Economic aspects of integrating the supply chain in the herbal industry in Poland

Abstract

PURPOSE: The main purpose of the article was to assess the level of integration in the supply chain in the herbal industry. The specific objectives were to identify entities operating in the herbal industry and to analyse the relationship between individual links in the supply chain.

DESIGN/METHODOLOGY/APPROACH: The research period covered the years 2016-2019. The source material was the primary data. The interviews were conducted with entities representing two links in the supply chain - suppliers of herbal raw materials from field crops and from the natural state of the Lubelskie and Podlaskie voivodeships, as well as a plant for processing herbal raw materials. The Supply Chain Integration’s Degree Measure (SCIDM) indicator was used to achieve the main purpose.

FINDINGS: The empirical results show that before 2001 the return in the U.S. was high and when the dollar was appreciated, after 2001, the same return became negative and the dollar was depreciated, but after 2004 the returns have growing positively for the U.S., and the returns for the Euro-zone are falling.

PRACTICAL IMPLICATIONS: It was found that the level of integration in the supply chain in the herbal industry was low, which was influenced by the limited relationships and the type of dependencies between the participants of the chain. The factor contributing to the low level of integration was the significant fragmentation and collection of herbs by hundreds of individual collectors from natural sites. The situation was slightly better on the side of recipients, where the degree of integration was in the middle range.

ORIGINALITY/VALUE: Development of a herbal supply chain model and assessment of its level of integration. Individual links in the studied supply chain were described and the relations between them were identified.