Transaction attributes and buyer-supplier relationships in AMT acquisition and implementation: the case of Malaysia

This paper explores how transaction attributes of technology affect differences in the relationship between technology buyers and suppliers. It also examines the impact on performance of different patterns of relationship between technology buyers and suppliers. Data obtained from 147 manufacturing firms in Malaysia are used to test several hypotheses, which were derived from a review of the literature on technology, transaction cost theory and buyer–supplier relationships (BSR). The research results indicate that the higher the level of technological complexity, specificity and uncertainty, the more firms are likely to engage in a closer relationship with technology suppliers. Even though the majority of firms reported improvements in their performance, results indicate that firms demonstrating a closer relationship with technology suppliers are more likely to achieve higher levels of performance than those that do not. It is also shown that with high levels of transaction attribute, implementation performance suffers more when firms have weak relationships with technology suppliers than with moderate and low levels of transaction attribute.     

Buyer behaviours and the performance of the supply chain: An international exploration

This paper studies the effects of buyer?supplier interaction in a supply chain environment. It focuses on the effects of buyer behaviours (such as supplier selection, number of suppliers, percentage of outsourcing, and frequency of production changes) on the performance of the supply chain. Using data collected from machine tool manufacturers around the world, the various behaviours of buyers are examined to see how they induce or mitigate the degree of uncertainty experienced by suppliers and thus affect suppliers' delivery performance. In addition, it was investigated how such buyer behaviours could further affect the supply chain's ability to perform as expected. The statistical results suggest that many buyer behaviours that have no direct effect on buyer's performance can have a significant effect on their suppliers' performance. Specifically, buyer behaviours directly manifest in supplier performance and only indirectly manifest in their own performance. This can give the buyer the false impression that the supply base is harming performance, when the real problem is the way the buyer manages the supply chain. The results vary by region of the world, suggesting that any theory that links buyer behaviours to supplier performance will need to consider a firm location.     

Collaboration in humanitarian supply chains: an organisational culture framework

The purpose of this study was to determine the impact that institutional logics and, more specifically, organisational culture can have on humanitarian supply chain (HSC) collaboration. A framework was developed that explicates buyer–supplier collaboration in a humanitarian setting. Twenty-nine semi-structured interviews were conducted with buyers and suppliers. The data indicated that in a HSC, collaborative outcomes, such as new product development, inventory management, and product/service delivery, are influenced by the buyers’ and suppliers’ organisational cultures. Based on suppliers’ characteristics, they can be classified as humanitarian suppliers, commercial suppliers, and humanitarian and commercial suppliers. These groups have distinct organisational cultures. An unexpected finding is that suppliers that serve commercial buyers primarily claim to have encountered no issues in supply chain collaboration with humanitarian buyers, although they have different types of organisational cultures. The factors that lead to successful collaboration are identified as trust, commitment, information sharing and mutual respect. Simultaneously, dominant institutional logics are observed in the dyadic relationship.     

A two-way approach to supply chain partner selection

All organisations face partner selection. It is the first step in establishing partnership. Over recent decades, a one-way selection approach has been dominant in the literature. It is assumed that a buyer searches for one or more suppliers from a set of suppliers. Once the best supplier is found and selected, a partnership is formed. However, in reality, not only is the selection not a one-way process as the relationship itself is bilateral, but the existence of other buyers and suppliers also needs to be taken into account. In this study, a two-way partner selection approach is proposed, where not only the buyers evaluate suppliers, but also the suppliers have the opportunity to evaluate buyers. Considering a marketplace where there are several buyers and suppliers, an integrative model is proposed in the form of an assignment model to optimally match all the buyers and suppliers. A generalised model is also formulated to take the suppliers’ capacity and buyers’ demand into account. The proposed models are illustrated using some numerical examples. Finally, conclusions and recommendations for future research are provided.     

Supplier post performance evaluation: the effects of buyer preference weight variance

We use empirical post performance data of suppliers and buyers to demonstrate that degrees of variability of buyer evaluation team weight preferences can have varying effects on the perception of supplier performance attributes. We first justify then use data envelopment analysis (DEA) as a research tool to integrate buyer performance and buyer weight preferences with supplier performance and then use the results of the dyadic DEA evaluation model to analyse three propositions. This integration is essential to a dyadic approach. Results indicate that buyer preference weights on supplier performance attributes influence the perception of supplier performance sometimes in unexpected ways dependent on the degree of conformity versus disparity in the factor weights that was put into operation using assurance regions. As a result, buyer performance factors and preferences must be measured and their effects understood before post performance supplier evaluation is completed and other components of a relationship management plan are implemented.     

Multiobjective capital allocation for supplier development under risk

Supplier development is increasingly important due to the complexity of today’s supply chains and the globalisation of businesses. Since manufacturers have only limited resources, they need to make an informed decision about which suppliers to develop. Moreover, the returns from investment in supplier development are uncertain, so manufacturers have to take this risk into account when choosing their suppliers for development programmes. In this paper, we propose a multi-objective model for capital allocation for supplier development under risk. We apply it to an example of a global car manufacturer and support the decision-making process with data downloaded from the Bloomberg database. We use stock market returns and cost of capital of suppliers to assess their performance. Our model supports an informed decision, which is that tradeoffs exist between risk and cost of supplier development programme. Depending on the risk aversion of the manufacturer, we demonstrate different allocation schemes for supplier development.     

Controlling a supplier’s subcontracting decisions through contractual enforcement or economic incentives

Suppliers often subcontract part of their workload to other suppliers, and manufacturers might suffer severe consequences if they do not anticipate their suppliers’ incentives to subcontract. In this paper, we study the case where a manufacturer outsources two tasks to a top-tier supplier. The manufacturer must decide whether it should design a contract that enforces that the different tasks are completed by the appropriate suppliers, and when it is preferable to use economic incentives to manipulate the top-tier supplier’s subcontracting behaviour. We find that when the cost difference between suppliers of different tiers is small and the correlation between the risks associated with the two tasks is minimal, the manufacturer can benefit from designing a contract that ensures the preferred subcontracting behaviour, if the cost of enforcing such a contract is not too high. However, when such enforcement cost is substantial, the manufacturer might be better off manipulating the top-tier supplier’s economic incentives.     

Organisational resilience and relational dynamics in triadic networks: a multiple case analysis

This study aims to analyse resilience and relational dynamics (competitive, cooperative and co-opetitive) within a triadic buyer–supplier–supplier context. Our central goal is to show how a buyer’s supplier–supplier relational behaviour leads to and shapes resilience of this triad. We utilised a multiple-design case approach and selected eight buyers and their suppliers from the textile industry in Turkey. By analysing a triadic context from another industry, we conducted validation analyses. Our findings showed a pattern of relationship between the resilience and the relational dynamics of a triad. Built on theory and insights from the cases, we proposed three propositions. We argued that when co-opetition prevails in a triadic context of relations, the triad resilience level is highest. In competitive relational settings the triad resilience level is lowest, and when the relational dynamics are cooperative, the triad resilience level is moderate. This study is the first to introduce and discuss organisational resilience at triadic level. Furthermore, to our knowledge, our insights from cases are among the first attempts to link three types of supplier–supplier relational dynamics to triad resilience via the use of a multiple-design case approach. Therefore, our contributions are likely to extend the organisational resilience and buyer–supplier–supplier relations research.     

Interactive selection model for supplier selection process: an analytical hierarchy process approach

Supplier Selection Process (SSP) becomes increasingly important for most manufacturing firms as it helps to reduce directly cost to the bottom line. The selection process involves the determination of quantitative and qualitative factors so as to select the best possible suppliers. It is essential to identify the relationship with the suppliers in terms of tangible factors. Owing to subjective human judgement in determining the relative importance of those selection factors, a method called Chain of Interaction is proposed to solve the problems associated with the dynamic nature of supply chain management. Focusing on the goodwill of an Analytic Hierarchy Process, an Interactive Selection Model is suggested to systemize the earlier steps, such as the determination of buyer-supplier relationships and formation of selection criteria, before the implementation of the Analytic Hierarchy Process with the help of Multi-Criterion Decision Making software called Expert Choice. The proposed Interactive Selection Model can be applied to supplier selection through the identification of buyer-supplier interactions and the valid data-collection methods. A numerical example is presented and the pros and cons of the model examined to seek further modification.     

Antecedents and Outcomes of Supplier Innovativeness in International Customer–Supplier Relationships: The Role of Knowledge Distance

The increasing competitive pressures and speed of R&D and product innovation is prompting many multinational enterprise customers to outsource their core activities to suppliers. Despite organizational challenges due to cultural and physical separation from their partners, these are now charged with supplier-driven innovation. This study looks at key drivers of supplier innovativeness, examines the role of cross-national differences in shaping supplier innovativeness and examines the impact of this dimension on relationship performance in international customer–supplier relationships. Our findings from a large-scale survey of Taiwanese electronics suppliers provide evidence of the contribution of antecedents such as customer orientation, customer control and technological uncertainty to the enhancement of supplier innovativeness. Innovativeness contributes to increased customer dependence and improves relationship performance. Differences in knowledge bases stemming from different institutions are also tested in this study; we find that knowledge distance may be detrimental to the innovativeness-performance link in international exchange relationships.     

Two-phase selection framework that considers production costs of suppliers and quality requirements of buyers

Buyers are faced with selecting the optimal supplier, while suppliers are left to consider production costs. In this study, we developed a two-phase selection framework that allows buyers to evaluate the performance of suppliers while taking production costs into account for value maximisation. This scheme is a win-win solution capable of promoting long-term relationships between buyers and suppliers. Under the assumption of normality, the first phase involves constructing a new Six Sigma quality capability analysis chart (SSQCAC) which takes production costs into account. The objective is to evaluate all potential suppliers using the 100?×?(1–α)% upper confidence limit (UCL) of an integrated Six Sigma quality index (SSQI) Q_PIh when dealing with products with smaller-the-better (STB), larger-the-better (LTB), or nominal-the-best (NTB) quality characteristics. According to interval estimation theory, this method can have a significant impact on the consumption of resources; i.e. the production costs of the supplier can be decreased by reducing the production quality to below that required by the buyer. The proposed method also filters out unsuitable suppliers in order to simplify the decision problem and reduce computational demands and operational risks/costs without compromising the quality of the final product. In the second phase, a detailed analysis is conducted using Euclidean distance measure to select the optimal supplier from among the remaining candidates. We conducted a real-world case study to evaluate the efficacy of the proposed method. We also conducted comparisons with existing methods to demonstrate the advantages of the proposed method and its managerial implications. Suggestions for future study are also provided.     

Credit guarantee mechanism with information asymmetry: a single sourcing model

This study concerns small and medium-sized enterprise (SME) suppliers suffering from cash constraints in operations, money shortages with possible disruptions and cost uncertainty because of the distributor’s supply risk and the information asymmetry. Thus, this study adopts the distributor’s (buyer’s) perspective and applies a credit guarantee mechanism with an incentive contract as a risk management tool. The distributor can adopt incentive contracts to reveal the type of its supplier; the higher the inefficient supplier’s contribution to the distributor, the smaller the gap between procurement contract quantities with the efficient supplier and procurement contract quantities with the inefficient supplier. An insight into practice is that incentive contracts are tools for acquiring ideal suppliers in the supply base and help companies such as Li & Fung enhance their competitive capabilities.     

Monitoring type B buyer–supplier relationships

The ability to monitor supplier performance is a critical capability for maintaining strong buyer–supplier relationships. Monitoring type B suppliers is especially challenging as they are not as clearly defined as either type A, with strong strategic partnerships, or type C, with little partnership. This research develops a non-parametric multivariate Hoteling’s T ² control chart to capture the in-control state of a dyadic relationship (Phase I), and show how it would be developed based on survey data of buyer–supplier relationship attributes. Modelling the satisfactory level of dyadic relationship performance is very useful for identifying when the relationship begins to move away from the desired state. We then use the designed control chart to monitor the relationship between dyads over time to determine if any unusual behaviour has occurred (Phase II) and illustrate its implementation through a case study from the auto industry. This research illustrates how supply chain managers can secure and improve their supply chain performance by monitoring and maintaining strong relationships with their partners. The proposed method extends the existing SPC tools to effectively manage Type B buyer–supplier relationships.     

Supplier development: communication approaches,activities and goals

Operations managers rely on the purchasing function to obtain production inputs from suppliers and to ensure supplier performance. The link between supplier development activities performed by buying firms with their suppliers, in terms of operational outcomes and impact on competitive advantage for the buying firm has been well documented. However, a buying firm should, prior to setting up a supplier development program and investing in supplier development activities, establish goals it wants to achieve and determine how to achieve these goals. Until now, supplier development goals in general and their relationship with supplier development activities have received little research attention. The results from this empirical study suggest that the relationship between the goal to improve a supplier's capabilities and knowledge transfer from the buyer to the supplier firm is moderated by the degree of human interaction. Buying firms pursuing the strategy to improve supplier capabilities rely more intensively on training and co-location of buyer and supplier employees to leverage the knowledge transfer to the supplier firm.     

The implication of vendor inventory liability period in a decentralised assembly system

This paper investigates a decentralised assembly system that consists of one manufacturer and multiple suppliers who produce the complementary components. In a single selling season, the manufacturer initially sets a vendor inventory liability period (VILP) to control the suppliers’ delivery times, and the suppliers simultaneously determine when to deliver their components. Given the firms’ equilibrium strategies, we find that it is not wise for the manufacturer to set an overly long VILP, since having no inventory is not always beneficial to the manufacturer. A supplier may choose to postpone his delivery when the length of the VILP increases or the other suppliers’ deliveries are delayed, and either of these conditions is detrimental to the supplier’s profitability. We also examine the impact of VILP under different situations and find that having VILPs customised for different suppliers can reduce the manufacturer’s cost as well as improve the supply chain’s overall efficiency.     

Study on suppliers’ flexibility in supply chains: is real-time control necessary?

In a supply chain, the suppliers’ flexibility is considered as a tool to cope with the environmental uncertainties. Flexible suppliers are capable of supplying/processing other jobs in addition to the one for which they are the original supplier. In a cluster of flexible suppliers, it is expected that flexibility of suppliers be utilized more expressively through better control of the supply chain. The online real-time information system is considered as one of the tools for effective control of the supply chain. However, in a cluster of flexible suppliers, the physical and operating characteristics of alternative suppliers (available by virtue of suppliers’ flexibility) may vary from each other for doing the same operation, which may result in a different lead-time to process the same job. This paper presents a simulation study on suppliers’ flexibility level (SFL) in relation to information system automation level of the supply chain and physical characteristics of the flexible suppliers. This paper contributes an approach for decision-makers to identify the information system automation level and variations in physical characteristics of the alternative suppliers with respect to suppliers’ flexibility level that can help in improving the overall delivery lead-time. A decision-maker can reach a trade-off between benefits obtained from supplier's flexibility and the investment required to have a suitable information system automation level and physical characteristics of suppliers. Results of simulation study show that if automation level of information system is not matching to the suppliers’ flexibility level then supplier's flexibility may become counterproductive. Further, a relative change in physical characteristics of the alternative flexible suppliers as compared to the original supplier is more than a certain limit then suppliers’ flexibility may again be counterproductive. However, a cost intensive real-time information system may not be needed when suppliers’ flexibility levels are lower. Study identifies the productive and counterproductive performance regions for suppliers’ delivery lead-time.     

Supply chain flexibility concepts,dimensions and outcomes: an organisational capability perspective

Due to the increasing uncertainty and diversity in supply chains (SCs), companies are aiming to develop their SC flexibility, which we define as the capability of a company, both internally and externally in conjunction with its key suppliers and customers, to respond to uncertainties and customer expectations without excessive costs, time and performance losses. SC flexibility has three dimensions – internal, supplier and customer flexibility. This study investigates how SC flexibility improves operational and financial performance from the organisational capability perspective. The conceptual model is empirically tested using data collected from 216 companies in China. Our findings suggest that only customer and internal flexibility contribute to operational performance directly, while supplier flexibility contributes to operational performance only indirectly through internal flexibility. The three dimensions of SC flexibility have no direct impacts on financial performance. We further identify complementarities between supplier and customer flexibility and tradeoffs between supplier and internal flexibility. However, no synergy effect is found for internal and customer flexibility on operational performance. This study provides a framework to understand SC flexibility from the organisational capability perspective and identifies the inter-relationships among the three dimensions of SC flexibility and operational and financial performance.     

Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints

In this paper, we study a duopolistic market of suppliers competing for the business of a retailer. The retailer sets the order cycle and quantities from each supplier to minimize its annual costs. Different from other studies in the literature, our work simultaneously considers the order size restriction and the benefit of order consolidation, and shows non-trivial pricing behaviour of the suppliers under different settings. Under asymmetric information setting, we formulate the pricing problem of the preferred supplier as a non-linear programming problem and use Karush–Kuhn–Tucker conditions to find the optimal solution. In general, unless the preferred supplier has high-order size limit, it prefers sharing the market with its competitor when retailer’s demand, benefit of order consolidation or fixed cost of ordering from the preferred supplier is high. We model the symmetric information setting as a two-agent non-zero sum pricing game and establish the equilibrium conditions. We show that a supplier might set a ‘threshold price’ to capture the entire market if its per unit fixed ordering cost is sufficiently small. Finally, we prove that there exists a joint-order Nash equilibrium only if the suppliers set identical prices low enough to make the retailer place full-size orders from both.     

Using integrated fuzzy DEMATEL and fuzzy C: means algorithm for supplier evaluation and selection

Decision-making techniques are used to help evaluate the current suppliers’ aim at classifying performance of individual suppliers against desired levels of performance, so as to design suitable plans to increase the performance and capabilities of suppliers. In this study, an integrated model is introduced and proposed for increasing the supplier selection and evaluation quality. The methodology is composed of two steps. The first stage is fuzzy decision-making trial and evaluation laboratory method in which the interactions between the evaluation criteria and the criteria weight have been computed. At the second stage, performances of suppliers are assessed using both the criteria weights obtained at the first stage and fuzzy c-means clustering algorithm by classifying the vendors according to their performances. Obtained results show that the proposed model is very well suited as a decision-making tool for supplier selection decisions.