Supplier integration in the assortment management of builders’ merchants

Abstract

Purpose – The purpose of this paper is to explore supplier integration in the assortment management of builders’ merchants (BMs) by identifying potential factors enabling supplier integration and potential factors mediating the success of supplier integration. Design/methodology/approach – A qualitative case study method was used, in which interviews and participative observations were conducted with a timber supplier and BMs in the UK. Findings – The likelihood that a supplier and a retailer will implement supplier integration is positively affected by the retailer’s format as a large chain with several product categories represented in its stores and the retailer’s trust in the supplier. Effectiveness and efficiency of supplier integration is mediated by the number of different retail formats represented by the retailers, the ability of the supplier to determine cost drivers in its operations and a homogeneous market, meaning that local circumstances have limited effect on demand. Research limitations/implications – The findings are exploratory and further testing of the propositions, using a wider empirical sample, is required. The paper extends theories relating to resource complementarity and suggests that a resource complementarity framework can be applied in relationships other than alliances. Practical implications – This paper suggests when incorporation of supplier resources is possible to implement and when it is likely to succeed. Originality/value – This paper uses a contingency perspective to explore supplier integration and targets individual buyer-supplier relationships. It uses a dyadic perspective and considers how supplier integration affects the dyad, rather than only the buyer.