A Strategic View on Relationship in the Grocery Supply Chain - The Case of low Complex Products

Sammanfattning: It is easy when studying the literature on the current development toward closer more integrated business to business relationships to get the impression that a close integrated relationship is desired for all circumstances. Instead, this thesis shows that the nature of business relationship is very strongly correlated to product supplied. The focus of this thesis has been a case study between a supplier of a low complex product, and a manufacturer in the grocery retailing industry. Low complex product is defined in the thesis as a product that adds little value to the end customer and that there are a number of suppliers available to supply the product at the required specifications. The questions this thesis asks is: How will new customer relationships develop and effect suppliers who provide low complex products? This has been done by studying a case relationship in the grocer retailing industry from three different angles in three different papers. The first paper takes the view of the buyer and investigates the driving forces behind the decision to establish a closer working relationship with the supplier of low complex products. The external driving forces influencing the manufacturer are mainly customers, competitors and external industry initiatives such as ECR (Efficient Consumer Response). However, the selected supplier in our case cannot be considered strategic, according to our model of supplier selection. The company focused on in this study is trying to pursue a partnership like relationship with the supplier of corrugated board. However, the results show that there is a time dimension in the selection of appropriate suppliers. According to the case, the long term supplies are secure since there is no problem of finding appropriate suppliers of corrugated board which can meet the required specifications. Nevertheless, since the purchased content is relatively large with frequent deliveries the risk of missed supply and inefficiencies in this supply in the shorter term is rather big. Therefore, to ensure a safe supply at low cost it is necessary to develop a closer working relationship, but this rests on the foundation that it will be successful in improving service requirements and reducing costs, due to the interchangeability of suppliers. The second paper uses these driving forces and compares them to those in a model of supplier relationship development to research a possible future nature of the relationship. The analysis shows that since the product bought is a low complexity product the driving forces are weaker in our case than in the model. This is because one of the main driving forces in the automotive industry has been to involve the supplier in product development, which is not interesting to the same extent in the case.