Supplier involvement in product development in the electronics industry: A case study

The movement of activities earlier in the product development process requires a re-examination of the total supply network. The objective of this paper is to determine the degree of early supplier involvement (ESI) that exists between a multinational electronics company and its key suppliers, in terms of depth of integration, information exchange and buyer–supplier relationships. The paper provides insights into the strategic factors that affect the dynamics of the ESI process. The research indicates that there are considerable impediments for those participants responsible for establishing and managing the implementation of ESI. A number of strategic insights are identified that explain the existence of the impediments to the ESI process. Finally, based upon the findings a number of lessons are highlighted for organisations considering the adoption of the ESI process.     

Drivers and Performance Outcomes of Supplier Innovation Generation in Customer–Supplier Relationships: The Role of Power‐Dependence

While innovations generated by supply channel relationships, as opposed to individual partners, play an increasingly important role in the success of all supply chain partners, there has been a dearth of research in the literature on how supply chain relationships cultivate the process of such innovation generation. We explore supplier market knowledge acquisition, relationship learning, systems collaboration, and technological uncertainty as antecedents of supplier innovation generation, which is in turn hypothesized to positively affect the relationship performance of the supplier. Furthermore, supplier dependence on the buyer is investigated as a moderator of the effects of such antecedents on supplier innovation generation. Empirical tests, which used a sample of 236 Taiwanese executives, supported most of the hypotheses, and some implications of the results are discussed.     

Supplier integration,operational capability and firm performance: an investigation in an emerging economy environment

Abstract

The literature on supplier integration’s (SI) impact on firm performance is intertwined with mixed findings in terms of definitional differences, study context, specific integration components, and the types of relationships examined. This study contributes to the supplier integration and firm performance (SI-FP) literature by investigating how and when supplier integration influences firm performance. Drawing on the relational view, the resource-based view, and the Dynamics Capability theories, we suggest that improvements in firm performance from the supplier integration perspective are dependent on gains in operational capabilities. We test this dependency with survey data from firms in Ghana, a developing economy. The results show positive significant relationships between supplier integration and competitive operational capabilities and between supplier integration and firm performance. Our results highlight the importance for managers in developing economies and elsewhere to improve their firms’ operational capabilities and competitiveness by investing in supplier integration. We also discuss implications of these findings for research.     

Supplier Rationalization: A Sourcing Decision Model

We draw on extant literature on strategic sourcing and supply base rationalization to anchor our argument that measuring supplier performance diversity is germane to executing an effective supply base rationalization strategy. We explicate how a novel approach to data envelopment analysis (DEA) efficiency assessment can be utilized to measure this performance diversity. More specifically, our methods are anchored in cross efficiency analysis in DEA that allows for evaluating the efficiency of a supplier with respect to the optimal weights (strengths) of its peers. This methodology is applied to an actual supplier dataset of a large multinational telecommunications company in categorizing their supply base into groups for effective supplier rationalization. We conclude that measuring and analyzing the performance diversity within the framework of DEA provides a mechanism for firms to better balance a rationalized and diversified supply base with unique skills.     

Reverse Auctions to Innovate Procurement Processes: Effects of Bid Information Presentation Design on a Supplier's Bidding Outcome

Information technologies (ITs) are being used to innovate various procurement processes. This research study focuses on the supplier‐side effects of IT design choices to conduct reverse auctions, which are increasingly used to procure a wide range of products and services. IT–enabled reverse auctions enhance supplier participation across geographical boundaries, leading to more efficient pricing. However, there are growing concerns about the adverse effects of IT–enabled reverse auctions on a supplier's performance. Supplier‐side issues are gaining prominence in the reverse auction literature and are critical for the long‐term success of reverse auctions. Therefore, we focus on suppliers’ bidding outcomes and assess how the design of an IT–enabled reverse auction facilitates the auction bidding outcomes of participating suppliers. Specifically, we examine the effects of two types of bid information presentation design—full price visibility and partial price visibility—on supplier's auction bidding outcomes, across auctions with different cost certainty and suppliers bargaining power vis‐à‐vis the buyer. The results of this study contribute new knowledge about the ways to use IT for creating effective auction designs and innovating procurement through auctions to enhance both the buyer's and suppliers’ performance. We present the detailed theoretical contributions of our study and discuss the managerial implications for designers of reverse auctions.      

Environmental Factors,Managerial Processes,and Information Technology Investment Strategies

Although significant research attention has been directed at understanding the value of information technology (IT) investments for firms, very little attention has been paid to understand the IT investment behavior of firms. This article seeks to fill this void. We introduce the concept of IT investment strategy, defined by dimensions of intensity and proactiveness, to characterize the IT investment behavior of firms. Synthesizing the environmental deterministic and strategic choice perspectives of a firm's strategic decision making, we examine the effects of environmental factors, managerial processes, and the interplay between them on IT investment strategy. Specifically, we examine the impact of environmental factors such as industry clockspeed and information intensity on IT investment strategy. We also incorporate the strategic choice perspective to argue that managerial processes such as frequent chief executive officer—chief information officer communications and collective information systems planning play a critical role in shaping the firm's IT investment strategy. The empirical results show that the environmental variables are related to IT investment strategy. Besides, managerial processes serve as a means to understand the environment and thus moderate the relationships between the environmental variables and the various facets of IT investment strategy. The conceptualization of IT investment strategy and the focus on both environmental determinism and strategic choice should enrich our understanding of firms’ IT investing behavior.     

信息技术资源和信息技术能力的互补性及其绩效影响

信息技术资源和信息技术能力之间的关系是明确信息技术价值实现机理的基础。本文基于资源基础理论、竞争战略理论和核心能力理论,构建了信息技术资源、信息技术能力、信息系统支持企业竞争战略、信息系统支持企业核心能力和企业绩效之间关系的理论模型,研究信息技术资源和信息技术能力在信息技术价值实现过程中的互补性以及其对企业绩效的影响机理。利用层次回归分析方法对296份中国企业的实际调查数据进行了数据分析和模型拟合。研究结果表明信息技术资源和信息技术能力在信息技术价值实现过程中具有互补性,而且两者之间的互补性通过信息系统支持企业竞争战略和信息系统支持企业核心能力等中介变量间接影响企业绩效。     

Supplier Opportunism in Buyer–Supplier New Product Development: A China‐U.S. Study of Antecedents,Consequences, and Cultural/Institutional Contexts

Collaborating with a supplier in a buying firm's new product development (NPD) project is commonly advocated and adopted, but does not always improve project performance. Some pre‐existing collaboration contexts, such as buyer–supplier NPD projects, are especially exposed to supplier opportunism due to the uncertain nature of the collaboration process. Adopting agency theory and transaction cost theory perspectives, we examine: (i) contextual antecedents and project consequences of supplier opportunism and (ii) if these causal influences vary in different cultural and institutional contexts. Using a survey sample of 214 United States (U.S.) and 212 Chinese buying firms’ responses about buyer–supplier NPD projects, we find that supplier opportunism is significantly influenced by the task and relational contexts. We also show that supplier opportunism damages both design quality and efficiency, two aspects of project performance. When comparing U.S. to China, we find that task and relational contexts have a greater impact on supplier opportunism in the U.S., but design efficiency is less hurt by supplier opportunism there. Finally, we show challenges of preventing supplier opportunism in certain NPD collaboration contexts, and offer solutions for overcoming these challenges.     

Early supplier involvement in the design process: lessons from the electronics industry

The movement of activities earlier in the product development process, necessitates a re-examination of the total supply network. Supply chain literature has traditionally examined procurement and value-adding activities, without explicitly defining product development as part of these. The trend towards outsourcing design activities is bringing recognition for this process as part of the total supply network. The objective of this paper is to determine the degree of early supplier involvement (ESI) that exists between a multinational electronics company and its key suppliers, in terms of depth of integration, information exchange and buyer–supplier relationships. The paper provides insights into the strategic factors that affect the dynamics of the ESI process. Such insights are valuable in terms of gaining a greater understanding of how the ESI process is managed and determining the barriers to effective supplier integration. The research indicates that there are considerable impediments for those participants responsible for establishing and managing the implementation of ESI. A number of strategic insights are identified that explain the existence of the impediments to the ESI process. Finally, based upon the findings a number of lessons are highlighted for organisations considering the adoption of the ESI process.     

Supplier integration and company performance: A configurational view

Supplier integration is considered a key managerial strategy for improving buyer performance. This study adopts a configurational approach to supplier integration, based on the interaction and complementarity between supply chain management practices. In this perspective, this study explores the impact of supplier integration and measures aimed at creating a fast supply network structure on buyer performance. This research also attempts to ascertain whether these practices can exert a synergic effect. After examining data from a sample of 186 manufacturing plants, we can conclude that while taken singly supplier integration and fast supply network structure practices have a markedly positive effect on the performance goals considered (i.e., efficiency, schedule attainment and flexibility); in addition, they interact to produce an additional synergic effect on efficiency and schedule attainment. The analyses also reveal that investing in FSNS or SI initiatives alone can be risky. On one hand, when companies fail to make any effort to structure their supply network in order to achieve fast lead times, the impact of supplier integration on efficiency and schedule attainment may be hindered and, in extreme cases, supplier integration might even have no impact at all. On the other hand, investing only in fast supply network structure initiatives, without striving to achieve an adequate level of supplier integration might well be useless: indeed, even detrimental to any improvement in performance. These findings provide useful guidelines for managers who must decide how to combine supplier integration and fast supply network structure initiatives in order to improve or maximize performance.     

Search for Alternatives and Collaboration with Incumbents: Two-Sided Sourcing Behavior in Business Markets*

Sourcing strategies in business markets have been considered separately and the practice of two-sided sourcing behavior—engaging in search for alternative suppliers and collaboration with an incumbent supplier—has not been examined. To fill that gap, we first identify boundary conditions under which the poor performance of an incumbent supplier intensifies an original equipment manufacturer's (OEM) search and collaboration. Then, we examine how an OEM's two-sided sourcing behavior influences one of the critical elements of sourcing performance: the responsiveness of the incumbent supplier. Our proposed hypotheses were tested with data from a national survey of 539 OEM purchasing managers in the Japanese electronics industry. The analysis results indicate three main findings. First, two environmental conditions—pace of technological change and volume uncertainty—have contrasting influences on the link between incumbent supplier performance and an OEM's search and collaboration. While uncertainty from the upstream channel (pace of technological change) enhances an OEM's search and collaboration, uncertainty from the downstream channel (volume uncertainty) lowers an OEM's search and collaboration. Second, an OEM's dependence on its incumbent supplier has differential effects: an OEM reduces search as its dependence on incumbent supplier increases, while it enhances collaboration as its dependence on incumbent supplier increases. Third, while search alone has a negative effect on responsiveness of an incumbent supplier, engaging in two-sided sourcing behavior (i.e., combining search with collaboration) has a positive effect on responsiveness of the incumbent supplier.     

Examining the Impact of Interorganizational Systems on Process Efficiency and Sourcing Leverage in Buyer–Supplier Dyads

Manufacturing firms are increasingly seeking cost and other competitive advantages by tightly coupling and managing their relationship with suppliers. Among other mechanisms, interorganizational systems (IOS) that facilitate boundary‐spanning activities of a firm enable them to effectively manage different types of buyer–supplier relationships. This study integrates literature from the operations and information systems fields to create a joint perspective in understanding the linkages between the nature of the IOS, buyer–supplier relationships, and manufacturing performance at the dyadic level. External integration, breadth, and initiation are used to capture IOS functionality, and their effect on process efficiency and sourcing leverage is examined. The study also explores the differences in how manufacturing firms use IOS when operating under varying levels of competitive intensity and product standardization. In order to test the research models and related hypothesis, empirical data on buyer–supplier dyads is collected from manufacturing firms. The results show that only higher levels of external integration that go beyond simple procurement systems, as well as who initiates the IOS, allow manufacturing firms to enhance process efficiency. In contrast, IOS breadth and IOS initiation enable manufacturing firms to enhance sourcing leverage over their suppliers. In addition, firms making standardized products in highly competitive environments tend to achieve higher process efficiencies and have higher levels of external integration. The study shows how specific IOS decisions allow manufacturing firms to better manage their dependence on the supplier for resources and thereby select system functionalities that are consistent with their own operating environments and the desired supply chain design.     

Supplier competition and its impact on firm׳s sourcing strategy

Most research on firms׳ sourcing strategies assumes that wholesale prices and reliability of suppliers are exogenous. It is of our interest to study suppliers׳ competition on both wholesale price and reliability and firms׳ corresponding optimal sourcing strategy under complete information. In particular, we study a problem in which a firm procures a single product from two suppliers, taking into account suppliers׳ price and reliability differences. This motivates the suppliers to compete on these two factors. We investigate the equilibria of this supplier game and the firm׳s corresponding sourcing decisions. Our study shows that suppliers׳ reliability often plays a more important role than wholesale price in supplier competition and that maintaining high reliability and a high wholesale price is the ideal strategy for suppliers if multiple options exist. The conventional wisdom implies that low supply reliability and high demand uncertainty motivate dual-sourcing. We notice that when the suppliers׳ shared market/transportation network is often disrupted and demand uncertainty is high, suppliers׳ competition on both price and reliability may render the sole-sourcing strategy to be optimal in some cases that depend on the format of suppliers׳ cost functions. Moreover, numerical study shows that when the cost or vulnerability (to market disruptions) of one supplier increases, its profit and that of the firm may not necessarily decrease under supplier competition.     

Strategic goals and design drivers of the supplier portal: lessons from the Ferrari case

The purpose of this work is to identify the main design drivers of a supplier portal and to verify the relationships between these drivers and the strategic goals of such portals. Through the analysis of an empirical case, three different design drivers have been identified, called penetration, breadth, and depth. Moreover, a relationship has been found out between strategic goals and the identified design drivers. This relationship, based on the evidences of a currently successful field experience, can provide a framework to support the design of a supplier portal.     

Toward a Typology of Buyer–Supplier Relationships: A Study of the Computer Industry*

Buyer–supplier relationship typologies are useful analytical tools for purchasing managers in managing exchange relationships with suppliers and monitoring their purchasing portfolios. Existing buyer–supplier relationship typologies are mainly focused on either relational contents or power‐dependence and have limited empirical support for their performance implications. In this study, we developed an alternative buyer–supplier relationship typology that integrates both relational content and power‐dependence dimensions, resulting in four generic relationship types: market, power, autonomous‐link, and constrained‐link relationships. We then performed a longitudinal exploratory investigation of eight leading firms in the U.S. computer industry to explore the performance implications of the typology, using a combinatorial qualitative approach that leverages the strengths of case study research, content analysis, and quasi‐experimental design. The results suggest three theoretical propositions. First, the association between the type of buyer–supplier relationships and buyer firm performance varies such that constrained‐link relationships are superior in terms of operational efficiency while autonomous‐link relationships are superior in terms of product innovation. Second, the positive association between buyer–supplier relational contents (i.e., relationalism) and buyer firm operational efficiency is strengthened as the suppliers' dependence on the buyer firm increases. And finally, the positive association between buyer–supplier relationalism and buyer firm product innovation is weakened as the suppliers' dependence on the buyer firm increases.     

I need you,but do I love you? Strong ties and innovation in supplier–customer relations

Research on supplier–customer relationships has attracted a great deal of attention, as such relationships can positively impact firms’ knowledge acquisition and innovation. Within this stream of research, strong ties with customers have been explored with attention to their beneficial and detrimental effects, presenting a paradox to be addressed. To contribute to this debate, we suggest focusing on how tie strength is measured, and accordingly, we return to the seminal definition of tie strength by Granovetter (1973), who defines it as a combination of behavioural and affective components. We acknowledge that the two components have different characteristics and dynamics, which urges us to unbundle the two components and measure their separate impacts on knowledge acquisition and innovation. To further investigate the role of tie strength in innovation, we hypothesize and test the mediating role of knowledge acquisition. We test our hypothesis in vertical partnerships between small- and medium-sized enterprises (SMEs) located in a high-tech cluster and their key customers. We show that the unbundled components of strong ties have a direct positive impact on the knowledge acquisition of high-tech SMEs and an indirect positive impact on innovation, with knowledge acquisition mediating the effect. Our study contributes to the debate on the paradox of tie strength in supplier–customer relations by providing and empirically testing a research approach that might complement the previous approaches and by shedding light on the important role of the affective component of tie strength in knowledge acquisition and innovation.     

Opportunism in Distribution Networks: The Role of Network Embeddedness and Dependence

Prior research documents the value of network relationships to firm behavior but is relatively silent on how networks influence opportunism in distribution channels. Focusing on a common type of distribution networks in which multiple distributors serve a single, dominant supplier, this study moves beyond a dyadic view to examine how a focal distributor's relational and structural embeddedness in such a distribution network influences its opportunism toward the dominant supplier. In particular, we postulate that a distributor's relational embeddedness in the network curbs its opportunism, whereas its network centrality, as a form of structural embeddedness in the network, promotes its opportunism. Moreover, we propose that relational embeddedness magnifies the role of a focal distributor's dependence on the supplier in suppressing the distributor's opportunism, whereas network centrality buffers such a role. We first empirically test these hypotheses using data collected from car dealers in China; the results provide support for the hypotheses. We then develop an analytical model to validate and further explain the underlying mechanisms of the network effects. Our analytical results not only validate the empirical results but also provide guidance for managers on controlling opportunism in distribution networks.     

Ex Post Problems in Buyer–Supplier Transactions: Effects of Transaction Characteristics, Social Embeddedness, and Contractual Governance

This paper focuses on ex post governance of inter-firm transactions. We develop and test hypotheses on the occurrence of ex post problems like delivery delays, inferior quality, and insufficient service in buyer–supplier transactions. Our hypotheses address effects of transaction characteristics, of social embeddedness, and of contractual governance on the occurrence of problems. Other than earlier research on embeddedness effects in this field, we consider not only effects of dyadic embeddedness but also effects of network embeddedness. We test hypotheses using rich survey data on more than 1200 purchases of information technology (IT) products: hardware and software, both standard and complex. We find evidence for effects of transaction characteristics on the occurrence of problems, while our data do not support hypotheses on effects of contractual governance. Our data provide rather consistent support for hypotheses on the effects of embeddedness. Specifically, we find evidence that network embeddedness reduces problems.