Summary

Business Administration, Business Process & Supply Chain Management, Degree Project (master), 30 higher education credits, 5FE02E, Spring 2012

Authors: Penekeh Pechu Tangiri and Vedat Zulfiu

Tutor: Dr. Fredrik Karlsson

Title: Partners Selection and Performance Measurement in Supply Chain

Background: Despite the existence of the concept of Supply Chain (SC) for decades, very little is known about how companies come together and which factors they take into consideration when selecting their business partners. Furthermore, when operating in the SC, companies focus more on efficiently utilizing company resources than effectively satisfying customers’ needs.

Purpose: The aim of this research is to test and scrutinize the factors that suppliers, manufacturers and distributors/retailers consider more important in the decision processes of choosing partners in a SC. It will investigate if Focal Companies (FC’s) in each of these categories (suppliers, manufacturers and retailers) take the same factors into consideration and identify metrics which companies focus on, in measuring the performance of a SC in terms of effectiveness and efficiency of SC processes.

Method: A webmail questionnaire was developed and administered to 525 companies within the forestry, manufacturing and retail industries in Sweden, of which 101 were answered giving a response rate of 19.2%. The empirical findings have been analyzed in comparison with existing theories and conclusions reached.

Conclusions: In sum, the importance of any of these factors in any situation cannot be regarded as predetermined. This greatly depends on the position and the influence of the company in the SC. However, BME, IT, QS, E.CEO, CC and GL are the factors that differentiate these three groups of actors, while EE and E.CEO are the two factors the distinguish FC’s from the other companies. Whereas in the chain, companies tend to focus2on managing their operating margins and working capital (efficiency) paying little attention to strategies for sustainable growth (effectiveness), which in most cases leads to ephemeral profitability.

Keywords: Supply Chain Management; Supply Chain; Value System Configurator; Partner Selection; Performance Measurement