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TOURISMSUPPLYCHAINS:ACONCEPTUALFRAMEWORK

PairachPiboonrungroj1andStephenM.Disney2

LogisticsSystemsDynamicsGroup,CardiffBusinessSchool,AberconwayBuilding,ColumDrive,Cardiff,UK,CF103EU

AbstractThe literature on tourism supply chainmanagement (TSCM) is reviewed.Weexplore currentTSCM research in academic databases, namely Scopus, ABI/INFORM Global (Proquest),ScienceDirect and EBSCO as well as Google Scholar. Accordingly, a systematic literatureevaluation is conducted toobtainanoverviewof thecurrentstateof researchonTSCM.WefoundthatthereislimitedamountofresearchonTSCM.Furthermore,thefindingshowsthatthe existing research frameworks for TSCM do not yet provide a holistic view of TSCM.Moreover, we found that the current issues in TSCM are concerned with applying SCM totourism management. Thus, we propose a new framework for research on TSCM. Thenpotentialresearchquestionsarediscussedandsuitableresearchmethodsareidentified.Keywords: tourismmanagement,servicesupplychainmanagement,literaturereview.1. Background

No matter what the economic climate, tourism has a significant impact on global and local economies (UNWTO 2009, Antunes 2000). During economic booms, the tourism (especially international tourism) sector absorbs wealth from people on trips away from their homes (Kim et al. 2006; Lee and Change 2008). On the other hand, during an economics crisis, domestic tourism is one of the key mechanisms for restoring the economy. This could be because many governments see that tourism can also create new jobs (Seckelmann 2002; Page 2009). Tourism has been recognised as a complex system (Jafari 1974; McKercher 1999; Smith 1994; Véronneau and Roy 2009). Business management in the tourism industry critically needs to consider supply chain perspectives not only to increase their efficiency and profitability (Zhang et al. 2009; Véronneau and Roy 2009) but also to ensure sustainability (Schwartz et al. 2008). Furthermore, Tourism Supply Chain Management (TSCM) is currently emerging as a new research agenda (Zhang et al., 2009). One of the reasons for this is that supply chain management (SCM) has already become a critical source of an organisations competitive advantage (Christopher 2005). Therefore SCM is considered to be a vital part of any kind of business. However, research on TSCM is still rather immature and very limited at the moment (Zhang et al., 2009). Consequently, the objective of this study is to provide a research framework for TSCM research. The potential research topics in TSCM are also identified.

1 PhD candidate and corresponding author (Email: [email protected]) 2 Senior Lecturer in Logistics and Operations Management, Cardiff Business School

PhD Networking Conference Piboonrungroj and Disney Exploring Tourism III: Issue in PhD research

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2. Literaturereview

To obtain the current state and evolution of TSCM research, we conducted a systematic literature search of the academic databases; Scopus, ABI/INFORM Global (Proquest),ScienceDirectandEBSCO3 as well asGoogleScholar using the keywords of, “tourism supplychain”, “travel supply chain”, and “hospitality supply chain”. Then we found that TSCM research is currently very limited. There were only 44 studies found in these databases. Most of TSCM literature has been published in 2008 and 2009 (29 papers or 66%). Figure 1 highlights the quantity of TSCM research over time. We found that there are two stages of TSCM research. The first stage is the era before 2007 where there are only conceptual‐framework papers and no empirical studies conducted. Secondly, in another stage since 2007, the number of TSCM research has rapidly increased. Moreover, in this stage of TSCM research, more empirical studies are published than conceptual framework papers.

Figure1:Trendinresearchontourismsupplychainmanagement Furthermore, we employed a content analysis to identify the main focus of each paper. Methodology and the geographical focus of the research will be classified if the study is empirical research. The findings show that a half of empirical studies were found in Europe whereas approximately one‐third of empirical studies were in Asia. Surprisingly, there are only 12% of empirical studies were found in the Americas, all in Canada. Within Europe, most empirical studies were conducted in the UK, Spain and Finland (4, 2, and 2 studies respectively). On the other hand empirical studies on TSCM in Asia are only in China and Thailand (4 and 2 studies respectively). It could be argued that empirical research on TSCM tends to be conducted only on the most famous tourist destinations. Considering the research methodology, a case study approach is a dominant choice (14 studies). There are only three works using quantitatively approaches. Moreover, the result shows that all studies conducted in Europe employed the case study approach. This significant role of case study approach in TSCM research could be due to the advantage of the case study that can gain depth and insights from the complex phenomenon. Details of the previous literature on TSCM can be found in Appendix A.

3 These databases include over 14,000 scholarly journals in business, management, and social science as well as trade publications.


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3. Whatarethetourismsupplychains?

This study offers a four‐step approach to define the tourism supply chains.

(1) Definingtourismindustry

The confusion of the terminologies between tourism, travel and hospitality could mis‐lead researchers (Pizam 2009). Therefore, it is critical to clarify the definition of tourism. Firstly, services provided by the hospitality and travel industry are partly for tourism purpose. Moreover, there are also non‐tourist customers in both the hospitality industry and the travel industry. Precisely, we can identify distinct activities in the tourism industry by considering whether they serve tourists (Figure 2).

Figure2:Therelationshipbetweenthetourism,hospitalityandtravelindustries.Source: Adapted from Pizam (2009).

(2) Specifyingspecialcharacteristicsoftourism

There are two main distinctive characteristics of the tourism industry. Firstly, on the supply side, tourism is not a pure manufacturing or a pure service industry (Jafari 1974; Page 2009; Zhang and Murphy 2009). It is a mixture of products combining services and goods. Tourism is a very complex industry. Tourism supply chains (TSCs) consists of various parties that are highly connected (March and Wilkinson 2009; Zhang et al. 2009). Thus coordination in TSCs is highly intensive. Secondly, on the demand side, tourism demand has been recognised as a complication (Sigala 2008, Lafferty and van Fossen 2001)). High volatility and sensitivity to the disturbances of tourism demand requires an insightful knowledge to manage it.

Travel trade

Attractions

Destination marketing

Tourism planning &

development

TourismIndustry

Clubs

Institutional foodservice

Assisted living facility

Lodging

Restaurants

Time share

Events

Commuters

Local travellers

Migrants

Students

Trains

Ferries

Airlines

Bus & coach

Car rental

HospitalityIndustry TravelIndustry


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(3) Identifyingtourismsupplychaincomponents

A generic supply chain usually comprises of raw material providers, suppliers, manufacturers, distributors, wholesalers, and retailers. However, it is not suitable to use this approach to describe the TSCs because it is a complex system that consists of various supply chains. Therefore, it could be more meaningful to use a correlation matrix approach (Figure 3) that is derived from the tourism supply chain links (Tapper and Font 2004, p.4). Tourismsupplychaincomponents 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 1. Transports to & from destinations

2. Ground transport 3. Ground operations 4. Excursions & attractions ∆ Ο 5. Cultural, social and sport events ∆ 6. Furniture and crafts 7. Infrastructures, service & resources of destinations

Ο Ο ∆ Ο Ο

8. Energy and water supplies Ο Ο Ο Ο 9. Waste recycling & disposal ∆ ∆ Ο Ο 10. Foods production Ο ∆ ∆ 11. Laundry 12. Caterings, foods and beverages Ο ∆ 13. Accommodations Ο Ο Ο 14. Tour operating ∆ ∆ ∆ Ο 15. Marketing & sales Ο Ο Ο Ο ∆ Ο Ο Ο 16. Customers Ο Figure3: CorrelationsmatrixofcomponentsinthetourismsupplychainsSource: Extended from Tapper and Font (2004) Note: Supply chain link (Tapper and Font 2004, p. 4) Ο Critical correlation between TSC components (the authors) ∆ Moderate correlation between TSC components (the authors) According to the figure 3, we found that TSCs consist of various components linking to each other. However, we may classify components in TSCs by their functions as followings.

a) Inputproviders(sources)As the second tier supplier, input providers have a role of supplying resources and materials for service operations in the first tier (Smith 1994; Zhang et al. 2009). We can classify input providers into different types by materials they supply. However, one of the important input providers is the food suppliers or the food supply chain (Font et al. 2008). Webster (2001) discussed the scope and structure of food supply chain from the sources of primary inputs (resources). They are agriculture sector, wholesalers, retailers, and final customers (Smith 1994).

b) Serviceproviders(serviceproducers)Service providers (1st tier supplier) are considered to be the core facets of TSCs (Zhang et al. 2009; Tapper and Font 2004). Firms in the first tier suppliers directly contact with the customers even though tour agencies or tour operators may manage the combination and linkages between each of the service providers (Véronneau and Roy 2009). Therefore, satisfaction of the tourists is largely based on the performance of service providers (Yilmaz and Bititci 2005).


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c) Intermediaries:touragenciesandtouroperators(productassemblers)Tour operators and tour agencies have a massive influence on TSCs (Schwartz et al. 2008, Font et al. 2008). The critical role of the tour operators is controlling the flow of tourists and partly managing the tourism supply chain (Zhang et al. 2009; Muhcina and Popovici 2008). Considering this vital role of tour operators, they may be considered to be forth‐party logistic service providers (4PLs), acting as architects, designing the supply chain.

d) Freighttransport(physicalflowconnectors)In a typical supply chain, freight transport is the integrator of the physical flow (McKinnon 2001). In TSCM, freight transport still has an important role to ensure the seamless transactions between input providers and service providers (Véronneau and Roy 2009). Various techniques for managing efficient transport operations in traditional supply chain, such as vendor managed inventory (Disney et al. 2003) or factory gate pricing (Potter et al. 2007), could be also applicable for TSCM.

e) Passengertransport(customerflowenablers)Not only does freight transport play a significant role in TSCM but also passenger transport play an important role. This critical role of passenger transport is to seamlessly move the tourists along their trips (Fawcett 2000; Duval 2007). According to the previous discussion, TSCs are considerably complex. It composes of various supply chains (Tapper and Font 2004; Muhcina and Popovici 2008). Apart from the components of TSCs discussed previously, it is noteworthy to state that there are also other important components i.e., souvenirs, energy and waste management which are rarely studied (Zhang et al. 2009).

(4) Outliningflowsandprocesses

Finally we outline flows and processes of the TSCs by proposing a generic tourism supply chains model (Figure 4), which is derived from combining perspectives of both the demand and the supply side. In this model, there are four major flows including physical flow (Zhang et al. 2009), information flow (Go and William 1993; Bignné et al. 2008), and customer flow (Fawcett 2000). This model represents components and flows in typical TSCs that can be divided into three phrases. Firstly, after the customers decided to make a trip, information inquiries and booking procedures with tour agencies or via the internet, and then the transactions between the tour agencies/tour operators and service providers. The second part is a combination of supply chains that associate to tourism such as lodging (hotel), catering (restaurant) supply chain, and passenger transport supply chains. There are two tiers of suppliers. Firstly, input providers who supply resources for service operations such as foods and beverages (F&B) or equipments. Another tier is the service provider that contacts customers (tourists) directly. Thirdly, after the trip, there may be some after sales services or activities between tourists and service providers/ tour agencies.


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Figure4:AGenericTourismSupplyChainsModel

Informationflows

Serviceopera‐tions



Customerflow

Viatravel

agencies

Viatour

operators

F&B Equipment Waste mgmt. Furniture

Water & Energy

Serviceprovidersi.e.,(1stTiersuppliers)

Servicesdelivery

Servicesdelivery

Servicesdelivery

Freighttransports&Distributionsystems

P h y s i c a l F l ow s

Upstream

Downstream Trip

Arrangement

I n f o r m a t i o n F l ow s

I. Before the trip

II. During the trip

III. After the trip

Hotels supply chains

Passenger transport supply chains

Attraction supply chains

Inputprovidersi.e.,(2ndTiersuppliers)

Passenger Transport (land)

Passenger Transport (air)

Customer (Tourist)

Direct contact

via websites

Passenger Transport (air)


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4. ConceptualframeworkforTSCMresearch

After we have a generic form of TSCs, then we can illustrate the research framework for research on TSCM (Figure 5). There are three major focuses in the framework (designs, relations, and performance measurements) under the concept of SCOR model that consists of plan, source, make, deliver, and return (Supply‐Chain Council 2009). Firstly, supply chain design is a critical starting point of TSCM. In TSCM, supply chain should be designed preliminarily based on what the targeted tourists want. The other aspects of the design process such as strategy, distribution or pricing could also be considered (Chopra and Meindl 2007). Secondly, the core of TSCM is relationship among stakeholders. Unlike typical SCM that considers only buyer‐seller relationship, in TSCM they are those correlations between TSC quartets that are first‐tier and second‐tier suppliers, tour agencies/tour operators, and tourists. Thirdly, performance measurement covers four aspects including external, financial, operational, and development that are considered in the balance score card (Johnston and Clark 2008).

Figure5:Aresearchframeworkoftourismsupplychainmanagement

III.Performancemeasurements

Intermediaries‐Touragencies‐Touroperators

I.Designs

1sttiersuppliers‐Lodging‐Travel‐Etc.

2ndtiersuppliers‐Foods‐Energy‐Etc.

2.Financial‐Margin‐Profitability

1.ExternalCustomersatisfaction

3.Operational‐Effectiveness‐Efficiency‐Responsiveness‐Reliability‐Resilience‐Valueadded‐Wastes(Muda)

Competitiveadvantage

Distribution

Sourcing

Pricing

4.DevelopmentSustainability

II.Relationships

Supplychainredesign

Customers

(Tourists)

Customervalue

Processes

Strategies

Plan Source Make Deliver Return

Collaborationswithin/between

thetourismsupplychains

Quartetrelationshipsofthetourismsupplychains

Facilities

Inventory

Transport


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5. Researchopportunities

The potential research agendas which could enable the better understanding of the TSCs have been identified. Furthermore, because SCM is a study of the relationships between each player along the supply chain, therefore another vital research agenda could be the collaborations of the TSCs. To an extent, drivers and impacts of collaboration in TSCs can be the focal consideration. Thus, we found some emerging topics in the literatures that are still the gaps. We outline five potential research agendas with specific research questions that should be answered.

(1) TSCdesign What is the right tourism supply chain to a particular situation? How can we identify it?

(2) Collaborationintourismsupplychain What type of collaborations existing in TSCs? What are the antecedents and the benefits of collaboration in TSCs?

(3) Performancemeasurement Which aspect that we should consider when measuring TSCM performance? How can we measure supply chain performance in tourism?

(4) ManagingriskanduncertaintyinTourismSupplyChain What are risks and uncertainties of TSCs? How can we measure and mitigate risks in TSCs?

(5) ICTandE‐tourismsupplychains How can we design ICT systems in TSCs? How can we identify the right E‐business model for a particular TSC?

In terms of research methodology, TSCM research could employ either qualitative or quantitative research methods or both (Piboonrungroj 2009). There are various research methods the selection of research method should be based on types of research questions and research objectives (Yin 2003). Examples of methodological selection in TSCM research can be obtained in Piboonrungroj (2009). Nevertheless, it was found that most of the empirical studies have employed the case study approach to provide an in‐depth analysis. However, concerning the level of generalisation of the research, survey‐based research using advance statistical methods such as structural equation modelling or econometrics could offer a better reliable model of the TSCM. 6. Conclusions

There is a growing consensus that a single company no longer competes in the marketplace but rather its supply chain that competes (Christopher 2005). Therefore, tourism is also a business that inevitably has to consider SCM. Various research topics suggested in this paper could extend the scope of the existing SCM research. The proposed research framework could also enable researchers in both tourism and SCM areas to comprehensively explore and examine the phenomenon in the TSCs. Undertaking this model, the research employed in other industries could be applied in TSCM research. Finally, considering the immaturity of the TSCM concept, the generic tourism supply chain in this present study may be a robust model for future research on TSCM. AcknowledgementsThe authors are grateful to the Royal Thai Government through the Commission on Higher Education for financial support of Mr. Piboonrungroj’s study in Cardiff University.


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AppendixA:SummaryofTSCMliterature

Authors Mainfocus Papertype Methods CountriesYear:2009 d’Angella and Go Collaborative tourism marketing Empirical Case study Spain & Austria Lemmetyinen and Go Tourism business network Empirical Case study Finland Keating Ethics in TSCs Empirical Case study China March and Wilkinson Tourism partnership evaluation Conceptual ‐ ‐ Murphy and Smith TSC relationship Empirical Survey

(Descriptive statistics) France

Page Overall TSCM Conceptual ‐ ‐ Piboonrungroj Methodological implications in TSCM

research Conceptual ‐ ‐

Rusko et al. SCM in tourism destination Empirical Case study Finland Véronneau and Roy TSCM practices Empirical Case study Canada Yang et al. Competition dynamics Analytical Quantitative

(Game‐theoretic) ‐

Zhang and Murphy SCM and tourist destination marketing

Empirical Case study China

Zhang et al. Overall TSCM Conceptual ‐ ‐ Year:2008 Almeida et al. TSC relationship Empirical Case study Brazil Bignné et al. IT adoption in travel agency supply

chains Empirical Quantitative

(Structural Equation Modelling)

UK

Dye SC Collaboration Descriptive Case study UK Font et al. Sustainable SCM Empirical Exploratory UK & EU Guo Competition &

relationship in TSCs Empirical Quantitative

(Stackelburg games) China

Harewood Coordination in supply chain Analytical Simulation Johnston and Clark Holiday supply chains Conceptual ‐ ‐ Kaosa‐ard and Suriya Tourism Logistics Empirical Case study Thailand Municină and Popovici Overall TSCM Conceptual ‐ ‐ Narayan et al. Service quality measurement in TSCs Empirical Quantitative

(Factor analysis) India

Piboonrungroj Supply Chain Audit Method Empirical Case study Thailand Rodríguez‐Díaz and

Espino‐Rodríguez Tourist destination competitiveness &benchmarking

Empirical Case study Spain

Schwartz et al. Sustainable SCM Conceptual ‐ ‐ Silaga SCM & sustainable tourism Empirical Case study Greece Smith and Xioa Overall TSCs (Culinary) Empirical Case study Canada Wei and Lu TSCM and tourism development Empirical Case study China Xinyue and Yongli TSC operations Conceptual ‐ ‐ Year:2007 Mitchell and Faal TSCM and tourism development Empirical Case study Gambia Ogden and McCorriston Supplier relationships in conference

and event mgmt. Empirical Survey UK

Schott Distribution channels Empirical Qualitative New Zealand Year:2006 Novelli et al. Tourism network and cluster Empirical Case study UK Walle and Steenberghen Public transport and trip chains Empirical Quantitative

(Regression) Belgium

Year:2005 Alford Business Process

Re‐engineering Conceptual ‐ ‐

Yilmaz and Bititci Performance measurement Conceptual ‐ ‐ Year:2004 Tapper and Carbone Sustainable SCM Conceptual ‐ ‐ Tapper and Font Overall TSCM Conceptual ‐ ‐ Year:2001 Hovara Logistics of airline service Conceptual ‐ ‐ King Logistics of airline service Conceptual ‐ ‐ Lafferty and Fossen Integration in tourism Conceptual ‐ ‐ Year:Before2001 Antunes (2000) Overall TSCM Conceptual ‐ ‐ Smith (1994) Tourism production process Conceptual ‐ ‐ Go and William (1993) Information technology Conceptual ‐ ‐