The New Business Model for SMEs Food Processors Based on Supply Chain Contracts

This paper presents a new business model which replace the traditional supply chain of small and medium enterprises (SMEs) food processors. The new model requires SMEs food processors to coordinate with other partners along the supply chain through contracts. Following the flow of the product down to the end user, the contract frame work is designed such that the processor and the wholesaler enter into revenue sharing, whereas the wholesaler motivates the retailer through rebate. To benefit from the rebate, the retailer has to attract consumers to buy more. This is achieved through advanced booking program. The processor as the main supplier of the product, production planning and distribution has to base on accurate information. Thus, the importance of processor-retailer vendor managed inventory partnership.