Case-ready meats: An outsourcing decision for food retailers

Innovation in the way food products are processed and distributed through the supply chain has been an important source of productivity growth in the U.S. and economies worldwide. While process and product innovations have not ceased, the uneven adoption of certain technologies and processes by retailers and consumers in some product fines is curious.;The poultry industry long ago realized that case-ready chicken products added value and increased profits in its commodity product lines. These new products combined improved production techniques, new processing and packaging technologies, and a new retail marketing strategy in a way that completely revolutionized how retailers stocked and sold poultry and how consumers used the product.;In comparison to the experience of chicken, case-ready beef has seen limited success in the retail marketplace. The limited success of case-ready beef products is surprising given several external demand factors favoring adoption of this advanced technology of fresh beef products. The objective of this dissertation is to determine what critical factors may affect fresh meat processors and retailers' decision whether or not to integrate case-ready beef products into their product lines.;Decision-makers in the fresh beef industry have for years contemplated and attempted various strategies for increasing adoption of case-ready technology and this research project seeks to assist the industry in those endeavors. To develop a better understanding of the operational concerns that help or hinder the successful introduction of case-ready beef products into retail grocery stores, this project developed six research questions to guide the research process. These questions were constructed by interviewing key industry experts, by directly observing case-ready meat products as they moved through the supply chain, and by conducting in-depth interviews with retail store managers and distribution center managers from a limited assortment grocery store chain with over 1,150 stores throughout the U.S. Also a thorough review of the Accounting, Strategic Management and Transaction Cost Economics literature was conducted as they relate to outsourcing and/or the "make or buy" decisions. From the six research questions a total of twenty-four testable research propositions were developed that will help identify the operational issues associated with the successful implementation of a case-ready meat strategy.;The academic literature was in agreement about firms outsourcing products and services. It is recommended that firms should outsource only those products that are not core to the business. However, in the instance of retail meat processing and packaging, the function is core to its business. This study focuses on the decision to convert its meat operations to case-ready beef products, which is a decidedly different approach to outsourcing. This research found that the adoption of case-ready meats is directly related to maximizing the opportunities within the six operational issues and mitigating others. An important observation is that central processing opportunities will become more evident to industry decision-makers if and when formal alliances are formed whereby retailers share point-of-sale data to firms throughout the supply chain.