Creating Low-Code Loan Applications using the Trisotech Mortgage Feature Set
Mitigating resisting forces to achieve collaboration-enabled supply chains
1. The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-5771.htm
Mitigating
Mitigating resisting forces to resisting forces
achieve the collaboration-enabled
supply chain
269
Stanley E. Fawcett
Brigham Young University, Provo, Utah, USA
Gregory M. Magnan
Albers School of Business and Economics, Seattle University,
Seattle, Washington, USA, and
Amydee M. Fawcett
Lateral Line Analytics, Woodland Hills, Utah, USA
Abstract
Purpose – The purpose of this paper is to address how companies mitigate existing forces to achieve
the collaboration enabled supply chain (SC).
Design/methodology/approach – Seven key theories were used to provide insight into the
theoretical framework for the creation of the collaboration-enabled SC: contingency theory, the
resource-based view of the firm, the relational view of the firm, force field theory, constituency-based
theory, social dilemma theory, and resource-advantage theory. An exploratory cross-sectional survey
was conducted at two different points in time – a six-year period in between. The survey targeted
three different functional areas – logistics, manufacturing, and sourcing – to compare and contrast
functional perceptions of barriers and bridges to collaboration.
Findings – Companies are beginning to pursue greater collaboration, however, managers are often
stymied in their pursuit of collaborative business models. The data suggest that the challenge is not
the existence of a single barrier to collaboration, but one of accumulation. As the many resistors
reinforce each other, the change needed to increase collaboration is avoided. To overcome these
challenges, the findings suggest that a comprehensive and carefully executed collaboration strategy is
needed to help a company profitably deliver high levels of customer satisfaction. Those companies
that succeed achieve substantial, documentable benefits.
Practical implications – The findings reveal that developing a collaboration-enabled business
model is very difficult. Therefore, managers must carefully evaluate their companies’ motivation and
readiness to pursue a collaboration-enabled SC, consider whether they can generate momentum for
sustained change, and ascertain whether they can persist when benefits are slow to emerge.
Originality/value – This study is both longitudinal and cross-functional and leads to a better
understanding of how to manage, change, and create a collaborative decision-making environment.
Keywords Supply chain management, Channel relationships
Paper type Research paper
Introduction
The essence of supply chain management (SCM) is that to improve competitiveness,
companies need to proactively manage resources beyond their organizational Benchmarking: An International
Journal
Vol. 17 No. 2, 2010
The authors wish to thank CAPS Research for its generous financial support of this research. pp. 269-293
q Emerald Group Publishing Limited
They also acknowledge the assistance and direction provided by the editor and anonymous 1463-5771
reviewers to help improve the manuscript. DOI 10.1108/14635771011036348
2. BIJ boundaries (Dyer and Singh, 1998). That is, well-managed companies possess valuable,
17,2 but constrained resources and specific, but limited capabilities. Although these
resource advantages may confer a competitive advantage on a firm, most companies
do not possess the inimitable resources needed to compete as stand-alone entities
(Barney, 1991; Dierickx and Cool, 1989; Eisenhardt and Martin, 2000; Newbert, 2007;
Rinehart et al., 2008). Competitive dynamics dictate that they work with other members
270 of the supply chain (SC) who possess vital resources and valued competencies.
To the extent that collaboration helps bring complementary competencies together
to create customer value, the collaboration-enabled SC becomes an important source of
competitive advantage (Fawcett et al., 2008). Automakers Honda and Toyota
exemplify the collaboration-enabled business model. Honda is particularly dependent
on its SC, sourcing about 85 percent of the value of its cars from suppliers (Nelson et al.,
1998). Both carmakers have developed strong relational capabilities that drive higher
than average economic rents and differential firm performance (Dyer and Singh, 1998).
Beyond this anecdotal evidence, research has confirmed that SC collaboration can
make substantive contributions to firm performance in the areas of enhanced
productivity and improved customer service and satisfaction (Dyer, 1996; Hendricks
and Singhal, 2003; Hult et al., 2004; Lee, 2004; Rinehart et al., 2008).
However, experience reveals that companies struggle to translate collaborative
rhetoric into collaborative reality (Fawcett and Magnan, 2002). Beth et al. (2003, p. 64)
noted that “despite years of technological and process advancements, an agile,
adaptive SC remains an elusive goal,” suggesting that the challenge lies deeper within
the fabric of the organization (Parker and Anderson, 2002; Fawcett et al., 2009a).
Behavioral issues appear to be problematic. For example, low trust across
organizational boundaries exacerbates the human tendency to avoid vulnerability
and protect potentially idiosyncratic resources, including proprietary information
(Fawcett et al., 2009a; McCarter and Northcraft, 2007). Likewise, functional
organization can easily become dysfunctional silos, which engender turf conflict and
dissipate value creation (Anderson, 1982; Barratt, 2004; Moberg et al., 2003; Wong and
Wong, 2008). These resistant forces are somewhat intransigent and inhibit a
company’s willingness and ability to collaborate.
To summarize, competitive dynamics are motivating companies to seek inter-firm
collaboration opportunities in an effort to build unique value-creation capabilities.
Standing in the way are cultural and structural barriers that inhibit these endeavors.
More often than not, the resisting forces have proven to be stronger than the driving
forces, resulting in minimal meaningful collaboration. This reality motivates the
following question, “Can companies mitigate existing resisting forces to achieve the
collaboration enabled supply chain?”
SC collaboration: a dynamic theoretical model
SC collaboration is a complex phenomenon. Grasping the nuances involved in
developing a dynamic collaborative capability requires that managers explore the
processes that promote or hinder collaboration from a variety of theoretical lenses. Key
theories that provide valuable insight are:
.
contingency theory;
.
the resource-based view (RBV) of the firm;
3. .
the relational view of the firm; Mitigating
.
force field theory; resisting forces
.
constituency-based theory (CBT);
.
social dilemma theory; and
.
resource-advantage theory.
271
Figure 1 combines these theoretical perspectives to present a framework for guiding
the development of a collaboration-enabled SC.
The role of dynamic environmental forces
Contingency theory argues that managers must identify sequential, cause-and-effect
relationships among environmental, decision-making, and performance variables
(Birkinshaw et al., 2002; Lawrence and Lorsch, 1967; Luthans and Stewart, 1977;
Nasrallah et al., 2003; Scott and Davis, 2006; Stonebraker and Afifi, 2004; Wathne and
Heide, 2004; Wong and Wong, 2008; Moffett et al., 2008). That is, as the world around
them evolves, SC managers must develop a contingent response – a strategy for
utilizing the firm’s resources to achieve a sustainable competitive advantage that leads
to above normal returns on investment (Guide et al., 2003; Johnson et al., 2002). Looking
through the contingency-theory lens raises two important questions:
(1) What forces in the external environment are changing the competitive rules and
thereby mandating a contingent response? The corollary: how are the rules
changing?
(2) What is the appropriate contingent response?
Customer
resources and
Resisting capabilities
forces
borati
Colla abler on
ip En s
rsh
Performance benefits
de
External driving forces
Co
l ea
nne
• Intensifying competition Improved operational
Differentiation
Contingent response
lopment
c
execution
tivity
Strategy
• Customers demands performance:
strategy
• Globalization Build a collaboration • Lower operating costs
• Enhanced customer service
deve
• Compressed technology cycles capability to leverage
Tra
firm resources! Improved competitive
• An information revolution
ier
ni i
pl
ng performance:
• Increasing financial pressures
p
Su
Custom r focus
e • Return on assets
• Sales and market share growth
Resisting
forces
Supplier resources Resisting forces
and capabilities Constituency-based resistors:
• Inconsistent performance measures
• Inadequate training for new mindsets and skills
• Non-aligned strategic and operating policies Figure 1.
Social dilemma resistors: A theoretical framework
• Inability or unwillingness to share information for the creation of the
• Lack of trust among decision makers
• An unwillingness to share risks and rewards
collaboration-enabled SC
4. BIJ For managers, the key is to recognize the environment is changing and then correctly
identify the forces driving the changes and their influence on competitive strategy. As
17,2 they evaluate their companies’ strategic positioning, managers are likely to find that
globalization, heightened customer demands, and compressed technology cycles are
increasing competitive intensity, putting tremendous pressure on cost management
(Friedman, 2005). Greater focus on financial performance is further inducing managers
272 to strive to increase asset returns and reduce concept-to-market lead times
(Simatupang and Ramaswami, 2004). Interestingly, an information technology
revolution is accelerating these competition drivers (Hammer, 1990, 2004; Hult et al.,
2004; Mabert and Venkataraman, 1998). The seemingly unavoidable reality that
today’s marketplace is dynamic and evolving at a rapid pace leads to our P1:
P1. Managers are cognizant that the environment is dynamic and that a variety of
forces are driving the need to cultivate a collaboration-enabled SC.
Collaboration as a contingent response
A firm’s contingent response is defined by its differentiation strategy, which answers
the business-model-design questions, “What strategic capabilities do we need?” and
“How can we best develop them?” The RBV of the firm provides insight into a firm’s
contingent-response options. RBV argues that a firm is “a collection of productive
resources” that can be used to create value and advantage (Wernerfelt, 1984). The more
valuable, rare, and inimitable the resources, the greater the advantage the firm may
attain (Barney, 1991, 2001). As important as the firm’s resources are, how it configures
them may be more important (Teece et al., 1997; Eisenhardt and Martin, 2000). That is,
combining and structuring resources to create a dynamic capability can lead to even
greater, more difficult-to-replicate advantage (Newbert, 2007; Zhu and Kraemer, 2002).
RBV thus encourages managers to pursue a contingent response that uses firm
resources to build a valued dynamic capability.
Importantly, companies now source a large percent (typically 50-80 percent of cost
of goods sold) of their value-added capability from materials and service suppliers
(Monczka et al., 2008). Thus, the quest to establish a non-imitable dynamic capability
extends beyond the firm’s boundaries. This reality is supported by the relational view
of the firm, which argues that the most powerful sources of advantage may be
embedded in inter-firm resources and routines (Dyer and Singh, 1998). Collaborative
routines that identify and integrate complementary competencies up and down the SC
have been shown to improve firm performance by both reducing costs and improving
customer satisfaction (Fawcett et al., 2008; Fine, 1998). Yet, relatively few firms have
learned how to collaborate effectively, suggesting that a collaboration capability is
rare, valuable, and hard to replicate (Frohlich and Westbrook, 2001; Fawcett et al.,
2009b). The need to improve resource leverage combined with the possibility of
creating unique value through collaboration defines our P2:
P2. Companies recognize the value of collaboration as an important strategic
response to a changing environment and are actively pursuing SC
collaboration initiatives.
The strategy execution chasm
Although many firms have espoused the development of a collaboration capability as a
central component of their competitive strategies, few have been able to execute to plan.
5. For example, Boeing adopted a collaboration-enabled business model to design and Mitigating
manufacture the Boeing 787, dubbed the dreamliner. Suppliers were given resisting forces
unprecedented responsibility for major components of the plane. Unfortunately,
governance issues exacerbated SC breakdowns forcing multiple delays in the plane’s
launch. Boeing’s credibility and cash flow were severely damaged (Lunsford, 2008a, b;
Sanders, 2009). Like the majority of firms that have pursued intense collaboration,
Boeing discovered that integrating complementary competencies across the SC is a very 273
difficult task. The question is, “Why do firms struggle to implement a collaborative
contingent response?”
Force field theory suggests that as managers pursue a collaboration capability, they
must consider two types of forces that will affect implementation success – driving
forces and resisting forces (Lewin, 1951). As discussed above, driving forces such as
demanding customers may dictate a need to rely on the strengths of other SC members.
Resisting forces such as a lack of top management support make it difficult to execute
the collaborative differentiation strategy. The drive for collaborative change often
stalls when it collides with well-entrenched resisting forces. In effect, resisting forces
freeze an organization into non-collaborative behavior, imperiling companies that
compete in a dynamic environment. Unable to change faster than the external
environment or collaborate more effectively than agile competitors, “frozen” companies
become irrelevant (Friedman, 2000; Grove, 1996; Lee, 2004). Lewin identified a
three-phase process for effective change management and strategy implementation:
(1) The unfreezing process: an external shock or emotional event such as the loss of
market share unfreezes the organization, making change possible. Management
resolve (Jim Collin’s Level 5 leadership) can at times lead to organizational
thawing.
(2) The movement phase: driving forces and resisting forces collide, leading to
implementation failure or success, depending on:
.
the relative strength of the forces; and
.
management’s ability to enact and leverage collaborative change enablers.
(3) The refreezing tendency: most companies settle into a new equilibrium state
after a period of dramatic change.
A closer look at collaboration resistors and collaboration enablers is needed to better
understand the dynamics of moving from the development of a collaborative strategy
to the effective execution of a collaboration capability.
Collaboration resistors. Forcing resisting collaboration vary in strength and
influence, might exist anywhere within an organization or SC, and may include people,
policies, or processes (Dent and Goldberg, 1999; Kotter, 1995). Inadequate technology
has often been blamed for impeding collaborative initiatives (Barratt, 2004; Moberg
et al., 2003; Tyndall, 1998; Cassivi, 2006). However, despite massive investments in
information and process technologies, collaborative capabilities have not dramatically
improved (Beth et al., 2003). This reality suggests that other forces are blocking
collaboration’s emergence. Fawcett et al. (2008) found that organizational structure and
culture are among the most intractable barriers to more effective collaboration within
the firm and across the SC.
6. BIJ Focusing first on structure, CBT provides insight into why functional structures are
17,2 so common and so resistant to change (Anderson, 1982). CBT suggests that companies
organize along functional lines to take advantage of in-depth knowledge that arises
from specialization. Deep functional skills are needed to manage specific value-added
activities. They are also the building blocks of core competencies (Prahalad and Hamel,
1990; Stalk et al., 1992). CBT does, however, warn that specialization has a dark side –
274 “specialists” tend to pursue their own goals. Rewarded on disparate metrics and
operating with distinct lines of authority, functionalists possess strong incentives to
protect their own domain. Silos are built and fortified. As tension and conflict emerge
across organizational boundaries, collaborative efforts are preempted. Unfortunately,
many practices from hiring and training to measurement and office space allocation
reinforce the dysfunctional organizational structure (Ellinger et al., 2006).
Turning to organizational culture, social dilemma theory heightens our
understanding of the conflicts that undermine collaboration. Social dilemma theory
posits that collaboration can enhance value, but uncertainty and risk regarding value
dissemination leads to competition for scare resources (Zeng and Chen, 2003).
Managers must manage the tension that exists between these two contending forces.
That is, members of a SC alliance have no incentive to invest in collaborative
capabilities if another member of the chain is likely to use asymmetrical power to
expropriate any collaborative gains (Dawes, 1980; Diekmann, 1985; Olson, 1965;
Cassivi, 2006). In essence, the existence of power asymmetry and opportunistic
behavior deters the commitment of resources needed to initiate meaningful
collaboration (Kollock, 1998; Komorita and Parks, 1996; Murnighan et al., 1993).
McCarter and Northcraft (2007) conceptualized SC collaboration as a social dilemma
where trust and fear determine how members of a chain will interact with one another.
Concerns regarding the excessive pursuit of self-interest must be mitigated to promote
the behaviors – e.g. information exchange, trust, sharing of risks and rewards –
needed to achieve collaboration capability (Celly et al., 1999; Luo, 2007). These
challenges suggest our P3:
P3. Traditional organizational structures and cultures inculcate a variety of
behaviors that impede the creation of a collaboration capability.
Collaboration enablers. Force field theory suggests that once an organization is
unfrozen, management enters a tenuous period where driving and resisting forces are
weighed in the balance (Kale et al., 2000). Managers can tip the balance toward
collaboration by investing in appropriate enablers (Frohlich and Westbrook, 2001; Min
et al., 2007). Research has identified a variety of collaboration enablers including the
following: aligned objectives, a shared customer-oriented vision, technological
connectivity, relationship trust, supplier development, and process redesign and
integration (Barratt, 2004; Drucker, 2001; Funk, 1995; Grzeskowiak et al., 2007;
Lambert and Knemeyer, 2004; Lee, 2004; Stonebraker and Afifi, 2004). Unfortunately,
establishing these diverse and often complex enablers can be difficult and resource
intensive (Moberg et al., 2003). Our P4 emerges from the need for managers to actively
promote collaboration:
P4. Companies have learned that collaboration is not the natural state or behavior
and therefore are actively engaged in building structural enablers to bridge or
mitigate existing collaboration resistors.
7. Desired performance benefits Mitigating
The fundamental goal behind strategic management theories is to explain differential resisting forces
firm performance. For example, contingency theory argues that an appropriate
contingent response effectively executed improves firm performance. Similarly, RBV
claims that cultivating a rare, valued, and inimitable capability leads to better market
performance. The question thus arises, “What are the performance benefits of a strong
collaboration capability?” 275
Working collaboratively with a network of capable customers and suppliers provides
access to skills, resources, and markets unavailable to industry rivals that do not
cultivate collaborative business models (Brady, 2003; Humphrey and Schmitz, 1996;
Premaratne, 2001). Moreover, collaborative relationships are able to solve problems
quickly while generating new and novel ideas and transferring technology efficiently
(Jones, 1996; Han et al., 1993; Cook et al., 2005). Ultimately, a collaboration-enabled SC
reduces lead times, minimizes inventories, increases asset utilization, lowers costs,
raises quality, facilitates faster innovation, and enhances flexibility (Corsten and Felde,
2005; Hadley, 2004; Wisner, 2003; Denkena et al., 2006). A collaboration-enabled SC
capable of increasing revenues and lowering costs is an ideal formula for sustained
customer satisfaction and profitability (Lee, 2004).
Importantly, each of the theories discussed above implies a time component without
explicitly discussing the mechanism through which time influences managerial
decision-making’s effect on firm performance. Resource-advantage (R-A) theory
addresses this gap, extending the RBV by looking at it through the lens of
heterogeneous-demand theory (Hunt and Davis, 2008). In essence, R-A theory
evaluates how the process of competition contributes to organizational learning. As
companies adopt a collaborative contingent response, they should learn from their
experiences – whether successful or not. The ability to learn should lead to stronger
and more innovative collaborative capabilities, creating a performance gap with less
adaptable and agile competitors. From this perspective, R-A theory suggests that in the
intensely competitive and dynamic environment of recent years, collaborative
capabilities should be increasing. The idea that competition drives learning leads to
our P5. P5 therefore states:
P5. Appropriately pursued, a collaboration capability delivers meaningful
operational and firm performance benefits. Moreover, companies are
learning to obtain higher levels of benefits from their collaboration initiatives.
Research methods
To assess the evolution and influence of a collaboration capability, an exploratory
cross-section survey was conducted at two different points in time. As the initial study
began, the notion of SC collaboration had been raised in the literature, but not
fully explored. Nor had an effort been made to empirically evaluate its evolution –
thus, the decision to replicate the study. A six-year interval between Periods 1 and 2
provided sufficient time to evaluate the emergence of a collaboration capability. Three
steps were undertaken to ground the research:
(1) A comprehensive literature search going back to the early 1980s was conducted.
This review provided insight needed to design a meaningful survey instrument.
8. BIJ (2) A series of half a dozen preliminary, informal managerial interviews were
17,2 conducted to ensure managerial relevance.
(3) An advisory board consisting of managers and academics was assembled to
provide feedback on the research content and process.
These efforts provided context to interpret the survey findings regarding how driving
276 forces, collaboration resistors, and collaboration enablers are influencing the
emergence and impact of a contingent collaboration capability.
The cross-functional and inter-organizational nature of a collaboration capability
together with the desire to perform the study longitudinally required careful and
consistent selection of the survey’s key informants. Therefore, senior-level managers
(e.g. director, vice-president, chief executive officer, etcetera) with broad organizational
accountability, cross-functional interactions, and access to overall firm-level
performance data were targeted. Because three distinct groups of SC managers –
logistics managers, production managers, and supply managers – define a company’s
collaboration capabilities, mailing lists were compiled with the assistance of three SC
professional associations: the Council for Supply Chain Management Professionals, the
Institute for Supply Management, and APICS: the Association for Operations
Management. Managers were randomly selected from industries actively involved in
SCM. The research team removed contact information for managers who did not meet
the selection criteria, yielding a list of seasoned managers with ample experience as
members of cross-functional and SC teams.
In both time periods, the survey process followed Dillman’s total design method;
that is, three mailings of a cover letter, an instruction sheet, and the survey were
performed. To increase the response rate, pre-notification phone calls were made to
invite managers to participate. Managers were also offered a copy of the study findings
and the opportunity to be entered into a drawing for one of several iPod Nanos. Overall,
980 usable surveys were returned for a response rate of 14.13 percent. Table I provides
detailed response rates broken down by time period and professional organization.
Importantly, the relative sample sizes and proportions from each of the three
professional associations were consistent across the two time periods suggesting
sample equivalence. Further, an independent t-test was performed on the control
variable of firm size as measured by number of employees. No significant difference
was found, which again indicates sample comparability.
Non-response bias was evaluated in both time periods. A total of two methods were
used. First, a comparison of early versus late responses revealed no problematic
response patterns (Armstrong and Overton, 1977). Second, to more clearly verify that
the respondents and non-respondents were not uniquely different, the demographic
Period 1 Period 2
Professional Completed Response Percent of total Completed Response Percent of total
association surveys rate (%) P1 sample surveys rate (%) P2 sample
APICS 171 12.1 36 159 17.9 31
ISM 138 10.6 29 156 19.0 31
Table I. CSCMP 166 11.6 35 190 19.3 38
Survey response rates Overall 475 11.4 100 505 16.7 100
9. profiles of the two groups were compared. In Period 1, because responses were Mitigating
anonymous, we called managers on the mailing list until we had spoken with resisting forces
300 non-respondents (100 from each managerial group) to gather basic demographic
data so that respondent and non-respondent profiles could be compared. No significant
differences in demographic profile were found. In Period 2, respondents were tracked
so that mailing and survey administration costs could be minimized. Non-respondents
could also therefore be identified. Demographic profiles for 100 randomly selected 277
non-respondents were develop using Dun and Bradstreet databases. These profiles
were compared to those of the respondents. No significant differences were found.
Findings and discussion
The following discussion evaluates the theoretical propositions identified above from
two perspectives. First, the longitudinal changes in the aggregate or overall responses
from the two time periods are presented. Second, the most recent perceptions (Period 2)
of the three distinct groups of managers are presented for comparison purposes.
Similarities and differences in the way that these materials managers approach SC
collaboration are identified and discussed.
Understanding environmental driving forces
Do managers really perceive that the competitive environment is changing in ways
that require higher levels of collaboration? To answer this question, we asked
managers to indicate the relative strength of six driving forces on a seven-point Likert
scale (1 – not a factor; 7 – critical factor). The data in Table II show that two forces are
driving SC collaboration:
(1) a desire to improve productivity; and
(2) a desire to improve revenue through increased customer satisfaction.
This finding is consistent over time although the emphasis placed on these two forces
decreased significantly over time. Of note, whereas the desire to improve customer
satisfaction was the most important driver in Period 1, the desire to improve
productivity has moved into a statistical tie in the Period 2 study. Competitive
pressures appear to have raised the relative emphasis on promoting collaboration to
mitigate cost pressures. Such a response is not unexpected in an environment where
China has become the “world’s factory floor” and India has become the “offshoring
destination of choice.” However, non-collaborative initiatives such as online auctions
and the threat of outsourcing to Asia have also been employed to drive costs down.
Comparing functional perspectives reveals that logisticians are significantly more
productivity focused than their counterparts. As logistics is typically a cost center, it is
not surprising that logistics professionals are focused on productivity. Otherwise the
four managerial groups are generally in agreement regarding the forces driving SC
collaboration.
Overall, SC managers pursue greater collaboration in response to a select group of
environmental driving forces. They appear to be very profit-and-loss statement
oriented; that is, their primary concern is to respond to intense competition by focusing
on customer satisfaction while driving costs down (Table III).
10. BIJ
17,2
278
Table II.
comparison
versus Period 2
collaboration: Period 1
Forces driving greater SC
Mean Rank Percentage of five to seven
Driving force Period 2 Period 1 Difference Period 2 Period 1 Difference Period 2 Period 1 Difference
Desire to improve SC productivity 5.34 5.71 20.37 * 1 2 1 79.67 83.30 2 3.63
Desire to improve revenue through increased
customer satisfaction 5.33 5.86 20.53 * 2 1 21 79.12 85.90 2 6.78
Intensifying industry competition 5.11 5.24 20.13 3 3 0 73.58 74.70 2 1.12
Desire to build the best SC team 4.67 4.73 20.06 4 4 0 59.49 58.90 0.59
Desire to focus on core competence 4.39 4.28 0.11 5 6 1 51.15 48.60 2.55
Desire to reduce capital investments 4.37 – – 6 – – 48.07 – –
Notes: *p , 0.01; To what extent have the following led your firm to seek greater SC collaboration? (1 – not a factor; 7 – critical factor)
11. Mitigating
Combined Purchasing Logistics Production
P2 P2 P2 P2 P2 P2 P2 P2 resisting forces
Driving force mean rank mean rank mean rank mean rank
Desire to improve SC productivity 5.34 1 5.26 2 5.66 1 5.22 2
Desire to improve customer
satisfaction 5.33 2 5.36 1 5.40 2 5.30 1 279
Intensifying competition 5.11 3 5.16 3 5.07 3 5.07 3
Desire to build the best team of
SC partners 4.67 4 4.81 4 4.62 4 4.49 4
Desire to focus on core competence 4.39 5 4.65 5 4.20 6 4.38 5
Desire to reduce capital
investments 4.37 6 4.43 6 4.41 5 4.37 6 Table III.
Forces driving greater
Note: To what extent have the following led your firm to seek greater SC collaboration? (1 – not a SC collaboration:
factor; 7 – critical factor) a functional comparison
Assessing the pursuit of a contingent collaborative capability
To better understand the extent to which companies are pursuing collaboration as a
contingent response, managers were asked to indicate the extent to which their firms
engage in each of four types of collaboration (1 – not engaged; 7 – totally engaged):
(1) Cross-functional process integration within the four walls of the company.
(2) Upstream integration with valued first-tier suppliers.
(3) Downstream integration with valued first-tier customers.
(4) Complete forward and backward integration from “supplier’s supplier to the
customer’s customer.”
Surprisingly, managers reported slightly lower levels of engagement in
cross-functional, upstream, and downstream collaboration activities (Table IV).
Adding value across boundaries is not easy and most managers have little or no
incentive to take the risks inherent in building collaborative relationships. Talking
about collaboration, holding team-building activities and investing in technology are
inadequate facilitators of higher levels of collaboration. Managers did, however, report
significant progress (P1 ¼ 3.37 vs P2 ¼ 3.68; p ¼ 0.01) in the area of complete forward
and backward integration. Investments in technology and SC mapping are beginning
to provide better SC visibility, improving decision makers’ ability to track inventory
and manage lead times. While progress in this area is encouraging, the mean of 3.68 is
quite low.
Looking at the functional responses reveals little difference among the three
managerial groups – the means and ranks are all similar (Table V). The highest level
of integration taking place within the firm, followed in order by forward integration,
backward integration, and complete integration. The desire to integrate with
customers to become a supplier of choice, create switching costs and grow revenues is
a stronger motivator than cultivating the benefits of more collaborative supplier
relationships. This finding suggests that collaboration is more important in building
customer relationships, whereas leverage and power characterize many companies’
approach to managing supply relationships.
12. BIJ
17,2
280
Table IV.
versus Period 2
Extent of engagement in
SC collaboration: Period 1
Mean Rank Percentage of five to seven
Collaboration type Period 2 Period 1 Difference Period 2 Period 1 Difference Period 2 Period 1 Difference
Cross-functional process integration 4.61 4.67 2 0.06 1 1 0 60.38 60.55 2 0.17
Forward integration with valued customers 4.29 4.33 2 0.04 2 2 0 49.61 51.07 2 1.46
Backward integration with key suppliers 4.15 4.26 2 0.11 3 3 0 43.83 50.88 2 7.05
Complete forward and backward SC integration 3.68 3.37 0.31 * 4 4 0 29.77 25.80 3.97
Notes: *p , 0.01; How extensively is your firm engaged in the effort? (1 – not engaged; 7 – totally engaged)
13. Mitigating
Combined Purchasing Logistics Production
P2 P2 P2 P2 P2 P2 P2 P2 resisting forces
Collaboration type mean rank mean rank mean rank mean rank
Cross-functional integration within
the firm 4.61 1 4.60 1 4.61 1 4.68 1
Forward integration with valued first- 281
tier customers 4.29 2 4.22 2 4.35 2 4.32 2
Backward integration with important
first-tier suppliers 4.15 3 4.21 3 4.08 3 4.10 3
Complete forward and backward SC Table V.
integration 3.68 4 3.80 4 3.55 4 3.66 4 Extent of engagement in
SC integration:
Note: How extensively is your firm engaged in the effort? (1 – not engaged; 7 – totally engaged) a functional comparison
To summarize, companies are not pursuing collaboration as proactively or as
successfully as proposed. This reality highlights the need to understand the forces
resisting collaboration.
Discerning collaboration resistors
The previous findings suggest that collaboration is hard work. It requires a new way of
thinking that is reinforced by supportive practices and systems. To explore whether
companies are overcoming the pervasive and powerful barriers to high-level
collaboration, managers were asked to evaluate the extent to which 11 resisting forces
impede SC collaboration (1 – not a barrier; 7 – serious barrier). The top seven forces
from Period 1 were included in the assessment. A total of four new items were added.
The data in Table VI reveal good news: the barriers to SC collaboration have
diminished. This is a very positive finding and is evidence that efforts to mitigate
collaboration resistors are achieving some success. Looking at individual resistors,
we see that despite the improvements, the four most pervasive barriers remained the
same across time periods, with inadequate information systems (mean ¼ 4.82;
percentage of five to seven ¼ 62.03 percent) again leading the list, followed by a lack
of clear guidelines for managing SC relationships (4.47; 53.08 percent), nonaligned goals
and measures (4.46; 52.43 percent) and an unwillingness to share risks and rewards
(4.38; 52.11 percent).
From a functional perspective, a high degree of consistency exists among the
respondents (Table VII). However, looking at the sum of the responses reveals that
manufacturers (4.09) are relatively optimistic – they perceive the barriers at lower levels
than their purchasing (4.30) and logistics (4.30) counterparts. In fact, purchasers and
logisticians rated all 11 barriers as more problematic than their manufacturing
counterparts, suggesting that distance from the point of collaboration (either up or
downstream) leads to a diminished view of the challenges. That is, the professionals
closest to the action are indicating that a gap exists between the “talk” of SC collaboration
and the “walk” of building collaborative relationships. A disconnect exists between
squeezing costs out of SC relationships and building more collaborative relationships.
Looking at the results in aggregate suggests that today’s challenge is not the
existence of a single formidable and immovable barrier; rather, the difficulty is one of
accumulation. As the many resistors – ranging from technology to organizational
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Table VI.
The strength of
collaboration resistors:
Period 1 versus Period 2
Mean Rank Percentage of five to seven
Collaboration resistors Period 2 Period 1 Difference Period 2 Period 1 Difference Period 2 Period 1 Difference
Inadequate information systems 4.82 5.19 2 0.37 * 1 1 0 62.03 69.40 2 7.37
Lack of clear guidelines for managing SC
relationships 4.47 4.87 2 0.40 * 2 2 0 53.08 60.70 2 7.62
Performance measures and operating goals are not
aligned 4.46 4.70 2 0.24 * 3 3 0 52.43 62.10 2 9.67
Companies unwilling to share risks and rewards 4.38 4.83 2 0.45 * 4 4 0 52.11 63.90 2 11.79
Turf conflicts hinder process management 4.30 4.49 2 0.19 5 8 3 47.04 50.90 2 3.86
A lack of willingness to share needed information 4.24 4.56 2 0.32 * 6 7 1 46.23 54.70 2 8.47
Process costs are difficult to measure 4.24 4.61 2 0.37 * 6 5 21 45.89 54.90 2 9.01
Lack executive-level managerial support for SC
collaboration 4.20 – – 9 – – 45.74 – –
Lack broad-based functional support for SC
collaboration 3.99 – – 8 – – 41.73 – –
Lack of trust among members of the SC 3.83 – – 10 – – 34.49 – –
Cultural differences among members of the SC 3.45 – – 11 – – 26.44 – –
Notes: *p , 0.01; To what extent are the following barriers to your firm’s SC collaboration efforts? (1 – not a barrier; 7 – serious barrier)
15. Mitigating
Combined Purchasing Logistics Production
P2 P2 P2 P2 P2 P2 P2 P2 resisting forces
Collaboration resistors mean rank mean rank mean rank mean rank
Inadequate information systems 4.82 1 4.84 1 5.02 1 4.58 1
Lack of clear guidelines for managing
SC relationships 4.47 2 4.57 2 4.48 6 4.29 4 283
Performance measures and operating
goals are not aligned 4.46 3 4.47 3 4.57 2 4.35 2
Companies unwilling to share risks
and rewards 4.38 4 4.38 4 4.55 3 4.30 3
Turf conflicts hinder process
management 4.30 5 4.36 5 4.53 5 4.07 8
A lack of willingness to share needed
information 4.24 6 4.30 8 4.55 3 4.19 6
Process costs are difficult to measure 4.24 6 4.32 7 4.27 7 4.26 5
Lack executive-level support for SC
collaboration 4.20 8 4.35 6 4.16 8 4.10 7
Lack broad-based functional support
for SC collaboration 3.99 9 4.16 9 4.02 9 3.80 9
Lack of trust among members of the
SC 3.83 10 3.98 10 3.86 10 3.64 10
Cultural differences among members
of the SC 3.45 11 3.50 11 3.57 11 3.45 11 Table VII.
The strength of
Note: To what extent are the following barriers to your firm’s SC collaboration efforts? (1 – not a collaboration resistors: a
barrier; 7 – serious barrier) functional comparison
structure and culture to human behavior – reinforce each other, the wave of resistance
becomes a tide that inundates many companies’ efforts to increase collaboration.
Because these resisting forces permeate the culture, structure, and technology of the
organization, managers find it difficult to eradicate them.
Evaluating collaboration enablers
To assess a company’s ability to establish behaviors and practices that are capable of
bridging the tide of implementation resistance, respondents were asked to evaluate
how well 16 different practices improve their companies’ ability to collaborate
effectively with other SC members (1 – does not improve; 7 – greatly improves).
The responses in Table VIII reveal that progress is being made. Of the 16 enablers,
11 are used more effectively to promote collaboration in Period 2 than in Period 1. The
mean score for the bridges in Period 2 was 4.38, which compares to a mean of only 4.07
in Period 1. That yields an average gain of 0.31 points, which is highly significant
( p ¼ 0.01). Moreover, the level of enthusiasm toward the enablers has risen
substantially – nine of the 16 are endorsed by more than 50 percent of the respondents
as effective enablers (percentage of five to seven). This compares to only two in Period
1. Companies are figuring out how to move their SC collaboration initiatives forward.
Among the most effective enablers are:
.
Open information sharing. Establishing a culture that is promotes information
sharing makes possible more effective senior-level interaction and greater
sharing of technical expertise.
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Table VIII.
The strength of
collaboration enablers:
Period 1 versus Period 2
Mean Rank Percentage of five to seven
Collaboration enablers P2 P1 Difference P2 [16] P1 [24] Difference P2 P1 Difference
Frequent, open information sharing among SC members 5.29 4.64 0.65 * 1 1 0 79.87 54.20 25.67
A willingness to share information among SC members 5.27 4.59 0.68 * 2 2 0 76.87 55.00 21.87
Efforts to establish common goals among SC members 4.97 4.31 0.66 * 3 5 2 69.11 45.70 23.41
SC simplification (e.g. fewer SC participants) 4.92 4.21 0.71 * 4 6 2 67.82 42.80 25.02
Collaborative efforts to adopt appropriate performance measures 4.91 4.08 0.83 * 5 12 7 67.09 42.30 24.79
Use of cross-functional and SC teams 4.85 3.84 1.01 * 6 3 23 65.73 37.93 27.8
Sharing of technical expertise with customers and suppliers 4.84 4.23 0.61 * 7 4 23 65.69 43.80 21.89
Senior level managerial interaction among SC members 4.84 4.21 0.63 * 7 7 0 64.16 46.00 18.16
Making decisions based on total cost analysis 4.83 3.85 0.98 * 9 17 8 62.00 47.50 14.5
Use of clear guidelines to manage SC relationships 4.78 3.76 1.02 * 10 20 10 63.21 32.00 31.21
Shifting roles and responsibilities (e.g. vendor managed inventories) 4.68 3.86 0.82 * 11 16 5 60.49 36.20 24.29
Increased employee training regarding SC practices 4.58 4.09 0.49 * 12 11 21 57.05 39.40 17.65
Creation of web-based linkages/portals to exchange information 4.52 – – 13 – – 54.24 – –
A defined and accepted approach to sharing risks and rewards 4.50 3.83 0.67 * 14 18 4 53.06 35.60 17.46
Use of enterprise resource planning (ERP)/SCM software 4.43 3.36 1.07 * 15 22 7 49.42 25.30 24.12
Process development and integration initiatives 4.36 4.21 0.15 16 8 28 47.88 43.40 4.48
Notes: *p , 0.01; To what extent do the following improve collaboration between your firm and other SC members? (1 – does not improve; 7 – greatly improves)
17. .
Creating alignment. Companies are working to establish common goals and Mitigating
jointly develop appropriate measures. resisting forces
.
Teaming. People drive or derail collaboration and teams are a critical mechanism
for enabling collaboration. Companies appear to be improving their teaming
skills.
A closer look at the functional responses (Table IX) reveals that just as purchasers and 285
logisticians were most sensitive to collaboration resistors, they are also the optimists
regarding the influence of enablers. The average enabler scores for the three groups
were as follows: purchasers ¼ 4.89, logisticians ¼ 4.83, and manufacturers ¼ 4.66.
Focusing on the differing perceptions, several contrasting views are highlighted below.
These contrasts are drawn from the comparative means as well as the relative
rankings of the 16 practices:
Combined Purchasing Logistics Production
P2 P2 P2 P2 P2 P2 P2 P2
Collaboration enablers mean rank mean rank mean rank mean rank
Frequent, open information sharing
among SC members 5.29 1 5.35 1 5.31 2 5.24 1
A willingness to share information
among SC members 5.27 2 5.35 1 5.53 1 4.95 2
Efforts to establish common goals
among SC members 4.97 3 5.08 3 5.04 3 4.80 4
SC simplification (e.g. fewer SC
participants) 4.92 4 5.05 4 4.81 9 4.90 3
Collaborative efforts to adopt
appropriate performance measures 4.91 5 5.01 6 5.02 4 4.75 6
Use of cross-functional and SC teams 4.85 6 4.98 7 5.00 6 4.06 16
Sharing of technical expertise with
customers and suppliers 4.84 7 4.93 9 4.82 8 4.80 4
Senior level managerial interaction
among SC members 4.84 7 4.90 10 5.01 5 4.68 7
Making decisions based on total cost
analysis 4.83 9 5.02 5 4.96 7 4.49 11
Use of clear guidelines to manage SC
relationships 4.78 10 4.94 8 4.71 10 4.63 9
Shifting roles and responsibilities (e.g.
vendor managed inventories) 4.68 11 4.89 11 4.43 15 4.66 8
Increased employee training
regarding SC practices 4.58 12 4.63 12 4.56 11 4.56 10
Creation of web linkages/portals to
exchange information 4.52 13 4.59 14 4.55 13 4.46 12
A defined and accepted approach to
sharing risks and rewards 4.50 14 4.63 12 4.56 11 4.34 14
Use of ERP/SCM software 4.43 15 4.36 16 4.55 13 4.55 13
Process development and integration
initiatives/workshops 4.36 16 4.51 15 4.35 16 4.15 15 Table IX.
The strength
Note: To what extent do the following improve collaboration between your firm and other SC of collaboration enablers:
members? (1 – does not improve; 7 – greatly improves) a functional comparison
18. BIJ .
Logisticians are significantly more willing to share information than the other
17,2 managers.
.
Logistics professionals are the only group to rank SC simplification outside the
top five enablers. Purchasing professionals gave SC simplification the highest
rating. Of note, although purchasers have made real progress with supply-base
rationalization, logisticians still struggle with what often appear to be intractable
286 complexity challenges.
.
Purchasers and logistics managers evaluate the collaborative value of teaming
more highly than production managers. Perhaps, this perception arises from
their more frequent participation on teams.
.
Purchasers believe that total cost analysis is vital to evaluating inter-firm
collaboration opportunities. Production managers rank total costing as one of the
least effective practices.
The response pattern suggests that day-to-day experience with a practice influences
how managers perceive its enabling impact. Managers rank practices they deal with
daily higher than their counterparts who only hear about them in meetings, through
in-house newsletters and in “lunchroom” conversations. More teaming, better training,
more effective rotation programs and enhanced communication of “success stories” are
needed to overcome this fragmentation of experience, which promotes silo thinking.
The overarching theme conveyed by the enabler data is that although much work
remains to be done, real progress has been made. As the data in Table X demonstrate,
in Period 1, the top five resistors had scores that were significantly higher than their
corresponding enablers ( p ¼ 0.01). By Period 2, although four of the top five resistors
Resistors Enablers
Rank Score Practice Rank Score Practice
2001
1 5.19 Inadequate information systems 1 4.64 Frequent and regular
communication
2 4.87 Lack clear alliance guidelines 15 3.97 Use of clear guidelines to select allies
20 3.76 Use of clear guidelines to manage
allies
3 4.84 Inconsistent operating goals 5 4.31 Use of common goals
4 4.83 Lack shared risks and rewards 18 3.83 Approach to share risks and rewards
5 4.61 Processes poorly costed 17 3.85 Use of total cost analysis
24 3.08 Use of activity-based costing
2007
1 4.82 Inadequate information systems 1 5.29 Frequent and regular
communication
2 4.47 Lack clear alliance guidelines 10 4.78 Use of clear guidelines to manage SC
3 4.46 Non-aligned measures and goals 3 4.97 Establish common goals
Table X. 5 4.91 Collaborative adoption of measures
Comparison of scores for 4 4.38 Unwilling to share risks and 14 4.50 Approach to share risks and rewards
top five resistors and rewards
enablers: Period 1 versus 5 4.30 Turf conflicts 16 4.36 Process development and
Period 2 integration
19. remained unchanged, their scores were significantly lower ( p ¼ 0.05) and the scores Mitigating
for the related enablers were all higher, three of them significantly. Managers are resisting forces
beginning to grasp where and how to invest scarce resources to promote both change
and more effective collaboration.
Measuring the performance benefits of collaboration
Documenting benefits is a critical part of an evaluation of the attractiveness of a 287
collaboration capability. After all, anecdotal stories about SC collaboration’s benefits
abound. So too do stories about failed collaboration initiatives. A careful assessment of
benefit achievability is therefore needed. To help quantify the benefits of SC
collaboration, we asked managers to indicate to what extent SC collaboration has
improved their firm’s performance in ten specific areas (1 – not improved; 7 – greatly
improved). The results reported in Table XI reveal that customer service benefits
remain collaboration’s most important contribution to firm competitiveness.
Establishing more collaborative relationships enables companies not only to improve
specific service capabilities but also to insinuate themselves into customers’ key
value-added processes. Although collaboration’s top-line, revenue-generating impact is
important, respondents also indicated that collaboration helps reduce a variety of costs.
As a result, overall SC costs are improved and firm profitability goes up.
Focusing briefly on functional perspectives reveals a relatively consistent view of
the collaboration benefits (Table XII). This represents an interesting evolution in
perception from Period 1 when the three managerial groups perceived the nature of
collaborative benefits quite differently. That is, in Period 1, the most prevalent benefits
identified by one functional area were viewed as relatively less important by the other
functions. One possible conclusion from this finding is that managers are doing a
better job of documenting and communicating the performance benefits that they are
achieving. Despite the general convergence, supply managers place more emphasis on
collaboration’s ability to reduce the cost of purchased items and logisticians value
improved on-time delivery benefits more than other managers.
Evaluated holistically, these findings suggest that a well-thought-out, carefully
executed collaboration strategy promises to help a company profitably deliver high
levels of customer satisfaction. This combination of service and efficiency is the allure
of most strategic initiatives, not just the collaboration-enabled SC.
Conclusion
The data confirm that SC collaboration is a complex phenomenon. They also tell an
intriguing story: as competition intensifies, some companies are responding by turning
to collaborative initiatives. They are mitigating resisting forces and implementing
collaboration enablers. Their organizational structures and cultures are transforming
to support their collaborative strategies. As a result, their collaborative capabilities are
improving and they are obtaining higher levels of customer service and productivity.
However, success has not been universal. Many companies are struggling to
leverage collaboration for competitive advantage. The barriers to success are many.
They begin with managers’ understanding of the nature of SC collaboration, which
involves the sharing of resources – information, people, and technology – among SC
members to create synergies for competitive advantage. Indeed, a high-level
collaboration capability goes beyond managing transactions for efficiency to
20. BIJ
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288
Table XI.
Documenting
collaboration benefits:
Period 1 versus Period 2
Mean Rank Percentage of five to seven
Period 1
Collaboration benefit Period 2 Period 1 Difference Period 2 (15) Difference Period 2 Period 1 Difference
Overall customer satisfaction 4.89 4.62 0.27 * 1 3 2 67.43 54.40 13.03
On-time delivery/due-date performance 4.83 4.65 0.18 2 2 0 66.20 56.10 10.1
Responsiveness to customer requests or
unexpected challenges 4.82 4.58 0.24 3 1 22 66.92 57.00 9.92
Firm profitability 4.69 4.51 0.18 4 6 2 60.95 49.00 11.95
Overall product and SC costs (productivity) 4.67 4.38 0.29 * 5 9 4 60.10 46.70 13.4
Cost of purchased items 4.65 4.58 0.07 6 5 21 59.57 54.40 5.17
Inventory performance (e.g. cost, levels, turns) 4.64 4.48 0.16 7 5 22 58.78 48.40 10.38
Overall product quality 4.40 4.16 0.24 * 8 11 3 50.83 40.40 10.43
Transportation costs 4.16 3.89 0.27 * 9 12 3 41.60 34.70 6.9
New product development capability
(e.g. cost, time, uniqueness) 4.02 3.60 0.42 * 10 14 4 39.28 24.80 14.48
Notes: *p , 0.01; To what extent has SC collaboration improved your firm’s performance in the following areas? (1 – not improved; 7 – greatly
improved)
21. Mitigating
Combined Purchasing Logistics Production
P2 P2 P2 P2 P2 P2 P2 P2 resisting forces
Collaboration benefit mean rank mean rank mean rank mean rank
Overall customer satisfaction 4.89 1 4.89 2 4.90 3 4.92 1
On-time delivery/due-date
performance 4.83 2 4.88 3 4.92 1 4.66 3 289
Responsiveness to customers 4.82 3 4.80 5 4.91 2 4.86 2
Firm profitability 4.69 4 4.85 4 4.64 5 4.53 5
Overall product and SC costs 4.67 5 4.78 7 4.65 4 4.49 6
Cost of purchased items 4.65 6 4.95 1 4.42 7 4.47 7
Inventory performance 4.64 7 4.80 5 4.49 6 4.55 4
Overall product quality 4.40 8 4.69 8 4.11 9 4.27 8
Transportation costs 4.16 9 4.16 10 4.35 8 4.04 9
New product development
capability 4.02 10 4.27 9 3.74 10 3.94 10 Table XII.
Documenting
Note: To what extent has SC collaboration improved your firm’s performance? (1 – not improved; collaboration benefits: a
7 – greatly improved) functional perspective
managing relationships for creativity and continuous improvement. Thus, for many
firms, building a collaboration-enabled business model requires a transformation in
thinking and practice. By failing to comprehend the character and magnitude of the
required change, these companies fail to:
.
leverage external driving forces; and
.
invest in collaboration enablers to mitigate prevalent collaboration resistors.
Their structures and cultures remain frozen – or are only partially thawed – and a
collaboration capability remains out of reach.
The diversity of outcomes suggests that managers must carefully evaluate their
companies’ motivation and readiness to pursue a collaboration-enabled SC. They
should assess managerial commitment to collaboration as well as managerial
understanding of what is required to achieve it. Managers must then consider whether
they can generate the momentum for sustained change. Simultaneously, they need to
evaluate their companies’ abilities to implement specific collaboration enablers – the
enablers that can most effectively mitigate the resistors that are present in their SC.
Finally, they should ask whether or not they can persist even when the benefits are
slow to emerge. Many companies simply do not have the vision or the patience to learn
how to collaborate successfully.
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Further reading
Fawcett, S.E. and Magnan, G.N. (2004), “Ten guiding principles of high-impact supply chain
management”, Business Horizons, Vol. 47 No. 5, pp. 67-74.
Corresponding author
Stanley E. Fawcett can be contacted at: stan_fawcett@byu.edu
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