Creating value through supplier development: The case of a fish feed supplier to the aquaculture industry

After studying 151 publications on the topic of buyer-supplier relationships over a 20 year period, Terpend, Tyler, Krause and Handfield [1]point out that the concept of sustained competitive advantage deserves more emphasis by researchers investigating value extraction form buyer-supplier relationships. Research should identify the types of practices and the conditions likely to gain a firm a competitive advantage and consider the durability of those advantages. This paper builds upon this call and argues that the capabilities that lead to competitive advantage for fish feed producers lie in finding and approving new raw materials. These firms have traditionally spent millions of dollars on analysing new protein sources and testing them regarding digestibility, growth enhancement, health issues etc. It is now time to realise that more focus need to be put towards the supplier delivering these raw materials, and the value that can be gained through supplier development. By introducing group wide supplier relationship management such as common supplier development programs, the case company managed to improve their purchasing process, which ultimately put top management in a better position to take strategic purchasing decisions. Research limitations referring generalizability and reliability of results are acknowledged.