Improving supply chain performance through improved visibility

Paul A. Bartlett, Denyse M. Julien, Tim S. Baines
2007 International Journal of Logistics Management  
Images and appendixes are available only in the published version in the journal]  supplier quality performance has plateaued;  delivery performance from suppliers is low;  supply base reduction targets have not been achieved; and  relationships between RR and their suppliers have deteriorated. The current supply base is under-performing on both delivery and the level of non-conforming parts delivered into RR. Only 20 per cent of the supply chain is achieving 95 per cent or greater against
more » ... he on-time delivery measure. This level of underperformance drives inefficiencies in the internal manufacturing plants, with high-levels of overtime worked in most departments to address both late deliveries and non-conforming products. The lack of clear visibility is considered by RR to be a key factor in these under-performing supply bases. RR believes that by having greater visibility of key information from suppliers, it would be able to manage the supply base more effectively, thus reducing the cost of internal inefficiencies. Supply chain visibility There are many different definitions of supply chains, [6] Christopher et al. (2002) describes a supply chain as: The management of upstream and downstream relationships with suppliers and customers in order to create enhanced value in the final market place at less cost to the supply chain as a whole. The supply chain consists of different levels including supplier, manufacturer, distributor and consumer and is a network of companies that influence each other from raw materials to finished goods. ([6] Christopher et al. , 2002; [4] Chan, 2003). [19] Lamming et al. (2001) suggests that there are varying degrees of supply chain visibility or sharing of information between partners in a supply chain and refers to it as transparency. [19] Lamming's et al. (2001) categorisation of the varying degrees of transparency is shown in Table I [Figure omitted. See Article Image.]. An increase in available supply chain data gives the illusion of visibility, however, it can add to a firm's challenge of matching insights from the analyses to strategy. According to [4] Chan (2003) "visibility for a supply chain is important for accurate and fast delivery of information". [20] Lee et al. (1997) states, "The lack of accurate information can cause certain negative consequences such as the 'bullwhip-effect' in supply chains". (2004) the two main influences on the perception of corporate vulnerability in supply chains are the degree of transparency and the degree of obscurity. He states that the more accurate the information, the higher the transparency, but the more the information deteriorates, the higher the obscurity. He believes that, together, these two influences create a conceptual framework and contribute to the dilemma of corporate vulnerability. The findings of [22] Svensson's (2004) research indicate that there is an obscurity in the access to information beyond 1st tier suppliers and 1st tier customers, which causes a lack of transparency in the supply chain and contributes to the supply chain's vulnerability. According to [22] Svensson Supply chain collaboration Collaboration in the context of a supply chain is suppliers, partners and customers working jointly on an activity or project. [2] Anthony (2000) suggests that supply chain collaboration occurs when "two or more companies share the responsibility of exchanging common planning, management, execution, and performance measurement information" and that "collaborative relationships transform how information is shared between companies and drive change to the underlying business processes". [3] Bowersox et al. (1999) state that firms collaborate in the sense of leveraging benefits to achieve common goals. According to [7] Cox et al. (2000): The use of collaborative and co-ordinated supply relationships was a crucial means by which Japanese companies were able to enhance their operational efficiency and effectiveness and, thereby, maintain a competitive edge. However, not all companies receive the expected benefits according to [16] Kapoor and Gupta (1997) , who suggest there should be a return to "aggressive sourcing" based on free-market principles rather than collaboration. [14] Johnsen and Ford (2001) state: To most firms in a dyadic relationship there will be conflicting pressures in creating a balance in their relationships between self-serving motives and the advantages of close interaction and collaboration. Changes and adaptations will have to be made throughout the relationship to keep it moving and for it to continue to work well. [13] Hakansson and Gadde (1992) suggest that the preparedness of a supplier to take part in various
doi:10.1108/09574090710816986 fatcat:drcdjpl6dbeglffuud7lqdmngq