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Forests 2017, 8(10), 360; https://doi.org/10.3390/f8100360

The Effect of Customer–Contractor Alignment in Forest Harvesting Services on Contractor Profitability and the Risk for Relationship Breakdown

1
SCA Forest Products, Skepparplatsen 1, SE-851 88 Sundsvall, Sweden
2
Département des Sciences du Bois et de la Forêt, Faculté de Foresterie et de Géomatique, 2405 rue de la Terrasse, Université Laval, Québec, QC G1V 0A6, Canada
3
Department of Forest Biomaterials and Technology, Swedish University of Agricultural Sciences, Skogsmarksgränd, SE-901 83 Umeå, Sweden
*
Author to whom correspondence should be addressed.
Received: 23 August 2017 / Revised: 16 September 2017 / Accepted: 16 September 2017 / Published: 25 September 2017
(This article belongs to the Special Issue Forest Operations, Engineering and Management)
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Abstract

In forest operations, the interface between forest companies and harvesting contractors is of special importance, considering that it is the first link in the forest industry’s supply chains. Supply operations account for a significant share of the final costs of wood products (up to 50%). This study investigates the effect of customer–contractor alignment on contractors’ profit margins and on the risk for business relationship breakdown. Alignment is empirically measured for a Swedish forest company and 74 of its harvesting contractors, who were monitored during a four-year period. Two measures of alignment are employed: (1) the customer-perceived value of the contractors’ services; and (2) the contractors’ perceived alignment with the forest company expectations. Results indicate that the two measures of alignment are largely independent from each other, and that customer-perceived value affects both contractor profitability and the risk of relationship breakdown. Conflict between the two parties and lack of trust for the customer were found to be common complaints among contractors who ceased working for the studied forest company. Consequently, customer–contractor alignment should be considered a key objective by contractors who strive for business success, and also by forest companies who wish to improve their supply chain performance. View Full-Text
Keywords: forest harvesting contractor; supply chain alignment; customer-perceived value; contractor profitability; business relationship; supply risk forest harvesting contractor; supply chain alignment; customer-perceived value; contractor profitability; business relationship; supply risk
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Eriksson, M.; LeBel, L.; Lindroos, O. The Effect of Customer–Contractor Alignment in Forest Harvesting Services on Contractor Profitability and the Risk for Relationship Breakdown. Forests 2017, 8, 360.

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