Web-enabled supply chain services for rural communities
S. M. Muniafu, A. Verbraeck
Systems Engineering Section, Delft University of Technology, Jaffalaan 5, Delft, The Netherlands
Keywords: Web-enabled services, supply ch
ain, rural logistics, ICT, Studio
Abstract: Currently, about half the population of the world lives in rural areas, and they are disadvantaged regarding
access to the basic technical knowledge to exploit the expanding Internet infrastructure. They lack readily
available supportive tools, methodologies, and the capability to take advantage of the newly developed
technologies to integrate their supply chains. This paper identifies the need for support environments in the
development of web-enabled supply chain services for rural areas, based on the concept of a so-called
design studio, which uses simulation models and collaboration technology to facilitate the design. The
practical applicability of the concept in creating joint efficiencies is discussed before concluding that the
conceptual model presented may provide a much-needed solution to some of the failures and problems
faced when trying to put supply chains in rural areas onto the web.
Exploratory cases are being carried out
to prove and validate the applicability of the concept
Currently, about half the population of the world,
particularly in the developing and transition
countries, still lives in rural areas (UN, 2004). In
comparison to urban areas, most of the rural areas
are heavily underdeveloped and perpetually
characterised by physical remoteness from basic
amenities, poor infrastructure, fragmented and
chaotic distribution systems, problems with cash
flow, low supply chain volumes, long distances to
markets, high unit transportation prices, and cases of
multi-tiered middlemen, among other issues
(UNCTAD, 2003). These conditions mean that there
are currently very few efficient supply chains, and
that although improvements may take time, there is
still hope that things can be done better especially if
carried out through the web.
However, rural people are disadvantaged
rding access to the basic technical knowledge to
use the expanding Internet infrastructure effectively
(Klein and Jang, 2003). They usually do not have
readily available tools and methodologies to assist in
effectively accessing or “organizing” new value-
added or niche markets for their products. They lack
the capability to take advantage of the newly
developed technologies in ICT to participate in those
supply chains that reduce their vulnerability to risk
while increasing their direct profit. In many cases,
new supply chains should be created that are geared
to the specific situation in the rural areas, such as
bad accessibility, lack of planning, and dependency
on external influences such as weather.
Given this situation, there is need to create
odels to help illustrate, simplify and manage
supply chain operations for rural areas (UNCTAD,
2003). One of the basic ideas is to use web-enabled
technologies and portal technology (Boyson et al.,
2004) to make the services accessible and easy to
use from remote areas. The aim of this paper,
following on (Janssen, 2001) is to show that the
development of web-enabled supply chain services
for rural areas using a support environment is more
effective than when such services are developed
without a support environment.
The paper highlights the need to provide support
r coordinated development practices in the
development and exploitation of web-enabled
supply chain services, and outlines a practical set of
interventions that can be deployed as part of the
support environment. It provides an example model
and concludes with a prognosis of the potential
impacts of the solution in terms of the establishment
of practices to create repeatable local solutions.
M. Muniafu S. and Verbraeck A. (2005).
CREATING JOINT EFFICIENCIES - Web-enabled supply chain services for rural communities.
In Proceedings of the Seventh International Conference on Enterprise Information Systems, pages 127-134
DOI: 10.5220/0002555301270134
1.1 Need for a support environment
for web-enabled services
The lack of supportive models to analyse decisions
for creating web-enabled rural supply chains might
be part of the reason for the low rates of technology
absorption and chaotic situations that exist in
attempts at improving rural supply chain operations.
Many rural areas possess large amounts of data
that is both of local and national importance, and
very little is done to provide the (rural) stakeholders
shared access to it. The result of this is that the
typical rural person does not have the capability to
utilise the available information so as to realize the
necessary efficiencies of industrialized agriculture
(Klein and Jang, 2003). It is important that we
design re-usable approaches for developing our
service architectures, which can be easily modified
by using a directly available and relevant approach,
embodied in a support environment. Such an
approach would ideally consist of methodologies
that allow us to scale up or out as required by the
pertinent situation.
A support environment (Sol, 1992) should
enable decision makers to focus on the relevant
design issues and treat context specific issues from
various points of view. Decision-making (Keen and
McDonald, 2000) is still too much viewed in terms
of technology. Current theories, frameworks, and
planning tools are incomplete and of limited use
(Kambil and Short, 1994) in helping decision
makers understand and manage the complexity of
these emerging, interdependent, networked
environments. Based on this, we therefore need to
develop a support environment (Janssen, 2001)
aimed at helping the stakeholders to identify
opportunities and evaluate the business values of
their decisions.
Indeed, rural areas have many assets arising
from their peculiar environmental, social and
institutional conditions, their position and valuable
countryside features including natural habitats,
scenic landscape and farming practices, limited
infrastructure, etc. (Savoldelli and Innocenti, 2001)
and in a way the use of the web is seen as being able
to assist in overcoming some of the disadvantages of
dispersion. Given that the main activity of rural
areas is agriculture, it is assumed that web-enabled
services could provide the means for improving the
delivery of inputs, enhancing access to markets as
well as enabling the interaction between farmers and
agricultural institutions (UNCTAD, 2003).
The United Nations’ General Agreement on
Trade in Services (GATS) recognizes that web-
enabled services in which service delivery is done
across borders (UNCTAD, 1998) are eligible
substitutes for other modes of service delivery, and
we believe that supply chains fit into this category.
The provision of support for the development of this
mode of service is the focus of this paper, in which
the phrase ‘across borders’ has been loosely
extended to include borders within countries.
However, access to telecommunication networks is a
key issue for the development of web-enabled
supply chain services, and access initiatives need to
be stimulated.
1.2 Web-enabled Services
These are services made possible with the help of
web-based technologies, mostly used when referring
to services delivered over telecommunication
networks or the Internet to a range of business areas
and verticals (McGraw, 2001, MIT, 2003). The
technology is used essentially as a tool or enabler to
provide the services, in which most of the functions
tend to be human-intensive and the processes and
services may be outsourced in order to derive a cost
advantage without sacrificing quality and efficiency.
Web-enabled services cover the entire range of
services that exploit the web for empowering an
organization with improved efficiency or types of
services that may not be possible to be rendered cost
effectively without the web. The web-enabled
services (Glass, 2000) are built upon another level
called web services, which is defined as a collection
of functions that are packaged as a single entity and
published to the network for use by other programs.
Web services (Turban et al, 2004) expose or
consume functions or content programmatically via
the Internet and can be viewed as building blocks for
distributed systems.
For rural areas (UNCTAD, 2003), exploitation
of the web for provision of supply chain operations
is highly desirable given that their commodity
supply chains involve many intermediaries, with the
result that the export earnings are shared by a
multitude of traders and processors, and producers
receive only a small share of the final consumer
price. The concept of providing support for their
development is particularly relevant for identifying
areas in which potential bottlenecks may arise and
designing commodity-specific support services. The
support offered to the developers will be at a higher
level above the basic functionality of the supply
chain itself. Using some basic
adopted from (Easton, 2003), the situation of a
supply chain in a rural area is presented next, to set
the pace for the discussion related to the
development of a support environment
2.1 Characteristics and constraints
2.1.1 Geography
The interior parts offer the most significant
development opportunities for web-enabled services
given that large sections of the population live there.
However, the challenges are higher due to poor
access to the hinterland and the general lack of good
infrastructure (Conyers, 1993, Easton, 2003, Smyre,
2000). The rural communities have to travel long
distances and over generally rough terrain to get to
the markets to sell their goods, which means that
they carry less and therefore make less money due to
the low volumes and high cost of shipment (Naude,
2.1.2 Infrastructure
In most rural areas, there is a general lack of proper
road, rail, warehousing, and logistics capabilities.
The most common method of transport for goods is
by road, which also seems to be the most preferred
(and cheap) option for moving goods to the market.
In general, road transport is thought of as offering
the most flexibility and control over delivery times
and the delivered condition of goods. In most cases,
the road transport network is not entirely well
developed and consists of very few tarmacked or all
weather roads, which are barely passable in times of
heavy rain (Conyers, 1993, Smyre, 2000).
On one hand, small and privately owned vehicles
dominate the road transport industry, and high
amounts of empty miles and high unit transportation
costs are a common characteristic. Given the low
level of infrastructure development and low
incomes, there is very little use of containerisation
and inter-modal operations. On the other hand,
coupled therewith are the high trucking costs and
relatively low security of goods in transit (Easton,
2.1.3 Production
In many cases, the rains come at specific times of
the year, which directly translate into planting times
for the farmers, who in turn tend to grow the same
kind of crops determined by the area their farms are
located in. Given that the weather patterns generally
remain the same for the same area, it means that
everything that goes into production of the farm
produce is done at the same time by all the farmers
e.g. planting, spraying, weeding, harvesting, etc. As
a result, all of them harvest their produce at the same
time and because storage facilities are not well
developed most of them have to sell their goods
immediately after harvest. This means that they
cannot bargain for better prices, and that they cannot
defer their selling so as to wait for when the market
is at its best (Naude, 2004).
2.1.4 Periodic markets
Closely related to production (Naude, 2004) is the
fact that there is limited direct access to markets that
are slightly further than the nearest shopping centre
(e.g. urban or international markets). Many rural
areas have a model of periodic markets, which are
held in some focal points, mostly close to major road
networks and trade centres that act as feeders for the
urban areas. Given that a lot of the produce comes
from far-flung rural areas, it is desirable to
coordinate the service provision and schedules for
the periodic transportation of the goods and the
farmers to and from the markets. There is also need
to provide facilitation for freight collection and
distribution services and subsidisation in support of
the coordinated schedules, centres, and services.
Coordination of local transport to coincide with
local periodic markets, mobile clinics, school
transport, etc. is also desired (Naude, 2004).
In some cases, you also have brokers and
middlemen who supposedly take the burden of
going to the far-flung periodic markets from the
farmers. They provide transport services as well as
collection points at which they buy the produce, but
these multi-tiered middlemen make the supply chain
too long and therefore unproductive (UNCTAD,
2.1.5 Telecommunications and the Internet
In most rural areas, teledensity remains depressingly
low (Parkes, 2001), though the mobile services
market is growing rapidly. Mobile penetration rates
in rural areas are very encouraging, with most
people having access to the mobile networks, and
this may provide some of the needed stimulus for
accessing web-enabled services.
Internet connectivity still remains dramatically
skewed in favour of urban areas, though some
efforts have been made to provide local access
points in some of the focal areas of rural regions.
The International Telecommunications Union (ITU,
2004) notes that given the rising demand for Internet
access, wireless technologies could provide the
solution for rural areas.
However, very little use is currently made of the
available telecommunication infrastructure for the
purposes of improving the supply chains.
CREATING JOINT EFFICIENCIES: Web-enabled supply chain services for rural communities
2.2 Utilisation of the opportunities
Based on the existing situation presented earlier, it
becomes clear that some of the problems facing the
rural communities can be solved by introduction of
web-enabled supply chain services. As a result, it is
important to provide support for the development of
such services to integrate, centralize, and rationalize
supply chain functions, assets, infrastructure, people
and operations. Encouraging free flow of
information, use of supply chain technologies,
provision of one-stop solutions, and end-to-end
synchronisation of logistics services, all via the web,
can be used to do this.
The general deduction that can be drawn is that
the technology and access to it from the rural areas
(UNCTAD, 2003) is no longer the main problem,
and therefore there is need to strengthen and
improve the development practises to enable
services to be efficiently provided over the web i.e.
delivered remotely. However, some of the
underlying problems are caused by farmers’ lack of
access to market information and their resulting
inability to bargain effectively. The development of
commodity market information systems and the use
of the Internet by producers themselves can enhance
market intelligence to the benefit of agricultural
producers (UNCTAD, 2003).
A support environment for the development of
web-enabled services is expected to provide the
much-needed support to the already existing
initiatives, as well as to stimulate the uptake of new
technologies. Use of the environment would then
allow the developers to model and simulate the
development processes and accessibility of the rural
communities to both national and international
markets for their goods and supply chain services.
It is the assumption of this paper that if the
design and development processes for web-enabled
services were standardised to incorporate best
practices exhibiting some means of repeatability, it
would be easier to expand the functionality of the
services provided to the rural communities. A model
incorporating possibilities of providing location-
based services or services offered over mobile
devices is highly desirable, given that it has been
proven (ITU, 2004) that it is possible to provide
services via mobile phones and networks, thereby
by-passing the ever present discussion about lack of
telecommunications infrastructure in rural areas.
Also worth taking advantage of is the presence
of cyber-cafes in many of the focal centres of the
rural areas, which has meant that provision of
services is no longer a mirage. If the cyber-culture
were to be encouraged to grow further, it is expected
that it will create some critical mass that utilizes the
services provided, thereby assisting in lowering the
charges associated with providing the service. With
web-enabled services, we get the advantage of
ubiquitous access, fast assembly of components, and
optimum utilization of existing resources as these
can all be done in a distributed manner.
Given the characteristics explained earlier about
rural areas, it becomes imperative that we are able to
create a link between several of the services
provided to the rural communities to effectively
utilize them. Through the use of the web, we can
provide for coordination of transport in rural areas
so as to reduce the amount of empty miles traveled
by ensuring that trucks can offer services mid-way.
Especially since the distances traveled are very long,
it would also be desirable if the farmers could be
able to book for transport services in advance to
coincide with, for example, the periodic markets.
The use of web-enabled supply chains in the
rural areas can reduce transaction costs in a number
of ways. The first is the reduction of search costs,
because buyers and sellers can easily locate each
other without necessarily traveling long distances
(UNCTAD, 2004). Multiple intermediaries
characterize rural marketing chains, and buyers
spend much time searching for information about
suppliers, products and prices. Web-enabled services
may reduce search costs in terms of effort, time and
money, because information can be exchanged more
efficiently via the web than through traditional
channels. Use of web-enabled supply chains can also
increase the efficiency of existing intermediaries to
the extent that they adopt the new information
technologies. This may lead to the development of
e-markets, which can be viewed as new
intermediaries to replace traditional offline
Another area in which the joint supply chain
efficiencies can be utilized is in the coordination of
non-emergency mobile services that can be done in
such a way that one takes advantage of the other.
For example, in many rural areas there are mobile
health clinics, banking services, and periodic
markets. Having a system that supports brokering of
transport in such a way as it fully utilizes the
available capacity would be very beneficial to the
rural communities. To complement this, organized
agricultural bodies (e.g. cooperatives) can be used to
improve the logistics services, and coordinate the
periodic markets.
3.1 The Conceptual Model
We feel that the development of web-enabled
services can be done better if the developers were
provided with a support environment that gives
insight into the complexity and dynamics of the
supply chain, while supporting and simplifying the
design process. Access to the services, the providers,
and the data can be done via web-enabled
connections, which in this case are taken to include
peer-to-peer networks. This concept is presented in
figure 1.
The service development environment presented
in figure 1 builds on the idea of (Keen and Sol,
2005), and begins from the decision process and
works back to the system providing a front end tool
that enables developers of web-enabled services to
work with the existing data rather than the other way
round. An approach within the environment is used
to support the entire process of developing web-
enabled supply chain or other matching services,
which will most likely have multiple stakeholders
with varying needs.
3.2 The Support Environment
The support environment, referred to as a studio by
(Keen and Sol, 2005), is interactive and it is where
suites are deployed. The suites are toolkits for the
designer, selected on the basis that they are the most
effective resources for support in the particular
decision domain. The effectiveness of the studio
rests on its processes, which fundamentally involve
people and collaboration. The studio contains
domain specific processes for effective decision
enhancement practice known as recipes, which are
proven, repeatable, sequential, and used. Within the
environment provided by the studio, the decision
makers are in a position to make more informed,
enhanced, and repeatable choices. Figure 2 (Keen
and Sol, 2005) diagrammatically presents the idea of
a framework for the decision enhanced studio.
Databases e.g. GIS,
meteorology, etc.
Service Access Point
e.g. library, town hall,
Figure 1: The service development, support, provision, and consumption environment.
Service Consumers
Service providers
Service Schedules
Service Development Support Environment
Services e.g. logistics, transport
scheduling, etc.
Access via the
web e.g. dial-up,
mobile access
The Web
Support for product
specific web-
enabled services
CREATING JOINT EFFICIENCIES: Web-enabled supply chain services for rural communities
The studio is centred on the design of skilful,
flexible, focused activities at the level of the
workplace, the organization, and between
organizations. It helps decision makers visualize
scenarios and alternatives, thereby giving them the
chance to ‘rehearse the future’ by framing decision
making situations, providing facilitative services,
and applying proven and adaptive recipes in
specified contexts. The development of activities
takes place in studios, which are targeted at
decisions that matter. The studios make use of
services that can support or improve the decision
making process by increasing the decision process
agility, referred to as Decision Enhancement
Services (DES). Some of these services include:
Services that shape the environment in
which we participate with other actors:
Services for collaboration and participation
that need to be facilitated separately
Services in the form of examples,
scenarios, recipes
Services for designing the processes, to
achieve real Business Process Agility
Services as instruments in the sphere of
animation, visualisation, (gaming)
Services that develop and realise effective
cooperation, collaboration, within the
These services of a studio make it a very
attractive option for the design of a support
environment in which the development of web-
enabled supply chain services for the rural areas can
take place. The decision makers and other
stakeholders are provided with the opportunity of
gauging their initiatives before implementation, and
this is expected to greatly improve the outcomes of
the various web-enablement initiatives.
3.3 Applicability of the concept
As is typical with any service implementation, the
service providers are often faced with almost
immediate requirements to change their structures or
add new structures to their profiles to suit customer
needs as soon as their product is ready. Such
additions or modifications may require re-designing
several tiers of the existing service environment. In
such a scenario, it would be more efficient if we did
not have to re-build the service architectures every
time but instead just modify the relevant structures
using a readily available approach. This approach
containing the various structures would be included
in a studio, thereby making it a useful solution.
Because of the fact that dynamic models and
visualization of ideas play an important role in the
concept of a studio, it supports both the gaining of
qualitative insight for all stakeholders into the
potential solutions, and quantitative results when
comparing alternatives.
To illustrate this, an example application taken from
the realm of rural logistics where web-enabled
services could be particularly relevant is when there
is need to coordinate periodic transport, service
provision and market schedules. Based on the
characteristics presented earlier, this would include
important aspects such as routes, stopping places,
and service times, considering that each of these can
vary even for the same customer group.
“Landscaping”, governance, blueprints
Experiential process methods and “recipes”
for leveraging suites
Core resources for design and delivery
Figure 2: The Decision Enhanced Services Framework
In such a case, it would be useful to establish a
system for arranging and disseminating information
about meetings and/or service access points and
times that might involve a different combination of
services and customer groups (Naude and Mashiri,
2000). By implication, mobile technology may have
a key role to play here in accessing the web-enabled
service. Using the studio, the developers would then
be able to model, simulate, and toy around with the
possible decision scenarios that can be taken to get
to the optimum decision.
In other cases, there may be a need to focus on
how different service supply chains involving
information and physical flows, as well as durable
and ‘rapidly vanishing’ stock could usefully link
with other service supply chains to create joint
efficiencies and add value to the supply chains.
Again, in this case, rehearsing the different scenarios
within the studio would provide very helpful insight
before implementing the service, and simulation
model results could easily demonstrate the potential
benefits to all involved stakeholders.
Owing to the peculiar situation of their
environment, most communities living in rural areas
regularly need to have access to logistics,
transportation, education, and many other services
which can be better provided through the use of
web-enabled technology. Use of the studio would
provide an environment to support the development
of these services. The services would then be
accessed via the local point of access to Internet in
the community, which would often be the town hall,
library, local school, or a cyber café in a rural centre.
The paper has attempted to show how the
development of web-enabled supply chains for rural
areas using a support environment can be more
effective than when you develop the services
without a support environment. The conceptual
model presented may provide support for a much-
needed solution to some of the failures and problems
faced when trying to put supply chains in rural areas
onto the web.
Web-enabled technologies are continuously
becoming essential tools in the development and
management of rural supply chains, since they
provide enhanced market access for rural
communities and for organizing markets and supply
chains. Considering that some of the (often GIS)
data is already present, several institutions and
government bodies would then only worry about
developing relevant business models and technical
solutions to implement new services for rural
communities. Using these databases in combination
with other local variables, it will then be possible to
create joint efficiencies in the rural areas by utilizing
every available capacity effectively.
The concept presented in this paper and the
accompanying discussions are part of work in
progress, and exploratory cases are being carried out
to prove and validate its applicability.
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