Integration of SWOT-AHP Approach for Measuring the Critical Factors of Dairy Supply Chain
Abstract
:1. Introduction
2. Literature Review
Research Gaps
3. Methodology
AHP Approach
- Preparation of the goal: Assessing the CFs to find their related priority.
- Forming a pairwise assessment matrix: Pairwise assessment matrixes are formed from expert’s feedback. The pairwise assessment matrix between the factors is accomplished by Saaty’s scale (Table 1).
- Determination of the Eigenvalues and Eigenvectors and comparative weights: The outlined pairwise comparison matrices are worked to establish the Eigenvalues and Eigenvectors and to compute the relative position of CFs.
- Assessment of the consistency ratio (CR): It is calculated to confirm the reliability of pairwise comparisons, as follows.CR = CI/RI,
4. Analysis and Results
4.1. Identification of CFs
A. Strength Factors |
S1. The purchasing power of the consumers is on the upswing with a growing economy and continually increasing population (PP). |
S2. Milk consumption in northern India is a regular part of the dietary program irrespective of the region and hence demand is likely to rise continuously (MC). |
S3. Labor cost is also fairly low which make the dairy industry a cost competitive (LC). |
S4. Highly trained and qualified technical manpower is available at all levels to support R&D, as well as industry operations (RD). |
S5. Provides employment to the rural population, especially to women (WE). |
S6. A regular source of income for the farmers (FI). |
S7. Use of two axis payment (based on Fat and SNF) system provides good milk producing price to the farmers (FP). |
B. Weakness Factors |
W1. Wastage of Water is an issue being faced by the dairy industry (WW). |
W2. Poor roads connectivity to the villages makes milk procurement problematic (BR). |
W3. Indian dairy market is divided into the unorganized and organized market out of which only 20% of the market is organized (OU). |
W4. The two-axis payment system is good but static in nature, and the milk prices paid to the farmers are not revised regularly, due to which farmers get low milk prices as compared to the unorganized sector (PS). |
W5. The distribution sector needs improvements and investments in the logistics and transportation phase (TF). |
W6. More refrigerated vehicles needed because of high perishable nature of milk products (AT). |
W7. Operator’s negligence is also a big issue in the milk processing plants. They need some strict rules and surveillance systems like CCTV and biometrics (ON). |
W8. Lack of water treatment plant for processed water (WT). |
W9. Use of plastic films which cause great danger to the environment, as well as to human health (PF). |
C. Opportunity Factors |
O1. Low milk output of animals makes a vast scope for improvement in milk production (AO). |
O2. Potential of export, due to low production costs (EP). |
O3. Use of dynamic payment system will lead to a better relationship between farmers and the organization, and it will also increase the farmer’s profit (DPS). |
O4. The packaging material may be replaced either with good quality cardboard, paper or glass bottles (PM). |
O5. Making the farmers aware of the milk quality issues and chemical contaminants, as well as residual antibiotics (LA). |
O6. The introduction of effective information systems will smoothen the flow of information throughout the dairy supply chain (IT). |
O7. Use of automated milk collection units (AMC) will lead to: |
O7.1. Savings in quantity of sample milk |
O7.2. Savings of chemicals and detergents |
O7.3. Savings of expenditure on glassware. |
O7.4. Savings in stationery and time. |
O7.5. Savings in expenditure on staff. |
O7.6. Transparency at the collection level. |
O8. Expansion of plant and investing in technological innovations and new technology will produce more jobs and self-employment opportunities (EP). |
D. Threat Factors |
T1. Low supplier satisfaction, as well as trust issues, if the dynamic payment system does not introduce into the milk procurement policy of the dairy industry (SS). |
T2. People are not willing to pay more for high-quality products, due to high price sensitivity of dairy products (HP). |
T3. The market competition is increasing gradually, due to the presence of new players in the market (MC). |
T4. High investment needed in R&D sector for new and featured products (RDI). |
4.2. Selection of CFs for AHP
A. Strengths |
S4. Highly trained and qualified technical manpower is available at all levels to support R&D, as well as industry operations (RD). |
S5. Provides employment to the rural population, especially to women (WE). |
S6. A regular source of income for the farmers (FI). |
S7. Use of two axis payment (based on Fat and SNF) system provides good milk producing price to the farmers (FP). |
B. Weaknesses |
W1. Wastage of Water is an issue being faced by the dairy industry (WW). |
W3. Indian dairy market is divided into the unorganized and organized market out of which only 20% of the market is organized (OU). |
W5. The distribution sector needs improvements and investments in the logistics and transportation phase (TF). |
W8. Lack of water treatment plant for processed water (WT). |
W9. Use of plastic films which cause great danger to the environment, as well as to human health (PF). |
C. Opportunities |
O2. Potential of export, due to low production costs (EP). |
O3. Use of dynamic payment system will lead to a better relationship between farmers and the organization, and it will also increase the farmer’s profit (DPS). |
O6. The introduction of effective information systems will smoothen the flow of information throughout the dairy supply chain (IT). |
O7. Use of automated milk collection units (AMC). |
D. Threats |
T1. Low supplier satisfaction, as well as trust issues, if the dynamic payment system does not introduce into the milk procurement policy of the dairy industry (SS). |
T2. People are not willing to pay more for high-quality products, due to high price sensitivity of dairy products (HP). |
T3. The market competition is increasing gradually, due to the presence of new players in the market (MC). |
T4. High investment needed in R&D sector for new and featured products (RDI). |
4.3. Application of AHP
Construction of the Pairwise Assessment Matrix
4.4. Final SWOT Analysis
- 1st Rank: Usage of plastic films for packaging dairy products.
- 2nd Rank: Execution of effective information technology systems.
- 3rd Rank: Supplier trust and satisfaction, as well as timely and direct payment to farmers.
- 4th Rank: Womens’ empowerment.
4.5. Determining the Preference Weight
4.6. Analysis of Results and its Implication
- The use of plastic films (PF) ranks first on the priority list and it has the highest priority in comparison to the other critical factors in this study. This factor is critical to the environment point of view also.
- The execution of effective information technology systems (IT) ranks second on the priority list and it plays an important role in smoothening the dairy supply chains.
- The supplier satisfaction and trust (SS) holds the third place in the priority list which is a must variable in any supply chain system, irrespective of the industry or sector.
- Women Empowerment (WE) acquires the fourth important level. This factor is basically the industry-specific and it is the major source of employment and involvement of women in the dairy industry. This also implies to the rural empowerment of India population.
5. Conclusions
Limitations and Future Scope
Author Contributions
Funding
Conflicts of Interest
References
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Score | Definition |
---|---|
1 | Equal importance of both factors |
3 | Limited importance of one factor over another |
5 | Strong importance of one factor over another |
7 | Very strong importance of one factor over another |
9 | Extreme importance of one factor over another |
2, 4, 6, 8 | Intermediate value between two close judgments |
N | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
---|---|---|---|---|---|---|---|---|
R.I. | 0 | 0 | 0.58 | 0.98 | 1.12 | 1.24 | 1.32 | 1.41 |
Priority Matrix (a) | Weight Matrix (W) | Overall Priority | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
S4 | S5 | S6 | S7 | S4 | S5 | S6 | S7 | Weight (W) | Ranking | a*W | |
S4 | 1 | 1 | 0.5 | 2 | 0.23529412 | 0.39473684 | 0.10344828 | 0.22222222 | 0.23892536 | 3 | 0.95639909 |
S5 | 1 | 1 | 3 | 3 | 0.23529412 | 0.39473684 | 0.62068966 | 0.33333333 | 0.39601349 | 1 | 1.730122297 |
S6 | 2 | 0.2 | 1 | 3 | 0.47058824 | 0.07894737 | 0.20689655 | 0.33333333 | 0.27244137 | 2 | 1.107354127 |
S7 | 0.25 | 0.333333333 | 0.333333333 | 1 | 0.05882353 | 0.13157895 | 0.06896552 | 0.11111111 | 0.09261978 | 4 | 0.375169404 |
Sum | 4.25 | 2.533333333 | 4.833333333 | 9.000000001 | Sum = 4.169044918 | ||||||
CI = 0.056348306 | |||||||||||
RI = 0.98 | |||||||||||
CR = CI/RI = 0.057498272 |
Priority Matrix (a) | Weight Matrix (W) | Overall Priority | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
W1 | W3 | W5 | W8 | W9 | W1 | W3 | W5 | W8 | W9 | Weight (W) | Ranking | a*W | |
W1 | 1 | 3 | 2 | 1 | 0.333333333 | 0.183486239 | 0.455696205 | 0.166666667 | 0.119999996 | 0.133333333 | 0.211836488 | 2 | 1.218973494 |
W3 | 0.2 | 1 | 3 | 3.0000003 | 0.5 | 0.036697248 | 0.151898735 | 0.25 | 0.360000023 | 0.2 | 0.199719201 | 3 | 1.07529139 |
W5 | 0.25 | 0.25 | 1 | 0.333333333 | 0.333333333 | 0.04587156 | 0.037974684 | 0.083333333 | 0.039999999 | 0.133333333 | 0.068102582 | 5 | 0.344438747 |
W8 | 1 | 0.3333333 | 3 | 1 | 0.333333333 | 0.183486239 | 0.050632907 | 0.25 | 0.119999996 | 0.133333333 | 0.147490495 | 4 | 0.754491533 |
W9 | 3 | 2 | 3 | 3 | 1 | 0.550458716 | 0.30379747 | 0.25 | 0.359999987 | 0.4 | 0.372851235 | 1 | 2.05457833 |
Sum | 5.45 | 6.5833333 | 12 | 8.333333633 | 2.5 | Sum = 5.447773494 | |||||||
CI = 0.111943374 | |||||||||||||
RI = 1.12 | |||||||||||||
CR = CI/RI = 0.099949441 |
Priority Matrix (a) | Weight Matrix (W) | Overall Priority | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
O2 | O3 | O6 | O7 | O2 | O3 | O6 | O7 | Weight (W) | Ranking | a*W | |
O2 | 1 | 4 | 0.333333333 | 3 | 0.224719101 | 0.484848485 | 0.166666669 | 0.333333322 | 0.302391894 | 2 | 1.289368386 |
O3 | 0.25 | 1 | 0.333333333 | 2 | 0.056179775 | 0.121212121 | 0.166666669 | 0.222222215 | 0.141570195 | 3 | 0.549607727 |
O6 | 3 | 3 | 1 | 3.0000003 | 0.674157303 | 0.363636364 | 0.500000008 | 0.333333356 | 0.467781758 | 1 | 2.064436511 |
O7 | 0.2 | 0.25 | 0.3333333 | 1 | 0.04494382 | 0.03030303 | 0.166666653 | 0.111111107 | 0.088256153 | 4 | 0.340054317 |
Sum | 4.45 | 8.25 | 1.999999967 | 9.0000003 | Sum = 4.243466941 | ||||||
CI = 0.081155647 | |||||||||||
RI = 0.98 | |||||||||||
CR = CI/RI = 0.082811885 |
Priority Matrix (a) | Weight Matrix (W) | Overall Priority | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
T1 | T2 | T3 | T4 | T1 | T2 | T3 | T4 | Weight (W) | Ranking | a*W | |
T1 | 1 | 3.0000003 | 3 | 3.0000003 | 0.521739149 | 0.333333356 | 0.4 | 0.642857166 | 0.474482417 | 1 | 2.051035281 |
T2 | 0.3333333 | 1 | 0.5 | 0.333333333 | 0.173913032 | 0.111111107 | 0.066666667 | 0.071428567 | 0.105779843 | 4 | 0.427079001 |
T3 | 0.25 | 2 | 1 | 0.333333333 | 0.130434787 | 0.222222215 | 0.133333333 | 0.071428567 | 0.139354726 | 3 | 0.562996021 |
T4 | 0.3333333 | 3 | 3 | 1 | 0.173913032 | 0.333333322 | 0.4 | 0.214285701 | 0.280383014 | 2 | 1.17394751 |
Sum | 1.9166666 | 9.0000003 | 7.5 | 4.666666967 | Sum = 4.215057813 | ||||||
CI = 0.071685938 | |||||||||||
RI = 0.98 | |||||||||||
CR = CI/RI = 0.073148916 |
Final Priority Matrix (a) | Weight Matrix (W) | Overall Priority | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
S5 | W9 | O6 | T1 | S5 | W9 | O6 | T1 | Weight (W) | Ranking | a*W | |
S5 | 1 | 0.333333333 | 0.333333333 | 0.5 | 0.111111111 | 0.153846154 | 0.090909091 | 0.076923077 | 0.108197358 | 4 | 0.434537684 |
W9 | 3 | 1 | 2 | 2 | 0.333333333 | 0.461538462 | 0.545454546 | 0.307692306 | 0.412004662 | 1 | 1.696192696 |
O6 | 3 | 0.33333333 | 1 | 3.00000003 | 0.333333333 | 0.153846153 | 0.272727273 | 0.461538464 | 0.305361306 | 2 | 1.290598294 |
T1 | 2 | 0.5 | 0.33333333 | 1 | 0.222222222 | 0.230769231 | 0.09090909 | 0.153846153 | 0.174436674 | 3 | 0.698620822 |
Sum | 9 | 2.166666663 | 3.666666663 | 6.50000003 | Sum = 4.119949497 | ||||||
CI = 0.039983166 | |||||||||||
RI = 0.98 | |||||||||||
CR = CI/RI = 0.040799149 |
© 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
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Mor, R.S.; Bhardwaj, A.; Singh, S. Integration of SWOT-AHP Approach for Measuring the Critical Factors of Dairy Supply Chain. Logistics 2019, 3, 9. https://doi.org/10.3390/logistics3010009
Mor RS, Bhardwaj A, Singh S. Integration of SWOT-AHP Approach for Measuring the Critical Factors of Dairy Supply Chain. Logistics. 2019; 3(1):9. https://doi.org/10.3390/logistics3010009
Chicago/Turabian StyleMor, Rahul S., Arvind Bhardwaj, and Sarbjit Singh. 2019. "Integration of SWOT-AHP Approach for Measuring the Critical Factors of Dairy Supply Chain" Logistics 3, no. 1: 9. https://doi.org/10.3390/logistics3010009