Supplier-Switching Inertia and Competitive Asymmetry: A Demand-Side Perspective

A Decision-Making Model for Selecting Product Suppliers in Crop Protection Retail Sector

This study aims to determine the importance of factors affecting supplier selection in the pesticide distribution sector as a global emerging market and present a decision-making model for the corporate marketing strategy. Specifically, a comparative study between suppliers and retail distribution experts was conducted to compare differences in the perception of supplier selection factors according to organizational characteristics. Based on previous studies, a decision-making model based on the AHP methodology was constructed with a total of 20 factors in five areas: product quality, price, flexibility, promotion support, and brand. Then, 42 Korean experts were surveyed to measure the importance of these factors. The results showed that product quality is the most critical factor in supplier selection, followed by price, brand, promotional support, and flexibility, in that order. Manufacturers consider product quality as the most important factor, while retailers consider price as the most important factor. Among the 20 factors, ‘quality excellence’, ‘expected return’, and ‘technological competitiveness’ were found to be the most important factors. In addition, while manufacturers considered factors such as ‘corporate reputation’ and ‘corporate trust’ as more important, retailers considered factors related to product characteristics, such as ‘product awareness’ and ‘brand reputation’ as more important.

Dependence structure, relational mechanisms and performance: teasing out the differences between upstream and downstream supply chain partners

Purpose

Firms are subject to power from both upstream and downstream partners; those partners may have different or even opposing impacts on supply chain relationships and financial performance. The purpose of this study is to investigate how upstream and downstream dependence structures affect a firm's financial performance through upstream and downstream relational depth (DEP) and relationship extendedness (EXT).

Design/methodology/approach

Data representing both upstream and downstream supply chain perspectives was collected using a multiple-respondent survey and was further augmented using financial performance data from an archival database.

Findings

Dependence advantages (ADVs) and disadvantages from upstream and downstream partners affect relational mechanisms and firm performance differently. Only downstream ADV will enhance a firm's DEP and EXT and subsequently affect firm's revenue and profit. Contradictory to widely held belief, the results reveal that firms that maintain long-term relationships with buyers and suppliers may experience lower revenue/profit.

Originality/value

This research represents a significant step in understanding the economic ramifications of dependence by (1) highlighting the difference between upstream and downstream supply chain dependence structure and (2) understanding the indirect effects of dependence structure on financial performance.

Understanding the impact of supply-side decisions and practices on supply risk management

Purpose

In the era of market turbulence, sourcing specialists consistently face challenges to keep the availability of the material efficiently and effectively without any disruption. Sourcing strategies and planning have a huge impact on procurement performance. The purpose of this paper is to examine the relationships among different sourcing strategies and supply risk management and performance and additionally, the role of procurement practices in different strategic settings.

Design/methodology/approach

This is empirical research that collected data gathered from 223 procurement specialists working in various manufacturing firms through a structured questionnaire. Valid data is then analyzed through the structure equation modeling technique for hypotheses testing.

Findings

The findings of this study reveal that supplier development is a partial complementary mediator between multiple supplier strategy and supply-side risk management. While in a volatile business environment, strategic supplier strategy has a significant negative impact on supply-side risk management, and in this case supplier development acts as a competing partial mediator between the two. Contract management has resulted in an important mechanism to be deployed in a strategic sourcing strategy. It is also shown that supplier risk management is also associated with improved supply management performance.

Practical implications

This paper establishes an explanation of theoretical and practical understanding of sourcing strategies and empirically shows that supplier development is the appropriate mechanism to deal with supply-side risk management, which in turn positively impacts on supplier management performance.

Originality/value

This study contributes to supply chain risk management literature, especially in the context of strategic risk management and explains how a strategic decision can impact supply risk management. This provides a piece of empirical evidence regarding the use of well-established procurement practices to improve supply performance.

Buyers’ switching intentions in a manufacturing supply chain: a migration theory perspective

Purpose

The purpose of this paper is to identify the negative impact of an incumbent supplier pushing out a buyer, the positive effect of an alternative supplier pulling a buyer, and the mooring impact that prevents a buyer from switching to a supplier in terms of the push-pull-mooring (PPM) model of migration theory. In this context, this study considers a buyer as the immigrant, an incumbent supplier as the origin, an alternative supplier as the destination, and inertia as the hesitance to migrate.

Design/methodology/approach

This study collected survey data from 148 end-product manufacturers and first-tier suppliers. It tested whether the PPM model fit in a supply chain relationship (SCR) using the partial least squares structural equation modelling approach and SmartPLS package version 2.0.M3.

Findings

The results support all hypotheses for causal relationships among factors of cognitive, affect, and behavioural intentions of each PPM effect. This study identifies the relative importance of each effect on a buyer’s intention of switching an existing supplier.

Originality/value

This study presents a new perspective that enhances the understanding of a buyer’s behaviour towards a supplier by applying the PPM model of migration to a manufacturing SCR. It promotes interdisciplinary and integrated views as well as broadens the diversity of the results in the business-to-business context.

Can asymmetry impact performance, collaboration and integration? An empirical study

Purpose

The purpose of this paper is to examine the influence of asymmetric environments on collaboration, integration, and performance during supply chain management processes.

Design/methodology/approach

The study conducted in the industrial sector of two markets – Spain and Poland – considering disparate behaviors among organizations and their managers. Using data collected from 133 firms and advanced partial least squares regression modeling, a number of direct and moderating effects are hypothesized and tested.

Findings

The authors found that existing asymmetry may prevent achievement of optimum equilibrium. Seven of the ten research hypotheses were validated, providing strong support for the significant role that asymmetry can play in managing supply chains (SCs). This result suggests that managers need to consider whether maximum collaboration or integration with SC partners is possible under the strong influence of asymmetry. The findings provide rational insights to SC managers regarding adequate measures to reduce imbalanced relationships and establish equilibrium between partners under varying contexts of collaboration and integration.

Research limitations/implications

This study was conducted in only two countries, so generalizations are limited. Furthermore, there are improvements to be made in sample design to allow for further validation and enhancement of the model and method.

Practical implications

Findings provide rational insights to managers regarding when it is adequate to reduce imbalanced relationships with partners under varying contexts of collaboration and integration.

Originality/value

Collaboration and integration have been well studied in many fields but this research suggests that managers in asymmetric environments must understand that development of strategies based on integration might be impossible to realize.

Analyzing the sourcing alternatives in an Indian manufacturing company

Purpose

The purpose of this paper is to analyze the sourcing alternatives (i.e. supplier development (SD), supplier switching (SS) and in‐house production (IP)) in an Indian manufacturing supply chain environment.

Design/methodology/approach

A total of 14 attributes are identified through an extensive literature review and discussion held with managers/engineers of different Indian manufacturing companies for analyzing the sourcing alternatives. A systematic methodology is proposed and applied, comprising a fuzzy analytic hierarchy process (FAHP) for analyzing the sourcing alternatives followed by the application of classical analytic hierarchy process (AHP) for result verification.

Findings

From the results obtained from both AHP and FAHP, it is established that the SD is the most preferred alternative in comparison to other two alternatives (i.e. SS and IP) for the considered Indian manufacturing environment.

Research limitations/implications

The same problem can be extended by incorporating the dynamic behavior of the attributes. The findings cannot be generalized for any other company as it is based on a single Indian manufacturing company.

Practical implications

The paper demonstrates a methodology to evaluate the sourcing alternatives considering judgment of multiple experts in a systematic way. It is believed that it will be quite useful for the supply chain manager to analyze sourcing alternatives by capturing his manufacturing environment into priority weights, which can reflect his priority considerations.

Originality/value

Although SD, SS and IP have been widely researched individually, no study has been reported in the literature to evaluate and rank these three alternatives in any specific Indian manufacturing environment.