Information integration between retailers and manufacturers in Swedish food retail supply chains : The manufacturers’ perspective

Linnaeus University, School of Management and Economics, 5FE00E, Spring 2010 Author: Hana Hulthén Tutor: Helena Forslund Title: Information integration between retailers and manufacturers in Swedish food retail supply chains; The manufacturers’ perspective. Background: According to study conducted by Brege in 2007, in Swedish food retail supply chains there is lack of external integration between retailers/wholesalers and manufacturers. This fact indicates that there are gaps in information integration between them which have consequences mainly for the manufacturers. Purpose: The purpose of this study is to describe gaps, from the manufacturers´ perspective, in the information integration between Swedish retailers/wholesalers and manufacturers, and analyze what are the consequences of these gaps for manufacturers as well as propose how these gaps can be alleviated. Method: Multiple - case study as research method has been applied. Specifically, three case companies, Swedish meat manufacturers, have been selected. Three one-hour long focused interviews combined with open-ended interviews have been conducted with two sales managers and one sales representative. The empirical evidence has been analyzed by using cross-case analysis method and pattern-matching method. Results, conclusion: Firstly, Swedish meat manufacturers do not have access to real-time demand or POS data on store level. Instead, they receive orders from retailers based on updated demand forecast. As manufacturers do not have perfect demand information it leads to information asymmetry between retailers and manufacturers. As a consequence of inaccurate demand signal processing a Bullwhip effect can occur. Implementation of integrated information systems using EDI for exchange of POS data could solve the gap. However, small-scaled manufacturers have neither enough resources nor incentives to invest in an expensive business-to-business system. Furthermore, manufacturers with restricted production flexibility cannot utilize provided information on very detailed level; such as POS data. Thus, in these cases implementation of integrated information systems seems not to be reasonable. Secondly, it has been found that information integration between retailers and manufacturers has been significantly improved the last three or four years. The Swedish retailers are willing to provide information to manufacturers. Future Work: The result of this thesis is based only on findings from meat manufacturers. Other sectors could be also included as well as opinion of retailers and wholesalers to identify common problems related to information integration in Swedish food retail supply chains