Japanese Supplier Relations: A Comparative Perspective

This paper describes major characteristics of Japanese supplier relations in a comparative perspective. The supplier relations in Japan, particularly automobile industry, are examined in comparison with those in the United States. The primary purpose of the study is to characterize significant features of Japanese supplier relations and to provide economic rationale for those relationships. In addition, comparing supplier relations in Japan and the U.S., convergence in the nature of those are discussed. Significant features of Japanese supplier relations are characterized: long-term relationships and commitments; forced competition among few suppliers; transaction-specific investments in plant, equipment, and human capital; significant involvement of suppliers in product development with sharing of information. Supplier relations in the U.S. are changing and moving close to the Japanese counterpart. There has been a limited, yet noticeable, convergence in the nature of U.S. and Japanese supplier relations.Long-term relationships, Procurement, Supplier relations, Transaction-specific investments

From Supply Chains to Total Product Systems

The evolution of supply chain management and practice has had an integral and expanding role in contemporary global economic and socio-political change over the past 25 years or so. Thi srole is moving closer to centre stage with the emergence of business models equating to 'total product systems'. The impacts of advanced supply chain practice include driving fundamental changes in approach to product design, the concept of 'product', production methods, distribution, marketing, aftermarket support and end-of-life (EOL) reprocessing. Viewed in their full context, methods in supply chain management (SCM) have major influences on societal functioning and on economic development at global, national and local levels. Even the supply chains for simple products can involve several different industries and link many companies, large and small. Those for complex products may span several technological domains and economic sectors, linking hundreds or sometimes thousands of companies

Management control of supplier relationships in manufacturing: a case study in the automotive industry.

This paper studies management control design of supplier relationships in manufacturing, a supply chain phase currently under-explored. Compared to supplier relations during procurement and R&D, which research found to be governed by a combination of formal and informal controls, supplier relations in manufacturing are more formal, so that they could be governed by more formal and less informal controls. To refine the management control system and influencing contingencies, we propose a theoretical framework specifically adapted for the manufacturing stage. This framework is investigated by an in depth case study of the supplier management control of a Volvo Cars production facility. We identify three types of suppliers visualizing the associations in the framework and illustrating the framework’s explicative power in (automotive) manufacturing. Furthermore, the case contradicts that supplier relations in the manufacturing phase are governed by little informal control, because the automaker highly values the role of trust building and social pressure. Most notably, a structured supplier team functions as a clan and establishes informal control among participating suppliers, which strengthens the automaker’s control on dyadic supplier relations.management control; supplier relationships; manufacturing; contingency theory; case research;

Collaborative improvement as an inspiration for supply chain collaboration

The battlefield of competition is today moving from the level of\ud individual firms to the one of the extended enterprises, that is, networks of customers and their suppliers. This paper discusses how learning and continuous improvement today take place in processes based on daily collaboration at intercompany level, i.e. Extended Manufacturing Enterprises (EMEs). The purpose of the paper is to present a preliminary theory on Collaborative Improvement (CoI), i.e. continuous improvement at the EME level. Based on a literature review on Supply Networks, and Continuous Improvement and on evidence from two explorative case studies, the paper proposes a model for Collaborative Improvement in EMEs and discusses a research approach based on Action Research and Action Learning to further develop preliminary theory and actionable knowledge on how to foster and sustain CoI in EMEs

Are Japanese Firms Failing to Catch up in Localization? An Empirical Analysis Based on Affiliate-level Data of Japanese Firms and a Case Study of the Automobile Industry in China

This paper analyzes the degree and the current status of localization of Japanese affiliates in China. For this purpose, we (1) compare the localization (measured in terms of the number of expatriates, local sales, local procurement, and local management) of Japanese and U.S. affiliates in China and other major regions; (2) analyze the impact of localization on the profitability of Japanese affiliates in China and in other major regions; and (3) conduct a detailed investigation of inter-firm transactional relationships in China between automobile manufacturers and parts suppliers. We find that compared with U.S. affiliates, Japanese affiliates tend to be less localized. Using a comprehensive affiliate-level panel data set on Japanese multinationals and concentrating on China, we then examine the effect of localization quantitatively and find that Japanese affiliates with higher procurement ratios and/or local CEOs and procurement managers enjoyed high profits. Next, turning to the factors determining trading relationships between assemblers and suppliers of different nationalities in China, our analysis suggests that even when taking various control variables into account, such as suppliers' productivity level and the distance between assembler and supplier, the transactional relationships of Japanese suppliers are more limited than those of suppliers of other nationalities. Moreover, Japanese automobile assemblers do not choose suppliers based on their current labor productivity level and transactional relationships between assemblers and suppliers are more closed in the case of Japanese firms than in the case of firms of other nationalities. On the other hand, we find that auto parts suppliers dealing with Japanese assemblers see their productivity grow faster regardless of the supplier's nationality. The results indicate that Japanese assemblers may well be choosing business partners which they expect to realize sustainable productivity increases in the future rather than focusing on present productivity levels. This finding provides evidence of business practices based on a long-term perspective characteristic of Japanese enterprises.

The Causality of Supply Relationships

This study examines the 'logic' or underlying causality of supply relationships. It develops and tests hypotheses, in a LISREL model, on detailed data for 553, 450 and 226 supply relationships in the US, Japanese and European automobile industries. The differences found between the three regions seem small, given the received view that there are fundamental differences between 'Japanese' and 'Western' contracting. However, the differences that remain suggest that in the US perhaps the 'Japanese system' has been surpassed, in a 'third way' that combines the advantages of sufficiently durable relations with the advantages of an open system with great variety.Automobile industries;Learning theory;Social exchange theory;Supply relationships;commitment

"Predictors of Trust in Buyer-Supplier Relations: A Contextual and Cultural Comparison of Japan and Turkey"

Trust is a dimension of buyer-supplier relations being researched widely, but studies have generally focused on developed economies. Developing countries, however, have contextual and cultural factors that may differentiate them from developed countries. This study attempts to apply a theoretical model developed for the US, Japan, and Korea to a developing country context, namely Turkey. While Turkey has cultural similarities to Japan in terms of collectivism and risk aversion, the results of the theoretical model show that is does not fit the Turkish case. Suggestions are made to extend the model theoretically and measurement-wise to help explain trust building factors in developing countries.

Innovation for a circular economy : exploring the adoption of PSS by UK companies in the baby products sector

Several authors have commented on the relatively slow rate at which Product Service Systems (PSS) have been adopted in B2B networks. Despite some prominent examples, such as the provision of integrated lighting systems to Sainsbury’s (supermarket chain) by Parkersell in the UK, and the ‘pay per copy’ (lease and take back) systems provided by copier companies such as Xerox and Canon, PSS has not been widely adopted even though the business case seems sound. Consequently, the question of identifying and overcoming barriers to PSS adoption has become an important research topic. In this study we explore barriers to the adoption of PSS in the UK baby products industry using a qualitative research design employing in-depth interviews with baby products suppliers (manufacturers) and buyers (retailers). The novelty of the approach adopted in this study is that key concepts from the Industrial Networks Approach are used to frame the analysis. Buyers and suppliers of baby products acknowledge the value of the PSS approach, but PSS adoption is found to require considerable adaptation to conventional patterns of inter-organizational interaction

Sustainable Value Proposition Design in a Product-Service System

Many companies have started to add services to their tangible products in order to defend themselves from increased competition from low-cost economies. Research regarding the transition towards product-service systems (PSS) and how the PSS providers' business models are affected exists, but there is a lack of research regarding how the suppliers to the PSS providers are affected by the transition towards PSS. Therefore, this thesis studies the situation for a supplier/partner to an OEM that has changed their business model to a PSS providing one. As the first step in a development of a new business model aims this thesis to provide guidelines for how to set up value propositions suitable for a supplier/partner in this new environment. When technologically complex products, such as aircraft engines, are provided through PSS offerings it is hard to translate customer needs into quality parameters, which makes it hard to sustain the value to customer over time. Therefore, how to keep the value offering sustainable over time is also investigated in this thesis. The aim of this study was to investigate how a sustainable value proposition can be designed for a product and technology supplier/partner to an OEM that offers PSS solutions. The research has been performed through studying relevant literature and collecting empirical data from a case company through semi-structured interviews and a workshop. The case company in this research is Volvo Aero Corporation (VAC). The empirical findings show that VAC wants to offer product-service bundled solution, which fit the whole spectra of PSS value propositions, to their partners/customers. To be able to deliver these different types of product-service bundled solutions different value propositions that suit the different kinds of PSS offerings are needed. Requirements that must be fulfilled to be able to offer and deliver the different types of value propositions exist in terms of securing sufficient information access, aligning the incentives of all actors involved and achieving an internal consensus of what is delivered