SCMAP Perspective #232
April 22, 2010 by carlo
Published in Port Calls, January 4, 2010
COLLABORATION, SCM SEMINAR
Fax 551-3207
Email lizaalmonte@yahoo.com.ph
By Ed Sanchez
SCMAP Executive Director
Collaboration
The Volume 30 No. 2 issue 2009 of the Journal of Business Logistics included an article entitled “An Analysis of Supply Chain Collaborations and Their Effect on Performance Outcomes”. This particular research work aims to assess the relationship between SC collaboration and business performance. The authors are Zach Zacariah (Lehigh University), Nancy Nix (Texas Christian University) and Robert Lusch (University of Arizona).
The prior literature review mentions that a lot of research work has been done, but emphasizing four key areas. I quote from the article the four areas.
1. Reasons to collaborate or desired collaboration outcomes
- To share resources and combine knowledge, skills and physical assets to create strategic advantage and enhance profits
2. Circumstances in which collaboration is beneficial
- Where the relationship cannot be controlled by formal systems, companies can create modular or sequential synergies, or to cope with environmental uncertainty
3. Inter-organizational or relationship characteristics facilitating collaboration
- Where firms are interdependent, where there is trust and commitment between them, and they have mutual credibility
4. Processes that influence collaboration outcomes
- Information sharing, knowledge acquisition, joint decision making, and the development of an alliance competence.
The article points out that there has been limited research on company business performance outcomes of a collaboration project. Being published in the Journal of Business Logistics, the article is typically highly technical and not easy to understand for non-techies. We just mention some of the highlights of the research.
- The focus is on collaboration projects between buyers and suppliers
- Out of 10,160 potential respondents (5,000 contacts from the Institute of Supply Management and 5,160 from a supply and value chain center of a university), after qualification and screening steps, the final useable sample numbered 473
- Types of collaboration project reported were
- New product, service and packaging development 29%
- Process innovation 26%
- Supplier development 13%
- Problem resolution 9%
- Negotiation process 7%
- Technology implementation 5%
- Relationship development 1%
- Others 10%
- The authors developed a theoretical framework relating 6 constructs, namely:
- Interdependence of knowledge and process
- Understanding of supply chain partner
- Collaboration level
- Operational outcomes (cost, quality, cycle time, customer service)
- Relational outcomes (trust, credibility, effectiveness of the relationship)
- Business performance (organizational performance, asset utilization, competitive position, profit)
- A technique called structural equation modeling was used to analyze the data
The research project set up seven hypotheses to be tested:
- The greater the interdependence of process and knowledge, the higher the level of collaboration among the firms
- The greater the level of understanding of supply chain partner, the higher the level of collaboration among the firms
- The higher the level of collaboration, the better the operational outcomes
- The higher the level of collaboration, the better the relational outcomes
- The better the operational outcomes, the better the relational outcomes between the collaborating firms
- The better the operational outcomes, the better the business performance
- The better the relational outcomes, the better the business performance
Testing of the 7 hypotheses would validate the theoretical framework. Statistical tests performed basically validated the hypotheses at the 99.9% level, except the 7th hypothesis which was at the 99% level.
Part of the summary reads: Collaboration outcomes (both operational and relational) have a large impact on business performance (asset utilization, improved profitability and stronger competitive position). Finding interdependent supply chain partners, investing time and resources to understand them, and collaborating intensely are critical to achieving successful operational and relational outcomes, and therefore business performance. The above may sound obvious to some, but there is always value in doing research that has gone through the rigors of statistical testing.
Intro to SCM Seminar
SCMAP’s first offering this year is its 2-day seminar on Intro to SCM. Readers please note the change in schedule (formerly Jan. 21-22, 2010).
- Schedule : Jan. 25-26, 2010 (Monday – Tuesday)
- Time : 8:00 am to 5:00 pm
- Venue : Astoria Plaza, Escriva Drive, Ortigas Center
- Fee : SCMAP members P11,000 VAT included
non-members P13,750 VAT included
- Please make check payable to UniMaC Business Consultancy, Inc.
The 2-day seminar is a capsulized version of the SCMAP-DLSU certificate program in SCM (which is 42 Saturdays long). Facilitators will be the same as the faculty handling the DLSU program. Their topics are:
- Ike Castillo (Avon Cosmetics) : Intro to SCM, Transportation and Distribution Mgt., Strategic Purchasing & Procurement Mgt.
- Al Lagera (PLDT) : Inventory Planning & Control
- Gabby Patag (TNT) : Warehousing Mgt., Material Handling & Inventory Mgt., Supply Chain Governance
Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com. Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org
