The Relative Cost Structures of Competing Grocery Supply Chains

Traditionally, research into supply chain management has focused on increasing the availability of products and reducing the cost of doing so by concentrating on coordination between supply chain members. Significant improvements have been made in improving the effectiveness and efficiency of supply chains. In this paper we compare the relative costs of different supply chains for grocery products. There appear to be fewer opportunities for improvement in supply chain management by improving availability or reducing logistics costs and more in examining the internal costs of individual supply chain members. Data on one product type, margarine, is used to illustrate the substantial differences in supply chain costs for similar products depending upon the type of manufacturer and type of retail format in competing supply chains.