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The Influence of Interorganizational

Information Systems on Resilience Within

Buyer-Supplier Relationships

Master Thesis Supply Chain Management

Author: Edwin Siegers

S3259250

MSc Supply Chain Management

University of Groningen, Faculty of Economics and Business

June 22, 2018

Supervisor: Dr. Kirstin Scholten

Co-assessor:

Dr. Ir. Thomas Bortolotti

Word count:

10.005

Acknowledgements:

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2

Abstract:

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3

Content

1. Introduction ... 4 2. Theoretical background ... 5 3. Methodology ... 11 4. Findings ... 16 5. Discussion ... 22 6. Conclusion ... 26 References ... 27

Appendix A: Interview protocol ... 33

Appendix B: Letter to organizations... 39

Appendix C: Consent form ... 41

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4

1.

Introduction

The use of Information technology (IT) between organizations has a crucial role in creating supply chain resilience (Tukamuhabwa, Stevenson, Busby, & Zorzini, 2015). Literature is even suggesting that “Information technology is the glue that keeps the supply chain together.”(Kong & Li, 2008: 3). Supply chain resilience can be described as the capability of supply chains to return back to normal, or improved supply chain operations after a disruption (Jüttner & Maklan, 2011; Ponomarov & Holcomb, 2009). Jüttner & Maklan (2011) identified four formative elements of supply chain resilience: flexibility, velocity, visibility, and collaboration. All four resilience elements have conceptual (Christopher & Peck, 2004; Kong & Li, 2008), and sometimes even empirical (Brandon‐Jones, Squire, Autry, & Petersen, 2014; Fawcett, Wallin, Allred, Fawcett, & Magnan, 2011; Scholten & Schilder, 2015) indications that they are influenced by aspects of interorganizational information systems (IOS) i.e. IT systems that cross the boundaries of the focal firm, by also linking buyers and / or suppliers. These IOS’s have aspects in which they can have different interpretations, such as the form of an IOS (Gunasekaran & Ngai, 2004; Ngai, Cheng, Ho, & Kong, 2004), the scope of the IOS (Bakos, 1991), information in the IOS (Welker, van der Vaart, & van Donk, 2008) or integration in the IOS (Shah, Goldstein, & Ward, 2002). Aspects of IOS’s can influence resilience within the buyer-supplier relationship for example by facilitating information sharing between buyer and supplier (Barratt & Oke, 2007; Fawcett et al., 2011), consequently increasing the visibility of information within buyer-supplier relationship, hence improving resilience (Brandon‐Jones et al., 2014). Moreover, IOS’s can improve strategies to enhance the resilience within a buyer-supplier relationship, for example through improving the coordination of responses to disruptions between buyers and suppliers in order to tackle the disruption more effectively (Erol, Sauser, & Mansouri, 2010; Kong & Li, 2008).

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5 following question: “How do aspects of IOS’s influence resilience within buyer-supplier relationships?”

Since IOS’s in buyer-supplier relationships are very complex (Fawcett et al., 2011), in-depth information is required to fully understand the influence that aspects of IOS’s have on resilience within buyer-supplier relationships (Brusset & Teller, 2017). The findings gathered from seven cases result in two main contributions to IOS and supply chain resilience literature. First, while supply chain literature often identifies and analyses supply chain resilience strategies, empirical evidence remains scarce (Kamalahmadi & Parast, 2016). Moreover, the available research lacks focus on how resilience strategies should be implemented (Tukamuhabwa et al., 2015). As the implementation of IOS’s often is not satisfactory with regard to the expected outcomes (Frohlich, 2002; Wu, Yeniyurt, Kim, & Cavusgil, 2006), a better understanding of aspects of IOS’s and their influence on resilience is required. This study contributes to this gap by giving an overview which clarifies how aspects of IOS’s influence the formative capabilities of supply chain resilience, thereby contributing to how IOS’s can be used to successfully achieve resilience within buyer-supplier relationships. Second, current literature focuses heavily on the positive influence that aspects of IOS’s have on supply chain resilience, while neglecting the potential negative influence. Still, there are some indications that aspects of IOS’s can have a negative influence on resilience in the buyer-supplier relationship (Alcantara et al., 2017; Kong & Li, 2008). However, this remains incomplete and lacks empirical corroboration. A more holistic view is developed regarding the influence of IOS’s on resilience within buyer-supplier relationships by including how aspects of IOS’s can have a negative influence on resilience. This can help managers to more consciously implement and manage IOS’s, in order to optimize resilience within the buyer-supplier relationship.

2.

Theoretical background

2.1.

Interorganizational information systems

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6 IOS’s have a substantial role in supply chain management. The increasing cooperation between organizations through IOS’s changed the level of competition from organization versus organization, to supply chain versus supply chain (Pereira, 2009; Rai, Patnayakuni, & Seth, 2006). This highlights the importance to focus on a perspective that reaches beyond the boundaries of a single organization, which is taken by the IOS. Moreover, IOS’s can increase the competitive advantage of supply chains through increased efficiency (Pereira, 2009), supply chain visibility (Barratt & Oke, 2007), and the ability to reconfigure the supply chain (Wei & Wang, 2010). However, IOS’s also come with risks, such as the potential overflow of information sharing, in which the necessary information cannot be found (Liker & Choi, 2004), untrustworthy information positioned within an IOS, or unavailable information can also have a negative influence on performance (Smith, Watson, Baker, & Pokorski, 2007). Different IOS’s are similar in a way that they link information to other members within the supply chain (Bakos, 1991; Johnston et al., 1988; Lee, Kim, & Kim, 2014). However, not all IOS’s are exactly the same (table 1), IOS’s have several aspects in which they can differ, for example in form, scope, integration, and information (Bakos, 1991; Ngai et al., 2004; Shah et al., 2002; Welker et al., 2008).

Two forms of IOS’s can be distinguished: an IOS based on electronic data interchange (EDI) and web based information systems (WBI) (Gunasekaran & Ngai, 2004; Ngai et al., 2004; Soliman & Janz, 2004; Welker et al., 2008). EDI is the more traditional form for IOS’s and enables organizations to electronically generate and communicate business documents throughout the supply chain, such as invoices and orders (Shah et al., 2002; Soliman & Janz, 2004). Communication through EDI requires a private communication network of the organizations involved (Shah et al., 2002; Soliman & Janz, 2004). However, these organizations need their hardware to be compatible in order for EDI to work optimally (Hart & Saunders, 1997). Another option is IOS in the form of WBI, which enables communicating business documents and data within a supply chain through the internet (Ngai et al., 2004). However, as WBI communicates through the internet, it uses a public communication network (Shah et al., 2002). This has several consequences which make up for the differences between WBI and EDI based IOS’s. First, through EDI all parties involved have ownership over the communication network, as they all have hardware in place (Soliman & Janz, 2004). In contrast, a WBI based IOS can be owned by either one of the parties, or even a third party (Soliman & Janz, 2004; Subramaniam & Shaw, 2002). This makes WBI often a more affordable option (Ngai et al., 2004; Soliman & Janz, 2004). However, the WBI uses a public network and is therefore increasingly exposed to security risks (Warren & Hutchinson, 2000), hence excellent data security is required (Ngai et al., 2004).

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7 the buyer-supplier relationship (Saeed, Malhotra, & Grover, 2005), which leads to reduced coordination and monitoring costs through more efficient information processing (Dai & Kauffman, 2002; Subramaniam & Shaw, 2002). Still, the scopes of these systems are linked, as the ultimate goal of a multilateral IOS is creating a buyer-supplier relationship, which can be facilitated by a bilateral IOS (Bakos, 1991).

The integration of an IOS relates to which organizations are linked within the IOS, and therefore are able to access and provide information within the IOS (Lee et al., 2014; Shah et al., 2002). Therefore, focusing on the external integration the IOS facilitates, rather than integration of processes within the boundaries of a single organization (Saeed et al., 2005). Three levels of integration are identified. The first level indicates that the focal firm is linked to either the supplier, or the customer (Shah et al., 2002). On the second level of integration, both supplier and customer are integrated in the IOS with the focal firm. On the third level, a network is created where suppliers are also linked to customers through the focal firm, enabling them to change data (Shah et al., 2002). A more integrated supply chain is able to operate more effective and efficient, thereby increasing supply chain performance (Lee et al., 2014). However, interdependencies between supply chain members increase (Lee et al., 2014). Moreover, higher levels of integration require greater collaboration (Pagell, 2004), which might not be desirable in all buyer-supplier relationships (Kim & Choi, 2015; Kraljic, 1983).

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Table 1: Aspects of IOS’s

Aspect of IOS Description Description is based on

Form The form of communication the IOS uses. (EDI and WBI)

(Gunasekaran & Ngai, 2004; Ngai et al., 2004; Soliman & Janz, 2004; Welker et al., 2008)

Scope The scope of organizations included in the IOS. (bilateral, multilateral, and hybrid)

(Bakos, 1991)

Integration The degree to which the supply chain members are integrated in the IOS. (supplier or customer, both, and network)

(Shah et al., 2002)

Information The type of information that is shared within the IOS. (inventory, sales, planning, order status)

(Lee & Whang, 2000; Welker et al., 2008)

In line with the aim of this research, the following section will discuss the concept of supply chain resilience.

2.2

Supply chain resilience

Supply chain disruptions can cause a tremendous amount of damage towards the whole supply chain (Jüttner & Maklan, 2011), therefore dealing with these disruptions is a key issue within supply chain management (Brandon‐Jones et al., 2014; Pettit, Fiksel, & Croxton, 2010). These disruptions can be caused by external sources such as earthquakes or political developments (Stecke & Kumar, 2009), but also within the supply chain itself originate disruptions, such as a machine breakdown. Internally, disruptions can emerge from both the suppliers’ (Tang, 2006a) and the customers’ side (Lee et al., 1997). Since identifying all potential disruptions is not always possible (Blackhurst, Craighead, Elkins, & Handfield, 2005; Skipper & Hanna, 2009), supply chains should be prepared for them in advance. Hence, supply chains should be resilient: designed in a way that they are able to “respond to unexpected disruptions and restore normal supply network operations.” (Rice & Caniato, 2003: 22). Many definitions of supply chain resilience have been used over the past decade (Kamalahmadi & Parast, 2016; Ponis & Koronis, 2012; Tukamuhabwa et al., 2015), leading to the currently most comprehensive definition of supply chain resilience: “The adaptive capability of a supply chain to prepare for and/or respond to disruptions, to make a timely and cost effective recovery, and therefore progress to a post-disruption state of operations – ideally, a better state than prior to the post-disruption.”(Tukamuhabwa et al., 2015: 5599).

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9 Jüttner & Maklan, 2011; Kamalahmadi & Parast, 2016; Tukamuhabwa et al., 2015). Most of the elements mentioned in the different frameworks overlap to some extent. In some cases directly, while in other cases they are part of a higher level element (Jüttner & Maklan, 2011; Tukamuhabwa et al., 2015). For example, visibility and velocity are mentioned as formative elements of supply chain resilience by Jüttner & Maklan (2011), whereas they are part of agility within the framework of Tukamuhabwa et al. (2015). For this study the well accepted (Johnson, Elliott, & Drake, 2013) framework of Jüttner & Maklan (2011) will be used, including flexibility, velocity, visibility, and collaboration as formative elements of supply chain resilience (see table 2 for descriptions of resilience elements adapted to the buyer-supplier relationship scope). This framework is especially fitting for this research, as there are indications for each of the formative elements that they are influenced by IOS’s (Christopher & Peck, 2004; Frohlich, 2002; Kong & Li, 2008; Roberta Pereira et al., 2014; Scholten & Schilder, 2015).

Flexibility refers to the adaptive capability of (reconfiguring) the supply chain in order to align supply and demand (Stevenson & Spring, 2007). It considers both the capability of the existing supply chain partners in making adjustments to match supply with demand, and the ability of forming new supply chain partnerships or terminate existing ones (Gosain, Malhotra, & El Sawy, 2004). Redundancy can be considered as a way to achieve flexibility (Johnson et al., 2013; Rice & Caniato, 2003). Although not efficient (Christopher & Peck, 2004), creating overcapacity, having multiple suppliers, or having inventory buffers can lead to a flexible supply chain (Christopher & Peck, 2004; Jüttner & Maklan, 2011; Stevenson & Spring, 2007). These forms of redundancy can make a supply chain able to respond more effective during disruptions by mitigating the misalignment between demand and supply caused by a disruption, therefore reducing the impact (Sheffi & Rice Jr., 2005).

Velocity defines how quickly these adaptations can be implemented (Stevenson & Spring, 2007) and can be determined by answering the question of“how rapidly can the supply chain react to changes in demand, upwards or downwards?”(Christopher & Peck, 2004: 20). This implies that velocity has a critical role in how fast a supply chain can respond, recover and grow from disruptions (Jüttner & Maklan, 2011; Wieland & Wallenburg, 2013). Velocity aims to mitigate the damage of disruptions, hence focusing on efficiency (Jüttner & Maklan, 2011). This means that velocity is crucial for the cost effectiveness of the recovery, which can result in creating a competitive advantage (Hamel & Välikangas, 2003). Through reducing lead times, and executing processes simultaneously rather than in a sequence, a supply chain can increase its velocity, and consequently supply chain resilience (Christopher & Peck, 2004; Tang, 2006b).

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10 able to see in a high visibility supply chain (Francis, 2008). An often used method to achieve visibility is investing in information sharing (Brandon‐Jones et al., 2014), which is often facilitated by IT resources (Fawcett et al., 2011). However, trust among the supply chain partners is an important requirement for gaining visibility through information sharing (Barratt & Oke, 2007; Fawcett et al., 2011). Visibility facilitates the identification of potential disruptions and necessary counteractions (Blackhurst et al., 2005; Jüttner & Maklan, 2011). Moreover, visibility also identifies when counteractions are not necessary, therefore preventing unnecessary interventions (Christopher & Lee, 2004).

Collaboration can be described as the “ability to work effectively with other entities for mutual benefit” (Pettit, Croxton, & Fiksel, 2013: 49). From a supply chain perspective, these entities are the organizations within a supply chain. Collaboration is characterized by the sharing of costs, information, or other resources (Bakshi & Kleindorfer, 2009; Christopher & Peck, 2004; Soosay & Hyland, 2015) and reduces uncertainty and the impact caused by disruptions (Blackhurst, Dunn, & Craighead, 2011; Christopher & Peck, 2004). During disruptions, collaborations can be very valuable in ensuring a quick recovery (Jüttner & Maklan, 2011; Scholten & Schilder, 2015). Also after the recovery from disruptions, collaboration has a role in supply chain resilience. Through learning and sharing experiences, collaboration within a supply chain enhances the resilience of a supply chain (Sheffi, 2001). Moreover, strong collaborations between organizations improve the effectiveness of the other formative elements when establishing supply chain resilience (Scholten & Schilder, 2015).

Table 2: Formative elements of resilience within buyer-supplier relationships

Formative element

Description Description is based on

Flexibility The adaptive capability of the buyer-supplier relationship in order to align supply and demand.

(Stevenson & Spring, 2007)

Velocity How quickly a buyer-supplier

relationship can respond, recover, and growth after a disruption.

(Jüttner & Maklan, 2011)

Visibility The extent to which buyer and supplier can see information through the supply chain.

(Christopher & Peck, 2004)

Collaboration The ability of the buyer and supplier to work effectively together with each other for mutual benefit.

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2.3

Conceptual framework

Information is of even greater value in environments where disruptions occur (Bodendorf & Zimmermann, 2005). This implies that IOS’s are especially important in achieving resilience within buyer-supplier relationships. The use of IOS’s can theoretically lead to increased resilience within buyer-supplier relationships (Fawcett et al., 2008, 2011; Frohlich, 2002; Pereira, 2009). Therefore, it can be expected that IOS’s have a positively influence resilience within the buyer-supplier relationship as well, for example by improving visibility through facilitating data sharing to identify disruptions (Roberta Pereira et al., 2014). However, the performance of IOS’s often does not live up to the high expectations of improving resilience within buyer-supplier relationships (Frohlich, 2002; Wu et al., 2006) and IOS’s can even restrain resilience within buyer-supplier relationships (Alcantara et al., 2017; Johnston et al., 1988; Pereira, 2009). For example by enabling lower inventory levels of suppliers (Johnston et al., 1988), which reduces resilience within buyer-supplier relationships (Cabral, Grilo, & Cruz-Machado, 2012; Tukamuhabwa et al., 2015). This implies that aspects of IOS’s influence the resilience within buyer-supplier relationships through different ways i.e. mechanisms. However, how aspects of IOS’s influence the resilience within buyer-supplier relationship has not been thoroughly investigated yet. Moreover, detailed qualitative analyses about the influence of aspects of IOS’s in supply chain resilience have been called upon by scholars (Brusset & Teller, 2017; Wang & Wei, 2007). A conceptual framework to analyze how aspects of IOS’s influence the resilience within buyer-supplier relationships is shown in figure 1.

3.

Methodology

3.1.

Research design

In studying how aspects of IOS’s influence the resilience within buyer-supplier relationships, an exploratory case study method is used. Due to the increasing amount of interorganizational relationships and rapid development of technology, supply chain resilience and IOS’s both qualify as

IOS

 Form  Scope  Integration  Information

Buyer-supplier relationship

resilience

 Flexibility  Velocity  Visibility  Collaboration

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12 complex phenomena, consequently rich data is necessary to increase the understanding of this topic. Case study research is especially useful in this situation, because it enables the development of a holistic view on complex phenomena in a real life context (Yin, 2009). Moreover, case studies are a good fit with “how” and “why” questions (Yin, 2009). Seven cases of buyer-supplier relationships are investigated to enable the consideration of different IOS’s in different contexts, as IOS’s are complex (Fawcett et al., 2011), used for different goals (Johnston et al., 1988), and differ a lot (Shah et al., 2002; Welker et al., 2008). It is expected that this more varying environment contains more mechanisms to be identified when investigating multiple cases, which improves theory building (Eisenhardt & Graebner, 2007). Seven cases will be studied, as this is a well-accepted amount of cases for multiple case study research (Eisenhardt, 1989). Moreover, buyer-supplier relationships is a particularly suitable unit of analysis, as most disruptions occur at the first tier of a supply chain (Alcantara et al., 2017).

3.2.

Research setting & case selection

In order to find different mechanisms of how aspects of IOS’s have influence on the resilience within buyer-supplier relationships, cases will be selected based on several criteria. First, the importance of resilience within the buyer-supplier relationship matters. Resilience is increasingly important for buyer-supplier relationships that are actively dealing with disruptions (Tukamuhabwa et al., 2015). Therefore, potential interviewees are asked in a preliminary questionnaire (see appendix A) if they can provide detailed information during the interview of at least two disruptions within the buyer-supplier relationship. Second, to enable the identification of mechanisms present in buyer-supplier relationships with different interpretations in the aspects of IOS’s (table 3), the cases of buyer-supplier relationships should have different interpretations in the aspects of their IOS’s (i.e. form, scope, integration, information), following theoretical replication logic (Yin, 2009).

Table 3: Case selection criteria

Case Form Scope Integration Information

A EDI Hybrid Supplier and

customer Planning Order status B EDI WBI Bilateral Supplier or customer Sales Planning Order status

C WBI Bilateral Supplier or

customer

Sales Order status

D WBI Bilateral Supplier and

customer

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E EDI Bilateral Supplier and

customer

Inventory Order status

F WBI Hybrid Network Order status

G EDI Bilateral Supplier or

customer

Sales

3.3.

Data collection

In identifying the cases, buying organizations were first contacted via a phone call to introduce the research and find out if they were capable and willing to participate in an interview for this study, and provide a supplier who is capable and willing to participate in an interview as well. After this phone call, the suppliers were contacted for verification. After this several documents were sent to the participating organizations via mail, namely: a letter about the research (appendix B), the interview protocol (appendix A) (containing a preliminary questionnaire and interview questions), and a consent form ensuring anonymity of the participating organizations and interviewees (appendix C). Consequently were suitable interviewee candidates identified based on their knowledge of the to be discussed disruptions. Interviewees were contacted through the email, after which interviews were scheduled. Before the actual interview the interviewees were asked to fill in a preliminary questionnaire with closed questions to verify the suitability of the case even further. The scheduled semi-structured interviews were condoned by two researchers during April, May, and June 2018 and to collect the data of a single case, both the buyer and supplier were interviewed separately at their own organization, in order to improve validity through achieve data triangulation (Voss, Tsikriktsis, & Frohlich, 2002). The characteristics of the interviews and interviewees are shown in table 4. Interviews followed the interview protocol (Appendix A) to enhance the reliability of the data and facilitate cross-case comparability (Yin, 2009), finally consent forms were signed by both interviewees and interviewers to ensure anonymity.

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Table 4: Interview characteristics

Case Buyer (B) or

Supplier (S)

Company sector Product /

Service Function interviewee Interview length A S Logistics Transportation

Support director 89 min

B Logistics Sales director 54 min

B S Materials manufacturer Trays Managing director General manager 96 min B Energy equipment Purchasing director 81 min C S IT reseller IT software and hardware

Managing director 116 min

B Public sector

Category manager

Contract manager 104 min

D S IT reseller IT hardware Sales manager 83 min

B Public sector Category manager 74 min

E

S Materials

manufacturer Acoustic isolation

Sales Manager 91 min

B Automotive

components Purchaser 40 min

F

S Human resources

Staff leasing

Recruiter 40 min

B Public sector Contract manager 83 min

G

S Materials

manufacturer Insulation material

Sales manager 91 min

B Automotive components Logistics director Purchaser 41 min

3.4.

Data analysis

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15 information) and resilience elements (i.e. visibility, velocity, flexibility, and collaboration). Codes that were related to multiple aspects of IOS’s or multiple resilience elements were duplicated in order to show that they were linked to multiple (in)dependent variables. An example of this process is shown in table 5.

To draw conclusions, first the data of the buyer and supplier within a single case is analyzed and triangulated to ensure reliability. Consequently the relevant codes are inserted in the data analysis file in excel (appendix D). After this within-case analysis, patterns across the cases are being identified, leading to several mechanisms, which will be thoroughly discussed in the next section.

Case IOS aspect Quote (first order) Description (second order) Resilience element

ES Form

We use EDI for the exchange of data. Some of our customers do supply internet-based systems like web platforms. We usually do not use this, only for large customers because it is a lot of effort to maintain these platforms, to fill it out and that is not really worth it for small customers.

Compatible systems collaboration

GS as soon as you discover the disruption, it is always about communicating with the

customer. Close collaboration collaboration

AB

There is a system for the inland navigators which can help with capacity statuses of the terminals, […] Which consequently leads to a better alignment of capacities and occupation of the terminals.

Capacity information increases

flexibility flexibility

BS

We do not unload easily. Then I can go for 5 or 6 times. The problem is that if I unload my trays, then I am really fast but the truck is coming to the customer and then the people there are scanning. The first pallet is going to the warehouse, scanning. So, there is a lot of lagging. Normally, you put the pallet down, next, down. The truck can already move afterwards. This process usually takes 20 min. But because the process what is better for our customer, the time for unloading is more than 60 min.

Data input slows down unloading process

DS

However after in the response the role of IT is limited. IT mostly has an administrative role, in administering the delivery times and communication reports. So that if our customer calls another one of our employees, the whole story does not have to be repeated. Because the employee can see what has been discussed in the system.

Visibility on the history of the response of the disruption saves time

DS There can be mistakes in the programming code, but this risk is lower than human

error. Risk of human error

EB Without IT nothing would work out for us. I need the information where

something is missing and this information I get via IT.

IT system for identifying late deliveries

CS

the contract takes four years, and implementing it takes 1 year, and then you work with each other 3 years, and maybe you are not their supplier anymore. So it is a risky investment, and also you share a lot of information with each other, and maybe you don’t want to share.

Integration is a risky investment collaboration

BB Our intention is to link the supplier more and more. To our ERP system. Because

it reduces the lead time in general. Our ERP system is our main system,

Higher integration leads to lower lead time

BS

This order process is running 4/5/6 times a day. Imagine if you have to call the suppliers every time: “Do you have capacity?”. That was done in the past, but it saves a lot of time.

Information sharing through IOS's is faster

AS

A disadvantage is that it is very complex due to the amount of information it includes, and due to all the links it has with different members in the supply chain [ports, customer etc.]

Integration & information make

the IT system complex visibility

FB

Yes. You have a Q&A module in the portal. If they send a question, all the suppliers can see the questions and the answers. So, that is the transparency thing. It is not that they are seeing if the others are offering and prices. Only the ranking afterwards they can see.

Aligning demand requirements with supply is done

transparantly

collaboration

AS

A disadvantage is that it is very complex due to the amount of information it includes, and due to all the links it has with different members in the supply chain [ports, customer etc.]

Integration & information make

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4.

Findings

In analyzing the data, several mechanisms were discovered of how different aspects of IOS’s influence supply chain flexibility, velocity, visibility, and collaboration within a buyer-supplier relationship and therefore supply chain resilience. The form of the IOS is the only aspect which did not directly influence the resilience within the buyer-supplier relationship. However it did influence another aspect of the IOS via compatible systems, namely the integration. Other mechanisms that have been identified (e.g. emphasized data) influence a non-visibility resilience element through visibility. This implicates that visibility can also be considered as an antecedent of supply chain resilience, rather than only an element of it. Moreover, some mechanisms (e.g. mutual dependency) influence the resilience within the buyer-supplier relationship without first influencing visibility.

Data found in all cases show that IOS’s influence how buyer-supplier relationships prepare for disruptions and identify disruptions. However, only in case D IOS’s have been found to have influence in the response to disruptions, and the recovery from it. This implicates that IOS’s mostly influence the resilience of the buyer-supplier relationship during the first two phases of supply chain resilience: the preparation and identification. In table 6, a comprehensive overview is given of all identified mechanisms. These mechanisms are thoroughly discussed in the following section.

Table 6: Overview of mechanisms (Note: * indicates via visibility; ** indicates via integration)

Visibility Velocity Flexibility Collaboration

Form **Compatible systems (cases: E, G) Scope Information overload (case: A) *Transparent negotiation (case: F)

Integration Human error

(case: A, B, C, D, F, G) *Emphasized data (cases: A, B, C, D, E, F) *Transparent negotiation (case: F) *Reconciled schedules (cases: A, B) Mutual dependency (cases: A, B C, D, E, F) Information Information overload (case: A) Administration of progress (case: B, D)

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4.1.

Visibility

Data shows that several aspects of the IOS (scope, integration, and information) influence the visibility within a buyer-supplier relationship via multiple mechanisms. Some mechanisms (information overload and human error) solely influence the resilience within the buyer-supplier relationship through visibility. Other mechanisms also influence velocity (emphasized data), flexibility (transparent negotiation and reconciled schedules) or collaboration (close collaboration) via visibility. How these mechanisms influence visibility within the buyer-supplier relationship is discussed in the following section.

While only identified in case A, an information overload can occur when there is too much information is available in the IOS. Consequently finding the necessary data can be harder as the system becomes “very complex due to the amount of information it includes, and due to all the links it has with different members in the supply chain” (Supplier case A). Therefore, the scope and information aspects of the IOS jointly contribute to the amount of information available within the IOS, and consequently influence the risk for an information overload. This mechanism was not found in other cases, however all cases had less supply chain partners included in the system (i.e. different scope), while some cases also had different types of information available in the IOS (cases: C, D, F, G).

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18 component that can lead to a problem. And in a systemized way, so that employees don’t have to think about it anymore.” (Supplier case D). Which is aligned with the expectations of case G, as they are planning to integrate through a new IOS: “The information will be available more easily via the new portal. Moreover, we do not expect any human mistakes within this process anymore or issues regarding the transmission of information caused by absence of employees.”(Buyer case G). Both types of human

error lead to information in the IOS which poorly reflects the real situation within the buyer-supplier relationship, hence influencing the visibility within the buyer-supplier relationship.

The data of almost all cases (A, B, C, D, E, F) highlight that visibility on order status created via emphasized data is crucial for the identification of a disruption, as “without IT nothing would work out for us. I need the information where something is missing and this information I get via IT” (Buyer case 5). The necessary information to identify a disruption is in these cases highlighted in some way, which can occur through automatically generated reports or order status updates. Various ways of highlighting order status information are used when a (potential) disruption arises. In case B, information about order status is highlighted by specific colors for different types of origination of disruptions (e.g. mistake at own production). Whereas in case F automatically generated emails are sent as a reminder of a status update in the IOS. However, the difference in how the data is emphasized does not lead to a different outcome, as in all cases it leads to enhanced visibility on (potential) disruptions.

Another mechanism that influences visibility within the buyer-supplier relationship is a transparent negotiation facilitated by the IOS. Findings in case F show that buyer-supplier relationships whom integrate with multiple suppliers within the scope of the IOS have improved visibility on ongoing negotiations within the network, and therefore in the buyer-supplier relationship. Through a question and answer module in the IOS both buyer and supplier are constantly updated on changes in supply and demand i.e. “they [suppliers] send a question, all the suppliers can see the questions and the answers […] for example if someone has a working experience of 2 years instead of 4 in the document is fine as well. It is part of a negotiation. Or questions like: What kind of team is the employee going to work within?” (Buyer case F). This mechanism therefore improves visibility on the negotiation, hence creating a better preparation for disruptions through clear and transparent expectations from both sides of the relationship.

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19 While previously discussed mechanisms show how different aspects of IOS’s influence the preparation for, and identification of disruptions, no mechanisms were related to the response and recovery phases of supply chain resilience. Findings indicate that all mechanisms except administration of progress, reconciled schedules and transparent negotiation have no influence on the response to disruptions. The reason for this is that in most situations (cases: B, C, D, E, G) responding to disruptions is done via close collaboration, hence in a more personal way than via a system. Two reasons were given for choosing for close collaboration rather than collaborating via the IOS. The first reason is influenced by the richness of the information visible in the IOS, as providing “additional explanation for our choices and process.” (Buyer case C) is preferred, and this detailed visibility within the buyer-supplier relationship is not possible through the IOS. It should be noted that this mechanism has a trade-off with the transparent negotiation that was identified in case F, as the transparency is provided is enabled through the IOS. The second reason for engaging in a close collaboration during the response, without the use of an IOS, is discussed later in the collaboration section.

4.2.

Velocity

Data shows that two aspects of the IOS (i.e. integration and information) influence the velocity within a buyer-supplier relationship via three mechanisms. One mechanism i.e. emphasized data indirectly influences velocity through visibility. While the other two mechanisms (administration of progress and data input) influence velocity directly via aspects of the IOS. How these mechanisms influence the velocity within the buyer-supplier relationship is discussed in the following section.

How emphasized data enables the identification of disruptions within the buyer-supplier relation through making the necessary data visible in the IOS, has already been discussed. However, integration within the IOS can make the identification of disruptions even faster, as the following quote shows: “We received the delay from our supplier through the IT system so we discovered it in the first place through the information linked to us through the IT system” (Supplier case D). This higher velocity within the buyer-supplier relationship via emphasized data occurred in cases B, C, D, and F. Contrary, in case A the IOS is being neglected sometimes as the emphasized data in the IOS is not recent enough, “So by phone is the quickest way to have recent information.” (Buyer case A). However, this method has not been proven useful, as they discover it “most of the time when it is too late.” (Buyer case A). Data shows that sharing emphasized data through the IOS results in a quicker identification of disruptions in comparison to communication via the phone, as the following exemplary quote illustrates: “imagine if you have to call the suppliers every time: “Do you have capacity?”. That was done in the past, but it saves a lot of time.” (Supplier case B). Hence, integration of the buyer and supplier within the IOS enables a faster identification of disruptions within the buyer-supplier relationship via emphasized data.

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20 administrating of on-going responses to disruptions save discussion time during the response to and recovery from disruptions. Because, “if our customer calls another one of our employees, the whole story does not have to be repeated. Because the employee can see what has been discussed in the system.” (Supplier case D). Case B even argues that the discussion time within the buyer-supplier relationship in general is reduced. Therefore, administration of progress can lead to a more efficient response to disruptions within the buyer-supplier relationship, hence increasing resilience.

Furthermore, velocity within the buyer-supplier relationship is influenced by data input. Some cases (A, B, F) indicated that manual input of order status information was required, in order for the IOS to have the most recent (i.e. usable) information. This data input is done through scanning codes (case B), or via manual input via a computer (case A and F). Still, in both situations data input increases the process time of other processes of the suppliers, such as unloading (case B) or communication (case A and F) as the following quote shows: “The problem is that if I unload my trays, then I am really fast but the truck is coming to the customer and then the people there are scanning. The first pallet is going to the warehouse, scanning. So, there is a lot of lagging. Normally, you put the pallet down, next, down. The truck can already move afterwards. This process usually takes 20 min. But because the process what is better for our customer, the time for unloading is more than 60 min (Supplier case B). Therefore,

data input of order status information can lead to a slower buyer-supplier relationship, hence influence the resilience of the buyer-supplier relationship.

4.3.

Flexibility

Data shows that three aspects of the IOS (i.e. scope, integration, and information) influence the flexibility within a buyer-supplier relationship via two mechanisms. Both mechanisms (transparent negotiation and reconciled schedules) influence flexibility indirectly through visibility. How these mechanisms influence the flexibility of the buyer-supplier relationship is discussed in the following section.

The influence transparent negotiation has on visibility also indirectly influences the flexibility of the buyer-supplier relationship. The comprehensive overview of changes in supply and demand indirectly increase the chance for suppliers to successfully meet demand. The suppliers within the scope of the IOS are continuously updated on changes regarding the specification of the demand via the IOS. Consequently, they are continuously informed if their supply meets the requested demand, hence reducing the chance for the purchasing organization that a demand is not met. Which is especially important in case F as “the more qualified staff is hard to get” (Supplier case F). This implicates that via transparent negotiation suppliers react more effectively to changes in demand within the buyer-supplier relationship, and vice versa, hence improving the flexibility of the buyer-buyer-supplier relationship.

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21 the schedules can be aligned in a more effective way, for example by highlighting moments of free capacity (case A). This “consequently leads to a better alignment of capacities.” (Supplier case A), such as the alignment of inland terminals and barges (case A), or production processes (case B), thereby implicating that via reconciled schedules the identified opportunities for better alignment also are utilized. This leads to a better alignment of supply and demand when changes in schedules arise within the buyer-supplier relationship, hence influencing the flexibility of the buyer-supplier relationship.

4.4.

Collaboration

Data shows that several aspects of the IOS (form, integration, and information) influence collaboration within a buyer-supplier relationship via three mechanisms. One mechanism i.e. compatible systems indirectly influences collaboration via integration. Moreover, close collaboration influences collaboration indirectly through visibility. Finally, mutual dependency influences collaboration directly. How these mechanisms influence collaboration within the buyer-supplier relationship is discussed in the following section.

Findings do not show a direct influence of the form aspect of the IOS on collaboration. However, an indirect influence is identified in cases E and G. Via compatible systems, does the form of an IOS influence the integration within the buyer-supplier relationship, and consequently the collaboration. When IOS’s within buyer-supplier relationships have the same form (e.g. EDI or WBI), the barrier to integrate within the buyer-supplier relationship becomes smaller. Consequently, as this barrier grows smaller, the integration becomes more feasible, which holds for compatible systems in both the EDI (case G), and WBI (case E) form. Therefore, the feasibility of integration within the buyer-supplier relationship is influenced via compatible systems, which consequently influences the collaboration through mutual dependency, which is discussed later on in this section.

The influence of information in the IOS via close collaboration on visibility has already been explained. However, there is a second reason why close collaboration replaces the information in the IOS. This second reason, which is linked to collaboration within the buyer-supplier relationship, is “to be in contact and the supplier knows that it is important.” (Buyer case G), and similarly from the suppliers side to “get a view on the opinion of the customer.” (Supplier case D). This indicates that a more personal approach is preferred as both buyer and supplier value the opinion of the other party, thereby implicating that a coordination on the response is desired, rather than a quick response with the information available in the IOS. Hence, close collaboration within the buyer-supplier relationship replaces communication through the IOS in the response to disruptions.

The last mechanism identified in this study is mutual dependency. Data shows that the integration within an IOS influences the collaboration within a buyer-supplier relationship via mutual dependency. Multiple cases (A, B, C, D, and E) indicate that “Linking all supply chain members is very

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22 to get it on right the track and to put in the contracts.” (Buyer case F). However, the increased dependency can also be a reason for less integration in the IOS, as is illustrated in the following quote: “the contract takes four years, and implementing it takes 1 year, and then you work with each other 3 years, and maybe you are not their supplier anymore. So it is a risky investment, and also you share a lot of information with each other, and maybe you don’t want to share.” (Supplier case C). Highlighting, that beyond the investment the information sharing also creates mutual dependency. Still, mutual dependency enforces collaborative activities (e.g. information sharing), hence integration within the IOS influences collaboration within the buyer-supplier relationship via mutual dependency.

5.

Discussion

The findings of this study suggest that IOS’s influence all four supply chain resilience elements within the buyer-supplier relationship, depending on the form of the IOS, the scope of the IOS, the information visible in the IOS, and integration within the IOS. This paper extends the research of Brusset & Teller (2017), which stated that IOS’s can increase supply chain resilience. It contributes to current literature by providing empirical insights in the understanding of supply chain resilience, specifically on how it is influenced by IOS’s on a buyer-supplier relationship level. Several mechanisms of how an IOS influences the resilience within a buyer-supplier relationship are being identified. Furthermore, this study extends the research of Brandon-Jones et al. (2014) by indicating through several mechanisms how visibility is dependent on IOS’s.

5.1.

Visibility

Visibility within a supply chain is crucial for the identification of disruptions and necessary counteractions (Blackhurst et al., 2005; Jüttner & Maklan, 2011). In line with Fawcett et al., (2011) IOS’s have a facilitating role in creating visibility within the supply chain. However, what is visible, and how visible it is within a supply chain, is dependent on multiple factors. First, if the scope of the IOS contains more than a buyer-supplier relationship, and integrates these potential suppliers as well, visibility within the buyer-supplier relationship becomes more transparent. This results in a better preparation for disruptions as mismatches between supply and demand are more easily spotted through transparent negotiation. However, in line with Liker & Choi (2004) this study also found that an information overload, explained by the scope and information aspects, can restrain the visibility as the necessary data will be harder to find. Therefore the following is proposed:

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23 P2. The scope of IOS’s and the information in IOS’s jointly influence the complexity of finding necessary information in IOS’s via potential information overload, hence influence visibility within buyer-supplier relationships.

In line with Brandon-Jones et al., (2014) this study also found that visibility is an antecedent of supply chain resilience. For example, the visibility enabled through an IOS within the buyer-supplier relationship influences velocity through emphasized data by highlighting order status information. Transparent negotiation and reconciled schedules show that visibility can be an antecedent of flexibility by enabling visibility in the IOS via integration within a larger scope and integration of planning information respectively. Close collaboration illustrates that visibility can even be an antecedent of collaboration by substituting the communication of an IOS due to the lack of richness in the information within the IOS, which extends the findings of Scholten & Schilder (2015) which stated that collaboration is an antecedent of visibility. Hence, the following is proposed:

P3. Order status information in IOS’s enables the identification of disruptions within buyer-supplier relationships via emphasized data, hence influences visibility.

P4. Integrating planning information in IOS’s enables via an overview of schedules the identification of potential misalignments within buyer-supplier relationships, hence influences visibility.

P5. The richness of information available in IOS’s influences visibility within buyer-supplier relationships.

Furthermore, in line with Brusset & Teller (2017) this study found that integration of IOS’s can lead to a more accurate visibility within the buyer-supplier relationship via human error (i.e. input of wrong information), by simply reducing the amount of data input moments the recentness of the information becomes less vulnerable to human related risks (e.g. absence). However, this study indicates that this is only the case when the errors are unintentional. Contrary to Brusset & Teller (2017), does integration within an IOS restrain visibility within the buyer-supplier relationship by enabling intentional human errors, hence increasing the amount of wrong information in the buyer-supplier relationship. In line with the findings, the following proposition is created:

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24

5.2.

How IOS’s influence velocity

Velocity determines how fast the supply chain responds to changes (Christopher & Peck, 2004).. In line with Pereira (2009), the data of this study shows that integration of order status information in IOS’s (indirectly through visibility) enable a faster identification of disruptions via emphasized data. Moreover, administration of progress enables a more efficient coordination of responses to disruptions, thereby increasing the velocity of buyer-supplier relationships. These findings extend the research of Brusset & Teller (2017) by discovering mechanisms of how IOS’s influence resilience within buyer-supplier relationships. However, contrary to previous research (Pereira, 2009), IOS’s can also reduce the velocity of the supply chain. Including order status information in IOS’s can delay other supply chain processes via data input by adding process steps necessary for the input of the data, reducing the velocity of buyer-supplier relationships. According to the findings the following is proposed:

P7. Highlighting order status information in IOS’s via emphasized data enables a faster identification of disruptions within buyer-supplier relationships indirectly through visibility, hence improving velocity of buyer-supplier relationships.

P8. Including information regarding the administration of progress in IOS’s during responses to disruptions shortens discussion and coordination time, hence increasing the velocity of buyer-supplier relationships

P9. Including order status information in IOS’s adds process steps within buyer-supplier relationships via data input, hence reducing the velocity of buyer-supplier relationships.

5.3.

How IOS’s influence flexibility

Supply chain flexibility determines how well the supply chain can adapt in order to be able to align supply with demand (Stevenson & Spring, 2007). Findings indicate that IOS’s influence flexibility indirectly via visibility in two ways. First, integration of larger scopes in IOS’s enables the identification of misalignments in supply and demand via transparent negotiation. However, beyond the identification, transparent negotiation also indirectly facilitates a more effective response to changes regarding supply or demand within buyer-supplier relationships, hence improving flexibility within buyer-supplier relationships. This finding extends current literature (Dai & Kauffman, 2002; Subramaniam & Shaw, 2002), which stated that transparency within the supply chain leads to reduced coordinating costs, and more efficient information processing, as this study also finds that it leads to more effective coordination and information processing.

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25 relationships through visibility. Both mechanisms extend Brusset & Teller’s (2017) research by illustrating how IOS’s enhance resilience. Therefore the following is proposed:

P10. The scope and integration of IOS’s together indirectly facilitate a transparent negotiation via visibility, resulting in a more effective response to changes in supply and demand within buyer-supplier relationships, hence increasing flexibility within buyer-buyer-supplier relationships. P11. Integrating planning information in IOS’s enables through visibility a more effective response

to changes in schedules within buyer-supplier relationships via reconciled schedules, hence indirectly influences flexibility within buyer-supplier relationships.

5.4.

How IOS’s influence collaboration

Collaboration within a supply chain is related to cooperation between supply chain members to achieve mutual benefit (Pettit et al., 2013). This study found that IOS’s influence collaborations via several mechanisms. First, integration in IOS’s require significant investments from both the buyer and supplier in the relationship. These investments become more feasible when both the buyer and supplier have compatible systems (i.e. similar forms of IOS’s), as the costs related to the implementation of the integration decrease. Hence, the form of the IOS influence the integration of the IOS within buyer-supplier relationships, consequently enforce the influence the integration has on resilience.

Second, in line with Scholten & Schilder (2015), does integration of IOS’s within buyer-supplier relationships lead to mutual dependency. This is caused by the large investments made by both sides of the relationship. Mutual dependency consequently enforces buyer and supplier to engage in collaborative activities (Scholten & Schilder, 2015), such as goal congruence, resource-sharing, and collaborative communication (Cao, Vonderembse, Zhang, & Ragu-Nathan, 2010).

Finally, the findings indicate that the desire for close collaboration within buyer-supplier relationships is a reason to use other communications modes than via IOS’s to coordinate a response to a disruption, as IOS’s are perceived as less personal, and are less suitable for communicating rich information. This is in line with the findings of Scholten & Schilder (2015) which state that communication by phone or face-to-face is more suitable in responding to disruptions. Therefore the following is proposed:

P12. Similar forms of IOS’s within buyer-supplier relationships improve the feasibility of the integration of IOS’s within buyer-supplier relationship, hence enforcing the influence integration has on resilience within buyer-supplier relationships.

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26 P14. IOS’s have limited influence in coordinating a response to disruptions within buyer-supplier relationships, as close collaboration substitutes this coordination based on the richness of information and required personal contact.

6.

Conclusion

This study discovered some new insights in how different aspects of IOS’s (jointly) influence the resilience within buyer-supplier relationships by analyzing seven cases of buyer-supplier relationships. Consequently, contributing to literature related to the concepts of supply chain resilience and interorganizational information systems. Current literature already indicated that IOS’s influences the resilience of buyer-supplier relationships. However, this is the first study that discovers how different aspects of IOS’s (jointly) influence the resilience of buyer-supplier relationships. Ten underlying mechanisms have been identified which all influence at least one of the resilience elements (i.e. visibility, velocity, flexibility, and collaboration) via at least one of the aspects of IOS (i.e. form, scope, integration, information). These main findings show that IOS’s strongly influence visibility within buyer-supplier relationships, as six out of the ten identified underlying mechanisms influence the visibility within buyer-supplier relationships. However, the findings indicate that IOS’s influence the other resilience elements as well.

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27 resilience within the buyer-supplier relationship, which contribute to supply chain resilience, and IOS literature.

6.1.

Managerial implications

Organizations increasingly deal with disruptions in buyer-supplier relationships, and managers are tasked to manage these disruptions, therefore the topic of supply chain resilience is highly relevant to managers. Managers can make more effective decisions on how to use the IOS by gaining a better understanding of how IOS’s influence resilience within buyer-supplier relationships. The results of this study indicate that integration of IOS’s enhance visibility within buyer-supplier relationships. This can help managers by enabling a faster identification of these disruptions, so that managers can respond in a way that the disruptions cause less, or even no harm. Deciding on more integration of IOS’s, by linking buyers and suppliers in the IOS, results in increased collaboration within the relationship, which can help with the identification of disruptions and its response. This paper also shows that the inclusion of different types of information in an IOS has different influences on the resilience within the buyer-supplier relationship. When managers decide to integrate planning information in an IOS, their schedules are more flexible in reacting to changes in schedules of the other party in the relationship. Moreover, does the integration of order status information enable a faster identification of disruptions, which can help managers to gain time in coordinating a suitable response.

6.2.

Limitations and future research

As with all research, this paper also has limitations. While this study explains very detailed how IOS can increase, or decrease the supply chain resilience, the actual effect of the mechanisms remains unquantified, leading to questions about the magnitude of the effects. For example, how much faster are disruptions discovered through different levels of integration? Further research is required to quantify the outcome of the mechanisms identified in this research. The results of this study are also based on data gathered from buyer-supplier relationships within different industries. Therefore, the results of this study are not generalizable for a specific industry, but rather create a general overview of influences. Further research should focus on a specific industry in order to generalize findings. This study focuses on the influence of IOS’s on resilience within buyer-supplier relationships. However, the influence of other resources on supply chain resilience remains understudied. Further research is required to discover the influence of other resources on supply chain resilience as well.

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