Conclusions: Is a Lean Supply Strategy Feasible
in the Multiple Retailer Fresh/Frozen Beef
Supply Chain?
The findings demonstrate that the power regime that
exists in the fresh/frozen beef supply chain for multiple
retailers and integrated processors is not one
that lends itself to the comprehensive adoption of
lean supply or network sourcing. This does not mean
that there is no scope for lean ideas to be introduced
in this chain because individual companies do have
opportunities internally to eradicate non-value adding
waste and inefficiency. The findings demonstrate,
however, that in this power regime lean
inter-organisational supply relationships based on
collaboration are only really appropriate for the multiple
retailers, the integrated processors and their
preferred agents in the chain. This is because it is
only at these points in the chain that the power structures
tend towards the buyer dominance and/or interdependence
situations that support longer-term
collaborative and lean approaches.
The problem for the integrated processors and buying
agents is, however, that this type of collaboration
may not be as beneficial as some proponents of lean
suppose. One of the major critiques of the lean approach
is that it may be difficult to implement operationally
if flow production is not possible. The
problem of ‘carcass imbalance’ in this supply chain
militates against continuous flow in production and
this often necessitates a batch production approach.
Relatedly, there is the issue of who will benefit commercially
from any long-term collaboration. In this
supply chain it would appear that the major benefi-
ciaries of collaboration are the multiple retailers. This
is because they have the power resources to appropriate
the maximum share of value from their own
premium branded products and, while they may
make lower returns from commoditised products,
they can still force their integrated processing partners
to pass the majority of value that lean collaboration
generates to them.
This leverage is, if anything, increasing against the
integrated processors as the multiple retailers develop
their own premium brands. This leads to the conclusion
that over time, unless even more effective
consolidation occurs at the integrated processor stage
to counter-balance the power of the multiple retailers,
their Janus-faced Dominance will ensure that collaboration
becomes a ‘‘treadmill to oblivion’’ of
continuous operational and commercial improvement
by the integrated processors in return for
higher volumes, but with only low returns.