Master’s Thesis
Sustainable Innovation in Supply Chain
Management within the Food Industry
“By knowing we can suddenly act more proactively”
Author: Gabriella Lodin & Rebecka Svensson
Supervisor: Viktorija Kalonaityte Examiner: Malin Tillmar
Term: Spring 2020 Date: 2020-05-21
Subject: Business Administration Level: Advanced level
Abstract
Background: Entrepreneurship is dependent on innovation and entrepreneurial activities
increase competition. The world is facing many problems concerning sustainability, especially in the food industry. There are challenges such as climate change and ethical issues, and to stay competitive in an industry faced with multiple challenges, a sustainability-driven innovation practice could be one way to do so. The food industry is of great importance to society and although there are research done in the area of sustainable innovation in the food industry there is still a need for clarification on how it can be applied.
Purpose: The purpose of this thesis is to contribute with a deeper understanding and develop
further knowledge about sustainable innovation in SSCM within the food industry.
Methodology: This study is a single-case study and has a qualitative and abductive approach
where data was collected through in-depth semi-structured online interviews.
Conclusion: We found in this study that there is a challenge when it comes to getting
acceptance and a common understanding of sustainability both externally and internally. We have contributed by shedding light on challenges and solutions concerning sustainability and therefore we have also developed the understanding of the triple bottom line within the food industry. A link was thus found between internal and external sustainability-work with the dissemination of information.
Keywords: Sustainability, supply chain management, innovation, entrepreneurship, food
Acknowledgments
We would like to give a big thanks to The Case Company which has been truly helpful throughout the process of conducting this study. They have given us valuable information by being highly communicative and transparent, which has been a requisite to successfully carry out this study. We would also like to thank our supervisor, Viktorija Kalonaityte, who has supported us and given us helpful insights concerning the topic of our thesis. Viktorija has been an important part of this journey and she has guided and encouraged us when we needed it the most. Lastly, a big thanks to our opponents and examiner who have taken their time to give us helpful feedback and ideas on how to make our thesis even better.
_________________________ _________________________
Gabriella Lodin Rebecka Svensson
Växjö, 2020-05-21
Table of content
1 Introduction ... 1 1.1 Background ... 1 1.2 Problem Discussion ... 3 1.3 Purpose ... 7 1.4 Research Questions ... 7 2 Methodology ... 8 2.1 Research Approach ... 8 2.1.1 Philosophical Standpoint ... 8 2.1.2 Abduction ... 9 2.2 Research Design ... 10 2.2.1 Case study ... 102.2.2 The Case Company... 10
2.3 Data Sources ... 11
2.4 Population and Sample ... 11
2.5 Data Collection Methods ... 12
2.5.1 In-depth Semi-Structured Interviews ... 12
2.5.2 Online Interactions ... 13
2.5.3 Written Documents ... 13
2.6 Operationalisation ... 14
2.7 Choice of Data Analysis Method ... 14
2.8 Quality Criteria ... 15
2.8.1 Triangulation ... 15
2.8.2 Transferability ... 16
2.8.3 Dependability ... 16
2.9 Social and Ethical Considerations ... 16
3.2 Sustainability ... 20
3.2.1 Weak and Strong Sustainability Concepts... 21
3.2.2 Sustainable Development ... 21
3.2.3 The Triple Bottom Line ... 22
3.3 Supply Chain Management ... 26
3.4 Sustainable Supply Chain Management ... 26
3.4.1 Supplier Evaluation ... 27
3.5 Innovation ... 29
3.5.1 Innovation Processes and Innovation Management ... 29
3.5.2 Sustainable Innovation ... 30
3.6 Theoretical Summary ... 32
4 Empirical Findings ... 33
4.1 Structure ... 33
4.2 Respondents... 33
4.3 Introduction of The Case Company's Sustainability Work ... 34
4.3.1 Sustainability Report ... 34
4.3.2 Sustainability Strategy ... 34
4.3.3 Corporate Purpose ... 36
4.4 Sustainability ... 37
4.4.1 High-risk Ingredients ... 37
4.4.2 Challenges Concerning Sustainability ... 38
4.4.3 Solutions Concerning Sustainability ... 40
4.5 Supply Chain Management ... 42
4.5.1 Selecting Suppliers ... 43
4.5.2 Supplier Evaluation ... 43
4.5.3 Challenges Concerning the Supply Chain ... 44
4.5.4 Solutions Concerning the Supply Chain ... 46
5 Analysis ... 51
5.1 Sustainability ... 51
5.1.1 The Economic Aspect... 51
5.1.2 The Social Aspect ... 52
5.1.3 The Environmental Aspect ... 54
5.1.4 Risk management ... 55
5.1.5 Transparency ... 56
5.1.7 Strong Sustainability Concept ... 57
5.2 Supply Chain Management ... 58
5.2.1 Sustainable Supply Chain Management ... 58
5.2.2 Supplier Evaluation ... 58
5.2.3 Four Levels of Analysis... 59
5.3 Innovation ... 60
6 Theoretical and Practical Contributions ... 62
1
1 Introduction
This chapter presents the background of this study and will discuss the concepts of innovation, sustainability and supply chain management. This is followed by a problem discussion where these concepts will be discussed more closely and in relation to the food industry in an attempt to merge these. Lastly, the purpose and research questions of the study will be presented.
1.1 Background
Entrepreneurial activities increase competition and the development of society; however, existing organisations may find it difficult to survive in this globalised world characterised with rapid change. It is therefore essential for them to renew themselves and be innovative to manage this (Nielsen et al., 2017). Entrepreneurship is a wide concept with different understandings and one of them is, according to Szirmai, Naudé, and Goedhuys (2011/2011), that entrepreneurship and innovation are almost synonymous. The process of innovation is when the innovator first attempts to carry out the idea or invention into practice (Galindo & Méndez-Picazo, 2013). Hence, the activity of entrepreneurship requires innovation in, for example, new ways of working. It is due to innovation that many entrepreneurs carry out their activities and one could state that innovation is the heart of entrepreneurship activity (Galindo & Méndez-Picazo, 2013). To manage the inevitable change entrepreneurial innovation is thus key and will be of increasing importance concerning current and future sustainability challenges (Szirmai, Naudé, & Goedhuys (2011/2011). According to Szirmai, Naudé, and Goedhuys (2011/2011), these challenges are not only challenges but also opportunities which makes innovative entrepreneurship indispensable.
2 It is therefore essential to consider all aspects of sustainability not only the environmental aspect but the social and economic aspects as well (United Nations, 2015). As mentioned above the food industry is of great importance to society but it also plays a critical role concerning its economic significance, especially in developing and least developed countries (Pandey et al., 2019). Further, according to León‐Bravo et al. (2019), the food industry has several areas that should be taken into account concerning their social responsibility which is the community’s well-being, the employees’ welfare and consumer health.
Moreover, an important factor when it comes to solving sustainable development challenges is the business sector since it plays a big role concerning sustainability challenges, job creation and economic growth (Beske, Land & Seuring, 2014: United Nations, 2015). Consumers are becoming more concerned with products that they consume including concerns about both environmental aspects but also social aspects such as the treatment of animals and the welfare of the employees. All aspects of sustainability are therefore necessary for the food industry to take into account (Beske, Land & Seuring, 2014). According to Rabadán, González-Moreno and Sáez-Martínez (2019), a company can increase their competitive advantage by working more sustainably. To be successful in the ever-changing markets and environment Klewitz and Hansen (2014) state that a sustainability-driven innovation practice is one way to be competitive.
Sustainability is something almost every company has to have in mind when operating their business (Haanaes, 2016). It is also something that many companies have implemented in their ways of working. Other industries than the food industry work with sustainability, such as manufacturers that produce clothes and furniture, etc.. However, the food industry has a critical role to play when it comes to sustainable development. This is an industry that by the year 2050 will have to feed nine billion people (Pandey et al. 2019), and that is an essential part of people's lives. Which is also why the food industry is worth understanding and improving (Economywatch, 2010).
3 Since the food industry has an enormous impact on society and is of great importance there is even more incitement to a larger extent work with sustainability (Pandey et al. 2019). Recently the food industry was majorly affected by the Corona crisis that resulted in crops going to waste, shops closing, resulting in an oversupply of some products and a shortage in others (BBC News, 2020). It completely changed the shopping habits of people around the world and even in some countries a lack of workforce. This crisis shows the importance of a food industry that is manageable but more importantly an industry that is sustainable. Now more than ever, sustainable innovation is needed to manage the crisis the world is trying to cope with (BBC News, 2020). Szirmai, Naudé and Goedhuys (2011/2011) further state that, given the current and future challenges of global development, innovation is necessary for companies and according to Wu (2017) to improve companies’ work with sustainability, they rely on innovation. By implementing business models that improve current products or services to meet both the current and future demands for sustainable development a company can meet the needs of a wider public. Companies need to stand out in the ever-changing competitive environment and also to constantly improve the ability to be innovative. In this way, they can respond to the pressure’s companies face regarding sustainability issues (Wu, 2017).
To sum up, the activities of an entrepreneur are dependent on innovation (Galindo & Méndez-Picazo, 2013), and by relying on being innovative, companies can improve their work regarding sustainability (Wu, 2017) and therefore improve their competitiveness (Rabadán, González-Moreno & Sáez-Martínez, 2019: Klewitz & Hansen: 2014). The challenge with sustainability mentioned above is an immense problem that most companies are facing (Haanaes, 2016). The food industry is facing many problems regarding sustainability which is also an industry of great importance to society and is thus worth studying (Pandey et al., 2019). Therefore, the problem discussion will discuss the concepts of innovation, sustainability and sustainable supply chain management more closely and in relation to the food industry since we identified a need for these concepts to be merged within that industry.
1.2 Problem Discussion
4 To make progress with sustainability goals in companies, mechanisms are set up in coordination with other supply chain actors in an economically reasonable appearance (Winter & Knemeyer, 2012). The link between sustainability and supply chain management (SCM) is clear, which is proven in operational driving forces of profitability and relationships to the environment and the people in it. Based on the environmental challenges that companies are facing today, supply chain management is an area of importance to meet these (Linton, Klassen & Jayaraman, 2007). Linton, Klassen and Jayaraman (2007) found that supply chains and sustainability are a critical area of research. They also concluded that sustainability broadens the concept of supply chain management making it into a wider perspective. Carter et al. (2019) has researched in the field of SSCM and they stated that the field has become one of the primary areas of research within the supply chain management discipline. They found in their study that the field of SSCM is evolving but that there are still a substantial amount of future research opportunities (Carter et al., 2019).
Beske, Land and Seuring (2014) are researchers that have contributed to the field of SSCM in the food industry. According to the authors, sustainability has become a large factor for customers today especially in the food industry. It has become important that organisations take all three dimensions of sustainability into account, that is economic, social and environmental (Beske, Land & Seuring, 2014). Their study aimed to describe “ [...] how SSCM practices allow
companies to maintain control over their supply chain and achieve a competitive advantage with the implementation of dynamic capabilities” (2014:131). Other authors have researched
the food industry and the different supply chains within it. Zhu et al. (2018) researched sustainable food supply chains, Diabat, Govindan and Panicker (2012) developed a model that analyses the risks in a food supply chain with the help of interpretive structural modelling, and Gružauskas, Gimžauskienė and Navickas (2019) focused on creating a strategy that promotes information sharing in the food supply chain to ensure long-term sustainable development. However, these articles (Zhu et al., 2018; Diabat, Govindan & Panicker, 2012; Gružauskas, Gimžauskienė & Navickas, 2019) have a stronger focus on food supply chains rather than on sustainable supply chain management. Therefore, the articles also lack a larger perspective where all three dimensions of sustainability are included (Beske, Land & Seuring, 2014).
5 Adding to this, the food industry also faces global food security issues, which results in that they are facing increased pressure to make sure they work with sustainability, and at the same time increasing their profitability. Some of the most common issues the food industry faces are related to food packaging, food processing loss, food wastage, energy efficiency, water consumption, chemicals, and waste management. For food producers, it is more important than ever before to maintain a sustainable food processing chain (Roy et al., 2013/2013).
When it comes to sustainable development the food industry is especially important and relevant since it contributes to solving challenges regarding, for example, a growing population, preserve natural resources etc.. This industry also deals with challenges such as product availability, company survival, consumer health, nutrition, community, and country development (León‐Bravo et al., 2019). According to Pandey et al. (2019) to achieve the Sustainable Development Goals, the global food industry plays an important role since its implications on the environment. The global food supply networks are dominated by large companies making it essential for them to commit and implement sustainability in their organisations (Pandey et al., 2019). Pandey et al. (2019) identified in their research some sustainability performance criteria which are for example measurement of sustainability outcomes, integration of sustainability programs with traditional management systems, and a process for the identification of specific sustainability issues. This research aimed at finding out how leading firms differ from laggard firms in the food industry concerning how they approach sustainability issues (Pandey et al., 2019).
Pandey et al. (2019) researched as mentioned about sustainability performance criteria, however, what that study lacked is the perspective of innovation and how that can help the sustainable development. According to Wu (2017) to manage sustainability challenges, companies work with innovation that is implemented in their business operations. Szirmai, Naudé and Goedhuys (2011/2011) add to this and state that, given the current and future challenges of global development, innovation is also necessary for companies. There are a lot of companies that work with innovation, and innovative food production solutions are needed to reduce the environmental and social impacts the increasing food productions are making (Jansson, Hunter & Berggren, 2019). A report by Jansson, Hunter and Berggren (2019) has researched such solutions. They argued for using insects as an alternative protein since insect farming has shown results in lower greenhouse gas emissions than conventional livestock production. Another example of innovation in the food industry is a report by Spörndly et al. (2019) that is about finding replacement food for cattle due to drought that is caused by climate change. It is therefore clear that innovation in the food industry is present, however, little is being done when it comes to theory contributions.
6 The second aim was “identifying the performances targeted in a triple bottom line perspective
when implementing innovations for sustainability” (León‐Bravo et al., 2019:1056). The study
by León‐Bravo et al. (2019) found two innovation approaches towards sustainable development. The first is a forward-looking innovation approach which implies a new sustainable business model. A second approach is a retro-innovation approach, which instead aims to use traditional operations and make minimal changes while at the same time trying to achieve sustainable development. Moreover, the study identified a connection between choices concerning sustainable innovation and the triple bottom line i.e. the economic, social and environmental aspects of sustainability. This showed the importance of innovation for all of the aspects of sustainability, not only the environmental aspect (León‐Bravo et al., 2019).
Another study that has researched in the field of sustainable innovation in supply chain management is a study by Kusi-Sarpong, Gupta and Sarkis (2019). They define sustainable innovation as “introducing novel, or modifications in, production processes, techniques,
systems, organisations and products to lessen environmental damage” (Kusi-Sarpong, Gupta
& Sarkis, 2019:1990). Moreover, their study proposes a sustainable innovation criteria framework for investigating sustainable supply chains in manufacturing companies. They use The Best-Worst Method to find out which criteria organisations prioritise and therefore rank those. One criterion is, for example, financial availability for innovation and their study showed that this criterion has the highest ranking. Other criteria they propose are technical expertise availability and investment in research and development for green practices, green manufacturing and operational capabilities development. The criterion with the lowest ranking is cultural, social values and norms (Kusi-Sarpong, Gupta & Sarkis, 2019). The result of the study by Kusi-Sarpong, Gupta and Sarkis (2019) will advise industrial managers, practitioners and decision-makers on which criteria they should focus on when implementing sustainability in manufacturing supply chains. What is interesting to reflect upon is that their study prioritise some criteria over others and we find it necessary to focus on all aspects of sustainability equally in the entire organisation. This since all aspects are important (United Nations, 2015: Beske, Land & Seuring, 2014). Therefore, an elaboration of their study is needed, where the focus lay on cultural and social factors as well, with the help of a qualitative study.
7 We want to shed light on challenges and solutions concerning sustainable innovation in SSCM within the food industry. It is therefore interesting to learn more about sustainable innovation in SSCM where the focus lays on the activities surrounding the supply chain. Similarly, to the articles by León‐Bravo et al. (2019) and Kusi-Sarpong, Gupta and Sarkis (2019), we aim to further develop the understanding of all three aspects of sustainability within the context of the food industry. We want to do this by building on these articles (León‐Bravo et al., 2019: Sarpong, Gupta & Sarkis, 2019) and the definition of sustainable innovation made by Kusi-Sarpong, Gupta and Sarkis (2019). Since the food industry is a big part of the challenges concerning sustainability a case study within this industry will be beneficial for existing theory. To sum up, what we have found is lacking in research is how sustainable innovation in SSCM is used within the food industry. There is a need to clarify how innovation can be applied when making a supply chain more sustainable. Therefore, this study will explore this phenomenon in the search for clarification. This will be done by studying a specific case within the food industry whichwe will call “The Case Company”1.
1.3 Purpose
The purpose of this thesis is to contribute with a deeper understanding and develop further knowledge about sustainable innovation in SSCM within the food industry.
1.4 Research Questions
• What are the biggest challenges concerning SSCM within the food industry and how can these challenges be solved?
• How can a supply chain become more sustainable?
8
2 Methodology
This chapter will explain how this study was conducted and what methods were used. First, the research approach will be presented. This is followed by the different methods used in the study integrated with information about how we have used these. The chapter ends with a discussion about social and ethical considerations.
2.1 Research Approach
In this study, a qualitative approach was applied, which does not have a certain starting point or follow a steady sequence of steps. Instead, it consists of linkages and interactions between multiple elements of the method (Kumar, 2014). Kumar (2014) argues that a qualitative method is about understanding, explaining, exploring, discovering and clarifying a group of people´s situations, perceptions, attitudes, values, beliefs, and experiences, in comparison to a quantitative study which has a more structural depth and is more precise and specific. In this study, we were seeking to understand and develop further knowledge about sustainable innovation in SSCM within the food industry by exploring people's attitudes, perceptions, and experiences within that context.
According to Creswell and Poth (2018), when researchers are demanding complex and detailed interpretations of a problem they need to talk with individuals and groups to take part of their perspectives. Further, Bryman and Bell (2017) describe that in qualitative research there is more focus on words than numbers during the collection and analysis of data. In this thesis, we were facing a complex situation concerning sustainable innovation, and sustainable supply chains, and the food industry that we as researchers had little experience of. Therefore, we had discussions with individuals from The Case Company to get a detailed comprehension of the issue, thus, a qualitative method was most suitable for this study.
2.1.1 Philosophical Standpoint
9 Since we aimed to understand and create knowledge about the phenomenon of sustainable innovation in SSCM within the food industry, interpretivism was the most suitable consideration in this thesis.
According to Creswell and Poth (2018) ontology is described as the nature of reality. Ontology implies that researchers grasp several realities, and different researchers grasp dissimilar realities. The same thing concerns the people being studied, and that is why qualitative researchers are aiming for visualising these several realities (Creswell & Poth, 2018). Further, there are two considerations of ontology which are objectivism and constructionism (Bryman & Bell, 2017). Constructionism implies that social phenomenon and categories are created through social interactions but they also are in continuous development. Objectivism is a consideration that is independent of social actors, thus reality is viewed as an objective phenomenon which cannot be affected (Bryman & Bell, 2017). Since we collected empirical data from people within The Case Company that is based on their realities and social interactions, the consideration of constructionism best describes how we chose to view the reality.
Researchers develop subjectivity because of the circumstances of factors such as their competence in research, profession, education, general intellectual capabilities, and philosophical perspectives (Kumar, 2014). These factors influence the researchers’ view and interpret different situations, which in turn may be different from other peoples’ subjectivity (Kumar, 2014). We are two researchers that have different backgrounds and also shared. There are a mutual interest and knowledge in sustainability and entrepreneurship. This resulted in subjectivity when we collected and analysed the data.
2.1.2 Abduction
10
2.2 Research Design
The introduction chapter described what the study is about, and by this research design chapter, we will explain how we conducted it (Kumar, 2014). A research design is a plan for researchers where the structure and strategy of the research are described to accurately, validly and objectively as possible answer the research questions. Further, the research design explains how we gathered the data, from whom, then how we analysed that information. Additionally, we will convince that our proposed plan turnout in reliable and valid outcomes (Kumar, 2014).
2.2.1 Case study
In this research, the method case study was used, which is qualitative (Bryman & Bell, 2017: Kumar, 2014). We decided to use case study since according to Yin (2014) a case study research is preferred when researchers have to comprehend a situation from the real world, including contextual conditions that are central and pertinent to the case (Yin, 2014). Additionally, it is appropriate to use a case study design when the research questions need in-depth and extensive explanations of one or more social phenomenon (Yin, 2014). This study examined the present circumstances of how sustainable innovation in sustainable supply chain management within the food industry is used. Since the study also requires an interpretation of a situation requested by a real-world company, the method case study was used.
Bryman and Bell (2017) argue that a case study is detailed, narrowed, deep and complex focused on a specific place, where the researchers make an intense review of a situation or environment. This is what we aimed to do with a focus on The Case Company's supply chain out of a sustainable perspective. There are two different types of case study designs which are multiple-case study design and single-case study design. Multiple-case study design focuses on more than one context whereas a single-case study design focuses on only one context (Yin, 2014). Moreover, Kumar (2014) describes that a community, a subgroup, a city, a group, and an instance are examples of cases. In this thesis, a single-case study was used since we studied one context, which is The Case Company. Further, one type of single-case studies is an embedded case study. An embedded case study consists of multiple units of analysis (Yin, 2014). According to Scholz and Tietje (2002), embedded case study is suitable to use when the researcher aims to describe the features, context, and processes of a part of a phenomenon, which is also the aim of this study.
2.2.2 The Case Company
11 The Case Company has a strong focus on sustainability which is an approach that impregnates in all of its brands, and, for instance, is proven in their two sustainability reports from 2017 and 2018. Here they show their approach on how to handle environmental and social issues that have an impact on the organisation and stakeholders, but also their advancements during these years2.
2.3 Data Sources
In this study, we have used both primary and secondary data. Primary data is original data collected by the researcher him- or herself and secondary data are already collected data by someone else (Bryman & Bell, 2017). When gathering primary data, the researcher does that with the intention to find data that will support the research but also answer research questions (Aaker et al., 2010). According to Bryman and Bell (2017), primary data brings insight to the studied context, such as insight to opinions, feelings etc. which is something we have done in this research. However, collection and analysis of primary data can be time-consuming and secondary data can, therefore, be less time consuming since it is already gathered (Bryman & Bell, 2017). The collection of secondary data was done with the help of two different search engines which are Onesearch and Business Source Premier. We have also collected secondary data from The Case Company in the form of written documents.
2.4 Population and Sample
According to Kumar (2014), how accessible respondents are and researchers’ judgment of potential respondents’ deep knowledge regarding the phenomenon, affects the sample selection. We agree with Kumar and therefore we chose the convenience sample which consists of people that is easily accessed to the researchers. To make a selection out of the population at The Case Company, we have used the snowball technique which is one type of convenience sample and a non-probability sampling method. This is a method of selection where the researcher in the initial process of the study get in contact with a relevant group of people, that group of people, in turn, are used to get in contact with even more relevant respondents (Bryman & Bell, 2017: Kumar, 2014). Bryman and Bell (2017) state that this method is suitable to get a representative sample to reflect people's realities which is the reason why we chose this method in our case study. We followed the snowball technique when choosing our respondents.
Four interviews were conducted in this study. All the respondents have pseudonyms since The Case Company is anonymous. It is also important to mention that except for the interview with Alexander we have had continuous meetings during this study with him. Therefore, the data from him presented in the empirical chapter is both from the interview and the meetings. Here follows a list of the interviews and information about the respondents.
12
Interview Pseudonym Job title Date
Interview 1 Alexander Ethical Compliance Manager 2020-03-13 Interview 2 Charlotte Group Sustainability Director 2020-03-13
Interview 3 Liam Supplier Assurance Manager 2020-04-21
Interview 4 Erica Buyer Functional Ingredients 2020-04-21 Interview 4 Harry The Senior Buyer Ingredients 2020-04-21
Since this is a qualitative study we did not have a predetermined sample size, instead, we kept collecting data until we reached the point of data saturation. Data saturation is subjective and is reached when we consider that there is no need for new information from the respondents anymore, and then data gathering stops (Kumar, 2014). Hence, this decided the size of this study´s sample. The purpose was to get a broad diversity since the magnitude is not essential. The diversity can be widely and correctly explained on the foundation of data gathered from one person only if the researcher select “information-rich” interviewees who are giving the demanded information (Kumar, 2014). After we had had four interviews with five different people we considered that we had reached the point data saturation. By also simultaneously collecting information from The Case Company in the form of written documents and meetings this has contributed to us reaching saturation in the collected material.
2.5 Data Collection Methods
2.5.1 In-depth Semi-Structured Interviews
13
2.5.2 Online Interactions
It is important to mention that all contact with The Case Company has been done with technology that is by phone, e-mail and, the online meeting tool Webex. This because since The Case Company is not located in Sweden thus making it hard for us to meet with them in person since we had a limited time frame and budget for this project. Therefore, online interviews were conducted. According to Creswell and Poth (2018), interviews can be done as web-based interactions. This is one type of data collection method that has emerged in recent years, and another type is by using email messages (Creswell & Poth, 2018). Salmons (2015) states that online interviews are performed with computer-mediated communication, which is used in a study where original data is collected through the Internet. This makes it easy for the researcher and the participants to talk directly anywhere and at any time (Salmons, 2015). Creswell and Poth (2018) write that web-based interviews are advantageable for both the interviewer and the interviewee in the sense of cost reduction and time efficiency since there is no travelling involved. Hence, the interviewee can be more flexible regarding time and space, which may result in that they feel more comfortable and also generate deeper responses. Additionally, this kind of data collection method makes it possible to get interviews with hard-to-reach groups. What comes with web-based research is new requirements, such as technical skills, access to the Internet, and reading proficiency. These requirements are for researchers to consider when conducting online interviews and therefore this was something we had in mind when conducting the interviews (Creswell & Poth, 2018).
Salmons (2015) states that online interviews are described as any dialogue related to the purpose of the data collection, such as verbal or written, detailed planned or casual exchange. For example, short email conversations are also handled as interviews (Salmons, 2015). Already from the beginning of this project we talked to The Case Company and collected empirical data from them. This was done in the form of meetings with Alexander, the Ethical Compliance Manager, that were conducted regularly throughout the process. The purpose of this was to learn more about them and also to understand the problem they are facing. We found that it was important to maintain regular contact so that problems or concerns could be picked up early in the process, and to follow the abductive research process.
2.5.3 Written Documents
14 This made it possible for us to get a deeper understanding of The Case Company and their supply chains which also made it possible for us to conduct this study.
Here follows an overview of the documents The Case Company shared with us:
• Sustainability report, 2017. A report of the work The Case Company did concerning sustainability.
• Sustainability report, 2018. A report of the work The Case Company did concerning sustainability.
• Sustainability procedure.
2.6 Operationalisation
To create and conduct interviews operationalisation can be used as a tool. When doing the operationalisation, the researcher reconstructs the theoretical material to measurable and concrete questions. These questions are in turn used when collecting the empirical data (Bryman & Bell, 2017). When doing the operationalisation, we started by identifying the theoretical standpoints which are sustainability, supply chain management and innovation. Therefore, the interview questions were constructed based on these areas, and also besides, we wanted to know more about how these interact within the food industry since we did not have much knowledge or information about that beforehand. It is worth mentioning that, since this is a qualitative study, the intention is to keep the questions broad. The operationalisation can be read in appendix 1 and 2.
2.7 Choice of Data Analysis Method
Kumar (2014) presents three options about how data can be analysed in qualitative research, which is by either developing a narrative, identifying main themes or by quantifying. In our case, we identified the main themes that we found from the transcribed in-depth interviews, and then clarified the themes by explaining them and using quotes from the participants. By doing transcriptions of our interviews we could easily share it with the respondents to get confirmation and make sure that we understood the situation correctly (Kumar, 2014). Moreover, we needed to make a content analysis to identify the main themes, which can be done in five steps which are described below:
1. Read the descriptive answers in detail and develop wide themes reflecting the message the respondents trying to communicate. It is essential to use a word of the theme that explains the messages correctly. The main themes are the foundation of analysing the data.
15 3. Undertake a thematic analysis and classify the interview answers by the multiple
themes.
4. Lastly, merge the main themes with the other text in the report. Depending on how researchers want to communicate their findings, they either use verbatim responses to maintain the “feel” of the answers, or they check how repeatedly a theme appears. (Kumar, 2014).
To analyse our collected empirical data the first thing we did was to take our transcripts from all four interviews and rewrite them. This was done to identify main themes in the texts with the help of the operationalisation i.e. the questions the respondents were asked during their interviews. Once this was done we merged the empirical data from all four interviews under main themes making the empirical chapter. The themes are sustainability which includes high-risk ingredients, challenges and solutions, and supply chain management which includes selecting suppliers, supplier evaluation, challenges and solutions. The next step in the work of analysing our data was to put theory and empirics together. We simply took the headings of our theory chapter and found appropriate empirical data to go with it. Once this was done our thoughts and analysis was merged into the text.
2.8 Quality Criteria
Reliability and validity are two criteria used for confirming the quality in research, however, there has been discussion whether these criteria are relevant for qualitative research. Some writers do view the criteria as relevant, but they also acknowledge that there is a possibility that the meanings of the criteria need to be altered (Bryman & Bell, 2017). According to Kumar (2014) and Svensson (1996/1996), the criteria validity means the researcher measure what was intended to be measured in the research. However, measuring is not something a qualitative researcher tend to spend much time on, but more so on the study of social phenomenon (Bryman & Bell, 2017). Bryman and Bell (2017) therefore suggest alternative criteria for confirming and assessing qualitative research. What is relevant for this study will be discussed down below.
2.8.1 Triangulation
16 Also, to assure the credibility in the data we gathered we made sure that we understood the information we gathered correctly by giving the participants an opportunity to speak their mind.
2.8.2 Transferability
Qualitative research typically studies, for example, small groups or individuals in a certain context (Bryman & Bell, 2017). The findings of such research tend to be focused on the uniqueness of the context and significant aspects of the social world being studied. This raises an empirical issue since it is not certain the findings in one context is applicable in another context. Therefore, it is encouraged in qualitative research to produce thick descriptions which essentially are descriptive and rich details of the phenomenon being studied (Bryman & Bell, 2017). To make this study transferable we made choices regarding how the data gathering has been done. Semi-structured interviews were chosen, this made it possible to have in-depth interviews that resulted in descriptive and rich empirical data. Also, by collecting empirical data in the form of both interviews and documents we were able to assure descriptive details of the context being studied.
2.8.3 Dependability
According to Bryman and Bell (2017), the idea of dependability is to make sure the research is trustworthy by ensuring the research process is properly controlled. During the process of writing this thesis we have always made sure our notes, interview transcripts etc., have been understood correctly. We also have had continuous meetings with our supervisor that has helped to ensure the trustworthiness of our study. Also, participating in seminars with our peers and examiner being able to reflect and state opinions regarding our work has been of great importance to us. However, we are aware that we as researchers have different knowledge going into this project and that this might have an effect on the outcome.
2.9 Social and Ethical Considerations
During research ethical issues are present in several phases of the study (Creswell & Poth, 2018). Different professions have ethical aspects concerning that profession. However, what all professions have in common when it comes to ethical considerations is causing harm to individuals, breaching confidentiality, using information improperly and introducing bias (Kumar, 2014). In this thesis it is important to mention social and ethical considerations and down below we have brought up relevant considerations regarding this study.
2.9.1 Informed Consent
17 This since it would most likely affect the outcome of the study. Also, we took it upon us to always give participants in this inquiry information about the purpose of the study and to make them aware of what their participation would entail.
Further, it is important that the researcher consider the relevance and usefulness of the study before collecting information (Kumar, 2014). Since this thesis has been conducted in cooperation with The Case Company there was no doubt that the study had relevance. The task they gave us was a request from them which shows there was a desire for us to conduct this study. This is something that should be mentioned since it shows that there is a mutual interest to conduct this study and also an interest in us as researchers.
At the beginning of each online-interview, we once again informed the interviewees about the purpose of the data collection. We also asked if it was okay for the interview to be recorded so we could make a transcription. After each interview, we sent the transcript to the participants to assure that we had understood them correctly. At the end of each interview, we also opened up for their questions, informed them about what would happen next and how we would use the information from the interview. Lastly, we thanked them for their time and participation.
2.9.2 Anonymisation
This thesis is a case study based on one company which on the request from them are anonymous. This since the information that was given to us can be used by competitors to The Case Company as an advantage, which makes the information of the sensitive character. According to Kumar (2014) when dealing with sensitive information it is especially important that the researcher gives the participants of the study enough time to decide if they want to share the information. Further, before getting access to relevant information from The Case Company we signed a non-disclosure agreement which is a contract forbidding us from giving out sensitive information about The Case Company.
Kumar (2014) states that when dealing with the anonymity the researcher should ensure that the collected information cannot be identified or related to the participants or the organisation. During this process, this is something we have had in mind. We did Google searches making sure that names and information used in this thesis could not be connected to The Case Company and also asked them whether they found the names we used appropriately. They also got the opportunity to read our thesis before publication so they could state concerns or if any changes where necessary. Moreover, since The Case Company is anonymous citation will not be done to the sustainability report, the text gathered from the report will be re-written to make sure The Case Company cannot be identified.
18 By them being anonymous this also made it possible for them to share more information, making them more transparent, which resulted in good access and valuable information. This information made it possible for us to conduct this study and also possible for us to make it relevant and valuable for The Case Company and contributing to existing theory.
2.9.3 Online-interviews
According to Bryman and Bell (2017) when it comes to doing research online one can consider the set rules and etiquette of the internet before doing research. But most importantly, according to them, is to consider the general ethical principles that are applicable to regular research. Since Bryman and Bell (2017) recommend the researcher to consider general ethical principles when doing online research this was discussed by us throughout this study. This to make sure that the contact we had with The Case Company was done accordingly. Further, transparency and accessibility were discussed with The Case Company before deciding whether there would be a collaboration or not. We and people from the company immediately agreed concerning these questions. Further, we considered a high level of communication and confidentiality from both sides as important to manage transparency and accessibility.
2.9.4 Managing Information
As researchers of this study, we will work accordingly ethical principles by for example not doing incorrect reporting and inappropriate use of the information. Hence, the focus of this inquiry is not on something unjustifiable, and no data will be adjusted so it suits our or any other actors´ interests more. Further, the use of the respondents’ answers will be clearly explained to work ethically correct (Kumar, 2014). When collecting secondary data, it is unethical with misrepresentation and not presenting data sources. Hence, the content, format or context will not be adjusted to be more suitable for this thesis, so that the understanding of the original information will stay the same (Kumar, 2014).
2.9.5 Critical Reflections
19 However, the Coronavirus has affected the entire world in different ways and it is unavoidable to not say that the virus has affected our study in some way.
2.10 Methodology Summary
Research Approach This study is based on a qualitative approach with an abductive
process.
Research Design Embedded single case study was used in this research.
Data Sources Primary data and secondary data were collected.
Population and Sample
The snowball technique was used in this research.
Data Collection Method
We collected data through written documents and in-depth
semi-structured interviews.
Choice of Data Analysis Method
To analyse the data, we identified main themes.
Quality Criteria Triangulation, transferability and dependability assured the
quality of our research. Social and Ethical
Considerations
Social and ethical considerations was considered regarding
20
3 Theoretical Framework
This chapter consists of a theory introduction which explains why the theories were chosen. Then different sustainability concepts will be presented before moving on to the theory of supply chain management and sustainable supply chain management. Lastly, innovation and sustainable innovation are described.
3.1 Theory Introduction
The theory chapter is organised so as first we will explain sustainability and the different aspects to that. That is followed by an explanation of supply chain management (SCM) and innovation. The different theories in this chapter are to be seen as circular rather than linear. The theories are intertwined and support each other’s causes, they were chosen since there is a clear need for these to merged.
Figure 3.1. Theory Overview.
3.2 Sustainability
One objective for managing a business is always going to be for economic reasons, however, the circumstances have changed so rapidly that companies need to have additional objectives that are related to sustainability (Svensson et al., 2016). Society expects companies to act sustainably and take responsibility for the influence they make on the environment (Svensson et al., 2016). Sustainability is a term that has been defined in several disciplines (Winter & Knemeyer, 2012), and the ones which will be used in this thesis is described below.
The British NHS Institute for Innovation and Improvement (2007) defines sustainability as a new attitude and a new way of thinking behind the new way of working, which leads to improved outcomes that become normalised.
Sustainability
21 After a year or longer, it should be possible to see that the processes and outcomes have not fallen back to the old level of performance. Instead, development should have taken place when the business faces challenges and may even continue to improve over time (NHS Institute for Innovation and Improvement, 2007). Sustainability is also a process that arises from having succeeded in implementing an innovation where improvements have been maintained, new working methods have become routines, surrounding systems have been transformed into support, and innovation may even evolve at an appropriate level (Fleiszer et al., 2015).
These definitions are similar to the concept of eco-effectiveness. Eco-effectiveness is the strategy that comes closest to stopping destruction and consumption and creates a renewal process. Here, designers are involved and broaden the future vision of products or systems from their original purpose to review the whole. Furthermore, possible consequences, time and place considerations, advertising, system culture and approaches are also analysed. The results of eco-effectiveness may be various improvements or innovations, but especially, there is a change in perspective from the destructive approach to nature (McDonough, 2009).
3.2.1 Weak and Strong Sustainability Concepts
The sustainability concept can be both weak and strong (Åhlfeldt, 2019). The weak
sustainability concept implies that organisations´ sustainability work only happens within the
company, to balance economic and social values internally to achieve a well working environment. Furthermore, it requires equality, health, capacity building and learning with a focus on results within the own organisation. To work accordingly with the strong sustainability
concept the company´s surrounding is also included, which implies the ecological dimension
and is performed on an organisational, societal, and global level as well. Here, the future is the focus of sustainable development outside the company's frames. The weak sustainability concept is criticised by sustainability science since efficiency and profit for the organisation are the only targets, while they should also be setting up goals for their surroundings such as fighting poverty and general economic development for everybody. That is why the link to sustainability disappears when both the social and economic aspects of sustainability become something that is only winning for their own company (Åhlfeldt, 2019).
3.2.2 Sustainable Development
The World Commission on Environment and Development managed sustainable development by trying to bring countries together to work towards a balanced ecological and economic growth concerning sustainable development (Borglund et al., 2012). A well-recognised definition of sustainable development is:
”Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
22 The definition of sustainable development includes the requirement that humans’ health and nature does not get affected negatively, at the same time as the earth’s ecosystem and the water’s production ability is maintained (Bonnedahl, 2012; McDonough, 2009). The concept implies economise with human and material resources in a substantial and dynamic society, which satisfies the primary needs that all people have (Bonnedahl, 2012; McDonough, 2009). Further, it includes problems such as food security in the whole world, ensuring conservation of non-renewable resources, interpretation of the impact that the environment has on economic activities in industrialised and developing economies, and assuring that primary human needs are fulfilled (Carter & Rogers, 2008). Adding to this, out of a business and economical point of view, the quote mentioned above suggests not only a focus on economic aspects within a business but also on the maintenance of earth's resources and the societies the businesses serve (Winter & Knemeyer, 2012).
3.2.3 The Triple Bottom Line
The triple bottom line is a concept consisting of three balanced aspects which define sustainability (Elkington, 1999; Carter & Rogers, 2008). The three aspects are economic, social and environmental, and each of them has activities the organisation can engage in. These activities have not only a positive impact on the natural environment and society but also generates long-term economic benefits and competitive advantage (Elkington, 1999; Carter & Rogers, 2008).
Figure 3.2. The Triple Bottom Line.
The economic aspect of sustainability concerns long-term actions rather than short-term income
and expenses (Winter & Knemeyer, 2012). In this perspective, growth is pursued sustainably, without the expense of the environment and/or human health. It should not contribute to environmental degradation or unequal and segregated society (Bonnedahl, 2012: McDonough, 2009).
Environmental
23
Some examples within the economic aspect of sustainability can be cost-savings related to reduced packaging and more effective design which make products reusable and recyclable (Carter & Rogers, 2008). Effective design for disassembly and reuse can result in shorter lead-times and lower costs. If an organisation improve their working conditions and provide more secure transport and warehousing then cost savings can also be done in the fields of safety and health, turnover and recruitment. Better working conditions generate lower labour costs due to higher level of motivation and productivity and fewer absenteeism. Adding to these cost savings the organisation’s reputations can improve, which in turn leads to increased attractiveness to stakeholders such as suppliers and customers (Carter & Rogers, 2008).
The social aspect of sustainability concerns both individuals and organisations (Winter & Knemeyer, 2012). Social sustainability is thus about understanding the effects of an organisation's activities on society (Winter & Knemeyer, 2012; Panda et al., 2020). This aspect is multidimensional which refers to several different explanations. One explanation described the social aspect as human provisioning and satisfying internal stakeholder needs such as employees, but also external stakeholder needs such as affecting suppliers, supplier’s workers, and local communities (Bai & Sarkis, 2010). Another explanation also implies human needs but adds political science and other social science (Missimer, Robert & Broman, 2016). Further, social sustainability can include social equity (Dempsey et al., 2011), and social justice (Hopwood, Mellor, & O'Brien, 2005). These ethical aspects are compressed into seven social challenges which are:
• Human rights • Child labour • Health and safety • Working conditions • Gender issues
• Inclusion of disabled and marginalised people
• Development of minorities (Yawar & Seuring, 2015).
24
The environmental aspect concern materials, energy, water, biodiversity, emissions, effluents
and waste, products and services, compliance, transport, supplier environmental assessment, and environmental grievance mechanisms (Wilson, 2015). Moreover, this aspect means that humanity’s use of resources is about to exceed in relation to accessible natural resources (Borglund et al., 2012). Therefore, this results in that the ecosystem no longer can produce and absorb the huge amounts of waste and emission which has increased (Bonnedahl, 2012). Despite humanity's awareness of the limited resources of the earth, our actions are the opposite without any thought of the consequences. Many focuses on quickly transforming natural resources into marketable products, which leads to high consumption even though there are not endless amounts of resources (Bonnedahl, 2012). The environmental aspect implies that work is being done to promote functioning ecosystem services that give the planet for example clean water, insects that pollinate plants, clean air, filtration of UV rays etc. (Winter & Knemeyer, 2012). Further, this aspect is also one of the leading strategies used by organisations to increase one’s image, reducing costs and also for creating a competitive advantage (Wilson, 2015). It is worth mentioning that the environmental aspect is the aspect which is most commonly viewed as sustainability. But, it is of importance to equally consider the social and economic aspects in to be proactive and committed when trying to achieve sustainable supply chains (Winter & Knemeyer, 2012).
There are more concepts which are included in the sustainability concept itself. The concepts that will be explained next are three supporting facets of the triple bottom line and are risk management, transparency, and strategy and culture (Carter & Rogers, 2008).
Risk Management
The definition of risk is wide and can be described as “the probability of variation surrounding
an anticipated outcome” (Carter & Rogers, 2008:366), and the definition of supply chain risk
can be explained as “the potential occurrence of an inbound supply incident which leads to the
inability to meet customer demand” (Carter & Rogers, 2008:366). Natural disasters are a source
of supply chain risk, and can, for example, be poor demand forecasting and failure to coordinate demand requirements across supply chains. It can also be hurricanes, and varied prices for primary raw materials including energy, legal liabilities, poor social and environmental work by the organisation itself and its suppliers, and poor supplier quality and shipment quantity errors (Carter & Rogers, 2008).
25 The risk of new and costly regulations can decrease if companies have a proactive engagement in sustainable practices (Carter & Rogers, 2008).
Transparency
Since there is a demand from external stakeholders and local communities about more visible and transparent business activities, organisations need to open their activities to bigger public inspection to improve their reputation and maintain legitimacy (Hart, 1995). For an organisation to be transparent they can actively engage stakeholders and receive feedback from them which the firm also applies (Carter & Rogers, 2008). This to develop better supply chain processes and ensure purchases. From the aspect of a stakeholder, transparency encompasses environmentally friendly and traditional activities regarding marketing (Carter & Rogers, 2008). Some companies use sustainability with the purpose to show off that they are working for a better environment and are taking social responsibilities (Wang & Bansal, 2012), even though they do not integrate the concept into real situations and processes, policy documents, marketing, and routines etc. (Alvesson, 2011). That is to say, a transition to practical action is required where new green solutions and innovations are utilized and routinised in organisations for the result to have long-term and real consequences (Åhlfeldt, 2019). This is called greenwashing (Wang & Bansal, 2012) and is not beneficial for the environment, the society or the company itself (Åhlfeldt, 2019).
By using horizontal cooperation across networks and vertical cooperation across supply chains, transparency can increase (Carter & Rogers, 2008). An example is, “common auditing
procedures adopted by an industry coalition can allow a single, effective supplier sustainability audit to be performed” (Carter & Rogers, 2008:367). This improves supplier sustainability and
transparency, and transaction costs will also be reduced for the supplier and the numerous purchasing companies, that potentially will be doing business with this supplier (Carter & Rogers, 2008). In the long-term, it is both easier and cheaper to have a transparent company concerning economic, social and environmental problems (Holliday, Schmidheiny, & Watts, 2002). One reason is because of the “flat world” which has been the result of today’s fast internet communications, interoperable software and globalisation of supply chains, that can spread companies’ errors and mistakes all over the world (Carter & Rogers, 2008).
Strategy and Culture
26 Furthermore, research shows that there is a significant relationship between organisational culture related to the welfare of others, fairness and supportiveness, and socially and environmentally responsible buying activities (Carter & Rogers, 2008).
3.3 Supply Chain Management
Most researchers agree on a definition of the supply chain, however, there is no agreed-upon definition of supply chain management (SCM) (Ellram & Cooper, 2014). There is an ongoing debate about SCM that the research discipline will not move forward unless there is an agreed-upon definition. Usually, practitioners develop their description as to how they define SCM, and this is most likely the reason why the existing definitions are flourishing (Ellram & Cooper, 2014). Supply chain management has continued to change and evolve to fit the needs of the growing global supply chain and adding to that the supply chain also covers a broad range of disciplines making the definition of SCM unclear (LeMay, 2017). A proposed definition of SCM is the following:
“Supply chain management is the design and coordination of a network through which organizations and individuals get, use, deliver, and dispose of material goods; acquire and distribute services; and make their offerings available to markets, customers, and clients.”
-LeMay (2017:1446)
The term supply chain management is used to describe how the process of supply is managed and controlled within an organisation (Weele & Arbin, 2019). The term is also used to describe how the material is processed both internally and externally. A distinguish exists between flows of material that comes into the organisation and material that goes out of the organisation. The first is about in what way the organisation distribute products to the customers. The second consists of all activities that are needed to optimise the flow of material from suppliers to the organisation (Weele & Arbin, 2019).
3.4 Sustainable Supply Chain Management
A supply chain includes all activities associated with for example flow of material and information flows in the organisation, supply chain management is the integration of these activities (Seuring & Müller, 2008). Sustainable supply chain management (SSCM) is defined as:
“[...] the management of material, information and capital flows as well as cooperation
among companies along the supply chain while taking goals from all three dimensions of sustainable development, i.e., economic, environmental and social, into account which are
derived from customer and stakeholder requirements”.
27 The members in the supply chain have to fulfil the social and environmental criteria to remain within the supply chain (Seuring & Müller, 2008). At the same time, the members also have to maintain competitiveness through meeting customer needs that are related to the economic criteria of sustainability. In SSCM there is a need to look at a longer part of the supply chain and also take more issues into account since SSCM deals with a wider set of performance objectives. This since it also takes the economic, social and environmental dimension of sustainability into account i.e. the triple bottom line approach. Further, there is also an increased need for partnering companies in SSCM to corporate with each other (Seuring & Müller, 2008). The supply chain affects the environment depending on how the supply chain is managed (Jonsson & Mattsson, 2016). The choice of supplier, for example, affects the environment, and the organisation can have requirements the supplier has to follow regarding sustainability. One way for the organisation to set demands is to require that their suppliers work continuously with sustainability goals (Jonsson & Mattsson, 2016).
Supply chains are complex relationship networks and are described as “The objective of a
supply chain is to produce value in the form of products and services that are delivered to a customer.” (Winter & Knemeyer, 2012:19). Additionally, it can be described as following “[...] the integration of key business processes from end-user through original suppliers that provide products, services, and information that add value for customers and other stakeholders”
(Lambert, 2008:2). The second definition is more suitable for cross-functional manner since the integration of sustainability into supply chain management matters for both business activities and processes, and collaborations with other actors in the network which constitute supply chains (Winter & Knemeyer, 2012).
3.4.1 Supplier Evaluation
The supplier has an essential part to play in an organisation and has become more and more important for an organisation’s supply chain (Weele & Arbin, 2019). This has led to an increased need to evaluate the supplier’s abilities. The organisation not only want the supplier to fulfil the requirement of delivery but also know if the supplier will be able to fulfil the organisation’s need for a longer time. Therefore, it is important to collect knowledge about the supplier's strengths and weaknesses concerning the supplier abilities. Another aspect that is important to know is if the supplier can guarantee continuity in the deliveries. This can be done by systematically collecting information about the supplier which will contribute with efficiency regarding production and reduced costs (Weele & Arbin, 2019).
28 If the organisation continuously have control over the production process that will ensure the product is produced according to the set standards. The third is quality level, where the process for quality-evaluation is audited and updated. The fourth and final level of analysis is on the organisational level, where the focus is not only on aspects of quality but also on economic aspects. The purpose is to ensure that the supplier will be competitive in the future (Weele & Arbin, 2019).
Regarding different methods for evaluating a supplier’s abilities depends on the organisation and two methods can be extinguished, subjective and objective methods (Weele & Arbin, 2019). Subjective methods are used when the organisation evaluates the supplier out of a personal perspective, by for example compiling different experiences of working with that supplier. Objective methods are used to quantify the supplier’s performance capacity. Further, there are also different tools an organisation can use to evaluate a current supplier. One tool is by systematically comparing different suppliers with the help of a data sheet. This is a simple tool and usually very enlightening. Another is a qualitative evaluation where different specialists, that has working experience with that supplier, evaluates the supplier with the help of a checklist. This checklist can consist of factors such as quality, production and planning (Weele & Arbin, 2019).
If the purpose is to choose a new supplier and not evaluating a current one, then a broader evaluation is preferable (Jonsson & Mattsson, 2016). The different criteria for evaluation depend on what the organisation intend to buy (Jonsson & Mattsson, 2016) and also on the organisation (Weele & Arbin, 2019). When evaluating a new supplier, commonly, the organisation evaluate whether the supplier consider environmental and social aspects (Jonsson & Mattsson, 2016). Further, one criterion that is important to find out is if the supplier can manage to quickly adapt to new demands concerning costs (Jonsson & Mattsson, 2016). Other criteria that can be good to evaluate is the quality and product design, if the supplier can produce new products in time, if they can quickly adapt the capacity in production to meet higher demands and if they have the necessary knowledge and IT-solution for solving issues (Jonsson & Mattsson, 2016).
