Donation vs. discount selling

When a supplier chooses to donate as opposed to sell at discount prices, such helps improving supply risk for a food bank. According to Persson (2016), food banks must carefully consider the health and perishability of foods. Davis et al. (2014) also point out that a food bank’s success lies in the suppliers’ abilities to redistribute foods.

Findings confirm that suppliers in which donate food items early, rather than late, are more willing to donate before discount selling. Oppositely, suppliers that prefer discount selling over donation donate foods that are much closer to their expiry dates. For example, even though MatBørsen (2019) and TINE (2019) prefer much communication with the food

bank, these suppliers also donate products that are closer to expiration due to a preference in discount selling over donation. Therefore, there are contradictions and tradeoffs

regarding the various methods used when limiting supply uncertainty

Preferring donation over discount selling also suggests more bounteous supply flow, since all products are now donated as opposed to some being sold in alternative markets.

Considering the suppliers of Matsentralen Vestfold og Telemark are expected to maximize profits, it is difficult to ask a company to choose donation methods. The donation

preference helps ensuring supplies in terms of quantities and to some degree more diverse foods. Yet, the donation preference does not fix the supply arrival problem.

7.0 Conclusions

The empirical study concludes that the food bank’s supply chain is highly similar to the traditional supply chain because the respective functions of each member coincide with traditional network structures. The food suppliers are upstream partners, such as farmers, producers, and wholesalers. Matsentralen Vestfold og Telemark functions as a distributor, redistributing foods to charities which function as retailers.

The study concludes that certain aspects correlate to reverse logistics theories. First of all, the food bank supply chain is mostly organized by a centralized network approach. Which means, Matsentralen Vestfold og Telemark makes decisions on behalf of the network as a whole. However, as the suppliers hold much of the supply power, it is debatable whether the supply chain is centralized or decentralized. Secondly, the analysis demonstrates that the food bank supply chain operates as an open loop network, where donated foods enter an entirely new supply chain. Discoveries further confirm that the general food bank work is motivated by ethical reasons, which differ from forward logistics where profit is

generally considered as the goal. Furthermore, data show that supply ambiguity is prominent, such as uncertainty quantities, types, or delivery times. Foods are also

generally donated due to date markings and production flaws. Including, suppliers donate to the food bank as due to choosing less costly solutions for elimination of unsaleable foods.

The study confirms that some findings do not conform to reverse logistics. Firstly, reverse logistics can be better planned than expected, through supplier/distributor agreements and contracts. Inventory management is challenging, but through an electronic warehouse system the food bank oversee inventory without too many hassles. Transportation is rather efficient as the food bank is in close proximity to most suppliers, where suppliers also mostly make deliveries. Lastly, donations to the food bank never reach farther downstream than the distributor node, challenging the theoretical implications in regard to returns in open loop networks.

Another finding is that the food bank supply chain is especially impacted by its regional aspects, where Matsentralen Vestfold og Telemark mainly receive and redistribute meat-, dairy-, and frozen products. Luckily, the food bank has extra freezer capacity at an offsite location, in addition to ample onsite storage for frozen, fresh, and dry foods. Further, the food bank has an onsite manager and a team of scheduled volunteer workers, making onsite operations rather efficient. Additionally, the food bank keeps track of all

inventories, both current and historic, using an electronic warehouse system. Where, the food bank manages regional challenges by additional storage space and proper inventory management.

Reverse logistics- and food bank literature especially mentions supply security as one of the most crucial aspects of reverse logistics and food bank success. Findings through interviewing and observation confirm that supply uncertainty is a risk-factor in food bank operations. Conclusively, supply risk is in relation to uncertainties regarding when supply arrives, what is supplied, and how much of it is supplied.

The study concludes that effective communication provides greater supplier understanding in terms of the food bank’s capacities and supply preferences. Effective communication, however, fails to ensure fixed delivery schedules. However, effective communication does not necessarily ensure proper delivery timing/planning.

The study constitutes that contracting with fixed delivery schedules ensures supply influx and provide more supply reliability, in addition to easing the overall planning of logistics.

Yet, a mere contract does not promise certain supply types or quantities. It is further debatable whether a fixed delivery schedule limits the overall communication among

supplier and the food bank, which reduces the supplier’s understanding in terms of food bank supply preferences.

Findings affirm that a centralized network approach may potentially offer additional supply quantities, as the suppliers reported the ease of working with merely one

organization as opposed to multiple. On the other hand, a centralized network approach does not secure supply in terms of types or timing of influxes.

Research conclude that supply identification tools and strategies ensure that more appropriate supply is donated. This is in regard to supply -types and -quantities.

Nonetheless, supply identification tools and strategies does not help the delivery timing problem.

Findings establish that donation preference over discount selling is more preferable because more supply is up for donation and to some degree ensure more supply diversification. In contrast, the donation preference does not arrange fixed delivery schedules.