Collaborative Relationship in a Global Supply Network

The shipbuilding industry is characterized overall by make-to-order production, based on the mobilization of many suppliers for one final product’s construction. Moreover, this industry presents a global nature, because its strategic position is defined by its global position (Cho & Porter, 1986). The shipbuilding industry faces a new wave of competition, due to demand from countries for their own national fleets, the increasing growth of exports and, as a consequence, the use of naval transport as added value to foreign commerce. In this preliminary investigation, we seek to find out if local conditions favor the retaking of this industry within a country, which in turn raises another question: how should the local suppliers become interconnected so that the shipbuilding industry can become competitive globally? This study identifies types of relationship and practices adopted by the shipbuilding industry in Brazil, in order to contribute to supply network structuring based on key-suppliers’ capabilities and cooperation between players.

Preparing for the Worst

The economic crisis has taken a major toll on almost every industry, as well as key customers and suppliers in all sectors of the economy. Supply chain managers are increasingly concerned about the financial impact on key customers and suppliers, deferred commitments and outstanding accounts. In an effort to probe into the underlying assumptions that their actions are based upon, the author surveyed supply chain executives, identifying key patterns that are beginning to emerge across industries and countermeasures that are being taken in response. Three key themes emerged. First, buyers and suppliers are co-dependent, and they should think within this context when faced with financial stress. Second, there is a need to better understand the warning signs and establish channels of communication, to address the key risks related to financial stress. Finally, managers should emphasize the need to better manage supplier relationships through modeling and event analysis, allowing them to take preventive actions before problems occur. These themes are discussed and developed into a set of propositions, as a foundation for future research.

Impact of Strategic Outsourcing on Operational Control

Many studies using the theories of Transaction Cost Economics and the Resource-Based View together with the core competencies approach have confirmed that strategic outsourcing might be an effective means for efficient exploitation of available resources. Additionally, for companies, outsourcing provides access to resources beyond the reach of the intrinsic capabilities of an organisation. In theory, such strategies should fuel competitiveness and operational efficiency. Five cases – all characterised by Make-to-Order or Engineering-to-Order for processing orders – have been reviewed, to explore the operational issues that result from strategic decision-making on outsourcing. From this evaluation, it appears that these companies perform weakly on the control of the outsourced activities. Furthermore, it seems that the (manufacturing) strategy is disconnected from outsourcing practices and that outsourcing is not perceived as contributing to competitive advantage. Finally, traditional criteria and behaviour for decision-making, i.e. a cost-driven perspective, prevail, which does not address the operational challenges for the cases. This chapter indicates that, based on these three theories, strategic decision-making on outsourcing insufficiently accounts for operational issues that emerge later during manufacturing.

Integration in Global Supply Chains

Supply chain management (SCM) demands a holistic view of the functions and processes required to bring a product or service to market. It assumes that optimization of subsystems does not necessarily lead to global optimization and that the supply chain should be strategically managed as a single entity in order to effectively and efficiently deliver the desired results. SCM requires supply chain integration, both internal integration (for example, across functions) and integration with suppliers, customers, and/or other concerned channel members. The key recurring themes characterizing integration research as applied to business processes concern connectivity and simplification. Connectivity implies seamless linkages (internally or externally) and encompasses coordination, collaboration, cooperation, and interaction. Simplification is the common manifestation of system optimization. The most important specific mechanisms for achieving integration are teams (or integration via human interaction) and IT (or information integration); these two are central to the evolution of knowledge integration into a collaborative “culture” of joint decision-making and knowledge management. The literature suggests that integration in a supply chain and firm performance are positively linked. Although a lot of research in a variety of research domains has addressed cross-functional teams or IT (internal integration) and firm performance, less work has been done on the interaction of integration mechanisms or on the impact of integration mechanisms conditional on other factors, such as environmental turbulence. Furthermore, empirical research with a holistic supply chain orientation is in its infancy. For example, neither second tier suppliers and customers nor recyclers are typically considered. The chapter concludes by suggesting several avenues for future research in global supply chain integration.

Network Marketing and Supply Chain Management for Effective Operations Management

The use of network marketing by an organization as a distribution strategy in its global supply chain management activities is increasing and becoming very popular. This chapter looks at the “new” network marketing-supply chain paradigm, and analyzes some implications of the strategies for effective operations management. The network marketing paradigm has been greatly enhanced by the growth and popularity of the internet, which provides a powerful impetus to the whole concept of effective global network marketing-supply chain management area. This mainly theoretical study also provides a practical perspective by discussing manufacturing and service companies that are implementing the network marketing-supply chain strategy model in some form. It analyzes the supply chain management activities used by these organizations to achieve unprecedented success in their respective industry. This chapter concludes by developing an effective network marketing-supply chain management model that uses network marketing and supply chain management as key strategies in operations management.

Effect of Customer Power on Supply Chain Integration and Performance

Supply chain integration (SCI) has received increasing attention from academic researchers and practitioners in recent years, however, our knowledge of what influences SCI, and how SCI influences the performance of supply chains and manufacturers within the supply chain is still very limited. Although researchers in marketing and management have investigated power and relationship commitment issues within and between organizations, few have examined their impact on SCI. This chapter studies the relationship between power, relationship commitment and integration between manufacturers and their customers within a supply chain. The impact of customers’ SCI on the customer service and financial performance of manufacturers is also investigated. The authors propose and empirically test a model using data collected from 617 manufacturing companies in China. The results show that customers’ use of different types of power has different impacts on manufacturers’ relationship commitment. Expert power, referent power and reward power are very important in improving manufacturers’ normative relationship commitment, while reward power and coercive power enhance instrumental relationship commitment. The authors also find that normative relationship commitment have a greater impact on customer integration and customer service by manufacturers than instrumental relationship commitment. Customer integration significantly enhanced manufacturers’ customer service and financial performance. The improvement in customer service of manufacturers positively influenced their financial performance.

Supplier Integration in the Chinese Automotive Industry

Supplier integration has become an important concept for improving supply chain performance in networked industries, such as the automotive industry. The aim of this chapter is to identify factors that facilitate and inhibit supplier integration in the context of the Chinese automotive industry. An inductive approach, based on grounded theory, was chosen as the research methodology, where data was collected through 30 case interviews conducted with automotive companies in China and through which data was collected accordingly. The results suggest that buyer-side leadership is an important antecedent for building motivation, trust and commitment among suppliers and for shaping their mindsets. This, in turn, facilitates strategic alignment and enables suppliers to build collaborative capabilities, which are shown to be a key enabler for successful supplier integration.

Control Model for Intelligent and Demand-Driven Supply Chains

Orchestrating supply chains is challenging. This chapter describes how to control a supply chain to make it truly demand-driven – based on the assumption that all relevant information is made available to all partners in real time. The chapter explores the elements of a framework for intelligent and demand-driven supply chain control, with regards to the overall concept and associated principles, and demonstrates these in a case example. Challenges to the realization of the proposed control model include trust and power, supply chain dynamicity and uncertainty, and required investments in competence, standardization, and information and communication technology. Some of these can be met through initial small-scale implementations of the proposed model, to demonstrate effects, and by exploiting facilities for information sharing and collaboration, like supply chain dashboards and control studios. Future research within operations management, technology and information and communications technology (ICT) will support broader realization of the proposed control model.

Offshoring Process

The purpose of this chapter is to contribute to the knowledge on how production offshoring and international operations management vary across cultural contexts. The chapter attempts to shed light on how companies approach the process of offshoring in different cultural contexts. In order to achieve this objective, the authors employ a qualitative methodology and compare three Danish and three Japanese manufacturing companies. On the basis of this comparative investigation, the authors find that the parent companies from both contexts employ offshoring as a remedy for the challenges of globalisation. Yet there are clear differences in how offshoring is conducted in Denmark and Japan. The main differences are outlined in a framework and explained employing cultural variables. The findings lead to a number of propositions suggesting that the process of offshoring is not simply a uniform technical-rational calculation of the most efficient organisation of activities across national borders, but it is rather specific to the parent companies’ national contexts.

Developing Angles of Integration

This chapter discusses the relationship between the focus and degree of internet-based Information Technology (IT) applications and the scope and orientation of process-oriented integration in supply chains. In particular, the degree of supplier and customer integration and its match with the implemented IT instruments supporting inter-organizational collaboration are investigated. Different types of integration are differentiated from each other. For the measurement of the focus and degree of IT integration and supply chain integration, an approach is introduced which allows the analysis of the alignment of both aspects. This approach is referred to as the angles of integration. With respect to supply chain integration and IT implementation, the analysis of different integration strategies are possible. The chapter helps companies to evaluate the alignment of their use of IT techniques with their supply chain management emphases. Furthermore, it refines an existing framework for the comparison of different supply chain integration strategies and applies it with IT. Based on the angles of integration, the match of supply chain integration and IT can be investigated.