Effect of buyer-supplier supply chain strategic collaboration on operating performance: evidence from Chinese companies

Abstract

Purpose The purpose of this study is to examine the impact of the implementation of supply chain strategic collaboration (SCSC) on companies’ operating performance. Design/methodology/approach Based on 181 SCSC announcements of listed companies in China, this study analyzes changes in the operating performance of the sample companies in the 20 quarters after the announcement. The changes in different operating performance metrics for the sample firms are compared against their metrics before the announcement. This study uses a self-control model based on historical performance and uses a combination of adjustment percentage changes and adjustment level changes to measure performance changes. Findings SCSC helps to improve firm operating performance, although this effect is only evident after two years. Companies that collaborate on product development have better performance improvements than do companies that implement market collaboration. The operating performance of buyer companies is better than that of supplier companies. Finally, strategic collaboration in the service supply chain improves performance more than that in the manufacturing supply chain. Practical implications The finding that company performance varies in different situations can help managers better understand and manage SCSC. Originality/value This study newly uses secondary data to assess changes in companies’ operating performance brought about by the implementation of SCSC.

Collaboration between supply chain partners: when does it matter? Evidence from collaborative profiles

“…Other literature (Kuik and Diong, 2019;Nakano, 2009) discussed steps to execute collaborative planning. Researchers (Gupta and Andersen, 2018;Liu et al, 2020;Nyaga et al, 2010) also demonstrated how to measure collaboration performance/intensity based on the elements described above. Nyaga et al (2010) modeled information sharing, joint relationship effort and dedicated investments lead to trust and commitment in collaboration.…”

“…To make the business model sustainable, SCC aims to build relational capital, by going beyond information exchange and integration. Most of the literature explicating collaboration and suggesting ways to implement it, do not consider integrating interpersonal attributes, strategic integration, CC, relationship strength (RS), active market collaboration (Liu et al, 2020) or connectedness and contingency plan to realign collaborative relationship in a cohesive fashion to create value for customers and partners involved. These elements are of great importance that have the potential to make collaboration successful.…”

“…Moreover, the growing level of global competition exerts ever-increasing market pressure on business enterprises. The collaboration will be more effective if collaborative strategy formulation considers characteristics of products, market and partners (Leeuw and Fransoo, 2009;Liu et al, 2020;Zheng et al, 2019). Therefore, it is crucial that collaboration is executed based on internal and external (market) focused functional areas.…”

“…Several authors (Anbanandam et al, 2011;Daugherty et al, 2006;Liu et al, 2020;Mehrjerdi, 2009;Min et al, 2005) have emphasized the importance of performance measurement. Targeting specific earning goal, cost and productivity, performance measurement brings efficiency and effectiveness in collaborative relationship (Min et al, 2005).…”

“…To encourage appropriate behaviors and enable effective collaboration, measuring partners' contributions and outcomes of collaboration is essential (Slone, 2004). Performance results can be used to resolve problems (Liu et al, 2020), improve processes, technology and personnel; it also helps identifying issues that need to be addressed and benchmarking best practices (Parung and Bititci, 2008;Zacharia et al, 2009). Having the performance of individual partner measured, a collaborative mechanism is required to give adequate rewards to its collaborative partner (s) for their involvement and contributions.…”