The Impact of Retailer-Supplier Cooperation and Decision-Making Uncertainty on Supply Chain Performance

Buyer-supplier relationships have been increasingly considered a critical part of contemporary supply chain management. In response to dynamic and unpredictable market changes, buyers and suppliers enter into cooperative relationships to pursue individual goals and joint goals for better economic and non-economic performance of the supply chain. On the other hand, cooperation between channel members is surrounded by uncertainty, which can create a detrimental impact on the performance of a supply chain. Previous research has focused on various aspects of uncertainty that could affect supply chain member behaviour. The present research contends that relationship behavioural factors play an important role in increasing or mitigating channel members’ perceived uncertainty in their supply or purchase decision-making. Specifically, the purpose of this research is to investigate the impact of retailer-supplier cooperation and retailer/supplier’s decision-making uncertainty (DMU) on retail supply chain performance from the perspectives of both the retailer and the supplier. A holistic model was developed as the theoretical framework for this conceptualisation. A sample of 202 retailers and 64 suppliers in the sporting goods retail business in Taiwan was used to separately test a number of hypothesised relationships by using structural equation modelling (SEM). The findings indicate that both cooperation and DMU are the key determinants of retail supply chain performance, including financial performance and non-financial performance (i.e., supply flexibility and customer service). Financial performance is positively affected by retailer-supplier cooperation and negatively affected by DMU in both the retailer model and the supplier model. The five dimensions of retailer-supplier cooperation (i.e. trust, guanxi, dependence, coercive power and non-coercive power) have significant effects on cooperation. However, apart from guanxi with the retailer/supplier, neither other relationship dimensions nor retailer-supplier cooperation have any influence on retailer’s DMU or supplier’s DMU. The results also indicate that differences and similarities exist across retailers and suppliers with respect to the effects of several relationship dimensions on cooperation and uncertainty. 2 The holistic empirical model developed for this research contributes further to understanding the links, which have been lacking in the extant channel relationship literature and supply chain management literature, between buyer-supplier relationships, DMU, and supply chain performance. The findings that a retailer/supplier’s DMU can erode the performance of a supply chain in various aspects highlight the need for improvement in some areas of supply chain efficiency and effectiveness, through cooperation-enhancing actions between the retailer and the supplier. From a managerial perspective, the performance improvement in the supply chain, in turn, will motivate more reciprocal commitment and efforts from the retailer and the supplier to maintain their working relationship. As such, mutual trust and enriched guanxi, dependence and non-coercive power help both the retailer and the supplier to have less uncertainty in their purchase/supply decision-making process. It creates a win-win position for both parties in the supply chain

The Impact of Retailer-Supplier Cooperation and Decision-Making Uncertainty on Supply Chain Performance

Buyer-supplier relationships have been increasingly considered a critical part of contemporary supply chain management. In response to dynamic and unpredictable market changes, buyers and suppliers enter into cooperative relationships to pursue individual goals and joint goals for better economic and non-economic performance of the supply chain. On the other hand, cooperation between channel members is surrounded by uncertainty, which can create a detrimental impact on the performance of a supply chain. Previous research has focused on various aspects of uncertainty that could affect supply chain member behaviour. The present research contends that relationship behavioural factors play an important role in increasing or mitigating channel members’ perceived uncertainty in their supply or purchase decision-making. Specifically, the purpose of this research is to investigate the impact of retailer-supplier cooperation and retailer/supplier’s decision-making uncertainty (DMU) on retail supply chain performance from the perspectives of both the retailer and the supplier. A holistic model was developed as the theoretical framework for this conceptualisation. A sample of 202 retailers and 64 suppliers in the sporting goods retail business in Taiwan was used to separately test a number of hypothesised relationships by using structural equation modelling (SEM). The findings indicate that both cooperation and DMU are the key determinants of retail supply chain performance, including financial performance and non-financial performance (i.e., supply flexibility and customer service). Financial performance is positively affected by retailer-supplier cooperation and negatively affected by DMU in both the retailer model and the supplier model. The five dimensions of retailer-supplier cooperation (i.e. trust, guanxi, dependence, coercive power and non-coercive power) have significant effects on cooperation. However, apart from guanxi with the retailer/supplier, neither other relationship dimensions nor retailer-supplier cooperation have any influence on retailer’s DMU or supplier’s DMU. The results also indicate that differences and similarities exist across retailers and suppliers with respect to the effects of several relationship dimensions on cooperation and uncertainty. 2 The holistic empirical model developed for this research contributes further to understanding the links, which have been lacking in the extant channel relationship literature and supply chain management literature, between buyer-supplier relationships, DMU, and supply chain performance. The findings that a retailer/supplier’s DMU can erode the performance of a supply chain in various aspects highlight the need for improvement in some areas of supply chain efficiency and effectiveness, through cooperation-enhancing actions between the retailer and the supplier. From a managerial perspective, the performance improvement in the supply chain, in turn, will motivate more reciprocal commitment and efforts from the retailer and the supplier to maintain their working relationship. As such, mutual trust and enriched guanxi, dependence and non-coercive power help both the retailer and the supplier to have less uncertainty in their purchase/supply decision-making process. It creates a win-win position for both parties in the supply chain

Supply chain decision making supported by an Open books policy

Based on a study of a buyer–seller relationship in the automotive industry, this article identifies 17 different decision-making processes where openly sharing cost data—a so-called open books policy—plays an important supporting role. These processes relate to supplier selection, various activities that occur prior to production, and the full-speed production stage of the exchange process. Overall, open books plays the greatest role in the pre-production stage, although it is found to support decision-making relating to supplier selection and decision-making during full-speed production to a greater extent than the literature recognizes

Small and Medium sized Enterprises’ Collaborative Buyer-Supplier Relationships: Boundary Spanning Individual Perspectives

Boundary-spanning individuals (BSIs) play a critical role in supply chain management, especially in small and medium sized enterprises (SMEs) where interactions with buyers and suppliers can depend heavily on just a few individuals. This study, utilizing data from Korean manufacturing-sector SMEs, explores whether cooperative social value orientations of SMEs’ BSIs influence the effects of collaborative buyer-supplier initiatives. The results suggested that the performance implication of decision-sharing initiative increases when BSIs have a high level of cooperative social value orientation. However, it also negatively moderates the relationship between risk/benefit sharing (involving financial losses or gains) and performance suggesting possible negative side-effects. However, we found that such orientation also negatively moderates the relationship between risk/benefit sharing (involving direct financial losses or gains) and relationship performance suggesting possible negative side-effects

Supply Chain Structure, Inventory Turnover, and Financial Performance: Evidence from Manufacturing Companies in China

Using data collected by the World Bank, we empirically investigate the relationship between Chinese manufacturers’ supply chain attributes, raw material and finished goods inventory turnover, and return on sales. Our findings indicate that location proximity, relationship continuity, and the relative power of the manufacturer over suppliers and customers have a significant impact on inventory performance, which in turn drives profitability. We especially focus on characteristics unique to China’s business environment. We find that Chinese manufacturing companies have relatively weak operational performance, and better operational performance is associated with closer distance, longer relationship with suppliers and customers, and relative power over suppliers. Unlike their counter parties in some developed countries, Chinese manufacturers’ profitability relies on both downstream and upstream inventory performance, with downstream inventory performance playing a somewhat more important role

A supplier selection strategy within the Malaysian telecommunications industry

The telecommunication industry in Malaysia has grown rapidly over the last 15 years, with effective supply chain management becoming increasing important within the sector. A multitude of providers and part owned Malaysian government companies, vendors and suppliers are involved in generating and creating value-adding products and services within this sector (across wireless, wireline, broadband business and consumer lines of business). This paper describes key challenges facing a major telecoms service provider in Malaysia with regards to drivers involved in the overall procurement and supplier selection with regards to components of performance management, decision-making, selection techniques, quality and cost management, procurement policy and procurement ethics. This paper further focuses on defining and detailing research currently being undertaken to develop a framework for identifying supplier selection drivers that are inherent within the sector and suggests a research approach to investigate and develop strategies for supplier selection for the telecommunications industry in Malaysia

Electronic marketplace-to-marketplace alliances: emerging trends and strategic rationales

The electronic marketplace domain has recently witnessed the joining together of a number of previously independent marketplaces and the formation of collaborative alliances between others. This study seeks to determine the nature or type of cooperative arrangements or alliances that are currently being forged between electronic marketplaces, and the strategic rationale that is leading to this observed alliance formation. The findings of the study are based upon an examination of statements made to the press by marketplaces undertaking strategic alliances. This published data was supplemented with face-to-face interviews with managers at three relevant electronic marketplaces. Three distinct types of alliance are observed; the merger between previously separate marketplaces, the acquisition of one marketplace by another and the formation of an interoperability agreement between two marketplaces. Three rationales for alliance formation were observed: an increase in the number of buyers or suppliers in a given market sector that can access the marketplace (an increase in scale of operations), an increase in the breadth or depth of services that are offered to users of the marketplace (an increase in the scope of operations) and providing the ability to exchange information across multiple tiers of a supply chain. A broader discussion of the findings is given and suggestions for further research are made

Beyond harsh trade? The relevance of ‘soft’ competitiveness factors for Ugandan enterprises to endure in Global Value Chains

This article is based on an empirical study which examined the issues of organization and coordination of global production and trade for the case of trade between Uganda and Europe.Respective experiences of 34 exporters in Uganda and 19 importers in Europe were documented through in-depth interviews and consequently analyzed. The article discusses matters of cooperation between the exporters and importers and points to its significance for upgrading and enhancing competitiveness of the exporters studied. It further identifies firm level ‘soft competitiveness factors’ (SCFs) of Ugandan exporters and discusses their relevance for the firms’ performance in Global Value Chains. The findings reveal that deficiencies in SCFs can have damaging effects, and vice-versa. Possession of the SCFs can yield significant competitive advantage for exporters and help to strengthen the relationship with the importers. Findings of ill-treatment of exporters by their importers highlight a particular kind of challenge that is often overseen in the debate about exports of African firms: the challenge regarding business behaviours, practices, and ethics including the ability to engage in relations with foreign buyers and leverage resources, knowledge and generally cooperation from them, first, and the general issue of problematic business practices in the global economy, second. The article policy recommends Policy, practice and research should focus on economic, political, social, cultural and institutional factors that impact on local levels of SCFs; to improve and help exporting enterprises in Africa to survive and succeed in GVCs, within the context of the state of the moral economy in global capitalism