The influence of horizontal and vertical
collaboration on supply chain resilience
Jeroen M. Kamphuis
| S4173597
Department of Operations, University of Groningen, Groningen, the Netherlands
Monday, 22 June 2020
Abstract
This study extends the knowledge of supply chain resilience beyond vertical collaboration by investigating various cases of horizontal relationships. This contribution is meaningful as the literature on supply chain resilience has referred to or emphasised vertical collaboration. We investigate vertical and horizontal collaborative activities and their relation to flexibility, velocity and visibility. Therefore, we conducted qualitative research by interviewing eight organisations on how vertical and horizontal collaboration influences supply chain resilience. The findings reveal how specific horizontal and vertical collaborative activities increase supply chain resilience trough increased flexibility, velocity and visibility.
Keywords
Disruptions, horizontal and vertical collaboration, supply chain resilience
Theme
Collaboration and firm resilience
Supervisor
M. J. van den Adel
Paper type
Case studyWord count
INTRODUCTION
As a result of the global sourcing and the continued trend for just-in-time, lean and flexible operations supply chains become more complex and vulnerable to supply chain disruptions (Christopher and Peck, 2004). In March 2020 nearly 75 per cent of organisations reported supply chain disruptions in some capacity due to coronavirus-related shipping restrictions, and more than 80 per cent assume that their organisation will experience disruptions due to the COVID-19 virus (Institute for Supply Management, 2020). Supply chain disruptions may result in long-term economic and social consequences (Torabi, Baghersad, & Mansouri, 2015). To cope with such disruptions, supply chain resilience, a concept that broadly refers to a supply chains’ ability to prepare for and/or respond to disruptions (Christopher & Peck, 2004; Ponomarov & Holcomb, 2009; Tukamuhabwa, Stevenson, & Zorzini, 2015), is of increasing interest to organisations.
Supply chain resilience requires organisations to look into the complete supply chain in order to withstand, adapt, and grow when faced with turbulent change (Pettit, Croxton, & Fiksel, 2013). Hence, collaboration plays an essential role in the literature of supply chain resilience (Christopher & Peck, 2004; Pettit et al., 2013; Hohenstein, Feise, Hartmann, & Giunipero, 2015). Collaboration is the ability to work effectively with other entities for mutual benefit (Pettit, Fiksel, & Croxton, 2010). Supply chain collaboration can, for example, help firms share risks and rewards (Barratt, 2004), improve technological capabilities (Fawcett, Wallin, Allred, Fawcett, & Magnan, 2011), reduces response time when faced with disruptions (Verwaal & Hesselmans, 2004) and obtain complementary resources and capacities (Park, Mezias, & Song, 2004). As stated by Wieland and Wallenburg (2013), collaboration improves resilience can also reduce resilience by creating dependencies. Manuj and Mentzer (2008) declared that while collaboration increases the organisations’ ability to control processes, systems and decisions, it also ties up capital and decreases a supply chains flexibility. However, these statements can be made for vertical
relationships but not for internal or horizontal relationships (Manuj & Mentzer, 2008; Wieland & Wallenburg, 2013). Dominantly, the literature on supply chain resilience has referred to or emphasised vertical collaboration (Soosay & Hyland, 2015), which includes collaboration with suppliers and buyers. While the literature agrees that collaboration is one of the leading accelerators of a resilient supply chain (Christopher & Peck, 2004; Pettit et al., 2013; Hohenstein et al., 2015), currently, little is known on how various types of collaboration influences supply chain resilience (Soosay & Hyland, 2015). Therefore, the main research question in this paper is: “How do
horizontal and vertical collaborative relationships influence supply chain resilience?”
By investigating various cases of relationships, the aim is to explore how horizontal and vertical collaborations influence supply chain resilience. By distinguishing underlying mechanisms of collaborative activities that lead to supply chain resilience, this research will help managers to control their collaborative relationships. Second, this research contributes to overcoming the lack of empirical evidence in supply chain resilience (Bhamra, Dani, Burnard, 2011; Wieland, Wallenburg, 2012; Tukamuhabwa et al., 2015).
This paper is structured as follows: first, the literature concerning supply chain resilience and collaboration is reviewed. Second, the research design applied for this article is described. Afterwards, based on interviews, a deductive research phase is implemented. This phase tests hypotheses from other relevant theories. In addition, an inductive research phase is conducted. Here, we look for patterns in the data and develop a theory that could explain those patterns. Finally, both phases are jointly concluded and discussed.
THEORETICAL BACKGROUND
Supply chain resilience
“adaptive capability of an organisation 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 disruption” (Tukamuhabwa et al., 2015; p. 5599). Building supply chain resilience is iterative and staged; creating and maintaining resilience is not a one-time event, but rather a process in itself (Pettit et al., 2013; Scholten, Scott, & Fynes, 2014). For this research, we follow the Juttner and Maklan (2011), who perceived visibility, flexibility, velocity and collaboration as the most frequently cited supply chain resilience elements in the literature, whereas collaboration is an antecedent of the elements visibility, flexibility and velocity (Scholten & Schilder, 2015).
Flexibility
Flexibility refers to a supply chains ability to change to new environmental requirements with minimum time and effort (Erol, Sauser, & Mansouri, 2010). Flexibility contains practices like order postponement (Jüttner, Peck, & Christopher, 2003), backup suppliers (Hohenstein et al., 2015) and multiple sourcing (Jüttner et al., 2003). Flexibility creates supply chain resilience by advancing quick adaptability during turbulent times (Christopher and Holweg, 2011), including enabling resources to be efficiently redeployed (Pettit et al., 2013).
Velocity
Velocity introduces the concept of speed into supply chains resilience; it describes the speed in which a supply chain can react to new environmental requirements (Christopher & Peck, 2004; Juttner & Maklan, 2011). Hence, lead time is an essential indicator of supply chain velocity (Cranfield School of Management, 2003). Consequently, velocity, and therefore supply chain resilience will drastically change when lead-times change (Spiegler et al., 2012; Tang, 2006).
Visibility
Visibility refers to the extent to which supply chain members have access to and timely share information about new environmental requirements, other members and information which they consider as being crucial or useful to their operations (Juttner & Maklan, 2011). Supply chain visibility addresses information regarding transport, orders, inventory, and distribution, as well as any events in the environment (Wei & Wang, 2010). Increasing the visibility of demand information across the supply chain enhances supply chain resilience (Blackhurst, Dunn, & Craighead, 2011; Chopra & Sodhi, 2004; Christopher and Peck, 2004), by preventing overreacting, unnecessary interventions and ineffective decisions (Christopher & Lee, 2004).
Collaboration
Since supply chain resilience is a network-wide concept, supply chain collaboration plays an essential role within the literature of supply chain resilience (Sawyerr and Harrison, 2020). Collaboration reduces supply chain’s risks and recovery capabilities (Lee, 2002; Craighead, Blackhurst, Rungtusanatham, & Handfield, 2007), as it allows the design and implementation of interventions to overcome the disruption of flow within the supply chain (Craighead et al., 2007). Simatupang and Sridharan (2008) state that decision synchronisation and incentive alignment are the key elements of an effective response to a supply chain disruption. After a disruption
This paper will build on Cao, Vonderembse, Zhang, and Ragu-Nathan (2010) defining collaboration by using the collaborative activities of information-sharing, goal congruence, decision synchronisation, incentive alignment, resource-sharing, collaborative communication, and joint knowledge-creation. These activities do not only need to be implemented at an operational level but also tactical and strategic levels in the organisations across the supply chain (Barrat, 2004).
There are two categories of supply chain collaboration. Supply chain collaboration can be vertical, which includes collaboration with different members at various value chain stages, like suppliers, manufacturers and customers. Alternatively, it can be horizontal, where it involves collaboration with partners at the same level in the chain (competitors), other supply chains (including government organisations), or different functional departments within an organisation (Barratt, 2004). The occurrence of disruptions can both strengthen, encouraging information-sharing with horizontal partners, and weaken, due to increased competition, the horizontal collaboration in a supply chain (de Sá, Pereira, & Miguel, 2018). Lee (2002) stated that overall collaboration reduces a supply chain’s risk and recovery capabilities, however, horizontal
collaboration between suppliers may also increase a supply chain’s risk through collusion (Choi & Krause, 2006).
Research framework
Previous studies show that collaboration is essential to prepare for and respond to disruptions (Christopher & Peck, 2004; Pettit et al., 2013; Hohenstein et al., 2015), yet little is known on how various types of collaboration influences supply chain resilience (Soosay & Hyland, 2015). This paper will explore the complicated relationships and effects between vertical and horizontal collaborative activities and supply chain resilience, as displayed in figure I, via an in-depth multiple case study. The formative concepts are further defined and operationalised in Table I.
Figure I Conceptual model
Table I The adaptive capacity of supply chain resilience
Formative element Construct Definition
Flexibility Flexibility The ability of a supply chain to change to new
environmental requirements with minimum time and effort (Erol, Sauser, & Mansouri, 2010)
Velocity Velocity The speed in which a supply chain can react to new
environmental requirements (Juttner & Maklan, 2011)
Visibility Visibility The extent to which partners have access to and timely
share information about new environmental requirements, other members and information which they consider as being crucial or useful to their operations (Barratt & Oke, 2007; Juttner & Maklan, 2011)
Collaboration Information-sharing The extent to which supply chain partners share relevant, accurate, complete and confidential ideas, plans, and procedures with its supply chain partners on time (Cao et al., 2010)
Goal congruency The extent to which individual supply chain partners objectives align with the supply chain objectives (Cao et al., 2010)
Decisions
synchronisation The extent to which supply chain partners orchestrate decisions in supply chain planning and operations that optimise supply chain benefits (Cao et al., 2010)
Incentive alignment The extent to which supply chain partners share costs, risks, and benefits (Cao et al., 2010)
Resource-sharing The extent to which supply chain partners collectively leverage and invest in capabilities and assets (Cao et al., 2010)
Collaborative
communication The extent to which supply chain partners communicate on a frequent, formal, and reciprocal basis while using rationality as a way to influence each other. (Cao et al., 2010; Joshi, 2009)
Joint knowledge
METHODOLOGY
Research design
To empirically investigate the relationships and effects of horizontal and vertical collaborative activities in relation to supply chain resilience, a multiple case study design is adopted (Eisenhart & Graebner, 2007; Eisenhart, 1989). The unit of analysis in this study relationship between companies, and therefore takes place in a network context.The network both embeds and affects these relationships, which indicates that the boundaries between the context and the phenomenon cannot be explicitly defined (Kähkönen, 2014). Additionally, given that the research questions is a “how” question and the investigator has little control over the environment, a case study research is appropriate (Yin, 2003). Multiple case study research is particularly suited to identify linkages between variables; in this case, collaborative activities and supply chain resilience, as well as describing and identifying why these relationships exist (Voss, Tsikriktsis, & Frohlich, 2002). By doing so a researcher can analyse data both within each case and across cases (Yin, 2003).
The eight companies were selected because they acknowledged having experienced at least one supply chain disruption. About the time that the interviews where held many organisations experienced disruptions due to the COVID-19 virus (Institute for Supply Management, 2020). Additionally, these companies have different relationships, power positions, industries and roles, which is relevant to the research aim of this study.
Companies A and D are active in the food industry. Company A produces 30 per cent for the Dutch consumer market and exports the other 70 per cent of its products; it delivers its product to more than 100 customers. D is a multinational with production locations in the Netherlands, producing for both the consumer and the food industry. Company B produces packaging for the food, pharmaceutical and general industry. C and G are both manufacturing companies; C is a sheet metal processing company, performing activities such as laser cutting and welding on demand for customer-specific products. Company G is a more knowledge-oriented manufacturing company; engineering and producing mostly high-tech welding machines for the automotive and general industry. E and F are both construction companies creating residential and utility constructions. Both companies are dealing with disruptions due to high levels of poly- and perfluoroalkyl substances (PFAS) on the construction sites. Company H is engaged in the design, financing, construction, management and maintenance of accommodations and infrastructure; long term contracts of 25 years where collaboration is vital.
Data collection
The primary sources of data used in this study are eight semi-structured interviews collected in April and May 2020; an overview is presented in table II. All interviews followed a standard format organised under defined topics concerning past disruptions, types of relationships and collaboration in general. The interview consisted of open-ended questions and probes to encourage detailed responses. The use of open-ended questions and probes allows the researcher to analyse data both within each case and across cases (Yin, 2003). All interviews were recorded and transcribed using the 24-hour rule of Eisenhardt (1989). The interviewees validated the transcribed interviews by providing clarification and final approval (Yin, 2009). To confirm statements, gather supplementary background data and fill in missing information, data is gathered by reviewing company documents, including presentations and websites.
Data analysis
The transcribed interviews are analysed using Miles and Huberman’s (1994) three-step approach: data reduction, data display and conclusion. First, the amount of data is reduced to collect relevant paragraphs and sentences for answering the research question (first-order codes). Second, the gathered data is coded into descriptive second-order categories such as “communication types” or “outsourcing.”. Using these descriptive second-order categories allows for a quick indication of the various collaborative activities being discussed, and it enables us to deduce third-order codes to the collaboration constructs as defined in table I. Third, the first-order code is linked to Juttner and Maklan (2011) supply chain resilience elements: flexibility, velocity and visibility. Lastly, the first-order code is linked to the two categories of supply chain collaboration, horizontal and vertical collaboration.
These four analyses are linked based on the first-order categories and united in one table, see Table III for an example. Besides, each case is analysed individually, to become well-known with the circumstances of each relationship (Eisenhardt, 1989), and summarised accordingly. The case analysis is followed by a cross-case analysis, where we search for patterns and relationships between the collaborative activities, the type of collaboration, and the antecedents of supply chain resilience.
Table II Case and interview details
Case Industry Annual turnover in
euros Employees Position of the interviewee
Company A Food 87.5 million 260 Logistics Manager
Company B Packaging 1.9 billion 6400 Supply Chain Director
Company C Manufacturing 12.5 million 100 Supply Chain Manager
Company D Food 3.7 billion 7000 Transport Planner
Company E Construction Not disclosed 1900 Cost Engineer
Company F Construction Not disclosed 60 Project Manager
Company G Manufacturing/
automotive 100 million 800 Operations Manager
Table III Example of coding
Vertical collaboration Link to
resilience capability
Data reduction Descriptive code Collaborative activity
Flexibility “There are certain car suppliers towards [organisation] who want an
[organisation] machine, so that cooperation, there is a shared interest. We are not involved with suppliers who say I actually have no interest in the market you are in.” (Company G)
Shared interest in
market Goal congruency
“In principle, we have of course worked very closely with our supplier of the master batch. We were able to get extra master batch delivered from them at no extra cost. They have the same approach as [company B], looking at how important [company B as a customer is to them”. (Company B)
Complimentary
delivery Incetive alignment
“What could happen, with really very large projects, that you purchase something, in combination with another company, which you can write off over the entire project.” (Company E)
Collective
investment Resource-sharing “I am involved in various improvement projects with my suppliers
and I have an interest in this, which is also going well”. (Company C)
Improvement
projects Joint knowledge-creation “Look, our suppliers who know better than anyone what is going on
in the world, what developments there are and we often question them. But on the other hand, we also offer them a platform, because we have a long-term agreement here, 25 years in this case, also try out on such a contract to renew things”. (Company H)
Long-term
agreements Joint knowledge-creation and goal congruency
Velocity “If there is something wrong with a customer, for example in the area of service, that the machine is stationary. Then we literally pull out all the stops because things need to get working as soon as possible. Then there are actually no limits in what we share. As long as we are quick and there is results”. (Company G)
Sharing information in a disruption
Information-sharing
“Initially by telephone. I think a common mistake during that situation is waiting for response via email. Then the first day is just gone again. That is why you will call your contact person. What you also do is bypass the buyer and immediately indicate to the
responsible person what the need is” (Company B)
Communication
types Collaborative communication
“Because we know how such a disturbance ... it always follows a certain pattern. For example, if you need a lamp to break, you know ... we know that the lamp will break, that we will take up to four hours to solve it. That just gives peace. You know which process you are under, who goes there, who solves it and the like. It is not necessarily more flexible but more simply manageable”. (Company H)
Analysing disturbances with suppliers
Joint knowledge creation
Visibility “Because we work with forecasting, we are used to having customers proactively notify us of their current demand and communicate changes in demand”. (Company B)
Proactive sharing changes in demand
Information-sharing
"What has changed in the collaboration is that you start on a tactical level, you look for a connection. Then you will coordinate
operationally what you will do exactly. And you also monitor that at an operational level. So you see, and with that the contacts change. You start with a very small group of people and it is getting bigger”. (Company G)
Communication
on different levels Collaborative communication
“Well especially the activity that you get together and maybe also share the information and people's knowledge to get to the root of the problem. So it is mainly sharing knowledge and information with the aim of solving the problem for both parties”. (Company A)
Joint problem
solving Joint knowledge-creation
“We are also in a very knowledge-sensitive corner. So you will also need suppliers to think along. When I look at the relationships we have with [organisation] and [organisation X], the major robot brands, you share knowledge with each other. The product we deliver in not so exciting, the knowledge is mainly very important. We actually sell knowledge”. (Company G)
Table III Example of coding (continued)
Horizontal collaboration Link to
resilience capability
Data reduction Descriptive code Collaborative activity
Flexibility “So what you see is that that collaboration, which is by definition, is
sought out. Because they are together ... they need each other to get a certain result”. (Company H)
Mutual
dependecy Goal congruency “The moment you draw up an offer, you will of course have your
profit and risk premium at the bottom of the line. We had made a firm agreement with [organisation] and also with [organisation] to be allowed to write certain profits”. (Company H)
Profit and risk
sharing Incentive alignment
“We also do merchant goods. These are things that we purchase externally outside our organization and then resell to our customers as a total package”. (Company B)
Outsourcing Resource-sharing
"But it could be, if the corona crisis hits hard here and we come to a complete standstill, but we still want to let our work continue that I will just outsource everything to our competitors”. (Company C) “But these are often jobs that are completely outsourced. It is not that only the carpentry is outsourced, but then you outsource such a whole job at once”. (Company F)
“Because they are natural from their core, they do the things they are good at. For example [organisation], which can do very good electronic and mechanical maintenance, but they also outsource specialist work such as lights, for example”. (Company H) “For colleagues companies it is also about how you can use each other's staff and you can develop initiatives together that you now see opportunities in the market. For example, it is about the production of a completely new product or, so you try your network”. (Company G)
Sharing staff and joint knowledge creation
Resource-sharing and joint knowledge-creation
“I've been in a working group to define the CEN standards, which is a digital standard for the manufacturing industry where we can communicate … we have done with our competitors, so hey that is also a type of cooperation where you look at what your process looks like, what does ours look like and what would be the best way to integrate this uniform standard within the ERP system that both they and we use. And you learn from that and then you don't have too many secrets”. (Company C)
Determining
industry standards Joint knowledge-creation and decisions synchronisation
Visibility “PET meat bowls is something that is easily recyclable. As a result, you have more suppliers of these products, when purchasing these [products] you also have to deal with governments and processing companies, but also with competitors, to jointly look at how we respond better to the use of products in a more environmentally friendly manner as the plastic industry. We benefit from this, but so do our competitors”. (Company B)
Shared recycling
environment Decisions synchronisation
“You want to know what, for example, the company in Brabant, then you want to know what measures they take, how they respond and what have we experienced”. (Company C)
Gathering competitors experiences
Information-sharing
“So you provide the data they need to do and then it is more of a commodity job that you put down and not the specialty work. Then you can think of just putting walls, laying floors, bit it ... not the complicated work, such as setting up installations, for example”. (Company H)
Sharing information with horizontal partners “You can see that in times of crisis or disruptions, that you have more
intensive contact in another area. And also, when I was in service you naturally make a round along these kinds of companies, [questioning] how do you do that? Then you see that there is also very little fear of releasing knowledge. Yes, you all have the same problems but a completely different market”. (Company H)
Knowledge creation in disruptive times
FINDINGS
By analysing the transcribed interviews, we were able to untangle insights on how horizontal and vertical collaborative activities influence supply chain resilience. An overview of the identified cases of collaboration is presented in table IV. The following sections will layout the complicated relationships and effects between vertical and horizontal collaborative activities and supply chain resilience in detail.
Vertical collaboration
Flexibility
The data indicated that goal congruency in the supply chain increases a company’s resiliency through increased flexibility. Company B stated that “as we grow our suppliers grow”, and G declares that “we are not involved with suppliers who say: I have no interest in the market you are in”, implying a shared objective. Long-term partnerships increase the extent to which individual partners objectives align with the supply chain objectives, as can be seen at company F and H, which has long-term agreements with their suppliers. The security of these long-term agreements enables their suppliers to experiment with new inventions and align objectives, which do not only benefits the supplier but also other supply chain partners. For example, a supplier of H used multiple sourcing to increase flexibility, with the idea that “if at one machine a malfunction occurs or maintenance takes place, they can use the other” (Company H), reducing the required time and effort to respond to disruptions.
The analysis indicates that incentive alignment can help to create flexibility, for example, through the delivery of an additional batch to company B. Determining the extent to which they share costs, risks, and benefits “by looking at how essential [company B], as a customer is to them” (Company B). Company E shares cost with other supply chain partners on a project basis, with the guarantee that they “can write it off over the entire project” (Company E).
Companies can create flexibility by collectively leveraging and investing in capabilities and assets with customers and suppliers. A large original equipment manufacturer (OEM), for example,
Table IV Identified cases of collaboration
Vertical collaboration
Resilience
capability Information-sharing Goal congruency Decisions synchronisation Incentive alignment Resource-sharing Collaborative communication Joint knowledge -creation Flexibility B, D, F, G, H E, B C, E, H C, H Velocity G A, B G, H Visibility A, B, C, D, E, F, G, H A, B, C, D, G A, G Horizontal collaboration Resilience
invested in company C expanding its capabilities required to perform high-quality welding and so increasing their flexibility. A broader skillset reduces the required time and effort to adapt to situations. Besides investing, companies can also increase flexibility by collectively leveraging a supplier, as can be seen by company H:
“It is sometimes possible to go together with the contract manager [of the supplier] towards such a subcontractor to put some more weight in the scale.”
Lastly, the findings indicated that collectively developing knowledge with suppliers and customers increases flexibility. Joint knowledge projects may have various purposes, and therefore, joint knowledge-creation can lead to increased flexibility, as well as velocity and visibility. Company H created knowledge with their supplier to increase the flexibility of their operation by multiplying the number of machines, and company C shared knowledge with their laser cutter supplier, to increase the range of applied materials, improving their flexibility and lowering “the cost price in the chain a little more”.
Velocity
Company G addressed the importance of information-sharing to increase the speed in which a supply chain can react to disruptions, “then there are no limits in what we share, as long as we are quick and there are results”. The relevant type of information reduces the time required to anticipate, inform other stakeholders, respond to and recover from disruptions. As company H stated: “The disruption is not necessarily a problem, but communicate it! That is collaboration!”. Additionally, companies need to consider how they communicate their information. The data shows that a phone-call followed by face-to-face contact is the best way to anticipate and quickly solve disruptions.
Joint knowledge-creation may lead to increased velocity, depending on the goal of the improvement project. Company G increased its velocity by reactively making sure with their supplier that disruptions could not happen again, or at least be of short duration. Joint analyses of previous disruptions help increase velocity, as a disruption, according to company H, "always follows a certain pattern". Companies can also take preventive actions to increase their velocity, as shown by company H:
"We have thought about this well in advance, we have agreed on certain protocols for how to report a disturbance, how quickly they must respond and how to log the disturbance when resolved”.
Visibility
The analyses highlighted the value of information-sharing and collaborative communication with buyers and suppliers in developing supply chain resilience. Almost all companies share forecasts with their suppliers, and proactively notifying them if there are changes in demand. As explained by company B:
” We simply try to trace all forecasts per SKU back to the original raw materials. Then the supplier can handle it better, we shorten the lead times, and we reduce the stock.”.
and collaborative communication instead of strict contractual agreements; “you see that a lot goes based on relationships.” (Company G).
As mentioned by company G, the level on which companies communicate change during a disruption: “what has changed [during the disruption] in the collaboration is that you start on a tactical level”. Communication takes place on a higher level, which increases the access to information about new environmental requirements. Company H tries to be as transparent as possible to prevent surprises :
“The philosophy, which we always adhere to, is: if you inform each other well, then you cannot be confronted afterwards with I did not know that or if only we had indicated or we would have looked
for other solutions.”
Collectively leveraging and investing in capabilities and assets can increase visibility. Partners can invest resources to improve inventory systems, joint forecasting, and possible strategic planning. As shown by company G:
“[Are you involved in supplier development?] Yess, an example of this is with [organisation], where we invest in automatically ordering, and things like that.”
Lastly, companies can increase their visibility by jointly creating knowledge about disruptions and the environment, as company A does with their supplier:
“[Which activities were most important for resolving disruptions?] Well, especially the activity that you get together and share the information and people’s knowledge to get to the root of the problem. So it is mainly sharing knowledge and information intending to solve the problem for both parties”.
The collaborative activity of joint knowledge creation develops information about disruptions and environmental requirements. Company G is active in a knowledge-sensitive sector, which requires them to work actively with its suppliers “to think along”.
Horizontal collaboration
Flexibility
Decisions synchronisation benefits the whole supply chain by increasing their flexibility. Our data indicated that this is common when companies share the same environment; for example, by synchronising and determining industry standards. Industry standards help reduce the time and effort required to respond to disruptions, as it enables backup suppliers and multiple sourcing.
“You have more suppliers of these products, when purchasing these you also have to deal with governments and processing companies, but also with competitors, to jointly look at how we respond better to the use of products in a more environmentally friendly manner as the plastic
industry. We benefit from this, but so do our competitors.” (Company B).
In the data, I only found cases of incentive alignment and goal congruency when working together in consortiums, as companies are sometimes obliged by their client to cooperate with another contractor. In a consortium, companies can share cost, risks, and benefits, reducing the individual time and effort required to react to disruptions.
We identified many cases where companies share resources, primarily through outsourcing work to competitors. Resource sharing increases sourcing flexibility through the use of backup suppliers. Company C perceives outsourcing as a last resort to continue operation in disruptive times.
“If the corona crisis hits hard here and we come to a complete standstill, but we still want to let our work continue that I will just outsource everything to our competitors.”.
“fellow machine builders, who supply to another market”. The outsourcing of employees improves flexibility through the postponement by deferring supply to a future period.
While dealing with disruption, companies share and jointly create knowledge on best
practices to deal with these disruptions; intensifying the communication. As company G states “then you see that there is also very little fear of releasing knowledge”. The accumulated knowledge reduces the individual effort and time required to change to new environmental requirements. Before disruptions occur, companies also develop a better understanding of and response to the market. Although companies can not prevent all disruptions, they can, according to company H, create joint processes with their horizontal partners to deal with disruptions. “You know which process you are under, who goes there, who solves it and so on.” (Company H), resulting in a manageable and quick reaction to new environmental requirements.
Visibility
When collaborating with partners at the same level in the chain, other supply chains, or different functional departments within an organisation, information-sharing leads to more visibility. Company B perceived “communication, and keeping each other informed” to be the most crucial activities in horizontal collaboration. Companies that produce commodity jobs share information more openly about their processes, for example, through factory tours. As company C declared they “had forty sheet metal workers here with a tour, so it is certainly not that we are very secretive towards our competitors”. Companies like to gather information on how competitors and other supply chains are dealing with disruptions, as company G explained:
“You can see that in times of crisis or disruptions, that you have more intensive contact in other areas. [...] Then you see that there is also very little fear of releasing knowledge. Yes, you all have
the same problems but a completely different market”.
Companies tend to share information more openly with other non-competitive supply chains and companies. When outsourcing work to competitors, as part of sourcing flexibility strategy, companies share information on a need to know basis. As company H explained:
“you provide the information they require to do [the job], and then it is more of a commodity job that you put down and not the speciality work.”
Knowledge-sharing with government organisations is also perceived to help gather information about new environmental requirements, especially during today’s COVID-19 disruptions. When outsourcing work to competitors, companies prefer to share information on a need to know basis. Sharing knowledge with government organisations is also perceived to help gather information about new environmental requirements, especially during today’s COVID-19 disruptions. Overall information sharing increases the access to information about new environmental requirements.
DISCUSSION AND CONCLUSION
This research highlights the attributes of collaborative activities that drive supply chain resilience. It takes a relational view and has multiple implications for the relationships between resilience and collaboration, as well as the antecedents of resilience.
Interpretation of results
time and effort required to respond to disruptions, as it enables backup suppliers and multiple sourcing. Flexibility to reallocate capacity and to optimise capacity utilisation within an external network benefits an effective response to unpredictable changes in demand (Jüttner and Maklan, 2011). In line with Stevenson and Spring (2007), we found that outsourcing builds flexibility through a joint effort of horizontal parties so disruptions can be absorbed. Besides the collaborative activities mentioned above, we identified goal congruency and joint knowledge creation to increase flexibility. Long-term partnerships increase the extent to which individual partners objectives align with the supply chain objectives, considering collaboration in the supply network means long-term relationships (Cousins, 2002). The security of these long-term agreements enables their suppliers to experiment with new inventions and align objectives, which do not only benefits the supplier but also other supply chain partners. As Golicic and Mentzer (2006) state in long-term, committed relationships partners are more willing to provide flexible responses to requests. Horizontally, goal congruency increases flexibility when working together in consortiums, as companies are
sometimes obliged by their client to cooperate with another contractor. In a consortium, companies can share cost, risks, and benefits, reducing the individual time and effort required to react to disruptions. Joint knowledge projects may have various purposes, and therefore, joint knowledge-creation can lead to increased flexibility, as well as velocity and visibility.
According to Scholten and Schilder (2015), information-sharing, collaborative
communication, decisions synchronisation, resource-sharing, incentive alignment efforts and jointly created knowledge increase velocity. In this study, we only identified vertical information-sharing, collaborative communication and joint knowledge-creation activities to be beneficial for velocity. Velocity is crucial for reliance because disruption events seem to entail potential “first-mover advantages” (Hamel & Välikangas, 2003). Besides, the proposed three fundamental foundations for improved velocity form Christopher and Peck (2004), all relate to vertical collaboration. Therefore we propose that competition does not lead to collaborative activities among competitors that increase velocity. The relevant type of information reduces the time required to anticipate, inform other stakeholders, respond to and recover from disruptions. Companies can also take preventive actions to increase their velocity by practising joint knowledge-creation.
Investments in information-sharing (Barratt & Oke, 2007), collaborative communication (Wieland and Wallenburg, 2013) and joint knowledge-creating (Scholten & Schilder, 2015) lead to increased visibility. When generalising horizontal and vertical collaboration, the findings affirm this statement. However, we indicated that companies do not actively create knowledge when
collaborating with competitors and other supply chains to enhance their visibility. As supply chain resilience is about responding and recovering from disruptions faster than competitors do
(Christopher and Peck, 2004; Jüttner and Maklan, 2011), competition does not lead to joint knowledge-creation with competitors. We did identify information-sharing and collaborative communication as contributors both in vertical and horizontal collaboration to visibility. When collaborating vertically, companies share information required to detect and respond to disruptions in their supply chain. Companies like to gather information on how competitors and other supply chains are dealing with disruptions, increasing access to information about new environmental requirements.
Implications for theory
Results of this research suggest that long-term partnerships increase the extent to which individual partners objectives align with the supply chain objectives. The security of these long-term
Further, this research extends the study of supply chain resilience beyond vertical collaboration by investigating various cases of horizontal relationships. This contribution is meaningful as the literature on supply chain resilience has referred to or emphasised vertical collaboration (Soosay & Hyland, 2015). We demonstrated that horizontally collaboration increases supply chain resilience. It was previously supposed that vertical and horizontal collaborative
activities lead to increased velocity (Scholten & Schilder, 2015); however, the findings, indicate that when horizontally collaborating competition does not lead to collaborative activities among
competitors that increase velocity. Besides the collaborative activities mentioned by Scholten and Schilder (2015), we identified goal congruency and joint knowledge creation to increase flexibility. Finally, this research contributes to overcoming the lack of empirical evidence in supply chain resilience (Bhamra, Dani, Burnard, 2011; Wieland, Wallenburg, 2012; Tukamuhabwa et al., 2015).
Implications for practice
By distinguishing underlying mechanisms of collaborative activities that lead to supply chain resilience, this research will help managers to control their collaborative relationships. Based on the collaborative activities outlined in this study, managers can increase their capabilities in responding to disruptions and enhance their resilience capabilities. We demonstrated that horizontally
collaboration increases supply chain resilience through various collaborative activities. For
example, outsourcing builds flexibility through a joint effort of horizontal parties so disruptions can be absorbed.
Results of this research suggest that long-term partnerships increase the extent to which individual partners objectives align with the supply chain objectives. This insight is relevant for managers, as it offers guidance on collaborative relationships: expanding an existing relationship might be more beneficial than starting new relationships. New relationships, compared to existing ones, with the same level of collaborative activities, temporarily reduce resilience.
Limitations and future research
We aimed to minimise possible limitations, although some of them may remain. First, the use of eight respondents to represent vertical and horizontal relationships generates inaccuracy and cannot be used to generalise to the total population. Future research should address these concerns and collected new data to validate the propositions developed here. Second, the mismatch in the respondent pool leaves room for different perspectives and understandings about supply chain resilience that can be problematic for analysing empirical data. One might question whether a supply management executive has the same knowledge and perspectives as a Cost Engineer.
Although we did confirm statements, future research into function-specific views may identify areas where differences in functional perspective have a significant influence on supply chain resilience.
Future research could examine the advantages and disadvantages of horizontal integration in the resilience domain. We found that outsourcing builds flexibility through a joint effort of
REFERENCES
Barratt, M. 2004. Understanding the meaning of collaboration in the supply chain. Supply Chain
Management, 9(1): 30–42.
Barratt, M., & Oke, A. 2007. Antecedents of supply chain visibility in retail supply chains: a resource-based theory perspective. Journal of Operations Management, 25(6): 1217-1233. Bhamra, R., Dani, S. & Burnard, K. 2011. Resilience: The concept, a literature review and future
directions. International Journal of Production Research, 49(18): 5375–5393.
Blackhurst, J., Craighead, C.W., Elkins, D., & Handfield, R.B. 2005. An empirically derived agenda of critical research issues for managing supply-chain disruptions. International Journal of
Production Research. 43(19): 4067–4081.
Blackhurst, J., Dunn, J., & Craighead, C. 2011. An empirically derived framework of global supply resiliency. Journal of Business Logistics. 32(4): 374–391.
Cao, M., Vonderembse, M. A., Zhang, Q., & Ragu-Nathan, T. S., 2010. Supply chain collaboration: conceptualisation and instrument development. International Journal of Production Research, 48(22): 6613–6635.
Choi, T., & Krause, D. 2006. The Supply Base and Its Complexity: Implications for Transaction Costs, Risks, Responsiveness, and Innovation. Journal of Operations Management, 24(5): 637– 652.
Christopher, M. & Lee, H. 2004. Mitigating supply chain risk through improved confidence.
International Journal of Physical Distribution & Logistics Management, 34(5): 386–8.
Christopher, M., & Peck, H. 2004. Building the Resilient Supply Chain. International Journal of
Logistics Management, 15(2): 1–13.
Christopher, M., & Holweg, M. 2011. “Supply Chain 2.0”: managing supply chains in the era of turbulence. International Journal of Physical Distribution & Logistics Management, 41(1): 63–82.
Craighead, C. W., Blackhurst, J., Rungtusanatham, J. M., & Handfield, R. B. 2007. The Severity of Supply Chain Disruptions: Design Characteristics and Mitigation Capabilities. Decision
Sciences, 38(1): 131–156.
Cranfield School of Management. 2003. Creating Resilient Supply Chains: A Practical Guide,
Department of Transport. Cranfield: Cranfield School of Management
Cousins, P. D., 2002. Aconceptual model for managing long-term inter-organisational relationships.
European Journal of Purchasing & Supply Management, 70: 1–13.
De Sá, M. M., Pereira, S. F., & Miguel, P. L. de S. 2018. The role of collaboration for resilience of the sugarcane-energy supply chain. Journal of Operations and Supply Chain Management, 11(1): 64–79.
Erol, O., Sauser, B. & Mansouri, M., 2010. A Framework for Investigation into Extended Enterprise Resilience. Enterprise Information Systems 4(2): 111–136.
Eisenhardt, K.M. 1989. Building theories from case study research. The Academy ofManagement
Journal, Academy of Management, 14(4): 532–550.
Eisenhardt, K.M. & Graebner, M.E. 2007. Theory building from cases: opportunities and challenges. Academy of Management Journal, 50(1): 25–32.
Fawcett, S. E., Wallin, C., Allred, C., Fawcett, A. M., & Magnan, G. M. 2011. Information technology as an enabler of supply chain collaboration: A dynamic-capabilities perspective.
Journal of Supply Chain Management, 47(1): 38–59
Fiksel, J. 2006. Sustainability and Resilience: Toward a Systems Approach. Sustainability: Science,
Practice, & Policy, 2(2): 1–8.
Golicic, S.L., & Mentzer, J.T., 2006. An empirical examination of relationship magnitude. Journal
Hamel, G., & Välikangas, L. 2003. The Quest for Resilience. Harvard Business Review, 81(9): 52– 63.
Hohenstein, N. O., Feise, E., Hartmann, E., & Giunipero, L. 2015. Research on the phenomenon of supply chain resilience: A systematic review and paths for further investigation. International
Journal of Physical Distribution and Logistics Management, 45(2005): 90–117.
Joshi, A. W. 2009. Continuous supplier performance improvement: Effects of collaborative communication and control. Journal of Marketing. 73(1): 133–50.
Jüttner, U., Peck, H., & Christopher, M. 2003. Supply chain risk management: out- lining an agenda for future research. The International Journal of Logistics Management. 6(4): 197–210.
Kähkönen, A. K. 2014. The influence of power position on the depth of collaboration. Supply
Chain Management: An International Journal, 19(1): 17–30.
Lee, H.L. 2002. Aligning supply chain strategies with product uncertainties. California
Management Review, 44(3): 105–19.
Manuj, I., & Mentzer, J. 2008. Global Supply Chain Risk Management Strategies. International
Journal of Physical Distribution & Logistics Management, 38(3): 192–223.
Park, N., Mezias, J., & Song, J. 2004. A resource-based view of strategic alliances and firm value in the electronic marketplace. Journal of Management, 30(1): 7–27.
Pettit, T. J., Fiksel, J., & Croxton, K. L. 2010. Ensuring Supply Chain Resilience: Development of a Conceptual Framework. Journal of Business Logistics, 31(1): 1–21.
Pettit, T. J., Croxton, K. L., & Fiksel, J. 2013. Ensuring supply chain resilience: Development and implementation of an assessment tool. Journal of Business Logistics, 34(1): 46–76.
Ponomarov, S. Y., & Holcomb, M. C., 2009. Understanding the concept of supply chain resilience. The International Journal of Logistics Management, 20(1): 124–143.
Prima Dania, W. A., Xing, K., & Amer, Y. 2016. Collaboration and Sustainable Agri-Food Suply Chain: A Literature Review. MATEC Web of Conferences, 58(02004).
Sawyerr, E., & Harrison, C. 2020. Developing resilient supply chains: lessons from high-reliability organisations. Supply Chain Management, 25(1): 77–100.
Scholten, K., & Schilder, S. 2015. The role of collaboration in supply chain resilience. Supply
Chain Management, 20(4): 471–484.
Scholten, K., Scott, P. S., & Fynes, B. 2014. Mitigation processes - antecedents for building supply chain resilience. Supply Chain Management, 19(2): 211–228.
Sheffi, Y. 2001. Supply chain management under the threat of international terrorism. International
Journal of Logistics Management, 12(2): 1–11.
Simatupang, T.M. & Sridharan, R. 2008. Design for supply chain collaboration. Business Process
Management Journal, 14 (3): 401–418.
Soosay, C. A., & Hyland, P. 2015. A decade of supply chain collaboration and directions for future research. Supply Chain Management, 20(6): 613–630.
Spiegler, V. L. M., Naima, M. M., Wikner, J. 2012. A control engineering approach to the
assessment of supply chain resilience. International Journal of Production Research, 50(21): 6162–6187.
Stevenson, M., Spring, M. 2007. Flexibility from a supply chain perspective: definition and review.
International Journal of Operations & Production Management, 27(7): 685–713.
Tan, C., & Sia, S. 2006. Managing Flexibility in Outsourcing. Journal of the Association for
Information Systems, 7(4): 179–206.
Tang, C.S. 2006. Robust strategies for mitigating supply chain disruptions. International Journal
Torabi, S. A., Baghersad, M., & Mansouri, S. A. 2015. Resilient supplier selection and order allocation under operational and disruption risks. Transportation Research Part E: Logistics
and Transportation Review, 79: 22–48.
Tukamuhabwa, B. R., Stevenson, M., Busby, J., & Zorzini, M. 2015. Supply chain resilience: Definition, review and theoretical foundations for further study. International Journal of
Production Research, 53(18): 5592–5623.
Välikangas, L. 2010. The Resilient Organization: How Adaptive Cultures Thrive Even When
Strategy Fails. New York: McGraw-Hill.
Van der Vorst, J., & Beulens, A. 2002. Identifying sources of uncertainty to generate supply chain redesign and strategies. International Journal of Physical Distribution & Logistics
Management, 32(6): 409–-30.
Voss, C., Tsikriktsis, N., & Frohlich, M. 2002. Case research in operations management.
International Journal of Operations and Production Management, 22(2): 195–219.
Wei, H. L., & Wang, E. 2010. The strategic value of supply chain visibility: increasing the ability to reconfigure. European Journal of Information Systems, 19: 238–49.
Wieland, A., & Wallenburg, C. M. 2013. The influence of relational competencies on supply chain resilience: A relational view. International Journal of Physical Distribution and Logistics
Management, 43(4): 300–320.
APPENDIX A
Interview Protocol
Adapted from dr. Kirstin Scholten1. General questions (± 10 min)
1.1. Could you give a short description of the organisation (upstream and downstream)? • Core activities and products
• Organisational goals
• Key aspects (organisation size, turnover, number of employees) • Number of suppliers (upstream) and customers (downstream) 1.2. Could you introduce yourself and your role in the organisation?
• Function • Team • Department
• Brief overview of your background, education, and experience
2. Main questions (± 45 min)
2.1. Please recall a recent disruption/problem in your supply chain. Could you describe the event in detail:
2.1.2. What was the cause, what was the impact, who was involved and whether the situation could be foreseen? (SITUATION-TASK-ACTION-RESULT)
• Cause
• Impact (financial/operational) • Affected suppliers/customers • Indications/warnings of disruption
• In general, how did you react to and resolve this disruption? • Did you analysed the situation responding to the disruption?
• If so: how was this analysed? Were previous disruptions taken in consideration to control the current disruption?
2.1.2. With whom did your organisation cooperate to resolve the disruption? • Why did you cooperate with these organisations?
• Did you also see any disadvantages of the collaborating? • Who initiated the collaboration?
• Why not other parties? Maybe outside your supply chain? (e.g. unions, government agencies, etc.)
• Have you worked with your competitors? 2.1.3. Were these other parties willing to cooperate?
• Why / not?
• Was immediate action taken? Or was the situation first looked at? Why? • Are there any restrictions on them working together?
2.1.4. How did your organisation collaborate with these parties? • Sharing of information or resources
• Attempts to coordinate decisions / incentives
• Which method of communication was used? (e.g. e-mail, telephone, face-to-face) • If you achieve successes, such as winnings, do you share it with partners? What if you
make losses? And if you want to do something that involves a lot of risks, do you share these risks?
• Do you and your partners look at what the market looks like and what competitors there are?
2.1.5. Who mainly made decisions during the disruption in your organisation? • Especially by managers or by employees?
• Why were these decisions made by managers/employees?
• Were the decisions made more from their own organisation or did other organisations have a lot of influence on these decisions?
2.1.6. Has collaboration changed during the different phases of the disruption?
• More collaboration before, during, immediately after or in a longer period after the disruption?
• Why? How?
2.2. The following questions relate to customers and suppliers that you have indicated to cooperate with:
2.2.1. How would you describe the relationship between your organisation and these parties in terms of trust?
• How did that influence the (intensity of) collaboration? • Are there differences in partnerships between these parties? 2.2.2. How dependent are your organisations on these parties?
• How did that influence the (intensity of) collaboration?
2.2.3. Do you work with these companies to the same degree when there is no disruption? • What are the differences?
• Do you have the same objectives as these parties in the supply chain?
2.2.4. (Only if suppliers are involved) Are you involved in supplier development (generating new competencies at suppliers) with these parties? Why not)?
• Do you invest in, for example, machines with other companies?
• (If so) How does this affect the response of these parties to a disruption?
2.2.5. (Only if suppliers are involved) How much information do you have about your suppliers' suppliers? And how did that affect the disturbance?
2.2.6. (Only if suppliers are involved) Are you coordinating strategies with your suppliers regarding their suppliers to avoid disruptions? Why (not)?
• Do you and partners look at how you can, for example, reduce collective stock or what the expected demand will be in an emerging period?
• Were decisions made from your own company? Or mainly from the supply chain? • Who made these decisions? Were decisions mainly made by managers or also by
2.3. The following questions relate to competitors (e.g. joint venture, strategic alliance) and the parties outside your own supply chain (not buyers and suppliers) with whom you have indicated to cooperate:
2.3.1. How would you describe the relationship between your organisation and these parties in terms of trust?
• How did that influence the (intensity of) collaboration? • Are there differences in partnerships between these parties? 2.3.2. How dependent are your organisations on these parties?
• How did that influence the (intensity of) collaboration?
2.3.3. Do you work with these companies to the same degree when there is no disruption? • What are the differences?
• Do you have the same objectives as these parties in the supply chain?
2.3.4. (Only if parties are involved) How much information do you receive from these parties? • And how did that affect the disturbance?
2.4. Did collaboration help resolve the disruption and minimize the impact? 2.4.1. Why (not)?
• Was the collaboration difficult?
• Was there anything that prevented other parties from working together? • Was collaboration time consuming (i.e. distraction from internal activities)?
• If so, what have you done to mitigate this?
• Which activities were most important for resolving disruptions? • Are there things you would have done differently?
• What have you learned from it? And how is this implemented? 2.4.2 Is there a limit to the degree of collaboration?
• For example, sharing data?
• On what basis is this assessment made?
2.4.3. Do you think you could have reduced the impact by working less together and focusing more or other, internal processes? Why (not)?
2.4.4. Does collaboration with other companies also have disadvantages? • If so, how does this affect flexibility?
• Trade-offs in collaboration with other companies • Effect of collaboration on future disruptions • Impact of a disruption through collaboration
2.4.5. Are there also cases in which your organisation decides not to cooperate? • When and with whom (e.g. competitors)? Why?
• Would it be too time-consuming (i.e. distract from internal activities)? • Would this make the situation more complicated?
2.5. Characteristics of disruptions and how they affect the decision-making process.
2.5.1. Do the characteristics of a particular disruption affect the degree of collaboration with other companies?
• If so, which / why this characteristic? • Closer collaboration on certain disruptions
2.5.2. Which characteristic of the disruption, e.g. external/internal cause/severity/location disruption, has led specifically to a different way of working together?
• Exchange of more information • More choices in suppliers • Greater flexibility
2.5.3. Is collaboration with other companies monitored? • How?
• How often?
• Based on which aspects is an action taken during monitoring?
3. Closing questions (± 5 min)
3.1. Are there any issues/topics about the supply chain, disruptions and / or collaborations that were not covered in the interview but that you expected to be addressed or thoughts that you would like to share with us about this?
