DEFINING THE NOTIONS OF MANAGEMENT OF SUPPLY CHAINS, VALUE CHAINS AND CLUSTERS IN AGRICULTURE

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  • Vladimir Mitrović MSc; PhD student; Faculty of Organizational Sciences in Belgrade
  • Jovan Mitrović Full Professor; Faculty of Economics in Kosovska Mitrovica

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Supply chain management as a new business philosophy in today’s competitive conditions is a source of numerous advantages for those enterprises that apply it. Due to its dynamic structure, it is a much wider term than that of logistics management, because it encompasses the process of conceiving, developing, optimizing and managing internal and external components of acquisition, transformation of material and distribution of finished products or services in accordance with the business strategic goals. The aim of the supply chain management is the creation of as great a value as possible for all value chain participants, especially for the final consumer, as he is at the end of the system of value creation and he validates the quality of supply chain via his purchase. When all enterprises –participants in the supply chain – do their business separately and act on their own separate business strategies, the sum of their expenses surpasses the expenses generated by integrated business of these enterprises within the supply chain. It is precisely because of this fact that, when an enterprise creates a unique system of goods and information flow with other members of the chain, it in fact enhances the efficiency of managing the entire chain. In that way, the value of the whole system increases for the consumer and competitive advantage of the chain is created. Since the clusters occur by connecting enterprises or chains of new value creation, the rest of this paper explains the meeting points between cluster concept and supply chain concept respectively, with special emphasis on agricultural clusters. The basic idea was that agricultural clusters are a geographical concentration of mutually connected SMEs, specialized suppliers and service providers, companies in related businesses, scientific and educational institutions, and government bodies and agencies in the sectors of agriculture and rural development. Therefore, the network of interdependent enterprises (individual agricultural farmsteads), within agricultural clusters and related institutions, confirms that within every cluster there are numerous supply chains, that is, that the supply chain management is an integral part and an indispensable factor of a cluster. At the same time, there is a complementarity and symbiosis between the concept of supply chain management and cluster concept, that is, their combination can effectively advance the competitive advantage both of the enterprises (individual agricultural farmsteads) and consequently regional and national economic competitiveness. The geographical proximity of cluster participants enables a more efficient access to specialized resources, information, human resources, institutions, and trainings; facilitates the coordination of activities within enterprises (individual agricultural farmsteads) as well as among cluster members; creates larger possibilities for innovation; stimulates permanent comparison of performances and of creating more successful business models, so-called best practices; and contributes to the commercialization of products and services and entering the new markets, as well as creating of new enterprises (individual agricultural farmsteads). More specifically, doing business in a cluster environment stimulates the competitiveness of enterprises (individual agricultural farmsteads) and affects the promotion of supply chain management within enterprises (individual agricultural farmsteads).

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2022-01-02