Forest industry companies can achieve a new kind of flexibility and service capability by intensifying co-operation particularly in their customer-supplier relationships. The doctoral dissertation by Kati Antola that investigates this topic will be defended at the Turku School of Economics on 29 May 2009. The dissertation entitled Customer-supplier integration in the forest industry is in the field of marketing.
In her doctoral dissertation, Antola investigated the long-term and established business relationships between forest industry companies. The objects of the case study were six customer-supplier relationships in different fields of business. The supplier was a global forest industry corporation. Antola termed developed partner relationships as customer-supplier integration.
– Traditionally, integration is considered as boosting existing functions, for example by standardising and streamlining them. But the benefits of integration are also related to new development, a new kind of mutual learning process and an improvement in flexibility and service capability. These elements are included in the term ‘customer-supplier integration’ that I use, says Antola.
Critical partnership
Research showed that a long-term and established business relationship is not necessarily integrated. It can get bogged down in too many existing traditions and is not able to renew itself in changing conditions.
– In an integrated business relationship, both parties have become critically important to each other. Close partnership and co-operation help the companies to create a new kind of added value for the market and for end customers. In some cases it is forecast, for example, that the role of the supplier will change to be more of a seller of solutions, and that the supplier will increasingly take responsibility for the inventory management of customers, says Antola.
It is typical that the integrated business relationships of forest industry companies combine the economies of scale, flexibility and dynamism of mass production. For example, a manufacturer-supplier of plywood was targeting economies of scale in production and its plywood convertor, a small family business in the United Kingdom, was able to offer a flexible service tailored to the needs of end customers, i.e. manufacturers of buses and railway trucks.
– In that way, the veneer manufacturer was able to concentrate better on the manufacture of standard-size plywood panels and on large order batches and efficient production.
Kati Antola emphasises that customer-supplier integration always requires long-term commitment and mutual orientation. The aim is for the customer and supplier to have unified and coherent strategies, functions and processes. The bilateral roles and division of labour of the supplier and customer must also be very compatible.
The doctoral thesis can be read at: http://info.tse.fi/julkaisut/vk/Ae5_2009.pdf
More information:
Kati Antola, tel. +358 40 506 3163, kati.antola(a)tse.fi