana are usually located in the regional and industrial areas such as in Accra, Tema, Kumasi, Sunyani, Techiman, Wenchi, Berekum and Tamale (Korankye et al., 2016). These firm as they expand in size, employ more labour which contribute greatly to the economy. University of Ghana http://ugspace.ug.edu.gh 22 2.4 Challenges of F&B Industry in Ghana The continuous rise in the input costs and further depreciation of the cedi against almost all major currencies as well as the fragmentation in the F&B industry appears to have a heavy toll on the sector. avers that inputs such as glass, plastic and ethanol are all imported and the duties on these commodities are calculated in foreign currencies, which affect the cost of production. The depreciation of the cedi has impacted particularly heavily on sachet water producers whose margins are very low (Anyidoho & Steel, 2016). Another issue of grave concern appears to be the erratic power supply. Odotei (2016) claim that erratic power supply negatively affects productivity among players in the F&B industry who have to rely on diesel generators to operate. Again, the number of illicit products and unregulated home brews still dwarfs the legal beverages market and although stakeholders reiterate the importance of regulation, enforcement and financial difficulties perhaps are the major challenges. These affect the profitability levels of the industry and sometimes cause stagnation in the growth trajectory of the F&B industry. F&B processing industry is also confronted with issues related to knowledge management, information integration, operational coordination from farm to market, sustainability, leanness and agility (Anyidoho & Steel, 2016). To harness the full potential, the industry needs a high level of integration from farm to market at all levels and layers. Firms that are large-sized are making significant investments in green production, packaging, design and quality to cope with domestic and international standards. Big data are making significant impacts on logistics and supply chain management through automatic food processing like cleansing, packing and storage (Anyidoho & Steel, 2016). Odotei University of Ghana http://ugspace.ug.edu.gh 23 (2016) observed that despite the contributions of the F&B industry to accelerated growth, job creation and economic development in Ghana, several factors continue to hinder its progress. Ghana‘s business environment remains tough for majority of F&B firms as well as manufacturing firms (Odotei, 2016). The author identified five key obstacles that limits F&B firms as: high competition from imported products, insufficient funding and higher interest rates, lack of government commitment and support, extreme levies, and taxes and high utility pricing. Ackah et al. (2014) states that a fundamental challenge that the food and beverage industry encounters ―is the lack of adequate access to funds and capital‖. These inadequate capital and funding opportunities adversely limit the growth and expansion of the industry. Similarly, Mose et al. (2013) identify a number of factors that endanger the food and beverage industry as erratic power supply, high lending rates, constant increase in fuel prices which repeatedly compel firms to reduce their production capacity. The liberalization of external trade has also introduced some kind of unfair competition from imported goods which always makes the F&B sector less attractive to potential investors. Oppong, Owiredu and Churchill (2014) observed that the scarcity of potential investors due to high levels of the cedi depreciation has constrained most businesses in Ghana including the F&B enterprises. The author argues that most manufacturing firms and other businesses always struggle with the high depreciation level of the Ghanaian cedi. This predicament denies majority of businesses the potential investors they require to expand their operations and has ultimately contributed to their collapse. In Ghana for instance, about 75% of firms in the F&B industry are continually constrained by the high depreciation level of the cedi (Oppong et al., 2014). University of Ghana http://ugspace.ug.edu.gh 24 2.5 Opportunities in F&B Industry in Ghana The F&B industry in Ghana now has more opportunities and prospects for growth and expansion than before. Several initiatives and policies now exist to support firms in Ghana. Sutton and Jenkins (2007) observed that the Financial Sector Adjustment Program (FSAP) which was established in 1987 by the Government of Ghana has provided more accessibility to financial support to firms. The food and beverage sector have equal opportunities to assess such financial opportunities that offer adequate insurance facilities and credit (Apanga, Addah & Sey, 2014). Several multifaceted initiatives have been initiated to expand the industrial output and capacity in the F&B industry within the manufacturing sector. Examples include special interventions by the Ministry of Finance and Economic Planning (MOFEP), Bank of Ghana, Financial Sector Support Project (FSSP) and the Ministry of Trade and Industry (MOTI) support programs (Apanga, Addah & Sey, 2014). The industrial development fund has also been established to reinforce the investment of firms into manufacturing subsector such as food and beverage industry in Ghana. These development funds are accessible by firms through financial institutions in the form of medium/long-term credit facilities to support in the expansion and growth agenda of the manufacturing and other economic sectors of the economy (Pissarides, 1999). 2.6 Policies Implemented to Support F&B Industry in Ghana Several industrial policies and measures have been used by the Ministry of Trade and Industry (MOTI) to enhance efficiency, high productivity, competitiveness and to effectively manage scarce production resources within the food and beverage industry in Ghana. While some of the University of Ghana http://ugspace.ug.edu.gh 25 industrial policies were meant to expand production capacity of firms within the F&B sector, others were intended to expand technological capacity within the industry. For instance, the Industrial Sector Support Program (ISSP) was established in 2010 to help provide some fair- pricing, quality products and services with the aim of boosting competitiveness in both the international and domestic markets (Pokuaa-Duah & Nadarajah, 2020). As part of the efforts of the Ghana government to achieve higher levels of growth in GDP, job creation, expand domestic production capacity and international trade, government of Ghana established the Industrial Sector Support Program (ISSP). This policy was introduced to help revive and drive an active industrial economy that has the capability to offer sustainable growth, increase job opportunities and reduce poverty (Kaplinsky,2000). The Industrial Sector Support Program (ISSP) was effective for some considerable period of time and was primarily driven by the Ministry of Trade and Industry (MOTI) and other supporting bodies. The reports by ISSP showed an overall industrial sector growth, increased the contribution of the food and beverage industry to GDP, increased in the volume and value of exports as well as increased in the flow in foreign and direct investment into the food and beverage industry (Ministry of Trade & Industry, 2016) Another area of support is the establishment of the Ghana Standard Authority (GSA) by government and charged with the duty of promoting industrial standards. Odonkor and Odonkor (2020) claim that since the establishment of GSA in 1963, the institution has contributed greatly to quality standards in Ghana and has greatly enhanced the certification of most local industries. Among the fundamental functions of the GSA is to put in place key standards that are vital for University of Ghana http://ugspace.ug.edu.gh 26 ensuring quality products in the manufacturing sector. Other roles of the authority include inspection, certification and testing (Ghana Standard Authority, 2018). The GSA also continues to set quality standards and quality practices to regulate the activities of firms. The institution has over the years ensure that approved practices and quality standards practices are effectively adhered to by firms. Similarly, it has provided guidance to firms and sanctioned firms that fail to adhere to the set standards by the GSA (Ghana Standard Authority, 2018). In order to boost the development of improved industry standards, GSA adopted the project known as improved standards for industrial development in 2001 as part of private sector-led accelerated industrial development strategy. Other initiative worth mentioning is the introduction of National Quality Awards (NQA) in 2017 by the GSA in collaboration with the Association of Ghana Industry to educate citizenry on standardization products (Ghana Standard Authority, 2018). This initiative recognized and awarded domestic firms that effectively implemented and adhere to quality standards in their daily operations. Among some of the objective of NQA scheme was to show the effect of quality on the performance of firms both domestically and internationally. The NQA also intended to promote reliability of products through quality management strategies 2.7 Major Players in the F&B Industry The Ghanaian food and beverage industry is made up of a network consisting of manufacturers, producers, wholesalers, distributors, retailers and consumers. Kaplinsky (2000) observed that each of these players has a specific impact on supply and demand throughout the value chain. Thus, understanding the similarities and differences between these players and their roles can University of Ghana http://ugspace.ug.edu.gh 27 improve knowledge into the supply chain and economic dynamics between the various players in the industry. According to Pokuaa-Duah and Nadarajah (2020), manufacturers are predominant players in the Ghanaian food and beverage industry. These manufacturers combine produce and raw materials from producers with a range of chemical and nutritional additives to create packaged food products or beverages. Such processed foods and beverages have significantly longer shelf life because of added preservatives, and are generally frozen, dehydrated and canned to further preserve freshness by the manufacturers. The Ghanaian food and beverage industry is made up of several state owned and private manufacturing companies with the leading manufacturers encompassing Guinness Ghana Breweries Limited (GBL) which has about 60% indigenous alcoholic beverage manufacturer, Kasapreko Company Limited (KCL), Accra Brewery Ltd and Voltic Ghana, the market leader in bottled water (Odonkor & Odonkor, 2020a). Among the commonly manufactured food and beverages are minerals, carbonated soft drinks, alcoholic drinks, energy and sports drinks, and processed foods. In Ghana, as food and beverage manufacturers become more demand driven, there is a shift towards more frequent changes in production runs. Thus, manufacturers are faced with the challenge of having an optimal supply plan while simultaneously considering all constraints, cost and capacities across the supply chain. Manufacturers in the Ghanaian food and beverage industry are under pressure to be more agile and flexible in building a supply chain foundation that can help automate daily activities in a way that creates superior competitive advantage (Pokuaa-Duah & Nadarajah, 2020). University of Ghana http://ugspace.ug.edu.gh 28 Wholesalers are another group of key players in the Ghanaian F&B industry. The wholesalers buy the products in bulk from the manufacturers and then sell the products to the retailers. In F&B industry, wholesalers have served as extended warehouses for distributors, granting access to numerous retail firms in the F&B industry in Ghana (Aovare, 2017). The wholesalers have acted as aggregators of demand, buffering manufacturing from small orders and logistics complexities. The wholesalers serve customers who purchase in large quantities, such as restaurants and institutions. However, a key challenge facing wholesalers in the F&B industry in Ghana especially in this current pandemic is inventory optimization (Addo-Tham, Appiah-Brempong, Vampere, Acquah- Gyan, & Gyimah-Akwasi, 2020). The authors argue that while the majority of wholesalers in the F&B industry suffer obsolescence by stocking too much supplies, others have lost competitiveness by stocking little supplies. Odonkor and Odonkor, (2020) posit that the wholesalers in the F&B industry by selling to retailers, have always leverage their economies of scale, and generated profit along the F&B supply chain in Ghana. Kaplinsky (2000) posit that retailers are another group of key stakeholders in the food and beverage industry. These retailers, having received supplies from the wholesalers in the value chain then sell directly to consumers. Kaplinsky (2000) observed that majority of such sales are carried out in local stores and super markets in Ghana. The predominant food and beverages retail outlets remain traditional markets in Ghana. The retail firm‘s stock these products and sell in smaller quantities to customers usually in commodity specialized areas where majority of petty traders are concentrated. University of Ghana http://ugspace.ug.edu.gh 29 In Ghana‘s F&B industry, retail firms closely track the preferences and demands of their customers and uses combination of price, product selection, service, convenience among other strategies to draw customers to their products (Aovare, 2017). It is observed that as a final link in the supply chain from the manufacturer to the consumer, retail firms drive demand for various F&B products in different regions in Ghana, based on consumers demand (Dzeagu-Kudjodji, Adjibolosoo, & Otoo-Arthur, 2019). Dzeagu-Kudjodji, Adjibolosoo, & Otoo-Arthur (2019) argued that in the F&B industry, retail firms undertake several activities including storage, transportation and marketing of products. The finale group of players in the F&B industry are customers. In Ghana‘s F&B industry, customers are either a purchasing organization that buys the products and incorporates them into another products to sell to other customers or a final end user of the product who buys solely for consumption (Abankwah, 2018). Several factors such as prices and quality affect consumers‘ behaviour in the F&B supply chain. Customers within the food and beverage industry place significant emphasis on product quality. Apanga, Addah and Sey (2014) emphasize that in Ghana, consumers prefer to have quality of any product they purchase. However, a notable challenge facing Ghanaian manufacturing as well as the F&B industry is the perception of poor quality customers have about their products. Consumers in general understand quality to mean the overall features of a product that results in full satisfaction. Majority of products manufactured in Ghana fails to adequately meet customer expectations, which has in effect resulted in higher customer dissatisfaction levels (Odonkor, Adom, Boatin, Bansa, & Odonkor, 2011). University of Ghana http://ugspace.ug.edu.gh 30 CHAPTER THREE REVIEW OF RELATED LITERATURE 3.0 Introduction This chapter considered the review of relevant literature. These include reviewed of related theories, the conceptual framework and empirical review. The theoretical review sought to examine related theories which draw relationships between the independent variables and the dependent variables. The conceptual framework modelled the structural relationships of the supply chain strategies, firm‘s performance and the firm‘s financial position as the mediation variable. The empirical review examined experiential evidence of related works on supply chain strategies and the impact on firms‘ performance in the F&B industry. 3.1 Theoretical Foundations of the Study The theoretical review examined two major theories; the Resources-Based View (RBV) Theory and the Dynamic Capabilities Theory. The two theories are useful in examining the relationships that exist between supply chain strategies and their impact on the operations performance of retailers in the F&B industry. 3.1.1 Resource-Based View (RBV) The Resource-Based View (RBV) is a managerial framework which advocates that firms identify and exploit their strategic resources for the purpose of achieving sustainable business and competitive advantage (Ganesh, Murugaiyan & Madanmohan, 2017). The RBV, propounded by Barney in 1991 claims that firms exploit their internal capabilities rather than external factors to achieve and maintain sustainable competitive edge. Resources refer to "all assets, capabilities, University of Ghana http://ugspace.ug.edu.gh https://en.wikipedia.org/wiki/Assets 31 organizational processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness" (Barney,1991, P. 99–120.). Wernerfelt (1984, P. 171–180) posits that capabilities as quoted in Barney‘s book are "a special type of resource, specifically an organizational-embedded non-transferable firm-specific resource whose purpose is to improve the productivity of the other resources possessed by the firm". Competitive advantage is achieved when a firm succeed in implementing value creating strategies that have not been implemented by potential or current competitors (Rugman & Verbeke, 2002). Barney in 1991 indicated that, resources are classified into tangible and intangible. The tangible resources are resources which are physically seen such as land, building, vehicles. The intangible resources are those resources which cannot be seen physically such as patent, know-how, capabilities, skills and trademarks (Wernerfelt,1984). RBV is built around the assumptions that firm‘s resources are both heterogeneous and immobile. The heterogeneity assumption indicates that both tangible and intangible resources of a firm such as the skills, capabilities, know-how, raw materials differ from one organization to another (Peteraf & Barney, 2003). The heterogeneity assumption presumes that a firm must possess unique and different resources, brands and capabilities from its competitors to be able to achieve sustainable competitive advantage (Hoopes, Madsen, & Walker, 2003). This implies that firms need to develop requisite capabilities with anticipation that once developed, its expected effect of improving operations performance will generate competitive edge through superior operations performance. University of Ghana http://ugspace.ug.edu.gh https://en.wikipedia.org/wiki/Competitive_advantage 32 The second assumption is that, resources are immobile thus, resources do not move from one business firm to other business firms, especially within the short term. The assumption of immobility presumes that; resources such as intangible resources should be difficult if not impossible to be replicated by a competitor at least within a short run. The assumption further asserts that intangible resources, including brand equity, knowledge, processes, intellectual property and patent are usually immovable (Rugman & Verbeke, 2002) relative to tangible resources like machinery, equipment and capital which can easily be replicated by rival firms. Again, incorporated in the RBV is VRIN framework which represents Valuable, Rare, Inimitability and Non-substitutability (VRIN) of firm‘s resources. Valuable resources are unique and when exploited judiciously reduces production costs and increases the value offered to the customers (Devi & Kamyabi, 2012). The rarity view assumes that firm‘s resources should be scarce and can only be obtained by one or few firms over a period of time (Taylor & Murphy ,2004). The firm‘s resources are inimitable when the resources are expensive to imitate by rival companies. The non-substitutability of resources refers to resources which cannot be easily substituted (Winter, 2003). Many authors argue however that, the RBV is vague with plethora of ambiguities in its assumptions and that, firms do not really operate in a perfect competitive market and the assumption of heterogeneity and immobility of resources in a long run is impossible (Devi & Kamyabi, 2012). Barney (1991) nevertheless claims that firms that are able to exploit valuable, scarce and inimitable resources can enjoy a sustainable competitive and business advantage in the short run. University of Ghana http://ugspace.ug.edu.gh 33 This theory is therefore relevant to this study since firms need to remain valuable by developing inimitable, rare and non-substitutable resources to ensure that there is a competitive supply chain linkage to enhance effective operational performance among retailers. Again, resources are scarce and must be managed judiciously by organisations to increase efficiency and responsiveness to rapidly changing demands. 3.1.2 Dynamic Capabilities Theory The dynamic capabilities defines the "the firm‘s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments" (Teece, Pisano & Shuen 1997). This theory claims that a firm‘s ability and readiness to react effectively and timeously to external challenges needs a good combination of diverse capabilities such as skills, competences and resources (Cepeda & Vera, 2007). The theory further asserts that firms must be able to develop their resources and competencies to responsively and efficiently change their operations performance (Peteraf, 1993). The ultimate assumption and argument of this theory is that organization's core competencies must be utilize in creating competitive positions which can be built into longer-term business and competitive advantage (Cepeda & Vera, 2007). To keep competitive business advantage within a highly volatile market, firms must constantly reconfigure and develop their core resources as a way of creating various avenues for long-term competitive advantage (Zott, 2003). The strategic objective of business firms has moved from only managing unique resources to encompass the efficient ways of rapidly modifying the resources in fast changing environments (Danneels, 2002). University of Ghana http://ugspace.ug.edu.gh 34 Thus, to stay competitive within the marketplace, firms must continuously build and develop new capabilities in response to the changing market requirements with the skills/routines/processes that are purely unique and tough to replicate by competitors (Chen, Paulraj & Lado, 2004). Therefore, dynamic capability is intended to build novel competitive business advantage that responds the changing market requirements in a more timely manner (Peteraf, 1993). Incorporated in this theory is the view that technology evolves over time. Technological capabilities are recognized as part of the dynamic capabilities which are vital in deciding the firm‘s ultimate success particularly for the technological intense business industries and within the environment of swiftly technological changes (Teece et al., 1997). Dynamic capabilities also assert that dynamic capabilities impacts firm performance positively as they always seek to match resource base of the firm with changes in the environments (Danneels, 2002), create market change (Prashantham & Zahra, 2006); support both the resource-picking as well as capability-building rent-generating mechanisms (Devi & Kamyabi, 2012); and enhance inter-firm operations and performance (Teece et al., 1997). Dynamic capabilities enhances the efficiency, effectiveness and speed of organizational responsiveness to environmental and markets turbulence (Peteraf, 1993), which ultimately strengthens the firm‘s performance. Dynamic capabilities allow ―the firm to take advantage of revenue enhancing opportunities and adjust its operations to reduce costs‖ (Cepeda & Vera, 2007). Through reconfiguration and modification, dynamic capabilities afford the firm a new collection of decision opportunities, which possess the capability to enhance firm performance (Prashantham & Zahra, 2006). Another important view of the dynamic capabilities is that firm‘s survival and growth indicate University of Ghana http://ugspace.ug.edu.gh 35 whether a business firm is capable of adapting and adjusting to its external business environment and the firm‘s capacity to achieve its performance goals such as increase efficiency, sales growth and financial solvency (Taylor & Murphy, 2004). This theory is very useful to this study as firms will need to exploit both their internal and external resources and remain proactive to environmental variabilities and turbulences if the firm must remain relevant in its operations. Again, firms must begin to develop their human resource base with adequate knowledge for achieving sustainable competitive business advantage. The DC theory also guides firms to realise three key objectives: supply products with several configurations (options, colours, sizes and features) in diverse quantities (Stevenson & Spring, 2007); swiftly respond to the changes in customer needs (Huang et al., 2002; Qi et al., 2011); and remains adaptable (Devi & Kamyabi, 2012). 3.1.3 Theoretical Implications on Supply Chain Strategies and Firm’s Performance The ability of business firms to effectively compete within the market is replicated by extent of capability they at their disposal (Magutu, 2013). This determines the way manner firms utilize their assets, knowledge and resources (Magutu, Aduda & Nyaoga, 2015) to convert raw materials, transport and create value along the supply chain. Supply chain management and efficient retail operations performance involves the use of resources and value creation which require competencies and capabilities which must be heterogeneous and non-transferable (Routroy, 2009) to achieve sustainable competitive advantage. These capabilities however, may not last in a long run as it keep changing over time through the basic process of depletion and accumulation (D. Li & O‘Brien, 2001). University of Ghana http://ugspace.ug.edu.gh 36 Another important area of emphasis is the technological dynamic capabilities which seeks to apply know-how, learning process, business secret, and organizational goodwill to generate advantage for the firms since these capabilities are tough to be attained from external business and markets environments. The application of these technological capabilities in transforming and incorporating supply chain linkages to enhance supply chain values and improve on retail operations performance is imperative (Magutu, 2013). Supply chain management involves the use of competencies which are intangible resources which are valuable, rare, inimitable and non- substitutable (Qrunfleh & Tarafdar, 2013). Firm‘s capabilities create competitive advantage Hines and McGowan, (2005) and frequent introduction of the new product and service to the market (Stank, Esper, Goldsby, Zinn, & Autry, 2019). The dynamic supply chain linkages that create a series of short-term competitive advantage and enhance retail operations performance. The current global competitive trend makes it imperative for firms to provide their customers with services and products which are reliable with full bundle of benefits at relatively lower price at the right time and place (Qrunfleh & Tarafdar, 2013). Again, firms that provide differential performance and efficiently manage the supply chain as a strategic resource that drives market value are sustainable (Routroy, 2009). The resource-based view of the firm emphasizes on sustainable and long-term competitive advantage whiles the dynamic capabilities view focuses on developing core capabilities to response effectively to changing business conditions. The dynamic capabilities theory advocates the building of relevant strategies by firms so as to adjust to essential discontinuous modification, while keeping minimum capability standards as a way of ensuring competitive survival (Hines & McGowan, 2005). Firms must therefore develop competitive and flexible University of Ghana http://ugspace.ug.edu.gh 37 supply chain practices to make changes inexpensive while ensuring transformation and reconfiguration ahead of the competition (Stank et al., 2019). Both theories emphasized on distinctive competencies as a form of competitive superiority, appropriability, inimitability of resources to create sustainable competitive edge. The resources must also be durable with a longer lifespan and non-substitutability to create a network of distinctive channels (Stank et al., 2019). The application of these theories in this study is suitable since supply chain must be sustainable, efficient, and responsive to ensure coordination and linkages across firms (Qrunfleh & Tarafdar, 2013) . 3.2 Conceptual Framework Conceptual framework is explained as assumptions and concepts that direct and support research (Robson & McCartan, 2016). The framework generally is a pictorial presentation of the main variables of the study. The objective of the study is to investigate the influence of supply chain strategies on the operations performance of organizations. Thus, supply chain strategies are the independent variables while operations performance formed the independent variable. This study additionally sought to know the mediating effect of firms‘ financial position of firms on the relationship between supply chain strategies and operations performance. Thus, financial position is adopted as the mediating variable. The study adopts agile supply chain, lean supply chain and leagile supply chain as the dimensions of supply chain strategies. Similarly, the study adopts efficiency and responsiveness as the dimensions for measuring operations performance. Financial position of the firm is measured using liquidity ratio, profitability ratio, solvency ratio and management efficiency ratio. Figure 3.1 displays the relationship between supply chain strategies and firm performance. University of Ghana http://ugspace.ug.edu.gh 38 The diagram further displays that financial position mediate between supply chain strategies and firm performance. Figure 3.1: Conceptual Framework 3.2.1 Supply Chain Strategies Supply chain strategies specify the key supply chain goals; they define the main focus of supply chains in relation to cost, responsiveness efficiency and quality. The key supply chain processes and activities encompassing inventory management, procurement, customer service and logistics are greatly affected by the choice of supply chain strategy (Qi et al., 2011). Relying on the idea that supply chain strategy is effectively executed through diverse unique set of activities or processes, Day (1994) observed that supply chain strategy, when effectively executed can result in superior performance. This idea is firmly backed by the notion of complementarity which advocates a good match between firms‘ strategy, practices and processes. An effective supply chain strategy is a basic requirement for achieving the desired firm performance such as profit. Thus, supply chain strategies should be adopted alongside and in complement with other specific supply chain practices (Zhang, Wang, & Wu, 2012). University of Ghana http://ugspace.ug.edu.gh 39 Specifically, this study identified and adopted three key supply chain strategies which encompassed lean supply chain strategy, agile supply chain strategy and leagile supply chain strategy. 3.2.2 Lean Supply Chain Organizations in recent times are working hard to adopt and implement the philosophy of waste elimination in their operations. Thus, lean supply chain strategy is now fundamental in the product development and innovative processes of organizations (Naim & Gosling, 2011). Lean supply chain strategy unlike the agile supply chain supply chain strategy focuses on minimizing cost. Ellinger (2000) observed that a fundamental principle of lean strategy is that every stage in the production process must add value for customers and that every source of waste must be removed. Though the principles of lean supply chain strategy were developed purposely for production and manufacturing organizations, numerous studies have demonstrated that lean principles are equally utilized in service organizations and have resulted in enhanced firm performance (Agarwal, Shankar, & Tiwari, 2006). Similarly, McIvor (2001) argues that lean principles of supply chain strategy can equally be utilized in the food and beverage industry. The notion of waste in the production processes and practices is far-reaching and comprises needless inventory, mistakes, unplanned orders and inappropriate processes and procedures (Zareia, Fakhrzad, & Paghaleh, 2011). The authors observed that lean strategy helps to effectively marry the two key conflicting objectives of quality and cost of production. University of Ghana http://ugspace.ug.edu.gh 40 According to Fearne and Fowler (2006), implementing lean supply chain principles improves value for customers by removing wasteful activities through the optimization of processes. The authors argue that organizations that implement lean strategy enjoy higher quality, less mistakes, efficient resources utilization and therefore enhanced performance. Typically, the majority of production processes are designed to minimize waste. The consequence is that inefficient inventory management and production processes lead to ineffective resources utilization and dissatisfied customers (Erridge & Murray, 1998). The usage of lean supply chain strategy through continuous improvement in manufacturing and production organizations can be achieved through the utilization of three main process management strategies; process automation and optimization, process standardization and data visualization. The standardizing of manufacturing processes helps in the elimination of bottlenecks and focus on quality products through effective processes and efficient resources utilization (Zareia, Fakhrzad, & Paghaleh, 2011). Similarly, while process visualization visually present the methods, processes, elements and means that should be clearly known by all players in the supply chain, process standardization defines key processes in order to make sure that such key processes are understood and well standardized across the whole firm (Pearson, Masson, & Swain, 2010). Fundamentally, the lean thinking strategy focuses on improving efficiency within firms and along the whole value chain of products. Since production activities and innovative processes are intended to increase efficiency in organizational processes as well as products, lean thinking organizations should concentrate on continuously improving activities. Lean supply chain strategy implementation results in improving efficiency within organizations that leads to more University of Ghana http://ugspace.ug.edu.gh 41 availability of resources for maximum production (Zareia et al., 2011). Hence, it is hypothesized that; H1: Lean supply chain strategy positively influences food and beverage firm‘s efficiency. H2: Lean supply chain strategy positively influences food and beverage firm‘s responsiveness. 3.2.3 Agile Supply Chain Supply chain agility is considered crucial for firms to produce products in accordance with changing and dynamic customer needs as well as requirements. In order for firms to effectively manufacture products that sufficiently respond to customers‘ requirements, the firms supply chain must remain agile, meaning, responding speedily to the volatile customer demands and shorter life cycles of products (Gligor, Esmark, & Holcomb, 2015). The concept of supply chain agility is very essential for introducing novel products as a way of responding to the dynamic needs of customers (Qi et al., 2011) and effectively reacting to variations in the delivery needs of both time and quantity (Yusuf, Gunasekaran, Adeleye & Sivayoganathan, 2004). The agile supply chain strategy is considered as one key supply chain strategy with an overall intention of timely and quick response by the whole supply chain to customer varying needs (Huang et al., 2002). Unlike the lean supply chain strategy, the agile supply chain strategy uses customers‘ service satisfaction as market winning strategy. The agile supply chain strategy is generally intended to achieve the following three key objectives: supply products with several configurations (options, colours, sizes and features) in diverse quantities (Stevenson & Spring, 2007); swiftly respond to the changes in customer needs (Huang et al., 2002; Qi et al., 2011); and to cope effectively with unexpected changes in product life cycles which means adaptability (Lin, Chiu, & Chu, 2006). University of Ghana http://ugspace.ug.edu.gh 42 Lin, Chiu, & Chu (2006) further argue that the ensuing two supply chain practices: Strategic customer relationship management and supplier partnership are required to achieve the key objectives. Supply chain agility, which encompasses firm‘s capacity to speedily adjust its operations as well as tactics, helps the firm to manufacture and produce in adaptation to product variety, unexpected changes in product volumes and to sense changes in market and customer requirements (Huang et al., 2002; Qi et al., 2011). Understanding the effects off supply chain agility on firm performance is therefore an essential concept considering how contemporary firms can effectively produce and supply amidst the dynamic markets, volatile demand and products with short life cycles. The agile supply chain strategy transmits its impacts on the performance of firms through diverse practices. Firstly, firms initiate strategic and effective supplier partnerships thus they are able to implement process integration linkages and relationships with their key suppliers. This enables them undertake initiatives including sharing ideas, new market opportunities identification, building greater knowledge and insights of raw materials and practicing the approach of continuous improvement with their key suppliers (Saeed, Malhotra, & Grover, 2011). Given the wider range and in-depth interactions with suppliers, firms can be more flexible in order to innovatively manage the fluctuating competitive opportunities and pressure. Lee (2004) observed that agile strategy points to two essential information requirements. The first relates to on time access to key information about market trends, preferences of customers and competitive actions needed in order to respond quickly to changing demands through new products introduction. Secondly, key information that enhances co-ordination and collaboration with supply chain players such as on time schedules exchanges, inventory and lead times are University of Ghana http://ugspace.ug.edu.gh 43 required for easily designing and supplying those products and efficiently executing inter-firm dealings and other processes (Saraf, Langdon, & Gosain, 2007). Hence, it is hypothesized that; H3: Agile supply chain strategy positively influences food and beverage firm‘s efficiency. H4: Agile supply chain strategy positively influences food and beverage firm‘s responsiveness. 3.2.4 Leagile Supply Chain The leagile supply chain concept has been applied in both the services and manufacturing contexts (Riberio, Barata, & Colombo, 2009). The leagile supply chain concept is commonly accepted by many researchers as an agile supply chain concept which employs various principles of lean in managing the supply chain (Zhang et al., 2012). The leagile supply chain has both agile and lean characteristics. It seeks to combine both low cost that governs lean principles with flexibility offered by the agile capability. Leagile strategy is mostly achieved through effective supply chain vis