Operations management,

cooperation and negotiation in

the wood supply chain

– the relationship between sawmills and

roundwood suppliers

Matti Stendahl, Magnus Larsson & Emanuel Erlandsson

Raw material

cost = ~65%

of total

production cost

??

Lack of innovativeness?

Relationship forest – mills?

Lack of competence?

Operational obstacles?

Relationship forest – mills?

RQ 1: What does the relationship between sawmills and

their roundwood suppliers look like?

RQ 2: What factors facilitates, respectively hampers,

supply chain coordination in this relationship?

Research questions

Supplier-customer Interactions (Cannon & Perreault 1999)

Information exchangeOperational linksCooperative normsLegal bondsAdaptations

The Offering(Ford et al. 2006)

ProductServiceLogisticsAdviceAdaptations

RelationshipRoundwood

supplierSawmill

Special focus The process in which the roundwood order specification is negotiated and agreed.

IDEF0-model (NIST 1993)

Theoretical framework

Method

• Four case studies of sawmills and their roundwood suppliers in Sweden

• Each case study included:

• Personal interviews (tot 21)

• Focus group discussion (one for each case)

• Theory-driven thematic coding of respondent accounts and construction of IDEF0-models

Summary of findings

• Offerings are relatively complex bundles of customer-adapted products,

services and advice to sawmills

• Interactions between roundwood suppliers and sawmills

• Strategic and operational level

• Include information exchange, operational links, cooperative norms,

adaptations and agreements

Conclusions

When it comes to actor relationships…

Coordination between wood supply dept. and sawmills is currently supported by:

• Collaborative planning, forecasting and replenishment

• Good communication

• Design collaboration

• Inter-organizational IT-systems

Coordination between wood supply dept. and sawmills is currently hampered by:

• Large ordering lots

• Lack of formal incentives for coordination

• Lack of metrics for information sharing

• Insufficient control of mill-designated road-side stocks

• Volatility of roundwood prices

• Cultural barriers

• Insufficient support and resource-devotion to coordination from senior

managers

Conclusions

The advice to practitioners are:

• Reduce relational barriers to SC coordination

• Adapt new SCM-technology to fit in relational context

• Responsivemess to uncertainties

• User-friendliness

• Enough resources during implementation stage

Future research:

• Test hypotheses from this study on larger sample

• Research other possible barriers to technology adoption:

• Innovativeness

• Competence

• Operational conditions

Thanks for listening!