Supply Chain Management for Competitive Advantage

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Methodology

This chapter presents the methodology used for the study. The chapter begins by giving brief introductory information about the meaning of research methodology including the types of research approaches. Moreover, it focuses and gives a detail explanation about qualitative research approach which is the chosen type of approach for the study. The description of the case study used, how data is collected and the types of data used are further discussed and explained in this section. Finally the chapter ends by addressing the problems encountered during the study.

Research Methodology

Kothari (2004) defines research methodology as a way of finding a solution for research problems or it can be described as a science that deals with how research is carried out scientifically. Kothari (2004) points out that research methodology is important for researchers in order for them to do research in a way that highlights and gives essential training in collecting material and arranging and putting it together for carrying out research. Kothari (2004) also adds that there are two basic approaches to research: qualitative research and quantitative research. For this research qualitative research is applied. The definition and description of qualitative research is explained in detail as follows.
‘Qualitative research is the collection, analysis and interpretation of data that cannot be meaningfully quantified, that is, summarized in the form of number’ (Diggines & Wiid, 2009, p.85). Qualitative research basically depends on the gathering of qualitative data (Johnson & Christensen, 2012). Neergaard and Ulhoi (2007) define qualitative research as a research that focuses on a multi method approach that includes an interpretive and naturalistic view of its subject matter. Qualitative research is concerned with qualitative observable fact, or in other words a phenomenon that contains quality or kind (Kumar, 2008). Beije (2010) illustrates that, in qualitative research the research questions are carried out in a flexible manner allowing one to get in touch with the people concerned to a degree that is essential to grasp what is being carried out within the field. Beije (2010) also adds that the definition of qualitative research contains three key components:
Looking for meaning
Using flexible research methods enabling contact
Providing qualitative findings
According to Mariampoliski (2001), qualitative research methods offer the required and complementary viewpoint on human behavior. ‘When used properly, qualitative inquiry can address numerous strategic information needs, such as creative ideation for new product development, conception and evaluation of marketing or communications tactics and insights into the culturally-based preferences of various racial and linguistic minorities’ (Mariampoliski, 2001, p.8). Diggines and Wiid (2009) mention that the techniques used in qualitative research include focus groups, in depth interviews and predictive techniques. On the other hand Wiid and Diggines (2009) also explain that the structure of qualitative research is less than that of the quantitative research. Wiid and Diggines (2009) indicate that Qualitative research is preferable when investigating or examining, attitude, perception, motivation and understanding.
As already mentioned above, to carry out this research the authors decided that qualitative research is the best applicable method for the study. The reason of using qualitative research is due to the nature of the research that is based on gathering, and analyzing of qualitative data. In other words, the study is made by investigating and interpreting individual ideas and analyzing the findings in relation to the literature review in context to the research questions.

Case Study

A case study can be defined as the study of a single case where a study is made extensively and the rationale behind the study is to at least apply partially, to a larger class of cases (Gerring, 2007). A case study is likely to grasp the complexity of a single case (Stake, 1995). Stake (1995) states that a case study deals with the particularity and complexity of a specified single case, coming to know its activities within significant situations. ‘The case study method is a very popular form of qualitative analysis and involves a careful and complete observation of a social unit, be that unit a person, a family, an institution, a cultural group or even the entire community’ (Kothari, 2004, p.113). An organization or company would be another example of such a unit. Kothari (2004) explains the major phases that are involved in the case study as mentioned below:
Phase 1. Recognition and identification of the status of the facts to be examined.
Phase 2. Gathering of data, investigation and background of the specific phenomena.
Phase 3. Analyzing and finding the causal factors as a foundation for a corrective or developmental action.
Phase 4. Implementation of corrective treatments.
Phase 5. Follow up program to know the effect or the effectiveness of the applied corrective treatment.
The authors chose a case study based on the Hungarian company named MOL Hungarian Oil and Gas PLC. The reason for selecting this company is because of its high performance in terms of profitability and high number of employees in central Europe (CNN Money, 2011; Kitekinto, 2011).

Collection of Data

One of the most significant steps in writing a report is the collection of data or information. Because the report depends on the quality of the data collected, the report will be good if the data collected is good (Guffey, 2010). When collecting data in research it is important to take into account, what type of data is to be collected and what method of data collection is to be implemented. Data collection can be expensive cost wise, but depends on the nature of the project. However, data collected plays an important role in determining the research problem (Stevensens, Wrenn, Sherwood & Ruddick, 2006). The following sections give a detail description about the types of data and methods of data collection from theoretical point of view and further addresses the data used and the methods of data collection implemented for the research.

Types of Data

Stevensens et al. (2006) state that there are two types of data:
Primary data: Data that is gathered by a researcher for the first time for a particular ongoing research project. According to Guffey (2010), primary data is that collected through firsthand experience. Primary data can be gathered by applying either of the two basic research methods, qualitative or quantitative (Stawarsk & Particia, 2008.)
 Secondary data: Data that has been formerly gathered by other researchers for other reasons. Guffey (2010) mentions that secondary data results from reading what others have experimented with and observed. In addition to these, Guffey (2010) adds that secondary data is simpler and has lower cost to develop and to use than primary data which might mean interviewing large groups and distributing questionnaires.
For this research the authors use both, primary data through interviews to get a relevant and reliable data to make a good research and secondary data from different sources, such as books and articles as a supportive data which helps in building the frame of reference for the study and gives a guidance in making analysis with the findings systematically and properly.

Methods of Data Collection

Philips and Stawarski (2008) illustrate that there are different ways of collecting qualitative data among these, the most commonly used ones are three: Interviews, focus groups and observations. Kothari (2004) state that for selecting the appropriate method for data collection, a researcher should keep in mind the following key factors:
Nature, scope and object of enquiry: This is the most important factor that influences or affects making a choice on the particular method to be implemented. This factor also plays an important role in making the decisions on what type of data to be used, primary data or secondary data.
Availability of funds: Availability of funds plays a big role for selecting the appropriate data collection method. When there is limitation of funds the researcher has to select a cheaper method for collection of data even though it might be less efficient and effective method compared to other costly methods.
 Time factor: It is important for a researcher to keep in mind the availability of sufficient time before making a decision on what type of method is to be used for the data collection.
 Precision required: Being precise is another key factor to be taken into account by researchers when selecting the method of collection of data.
Due to the nature of the research, which is based on conducting the research using qualitative research approach, which needs to make a deep investigation the authors discovered and applied interviews as the relevant data collection method. Therefore the authors used interviews as the main data collection method. Besides these, while gathering the data for the study the means of communication used with the concerned contact person of the firm chosen for the research was through internet by using Skype. This is because of the fact that the company chosen for the case study has not presence in Sweden and is located in Hungary.

Interviews

‘While the interview process uncovers reaction, learning, and impact data, it is primarily used for collecting application data’ (Phillips & Stawarski 2008, p.23). Phillips and Stawarski (2008) also mentioned that interviews could take a long time and needs the preparation of the interviewer to guarantee the consistency of the process. According to Lussier and Kimball (2009) there are three types of interviews: structured interviews, unstructured interviews and semi structured interviews. Lussier and Kimball (2009) explains that structured interviews use a list of preplanned questions to ask all individuals or candidates that are to be interviewed where unstructured interviews are interviews that don’t use questions that are planned in advance. Semi structured interviews are interviews where interviewers ask questions from a preplanned list of questions but also ask unplanned questions as well (Robert and Kimball, 2009). On the other hand Tenenbaum and Driscoll (2005) mentioned that semi structured interviews contains a number of questions to be explored by each of the candidates to be interviewed. Klenke (2008) mentioned that one of the major strengths of using semi-structured interview is that there is a positive rapport between the interviewer and interviewee. On the contrary Klenke (2008) adds that one of the weaknesses of semi structured interview is that it is time consuming and expensive.
For this research semi structured interviews were applied because of several reasons. One of the main reasons is that the research is based on a single case study where interviews were made with different individuals working in the same company or involved in a project with the company. Another reason is that candidates interviewed have different posts. Therefore, questions of each interview should be different from the other candidate to prevent redundancy. In other words interview questions should be relevant with the job description of the candidates to be interviewed to get relevant information to make a better research.

Problems Encountered

The authors have encountered several problems in the data collection process: one of the problems encountered was that there were a limited number of references on the selected topic. In other words there is not enough research made on the topic which is supply chain optimization in the oil industry and this was one of the biggest obstacles the authors faced during of the study. The other problem encountered was regarding the interview. One of the respondents of the interview did not answer the interview questions as per the order which made difficult for the authors in doing the empirical study and analyzing it.

Empirical Study

The information of this qualitative research has been gathered through a deep interview with Szabolcs Szabó and Tamas Kenesei who work for MOL Group in the Supply Chain Management department. Szabolcs Szabó is performance analyst and Tamas Kenesei is member of the optimization and planning unit in the supply chain management department. An interview was also conducted with Csaba Paal who works as a consultant in McKinsey & Company and participated in a supply chain management related project at MOL. The empirical study is conducted on the basis of semi structured interviews and reflect the theoretical framework developed in the literature review which can be found in Appendix 6, 7 and 8 as well as in Figure 2.3 respectively.

Findings

As the Jönköping University (2011) states that in the case of qualitative research is very hard to distinguish between result and analysis because there is not really a ‘pure’ statistical result. The findings follows the main elements of literature review, therefore, the information gained from interviewees can be presented in a logical systematic way. Interviewees also demonstrate their speech with several real or theoretical examples for the better understandings. It is has to be noted that the findings about supply chain optimization at MOL Group consider only the downstream supply chain.

Table of Contents
1 Introduction
1.1 Background Information
1.2 Problem Statement
1.3 Purpose
1.4 Research Question
1.5 Delimitation
1.6 Outline
2 Literature Review 
2.1 Supply Chain Management Defined
2.2 Supply Chain Management for Competitive Advantage
2.3 The Oil Industry
2.4 The Oil Supply Chain and Its Characteristics
2.5 Supply Chain Optimization in the Oil Industry
2.6 Summary
3 Methodology
3.1 Research Methodology
3.2 Case Study
3.3 Collection of Data
3.4 Problems Encountered
4 Empirical Study 
4.1 Findings
5 Analysis 
5.1 Downstream Oil Supply Chain Management and Optimization
5.2 Approaches to the Optimization
5.3 Functions of Downstream Oil Supply Chain
5.4 Summary
6 Conclusion 
References
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Supply Chain Optimization in the Oil Industry: A Case Study of MOL Hungarian Oil and Gas PLC