Investigating Supplier-Supplier Co-Opetition and Buyer Implications – A Project on Buyer-Supplier-Supplier Triads in a Supply Chain Resilience Context
Final Report Abstract
Recent events such as the COVID-19 pandemic or the blockade of the Suez Canal have once again highlighted the severe impact of supply chain disruptions on the performance of companies and thus our economy. To mitigate such risks, two different approaches have been developed in research: managers are advised to either take internal company measures or to use their external supplier relationships to manage the disruptions more easily. Regardless of the benefits of external measures, they have played only a minor role in research to date. This lack of focus suggests that supply chain research continues to largely attempt to focus supply chain management recommendations on internal measures. However, much research suggests that modern supply chains are best understood as complex networks. The smallest object of a network is the triad. When, examining triads rather than dyads one automatically starts asking whether suppliers at the same value stage can support each other to perform better for their buyer. Such efforts could increase a supplier's ability to identify, respond to, and recover from any disruptions - with positive consequences for the resilience of the downstream buyer. The study of triads may therefore open new avenues for managing supply chain disruptions. The SSCIon project aimed to expand our understanding of supply chain disruption management through the study of triads. In particular, it looked at how a buyer can build resilience in its upstream suppliers and use it to its own advantage. For this purpose, quantitative data was collected from manufacturing companies in the DACH region. In a first step, buyers were contacted who themselves participated in the survey and were willing to name two of their suppliers. These suppliers are supposed to cooperate and compete with each other at the same time - also called “coopetition”. In a second step, the answers of the suppliers were collected and merged with those of the buyers. In total, 33 complete triads were formed and analyzed. Our analyses showed that a high level of coopetition between suppliers improves their ability to recognize and respond to a disruption. However, it does not help the supplier to recover from the disruption. Contrary to our expectations, it was also found that a supplier's resilience has a negative effect on the buyer's performance in the event of a disruption - not a positive one, as previously thought. However, this undesirable effect can be reduced by a high degree of social bonding between buyer and supplier. Our results yield a number of new insights for the supply chain management domain: First, we extend our previous understanding of supply chain disruptions by considering the resilience of two suppliers within a network. Surprisingly, this does not necessarily protect the buyer's financial performance - rather, it appears that the underlying dynamics are much more complex. Managers should therefore not simply rely on their suppliers, but rather monitor and manage their upstream supply chain independently. They should also be cautious about encouraging coopetitive relationships between their suppliers, as this can also be detrimental to their risk management. Second, to our knowledge, this project is the first attempt to study triads within a tetrad research context. In doing so, we add to the existing triad literature. Finally, we contribute to the so-called "social exchange" literature in supply chain management by demonstrating the benefits of information exchange between suppliers of the same value stage as well as those of social ties between the buyer and its supplier. Future research, building on our findings, should further explore the role of coopetition in risk management. In particular, it is important to investigate why and how decisions to coopetition between suppliers are made. The question arises whether such decision processes are more rational or intuitive - with possibly very different implications for risk management effectiveness and business performance.
Publications
- (2020). Supplier–supplier coopetition and supply chain disruption: First-tier supplier resilience in the tetradic context. International Journal of Operations & Production Management, 40(7/8), pp. 1041-1065
Durach, C. F., Wiengarten, F., & Choi, T. Y.
(See online at https://doi.org/10.1108/IJOPM-03-2019-0224) - (2021). Turning German automotive supply chains into sponsors for sustainability. Production Planning & Control, 290(1), pp. 1-14
Wissuwa, F., & Durach, C. F.
(See online at https://doi.org/10.1080/09537287.2021.1893405)
