An investigative study on the effects of sub-suppliers to the networks of business relationships

Abstract

There is a trend in the value chain today where sub suppliers are included in supply chain activities. The benefits to include them in the value chain are in terms of time and cost savings. The sub suppliers are also involved in development projects where knowledge and skills are shared. The purpose of this thesis is to investigate the effects of sub suppliers when they are within a business network. The business network includes having relationships with actors such as the customer’s customers, customers and the suppliers. Theory within the International Business, Industrial Marketing Purchasing, Purchasing Management and others are used to facilitate in the investigation. Interviews with Swisslog and Graniten are conducted to have an overview of the case study of a collaboration project between the two actors. The collaboration project involved Swisslog and Graniten fulfilling a special need required by St Olavs Hospital. The hospital is the customer and they wanted the pharmacy’s logistic systems fully automatic. The interviews and case study will act as primary sources of data while literature found from journals and articles will act as secondary sources of data. The data are then used to comprehend more about the management of actors in business networks as well as the effects of sub suppliers in the case study. Triangulation of data and pattern matching are performed as part of enhancing the quality and validity of the study done. Through the interviews, actors are managed well through trust and respect and therefore, a positive effect is seen with the inclusion of sub suppliers in projects. In conclusion, a firm would always want a long continuous relationship with their actors such as the sub suppliers but the firm has to be aware of its ‘surroundings’ better so to be able to strategise better and gain a competitive advantage over others.