Role of Information in an SME in a Local Food Supply Chain - Case Study of a Norwegian Craft Beer Retailer
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Demand for locally produced food is increasing and the industry is gaining increased attention. But, many challenges are present for actors in local food supply chains (LFSC), and are especially related to limited capacity. Balancing supply and demand of their products is thusly extremely important in regards to inventory management and replenishment decisions. Local food actors, often small and medium enterprises (SMEs), especially need to reduce costs in order to be competitive. Supply chain management (SCM), which includes practices like, information sharing, has a focus on maximizing value for all actors in a supply chain, yet is underutilized by local food actors, including both local producers and local food retailers. Information technology is an enabler of SCM and has been understudied in an SME context. Therefore, the following research questions have been explored to gain a better understanding of how information and information technology (IT) can improve these types of SC: ● RQ1: What is the role of information in an SME in LFSC?● RQ2: How can IT support use of information in an SME in LFSC?● RQ3: How can IT assessment be carried out in an SME to fulfill the role of information? This thesis consists of two main sections, the literature study and the case study. The literature study gives background on LFSC, SCM and information, and information technology. The case study covers the retail operation of an SME, The Gulating Group, working in the craft beer industry. Multiple semi-structured interviews, a workshop and secondary sources were used to gather data related to the case. Thereafter, an analysis using relevant literature was done to assist in answering the research questions. In the literature study, it was found that SMEs have received less attention regarding both SCM and IT practices than large enterprises. More specifically, studies on SME retailers are lacking. Therefore, using the existing literature on SCM and informational practices, and the case study, can give new insights to the requirements of IT and information in an SME retailer context. The Gulating Group has multiple operations ranging from retail to import, though the retail operation will be in focus in this study. The suppliers comprise of local breweries, import and industrial actors, but the local breweries are prioritized. The replenishment process from these different suppliers vary, and range from using simple technology like SMS, phone calls and email to web portals. Besides ordering, little use of SCM practices, like information sharing, were found to be present. The nature of processes were often informal, intuition based and inconsistent. All available information was not found to be utilized in current planning processes. Increased growth, including opening of new stores, has led to difficulty in managing the multiple stores and suppliers, and spurred the assessment of possible IT to assist. The first research question showed that information is an enabler of SCM, and assists in good decision making. Sharing information requires that information is of a certain quality in order to be fully utilized. The quality and utilization are affected by certain factors, both inter- and intra-organizational. SMEs have an informal nature, and thusly have access to less information, which is affected by quality dimensions such as timeliness, and completeness. This increases challenges in planning and controlling material and product flow. The second research question covered how IT is used to support information capture, analysis and communication. IT can assist in operational to strategic levels of planning. Mainly operational has been focused, although some tactical functionality has been considered. SMEs often have a lower level of technology, but can benefit from IT. The third research questions was answered primarily with literature by first developing an IT assessment process flow. With insights gained from the case company, it was modified later. Thus, an extra decision in the IT assessment process flow was added concerning, if current IT is underutilized or processes can be improved. This is especially relevant for SMEs, which are often constrained financially. The findings from this thesis can assist SME retailers in LFSC and other industries to increase their competitiveness and performance through better use of information. IT can help in achieving this, but the formalization and addition of some processes may offer improvement potential for SMEs and reduce required costs related to new technology adoption.