This article focuses on data exchange relationships and ways to improve collaboration in the supply chain. Initially, the article examines the information needs and alternatives in supply chain management. In the second part, it identifies different sets of factors that are likely to influence information sharing with suppliers, from a manufacturers' point of view. Results from a Finnish Manufacturing industry survey show that manufacturers provided substantial information on demand data, production schedules, and inventories to their suppliers. Respondents perceived delivery performance measured by the timeliness, accuracy, and defect rate of deliveries as the primary incentives for supplier collaboration. On the other hand, supplier image and the market in which the supplier operates were found to be less relevant in determining the intensity of collaboration.
In the past, Inter-Organizational Relationships (IOR) in the supply chain have taken various forms. On one end of the spectrum, companies kept considerable distance from each other by engaging mainly in spot markets, whereas at the other extreme, companies enjoyed closer ties with their suppliers and customers as in the case of Japanese keiretsus.1 Nevertheless, with the advent of the concept of Supply Chain Management (SCM) in the 1980s, a trend aiming for higher collaboration between supply chain partners was set. SCM quickly gained popularity as it promised the reduction of production and logistics costs in the supply chain through better process integration. On the other hand, increasing competition due to globalization, rapid developments in information communication technologies in the 1990s, and the emergence of e-commerce, have brought suppliers and customers even closer together in the supply chain.
Today, the practice of SCM continues to be the top agenda item for many firms. However, despite widespread interest from the scientific community and myriad reports on SCM adoption in business, there is a shortage of empirical studies in this field. While most research has focused on the effects of SCM, less is known about how companies approach SCM. If information exchange is required for an effective supply chain, then what are the factors that encourage information exchange between firms? This paper aims to provide a better understanding of the factors driving information exchange, specifically between manufacturers and their first-tier suppliers, by studying the Finnish Manufacturing Industry. |
