Supply chain collaborative advantage: A firm’s perspective

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<ul><li><p>USA</p><p>te U</p><p>ha</p><p>ive</p><p>om</p><p>pet</p><p>n,</p><p>chi</p><p>the</p><p>ata</p><p>various industries. Reliable and valid instruments were developed through rigorous empirical analysis</p><p>including structured interviews, Q-sort, and a large-scale study. Predictive validity is evaluated by</p><p>e strivsupplYakotonomhain over sur et a</p><p>investigation is needed to recognize its value (Gofn et al., 2006).</p><p>setaturee as</p><p>ve dimensions of process efciency, offering exibility, business</p><p>web survey with manufacturers across the US, the research</p><p>Contents lists available at ScienceDirect</p><p>w.e</p><p>Int. J. Productio</p><p>Int. J. Production Economics 128 (2010) 358367performance.qzhang@astate.edu (Q. Zhang).also intends to develop reliable and valid instrumentsand demonstrates that these elements form a secondorder construct. In addition, predictive validity is examined bytesting the impact of supply chain collaboration on rm</p><p>0925-5273/$ - see front matter &amp; 2010 Elsevier B.V. All rights reserved.</p><p>doi:10.1016/j.ijpe.2010.07.037</p><p>n Corresponding author.</p><p>E-mail addresses: mcao1@uwsuper.edu (M. Cao),of interorganizational collaboration (Barratt, 2003; Min et al.,2005). Collaboration seems to have great potential, but further synergy, quality, and innovation. Through a large-scalecollaboration, many partner relationships fall short of meeting theparticipants expectations (Doz and Hamel, 1998; Barringer andHarrison, 2000). Few rms have truly capitalized on the potential</p><p>insights and empirical ndings. By pooling an extensiveof factors, the research extends our understanding of the nand attributes of supply chain collaborative advantagrelationships can help rms share risks (Kogut, 1988), accesscomplementary resources (Park et al., 2004), reduce transactioncosts and enhance productivity (Kalwani and Narayandas, 1995),and enhance prot performance and competitive advantage overtime (Mentzer et al., 2000).</p><p>Despite the popularity and benets of interorganizational</p><p>demand information can be integrated into the production plansvia supply chain collaboration for automotive manufacturers(Tomino et al., 2009).</p><p>The objective of the study is to uncover the nature andcharacteristics of supply chain collaborative advantage. The studycontributes to the body of knowledge by providing theoretical1. Introduction</p><p>In the past decades, rms havcollaborative advantages with theircett and Magnan, 2004; Lejeune andcollaboration means two or more aujointly to plan and execute supply cand Sridharan, 2002). It can deliadvantages to its partners (Mentzerm performance. The construct and measures in this study have provided a rich and structured</p><p>understanding of collaborative advantage in a supply network. The results of the structural analysis</p><p>indicate that supply chain collaborative advantage indeed has a bottom-line inuence on rm</p><p>performance.</p><p>&amp; 2010 Elsevier B.V. All rights reserved.</p><p>ed to achieve greatery chain partners (Faw-va, 2005). Supply chainous rms are workingperations (Simatupangbstantial benets andl., 2000). Collaborative</p><p>Although the collaborative advantage is acknowledged in theliterature, its exact nature and attributes are not well compre-hended. In addition, the research studies on the collaborativeadvantage in the context of supply chain are still sparse.Collaboration between supply chain partners is not merely puretransactions but leverages information sharing and marketknowledge creation for sustainable competitive advantage (Mal-hotra et al., 2005; Vachon and Klassen, 2008; Bailey and Francis,2008; Ding and Huang, 2010). For example, changing marketdemonstrating a strong and positive relationship between supply chain collaborative advantage andSupply chain collaborative advantage: A</p><p>Mei Cao a, Qingyu Zhang b,n</p><p>a Department of Business and Economics, University of Wisconsin-Superior, WI 54880,b Department of Computer and Information Technology, Arkansas State University, Sta</p><p>a r t i c l e i n f o</p><p>Article history:</p><p>Received 3 October 2009</p><p>Accepted 21 July 2010Available online 3 August 2010</p><p>Keywords:</p><p>Collaborative advantage</p><p>Supply chain</p><p>Survey research</p><p>Structural equation modeling</p><p>a b s t r a c t</p><p>In the past decades, rms</p><p>chain partners. The object</p><p>collaborative advantage fr</p><p>benets gained over com</p><p>enabled knowledge creatio</p><p>that could not have been a</p><p>collaborative advantage as</p><p>quality, and innovation. D</p><p>journal homepage: wwrms perspective</p><p>niversity, AR 72467, USA</p><p>ve strived to achieve greater collaborative advantages with their supply</p><p>of the study is to uncover the nature and characteristics of supply chain</p><p>a focal rms perspective. Collaborative advantage is dened as strategic</p><p>itors in the marketplace through supply chain partnering and partner</p><p>and it relates to the desired synergistic outcome of collaborative activity</p><p>eved by any rm acting alone. The research conceptualizes supply chain</p><p>ve dimensions: process efciency, offering exibility, business synergy,</p><p>were collected through a web survey of U.S. manufacturing rms in</p><p>lsevier.com/locate/ijpe</p><p>n Economics</p></li><li><p>2. Conceptual development</p><p>Supply chain collaborative advantage is based on a paradigmof collaborative advantage (Kanter, 1994; Dyer, 2000) rather thancompetitive advantage (Porter, 1985). According to the collabora-tive paradigm, a supply chain is composed of a sequence ornetwork of interdependent relationships fostered through strate-gic alliances and collaboration (Chen and Paulraj, 2004). It is arelational view of interorganizational competitive advantage(Dyer and Singh, 1998).</p><p>By collaborating, supply chain partners can work as if theywere a part of a single enterprise (Lambert et al., 2004). Suchcollaboration can increase joint competitive advantage, i.e.,collaborative advantage (Jap, 2001). Supply chain collaborativeadvantage refers to strategic benets gained over competitors inthe marketplace through supply chain partnering and partnerenabled knowledge creation, and such synergistic benets couldnot be attained by acting independently (Jap, 2001; Vangen andHuxham, 2003; Malhotra et al., 2005). Supply chain partnering</p><p>Hansen and Nohria (2004) argue it is increasingly difcult tosustain competitive advantage on the basis of the economics ofscale and scope. Competitive advantage will belong to rms thatcan stimulate and support collaboration to leverage dispersedresources. They contend that the value creation from collabora-tion could be cost savings through the transfer of best practices,enhanced capacity and exibility for collective actions, betterdecision making and increased revenue through resource synergy,and innovation through the combination and cross-pollination ofideas. Similarly, Lado et al. (1997) and Luo et al. (2006) suggestthat collaboration produces various benets including costsavings, resource sharing, learning, and innovation.</p><p>Synthesizing the above studies, this research conceptualizessupply chain collaborative advantage as the following ve sub-dimensions: process efciency, offering exibility, business synergy,quality, and innovation. These collaborative advantages are viewedfrom the focal rms perspective (Duffy and Fearne, 2004) (Table 1).</p><p>Process efciency refers to the extent to which a rms</p><p>e</p><p>in</p><p>M. Cao, Q. Zhang / Int. J. Production Economics 128 (2010) 358367 359involves collaborative activities such as sharing information,synchronizing decisions, sharing complementary resources, andaligning incentives with partners costs and risks.</p><p>Collaborative advantage resides not within an individual rm butacross the boundaries of a rm via its relationship with supply chainpartners (Dyer, 1996; Dyer and Singh, 1998; Kanter, 1994; Jap,2001). Ferratt et al. (1996) dene collaborative advantage as thebenet gained by a group of rms as the result of their cooperationrather than their competition. They argue that, in healthcareindustry, IT enables rms to achieve competitive advantage throughcollaboration not only with supply chain partners but also withcompetitors (Pouloudi, 1999; Naesens et al., 2009).</p><p>Collaborative advantage relates to the desired synergisticoutcome of collaborative activity that could not have beenachieved by any rm acting alone (Vangen and Huxham, 2003).Jap (1999) explains that collaboration can enlarge the size of thejoint benets and give each member a share of greater gain thatcould not be generated by each member on its own. Kanter (1994)argues that supply chain partnering, as the strongest and closestcollaboration, is a living system that grows progressively in theirpossibilities. Collaboration involves creating new values togetherrather than mere exchange, and it is controlled not by formalsystems but a web of connections and infrastructures thatenhance learning and open new doors and unforeseenopportunities. Thus, collaboration-associated benets may notbe immediately visible; however potential long-term rewards areenticing and strategic (Min et al., 2005).</p><p>Table 1Denition of supply chain collaborative advantage and sub-dimensions.</p><p>Construct Denition</p><p>Supply chaincollaborativeadvantage</p><p>Strategic benets gained over competitors in the marketplac</p><p>through supply chain partnering</p><p>Process efciency The extent to which a rms collaboration with supply chain</p><p>partners is cost competitive</p><p>Offering exibility The extent to which a rms supply chain linkage supports</p><p>changes in products or services available for customers</p><p>Business synergy The extent to which supply chain partners combine</p><p>complementary and related resources to achieve spill-over</p><p>benets</p><p>Quality The extent to which a rm with supply chain partners offers</p><p>reliable and durable products that create higher value for</p><p>customers</p><p>Innovation The extent to which a rm works jointly with its supply cha</p><p>partners in introducing new processes, products, or servicescollaboration process with supply chain partners is cost competi-tive among primary competitors (Bagchi and Skjoett-Larsen, 2005).The process could be information sharing process, joint logisticsprocess, joint product development process, or joint decisionmaking process. Process efciency is a measure of success and adeterminant factor of the ability of the rm to make prot(e.g., inventory turnover and operating cost). Process efciency isimproved through lower inventory and better delivery perfor-mance (Vachon and Klassen, 2008; Cachon and Fisher, 2000; Leeet al., 2000). Supply chain collaboration facilitates the cooperationof participating members along the supply chain to improveperformance (Bowersox, 1990). The benets of collaborationinclude cost reductions and revenue enhancements (Lee et al.,1997; Giannoccaro and Pontrandolfo, 2009).</p><p>Offering exibility refers to the extent to which a rms supplychain linkage supports changes in product or service offerings(e.g., features, volume, and speed) in response to environmentalchanges. It is also called customer responsiveness in literature(Kiefer and Novack, 1999; Holweg et al., 2005). Offering exibilityis based on the ability of collaborating rms to quickly changeprocess structures or adapt the information sharing process formodifying the features of a product or service (Gosain et al.,2004). In todays market rms indeed pay attention to customersand more rms solicit customer inputs at the design stageresulting in better acceptance of the products and services later(Bagchi and Skjoett-Larsen, 2005).</p><p>Business synergy refers to the extent to which supply chainpartners combine complementary and related resources to</p><p>Literature</p><p>Jap, 2001; Dyer, 1996; Dyer and Singh, 1998; Ferratt et al., 1996; Kanter, 1994;</p><p>Vangen and Huxham, 2003</p><p>Bagchi and Skjoett-Larsen, 2005; Fisher, 1997; Lee et al., 1997; Simatupang and</p><p>Sridharan, 2005</p><p>Beamon, 1998; Gosain, et al., 2004; Holweg et al., 2005; Kiefer and Novack,</p><p>1999; Narasimhan and Jayaram, 1998</p><p>Ansoff, 1988; Itami and Roehl, 1987; Larsson and Finkelstein, 1999; Lasker et al.,</p><p>2001; Tanriverdi, 2006; Zhu, 2004</p><p>Harvey and Gray, 1992; Li, 2002; Rondeau et al., 2000; Fynesa et al., 2005</p><p>Clark and Fujimoto, 1991; Dyer and Singh, 1998; Handeld and Pannesi, 1995;</p><p>Kessler and Chakrabarti, 1996; Malhotra et al., 2001; Mowery and Rosenberg,</p><p>1998; Vesey, 1991</p></li><li><p>transportation and transportation capacity sharing) resulting in</p><p>M. Cao, Q. Zhang / Int. J. Production Economics 128 (2010) 358367360substantial capital relief (Min et al., 2005).Lasker et al. (2001) claim that synergies between supply chain</p><p>partners are more than a mere exchange of resources. Bycombining the individual rms resources, skills, and socialcapital, the collaboration can create something new and valuabletogether. Supply chain partners can also achieve synergy ofcommon IT infrastructure, common IT management processes,and common IT vendor management processes (Larsson andFinkelstein, 1999; Zhu, 2004; Tanriverdi, 2006). As long as supplychain partners make decisions in the best economic interest of thesupply chain as a whole, not its own portion, the gain or jointoutcome will be expanded (Simatupang and Sridharan, 2005).</p><p>Quality refers to the extent to which a rm with supply chainpartners offers quality product that creates higher value forcustomers (Harvey and Gray, 1992; Rondeau et al., 2000; Li, 2002;Fynesa et al., 2005). It is expected that rms that can respond fast tocustomer needs with high quality products, innovative design, andexcellent after-sales service allegedly build customer loyalty,increase market share, and ultimately gain high prots. Garvin(1988) proposes eight dimensions of quality: performance, features,reliability, conformance, durability, serviceability, aesthetics, andperceived quality, which are comprehensive but measures for eachare difcult to establish. Quality improvement can be achievedthrough supply chain collaboration (Fynesa et al., 2005).</p><p>Innovation refers to the extent to which a rm works jointlywith its supply chain partners in introducing new processes,products, or services. Due to shorter product life cycles, rms needto innovate frequently and in small increments (Clark andFujimoto, 1991; Vesey, 1991; Handeld and Pannesi, 1995; Kesslerand Chakrabarti, 1996). By carefully managing their relationshipswith suppliers and customers, rms improve their ability to engagein process and product innovation (Hage, 1999; Kaufman et al.,2000). Innovation as a highly structured, knowledge-intensiveactivity embeds in networks that span organizational andgeographical boundaries (Dyer and Singh, 1998; Mowery andRosenberg, 1998; Sapolsky et al., 1999; Malhotra et al., 2001). Bytapping joint creativity capacities, joint organizational learning,knowledge sharing, and joint problem solving between supplychain partners, rms can improve absorptive capacity and thusintroduce new products and services fast and frequently.</p><p>3. Instrument development</p><p>The development of instruments for supply chain collaborativeadvantage was carried out in three steps: (1) item generation,(2) structured interview and Q-sort, and (3) large-scale analysis.First, to ensure the content validity of the constructs, an extensiveliterature review was conducted to dene each construct andgenerate the initial items for measuring t...</p></li></ul>

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