Important Factors for a High Degree of Supply Chain Maturity - A Study at a Swedish Retailer Firm in the Food Industry

Abstract: The food industry is facing a high degree of competition from both international and private-label competitors, which has increased the importance of generating cost savings. Previous research show there is a significant relationship between the purchasing unit's maturity level and cost reductions. Maturity is defined as the level of professionalism in the purchasing unit. The purpose of this thesis is to study if supplier flexibility, supplier selection and cost savings contribute to a high degree of maturity for a company in the food industry. Previous research has focused on measuring maturity from an industry perspective. This thesis will study the three factors stated above within a micro perspective setting. A qualitative interpretive study is applied by interviewing the entire purchasing unit. The findings show that flexibility in the supply chain, supplier selection and cost savings affect the level of maturity in the purchasing unit. By being flexible the case company can react faster to changing demands and choosing right suppliers to work with affect the strategies chosen by the case company. Measuring cost savings accurately results in the case company building future strategies based on concrete facts. These three factors together with working more centralized and cross-functionally affect the level of maturity in the purchasing unit. The findings offer insight to the importance of ensuring a consistent level of maturity within an entire case company in order to enable the purchasers to generate cost savings.