A social network analysis of a regional automated wood pellet heating industry in pursuing homeowner satisfaction

Our study examined relationships among pellet mills, bulk delivery companies, and high-efficiency pellet boiler equipment firms in northern New England as they relate to homeowner satisfaction, using social network analysis and the concept of supply chain management. The continual growth of supply and demand for automated pellet heating requires a careful match between innovative technologies and homeowner needs; these involve multiple factors and require collaboration among firms. Using interview data with managers from pellet mills, bulk delivery companies, and equipment firms in Maine, New Hampshire, and Vermont, we found 15 firms that are connected through both a transaction network and an informal business interaction network. The networks were characterized by short paths and no obvious sign of centralization. Network statistics reported for each network included density, clustering coefficient, and degree, closeness, and betweenness centrality. Most firms in the supply networks shared customer satisfaction information (average number of information sending ties = 3) and considered collaboration in customer services important (mean = 4.4, on a 5-point scale). However, equipment firms initiated more information sharing than other types, and bulk delivery companies were in the best position in the supply network to promote collaborative customer services. Opportunities exist to improve communication between pellet mills and equipment firms, leading to a robust automated pellet heating supply chain, strong demand, and subsequent homeowner satisfaction.