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Abstract
In response to current market pressures, firms are forming strategies under various industry initiatives to gain competitive advantage. Whether these initiatives entail better service, lower costs, or both, they share a common essence: integrating the supply chain. The objective of this project was to contrast firm-level strategic decision criteria with integrated supply chain decision criteria for three activities in the wheat supply chain. The model developed provides a mechanism to better understand information requirements necessary for firms to evaluate supply chain integration strategies. Consistent with the strategy literature, these strategies have, heretofore, primarily been analyzed qualitatively.
Differences in wheat quality preferences among individual firms comprising the wheat supply chain were found. With the exception of protein, these are all but lost in the complexity of the competitive structures facing each individual firm. Therefore, benefits of supply chain coordination exist, but are either not compelling or tangible. Methods to quantify these benefits and how they are distributed among firms in the supply chain, however, have not been adequately addressed. By quantifying benefits and how they are distributed among a supply chain, firms can better negotiate vertical coordination strategies, ultimately improving their competitive position.
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