Information sharing in buyer-supplier relationships Rippa.pdf · 2015-06-24 · Information sharing...

14
1 Dept. of Business and Managerial Engineering, Universitá di Napoli Pederico II, P.le Tecchio 80, 80125, Napoli, Italia E-mail: [email protected] , phone: +390817682934, fax: +390817682154 121 Information sharing in buyer-supplier relationships Pierluigi Rippa 1 University of Napoli Federico II, Italy Abstract The aim of this research project is the evaluation of performance in buyer-supplier relationships through the measurement of intensity and effectiveness of information flows occurring between two or more actors involved in a supply chain. It is grounded in the assumption that gradual increments of the information sharing produce positive increase in the local and global performance of the supply chain. Data will be drawn from the case study of a big Italian telecommunication firm who adopted a portal as e-supply chain solution. This paper presents the main phases of the research and the earlier results. Keywords: buyer-supplier relationships, information flow, relationships’ performance 1. Introduction and aim of the research Many authors argue that gradual increments of information sharing produce a positive increase in the local and global performance of the supply chain (Willcocks and Sauer, 2000). When one company can use the information of other companies in the supply chain, the negative effects of uncertainty can in theory be mitigated. In this way, technologies that enable communication play a critical and profound role in the way firm activities (internal or external) are coordinated, how commerce is conducted, how people and machines communicate, what defines communities and how they interact, and how and when goods are made and delivered. The information and communication technologies (ICT) foster the integration of business processes across the supply chain by facilitating the information flows, which are necessary for coordinating a business activity. ICT are focused mainly on acquiring and sharing information in order to create knowledge for the different actors involved that are using this distributed knowledge base (Dewett and Jones, 2001). Many of the characteristics of ICT seem to be just the right answer for a successful Supply Chain Management strategy. Inter-company integration and coordination via information technology, therefore, has become a key to improved supply chain performance. This research aims to evaluate how the intensity of information flows, enabled by ICT, can affect performance of buyer–supplier relationships. More in depth, the analytical object is the explicitness of the typology of information flows occurring between buyer and supplier, the measure of intensity of these flows, and the measure of interaction between that intensity and the overall performance of the relationships. I maintain that measuring the intensity of information sharing can help evaluate the effectiveness of the enhanced buyer-supplier relationships. 2. Information flows in supply chain management: the role of ICT Supply chain (SC) is defined as a network of connected and interdependent organizations mutually and co-operatively working together to control, manage and improve the flow of materials and information from the suppliers to the end users (see fig 1). So, supply chain management (SCM) encompasses materials/supply management from the supply of basic raw materials to the final product (and possible recycling and re-use). SCM focuses on how firms utilise their suppliers’ processes, technology and capability to enhance competitive advantage. It is a management philosophy that extends traditional intra- enterprise activities by bringing trading partners

Transcript of Information sharing in buyer-supplier relationships Rippa.pdf · 2015-06-24 · Information sharing...

1 Dept. of Business and Managerial Engineering, Universitá di Napoli Pederico II, P.le Tecchio 80, 80125, Napoli, Italia E-mail: [email protected], phone: +390817682934, fax: +390817682154 121

Information sharing in buyer-supplier relationships Pierluigi Rippa1

University of Napoli Federico II, Italy

Abstract

The aim of this research project is the evaluation of performance in buyer-supplier relationships through the measurement of intensity and effectiveness of information flows occurring between two or more actors involved in a supply chain. It is grounded in the assumption that gradual increments of the information sharing produce positive increase in the local and global performance of the supply chain. Data will be drawn from the case study of a big Italian telecommunication firm who adopted a portal as e-supply chain solution. This paper presents the main phases of the research and the earlier results. Keywords: buyer-supplier relationships, information flow, relationships’ performance

1. Introduction and aim of the research

Many authors argue that gradual increments of information sharing produce a positive increase in the local and global performance of the supply chain (Willcocks and Sauer, 2000). When one company can use the information of other companies in the supply chain, the negative effects of uncertainty can in theory be mitigated. In this way, technologies that enable communication play a critical and profound role in the way firm activities (internal or external) are coordinated, how commerce is conducted, how people and machines communicate, what defines communities and how they interact, and how and when goods are made and delivered. The information and communication technologies (ICT) foster the integration of business processes across the supply chain by facilitating the information flows, which are necessary for coordinating a business activity. ICT are focused mainly on acquiring and sharing information in order to create knowledge for the different actors involved that are using this distributed knowledge base (Dewett and Jones, 2001). Many of the characteristics of ICT seem to be just the right answer for a successful Supply Chain Management strategy. Inter-company integration and coordination via information technology, therefore, has become a key to improved supply chain performance.

This research aims to evaluate how the intensity of information flows, enabled by ICT, can affect performance of buyer–supplier relationships. More in depth, the analytical object is the explicitness of the typology of information flows occurring between buyer and supplier, the measure of intensity of these flows, and the measure of interaction between that intensity and the overall performance of the relationships. I maintain that measuring the intensity of information sharing can help evaluate the effectiveness of the enhanced buyer-supplier relationships.

2. Information flows in supply chain management: the role of ICT

Supply chain (SC) is defined as a network of connected and interdependent organizations mutually and co-operatively working together to control, manage and improve the flow of materials and information from the suppliers to the end users (see fig 1). So, supply chain management (SCM) encompasses materials/supply management from the supply of basic raw materials to the final product (and possible recycling and re-use). SCM focuses on how firms utilise their suppliers’ processes, technology and capability to enhance competitive advantage. It is a management philosophy that extends traditional intra-enterprise activities by bringing trading partners

P. Rippa: Information sharing in buyer-supplier relationships

122

together with the common goal of optimisation and efficiency (Tan and Handfield, 1998).

SCM often requires the integration of inter- and intra-organizational relationships and coordination of different types of flows within the entire supply chain structure.

In a traditional vision of the SC, demand flows up the chain (from each trading partner to its upstream trading partner) and product flows in the opposite directions. Time delays, distorted demand signals, and poor visibility of exceptional conditions result in

critical information gaps and serious challenges for SC managers, including misinformation and ultimately, mistrust. For example, when partners lose faith in the forecast they receive, they typically respond by building up inventory buffers to guard against demand uncertainty. The disruption that results from dramatic, sudden changes in forecasted demand is amplified as it travels up through the SC. This “bullwhip effect” is responsible for much of the inefficiency in SCs (Lee et al., 1997; Chen et al., 1999).

Figure 1 - Flows shared in buyer-supplier relationships (Adapted by Akkermans et al., 2003)

Information and communication technology (ICT), and in particular the Internet, have played a fundamental role in helping companies reach the goals of « supply chain integration ». The Internet can change the role and type of relationships between the various players, creating new value networks and developing new business model. (Muffatto and Payaro, 2004).

The transaction cost theory (Coase, 1937; Williamson, 1975) provides an insight into institutional arrangements for economic relationships between organizations. The focus of transaction cost theory is on the conditions under which a transaction is likely to be carried out internally (hierarchical organization) or externally (in the market). Buyers and sellers need to choose a coordination mechanism in order to

economise on transaction costs, which include factors such as asset specificity, uniqueness, uncertainty and complexity of the exchange as well as opportunistic behaviour. Williamson argues that under high transaction costs, firms tend to choose vertical integration to control the transaction process by closer supervision. In the cases where straightforward, non-repetitive transactions involving no transaction specific investments are concerned, markets coordinated by price mechanism represent the optimal choice. However, organizations may adopt electronic tools to lower transaction costs and improve information flows, thus facilitating improved planning and more coordinated actions to reduce uncertainty.

P. Rippa: Information sharing in buyer-supplier relationships

123

Porter (1980) developed the five forces model to consider strategic choices in competitive environments. The basis of this model is that a firm exists within an industry and, in order to succeed, it must effectively deal with the competitive forces which exist within the particular industry.

Buyers or suppliers may be powerful enough to bargain away much of the profitability available to the firm: increasing buyer and supplier switching costs can reduce that power by making a change of relationship expensive.

Porter (1985) also considered the concept of the value chain with primary activities forming a linear flow from the supplier through to the customer. Each activity must be carried out and linked effectively to achieve optimum overall performance.

Within inter-organizational systems, such as information systems used in managing the supply chain, conflicts may arise between organizations that are part of more than one supply chain, with varying strategic directions. These systems must fit within the organizational requirements of the supply chain/network members, or else the overall acceptance may not be adequate for the system’s use (Volkoff et al., 1999). Indeed, without careful planning and agreement across organizations, the potential for inter-organizational conflict also increases.

The factors that have to be managed, maintained and operated internally are: costs, adaptability (internal and external), platform neutrality and interoperability, scalability, security, reliability, ease of use, customer support, perceived value. From an external point of view, communication systems factors that need to be considered are: communication speeds, type of standard, security, reliability, transaction filtering, additional value-added services, information access, various costs. (Sarkis and Talluri, 2004).

In this view, the ICT are a key factor that enables for competitive advantage, by cementing relationships with customers, enabling integration forward or backwards in the industry value chain, or establishing a technological lead.

The key business benefits that ICT can bring can be identified as (Roberts and Mackay, 1998): - Improvements to customer service through

simpler processes and reduced lead times;

- Lower supply chain costs through simpler integrated processes, lower administrative costs and reduced incidence of failure;

- More efficient processes and improved management information;

- Improved supplier relationships. Barut et al. (2002) identifies other benefits as

well, including quicker response to end customer demands, lower inventories along the supply chain, and lower costs associated with expediting shipment and/or production.

The Internet provides the opportunity for demand data and supply capacity data to be visible to all companies within a manufacturing supply chain. Consequently, companies can be in a position to anticipate demand fluctuations and to respond accordingly. The Internet has given companies even greater tools for tightly orchestrating relationships across the entire supply chain and creating strategic partnerships and operational linkages with a dynamic web of large and small firms spanning all continents. Internet-enabled shared information helps break down organizational policies and functional fences, helping supply chain alliance members develop a common understanding of the competitive environment (Boyson et al., 1999). In short, the availability of the Internet and the associated technologies provide the opportunity to make further significant, even radical, improvements to break down functional barriers and enhance the flow of information.

Many researchers agree that ICT reduce cost of coordination. Lack of coordination will result in the supply chain holding inefficiencies in the form of inventory buffers, under-utilised capacity, obsolescence of products or lost sales.

The degree to which two activities are coordinated is limited by the cost of coordinating the activities. In other words, if the cost of coordination is higher than the cost of inefficiencies, the firm is better off not coordinating. The trade-off between cost of coordination and cost of inefficiencies in the system determines the extent to which activities in the supply chain are coordinated. Coordination flows support the integration of business activities through information sharing. Therefore, they will tend to expand to many tiers in the supply chain.

P. Rippa: Information sharing in buyer-supplier relationships

124

2.1 The technology transfer model Elaborated in the early 1990s by Esposito and

Raffa (1991,1994), the technology transfer model aims to analyse the wide range of customer-subcontractor and subcontractor-subcontractor relationships between two firms. In this model, the channels through which two firms communicate are viewed as vehicles for transferring the various technology components (Allen, 1988). The firm’s technology is seen as sets of knowledge embodied in hardware systems, software systems, and human resources (Technology Atlas Team, 1987). This implies a systematic application of various categories: machinery, professional skills, information, and organizational rules.

Amongst the above mentioned communication channels, there are seven channels that can directly linked to the information sharing process (see fig 2). One remark can be made. It is possible to represent the flow of exchange of information, material, and financial goods between two firms.

Moreover, the model is able to measure the intensity of collaborative relationships between buyer and supplier. The degree of use of technology-transfer channels shows that the new subcontracting relationships, unlike the traditional ones, are typified by a significant exchange of the technology categories (machinery, organizational rules, professional skills and information).

2.2 Internet channel: the e-supply chain portal

An often overlooked factor in website

effectiveness and development is the effect of individual user differences on the acceptance of the new technology.

Another key barrier to full supply chain management has been the cost of communication with, and coordination among, the many independent suppliers in each supply chain.

The key to enhanced supply chain operations is not solely efficient information transfer, but timely information availability. In fact, the use of information systems to ensure visibility (transparency) of item demand, location, and status to all parts of the

logistics network was identified over a decade ago as an important attribute of manufacturing (Kehoeand Boughton, 2001, 2001-2).

The Internet is the first channel that makes it possible for information located at a central source to be available to anybody. Furthermore, using Internet-based information transfer, supply webs will replace the traditional linear movement of information within supply chains, thereby facilitating a more interactive approach to supply chain partnering. The Internet provides the opportunity for demand data and supply capacity data to be visible to all companies within a supply chain.

Therefore, before deciding to embrace e-supply chains, a firm needs to clearly understand its own automation needs and different potential options for creating supply chains including their benefits and challenges. It is only then that a firm should select the supply chain option that it can successfully manage.

A portal, a solution for enabling the real time end-to-end e-supply chain, is a site that serves as a starting point for accessing the web from which the user may access many other sites. The most important function is the collecting of buyers and suppliers to make the transaction easier for the buyer and more efficient for the suppliers (Hartman and Sifonis, 2000). The presentation layer gives the user of the portal access to certain information, dependent upon the user’s level of security clearance and/or need to know. Portal technology allows all the partners in a supply chain to log onto a single portal site and immediately get the relevant information they need to make certain decisions. The portal has uses for both suppliers and customers. Suppliers can be given insight into the inventory levels of other portal users and tune their products based on this information. Customers can be given diverse information and services on a unified front-end on the Internet.

An additional significant advantage of portal technology for streamlining and coordinating the internal operations of the firm is that it provides the unifying structure allowing a single, shared database to coordinate all the transactions within the firm as well as the transactions between the firm and its trading partners in real-time.

P. Rippa: Information sharing in buyer-supplier relationships

125

Figure2 - Technology transfer model (Esposito, Raffa, 1991)

3. Relationships’ performance evaluation tool

In the earlier literature, several supplier evaluation tools were developed in line with the evolutionary trend of supply chain (an example of this tools are the MacBeth’s Model and the Vendor Management Model by Cousins)

Actually, all these tools are based on an individual evaluation of supplier and/or customer performance to determine supplier selection criteria. However, lean supply has developed an evaluation tool of relationships, which is a methodology to control the whole relationship, and not just the single firm involved in those relationships. This kind of methodology allows to evalute the development of the relationships, answering to the question “which are the actions to improve the buyer-supplier relatioships?”. Within the relationships, such factors have to be analysed. For every of these factors, one must choose an objective: minimum, maximum, current and optimal. The tools can therefore be

utilized as a management one as well. This study is concerned with the modality of evaluation of the factor which is also one of the main interests of the management literature.

The evaluation methodology of supply chain

follows the trend of the supply modality. As in the past

the principal purpose of the buyer was the supplier

selection. The tools focused on supplier performance

evaluation in the partnership era, where linkages

between buyer and supplier are more intensive than

in the past, the methodology of evaluation must look

at the evaluation of relationship’s performance (fig 3).

In Table 1, there is a review of articles by authors

interested in the study of the performance evaluation

in supply chain management. These articles are

relatively recent, and the whole relationship has never

been the main focus of these studies. In fact, those

methodologies do not consider the whole relationship,

but focus either on the buyer’s point of view, or the

supplier’s point of view.

P. Rippa: Information sharing in buyer-supplier relationships

126

Figure3 - Trend of evaluation methodology of supply chain (Adapted by Lemming, 1994) 4. Research project and

methodological approach

The research project presented in this paper consists of five main phases: 1. Development of a methodology for the evaluation

of buyer-supplier relationships performance

2. Choice of appropriate indicators to measure the intensity and the effectiveness of information flows in buyer–supplier relationships;

3. Choice of the appropriate indicators to measure relationships’ performance (Key Performance Index) in a supply chain;

4. Choice of a correlation index to measure of the linkages existing between information flows intensity and KPI. In doing so, my purpose will be the building of a methodology that is able to capture the performance evaluation of a Supply Chain in an ICT environment.

5. Case study selection

In the next sections, the methodological approach will be shortly described. Then, some information about the case study will be illustrated.

4.1 The Information Intensity Index The calculation of an index to measure the

intensity and the effectiveness of information flows will be based on the Intensity Information Index (Barut et al., 2002), which is an index describing the richness and amount of information used (either in the direction of customers or suppliers).

Each information intensity component (IId and IIu) can be described by four different types of information used: demand, inventory, capacity, and production schedules (indicated, respectively, by the letters D, N, C and S). The letters d and u indicate which II component is being calculated, with d referring to customers, and u to suppliers.

IId and IIu are defined in terms of these four different types of intensity information used:

IIi = wi

1 Di + wi2 [pi

1 Ni + pi2 Ci

+ pi3 Si ] (2)

where i =‘‘d’’ when we are addressing the II in the direction of the enterprise’s customer(s). Then, i =‘‘u’’ when we are referring to the II in the direction of the enterprise’s suppliers. When IId is calculated, the coefficient w1 is the relative weight, between zero and

future Relationship evaluation

Lean supply

past Supplier

evaluation

Supply chain

Nature of competition

Purchasing decision

Information exchange

Skill management

Delivery process

Price challenge

Quality

R&D

Pressure level

Factor for relationship evaluation

Quality

Price

Geographical location

Time delivery

Flexibility

Factor for supplier evaluation

P. Rippa: Information sharing in buyer-supplier relationships

127

Authors Level of analysis

Implications

Prahinski, Benton, 2004

Determination of how suppliers perceive the buying firm’s supplier evaluation communication process and its impact on suppliers’ performance. Three communication strategies were tested using Structural Equation Modelling and data collected from 139 first-tier North American automotive suppliers

When the buying firm uses collaborative communication for the supplier development programs, it is perceived as an effective mechanism to improve the buyer-supplier relationship. Collaborative communication includes indirect influence strategy, formality and feedback. However, the implementation of several supplier evaluation communication strategies by itself is not enough to influence the suppliers’ performance.

Carr A.S., Pearson J.N., 1999

Attempt to examine a structural model of strategic purchasing and its influence on supplier evaluation systems, buyer-supplier relationships, and firm’s financial performance.

Strategic purchasing function is important to the success pf the firm. Firms that have a strategic purchasing function are more likely to implement a supplier evaluation system. Strategically managed long-term relationships with key suppliers have a positive impact on the firm’s financial performance.

Humphreys, Chan, 2004,

The study emphasize the crucial role that purchasing and materials management activities plays in determining overall corporate performance. To examine the role of supplier development in the context of buyer – supplier performance from a buying firm’s perspective, a survey was conducted of 142 electronic manufacturing companies. Factor analysis yielded eight factors including transaction-specific supplier development and seven infrastructure factors of supplier development: strategic goals, effective communications, long-term commitment, top management support, supplier evaluation, supplier strategic objectives, and buyer trust in supplier.

Transaction-specific supplier development and its infrastructure factors were positively associated with buyer-supplier performance improvements; transaction-specific supplier development significantly contributed to prediction of buyer-supplier performance improvements; several infrastructure factors of supplier development, including trust in supplier, supplier strategic objective and effective communication are also significant predictors of buyer-supplier performance improvements.

Heide, Stump, 1995

This article draws on transaction cost theory to propose that: (1) crafting stronger relationships is partly a response to the presence of uncertainty and transaction-specific assets and (2) structuring relationships in accordance with transaction cost theory prescriptions should have positive performance implications. Regression analysis conducted in a sample of buyer-supplier relationships.

From a theoretical perspective, there is a confirm of the normative predictors of transaction cost theory. From a managerial perspective, the results of this study demonstrate the potential viability of organizing relationships in a cooperative, as opposed to in a competitive fashion.

O’Toole T., Donaldson B., 2002

This article aims to bring a relationship performance understanding to the study of buyer-supplier exchange. The relationship performance incorporates both non-financial and financial dimensions. The results are developed from seven qualitative interviews followed by a postal survey incorporating the views of 200 industrial buyer respondents. Factor analysis was conducted on 21 dimensions of performance.

A relationship viewpoint can have a high potential in the assessment of buyer-supplier partnership performance.

Young, Gilbert, McIntrye, 1996

Set in an industrial product distribution channel, the authors investigate the relationships between: (1) a supplier’s power and its use of influence tactics with a distributor, (2) the level of bureaucracy with use of influence, (3) influence use and relationship performance, and (4) bureaucracy and performance. A series of structure equation models were developed.

The bureaucratic dimensions of channel structure have effects on dynamic and daily activities between boundary personnel. Moderate levels of formalization have indirect positive effects on interfirm performance. Centralization, whereas highly correlated with formalization, has an opposite effect on interfirm exchange. Relationships in which one party attempts to monopolize interfirm decisions create a trading atmosphere where mediated influence is the preferred choice of supplier reps. These influence strategies hinder the long-term performance of the channel relationship. Influence strategies that encourage self-determination and enhance the source’s credibility appear to enhance interfirm performance.

Table 1 - Critical aspects in evaluating buyer – supplier relationships

P. Rippa: Information sharing in buyer-supplier relationships

128

unity, given to having and using demand information from the customer. The coefficient w2 is the relative weight, between zero and unity, given to having and sharing the supply information (inventory, capacity and production schedules) with the customer, with w1

+ w2 = 1. On the other hand, when calculating IIu, the coefficient w1 is the relative weight, between zero and unity, given to having and sharing our demand information with suppliers in the supply chain. The coefficient w2 is the relative weight, between zero and unity, given to having and using the supply information (inventory, capacity and production schedules) of our suppliers. The weights of p1, p2, and p3, when i=‘‘d’’, are the relative importance of sharing our supply information of inventory, capacity and production schedules with our customers. When i=‘‘u’’, the weights are interpreted as the relative importance of having and using our suppliers’ supply information about inventory, capacity and production

schedule information, respectively. Again, the determination of the values for these weights is subject to the enterprise’s strategy.

4.2 Key performance index in a supply chain environment

After the literature review, a set of key performance index will be set to evaluate the performance of the whole relationship. Actually, this literature review is schematised in Table 2, where various contributes by authors from all over the world are summarized. A supply chain can be viewed as a connection of different operations’ areas, and for every area a particular performance index can be used. At the end, I will choose only some of these indexes to build a structured index to capture the different partition of a supply chain.

Activity Performance objective Metrics

Order Entry Method Order-Lead Time

Planned Order

Procedures

Performance of downstream activities and inventory levels

Customer Order Path Level and degree of information sharing

Buyer-vendor cost savings initiatives Extent of mutual co-operation leading to improve quality

The Entity and stage at which supplier is involved

Supply chain partnership

Level of competitiveness (based on faster introduction of a product depending on the

reliability and quick responsiveness of suppliers) Extent of mutual assistance in problem solving efforts

Range of product and services

Capacity Utilization Production

level

Performance of the production process (that impact on product cost, quality, speed of delivery,

and on delivery reliability and flexibility) Effectiveness of scheduling techniques

Delivery performance evaluation Delivery Link Driver of customer satisfaction

Total distribution cost

The customer query time Customer service and satisfaction

Customer satisfaction (that integrate the customer specification in design, to set the dimension of

quality, for cost control, and as feedback for the control of process) Post transaction measures of customer service

ROI

ROA SC finance and logistic

cost

Performance of logistic system (to decide on a broad level of strategies and techniques that

would contribute to the smooth flow of information and materials in a SC environment) Total inventory cost

Table 2 - Research project: Steps of the methodological approach

4.3 A case study

The methodological approach will be implemented in a big Italian firm operating in TLC industry (Telecom Italia Group). Telecom Italia, Italian leader in ICT industry, is one of the strongest industrial groups in Europe from a financial solidity

and profit supremacies points of view. These competitive advantages are built on a competitive ability in innovation, quality of the service, attention to the customers. The group is able to integrate the experience consolidated in beyond one hundred years of activity in the field of the telecommunications,

P. Rippa: Information sharing in buyer-supplier relationships

129

with one meaningful presence in the world of the media, of Internet and of the most advanced frontiers of the Information Technology, thanks to an intensive research and development activity that help the company in developing innovative technologies. Telecom Group include firms as Telecom Italia Wireline, Tim, Olivetti Tecnost, Telecom Italia Lab, Telecom Italia Media, and other (all information are available at the web site www.telecomitalia.it). Through these companies, the industrial engagement of the group is realized to offer leading technologies and services, assuring an opportunity of increase for itself and the entire country. Being based on technological innovation, the attention to the customer and the engagement in order to supply an excellent service, the societies of the group operate in the field of the fixed and mobile telecommunication, Internet and Media, information technology, research and development and solutions and systems for the business.

In 2003 this firm had implemented the Suppliers Portal. This Suppliers Portal is a new web based tool created with two different goals: become the main communication medium and be an effective working instrument for National and International Telecom Italia Group's Suppliers.

The use of portals as integrative supply chain architectures will surely proliferate across diverse sectors and organizations. This diffusion is already well underway in Boyson et al. (2003). The e-supply chain portal allows more effective management of the supply chain by providing the necessary tools to everyone involved and allowing the links of the supply chain to work together to produce the best possible outcomes with the least manual workarounds.

The Portal is the place where information can be found, one can participate in auctions, propose himself as a new supplier, find new contacts, but mainly it is the instrument born to support business between Alpha Italia Group and its own suppliers, both active and potential, during the entire trade relationship lifecycle. Using new web technologies, traditional information channels have been integrated and substituted; this optimises communication and data exchange, automates activities and improves sourcing and procurement process.

Portal systems features, as Boyson et al. (2003) described, will be analysed so as to evaluate the intensity and the effectiveness of information flows in a supply chain. Then the evaluation tool of relationships’ performance will be implemented. The final objective will be the discovering of a direct relationship between the intensity of information flows enabled by ICT and the overall performance of buyer-supplier relationships.

At this moment, the evaluation of intensity and effectiveness of information flows will be calculated through the Information Intensity Index (Barut et al, 2002). In appendix A the questionnaire used to collect data is reported. The questionnaire is divided into two main sections: Information Extent and Information Intensity. In the first section, this index provides at establishing how many levels of both customer information and supplier information the firm uses.

In the second section the intensity of direct customer and supplier demand, scheduling, inventory and capacity information used by the firm are calculated.

5. Expected value of the research and conclusion

The main contribution of the research will be the formulation of a methodology to find the parameter to measure information flows intensity in buyer-supplier relationships so as to evaluate the effectiveness of these relationships. This framework will be cross referenced with relevant literature on supply chain, in order to build a tool to evaluate buyer-supplier relationships performance by measuring the intensity of information flows along the supply chain.

From a scientific point of view, it will add to the debate on how supply flows can be exploited, and how buyer-supplier relationships can be evaluated. I will also propose introduce a supplier selection criterion based on ICT management able to enhance those flows.

From a managerial point of view, the purpose is to elaborate a management model to evaluate the effectiveness of buyer-supplier relationships, and also give the manager an instrument to monitor the effectiveness of the ICT in the supply chain.

P. Rippa: Information sharing in buyer-supplier relationships

130

Bibliography

Akkermans, H.A., Bogerd P., Yucesan E., van Wassenhove L.N., (2003), The impact of ERP on supply chain management: Exploratory findings from European Delphi study, European Journal of Operational Research, 146, 284-301.

Allen T., 1988, Managing the Flow of Technology, MIT press, Cambridge, MA

Barut M., Faisst W., Kanet J.J., 2002, Measuring supply chain coupling: an information system perspective, European Journal of Purchasing & Supply Management, 8, 161-171.

Boyson S., Corsi T., Verbraeck A., (2003), The e-supply chain portal: a core business model, Transportation Research Part E, 39, 175-192.

Carr A.S., Pearson J.N., (1999), Strategically managed buyer-supplier relationships and performance outcomes, Journal of Operations Management, 17 (497-519).

Chen, F., Drezner, Z., Ryan, J.K., Simichi-Levy, D., (1999), The bullwhip effect: managerial insights on the impact of forecasting and information variability in a supply chain. In Mayur, S., Ganeshan, R., Magazine, M.J. (Eds.), Quantitative Models for Supply Chain Management. International Series in Operations Research & Management Science, Kluwer Academia Publishers, Boston, Vol. 17. pp.419-439.

Coase, R.H., (1937), The nature of the firm. Economica 4, 386 – 405.

Croom, S., Romano, P., Giannakis, M., (2000), Supply chain management: an analytical framework for critical literature review”, European Journal of Purchasing & Supply Management 6(1): 67-83.

de Boer L., Labro E., Morlacchi P., (2001), A review of methods supporting supplier selection, European Journal of Purchasing & Supply Management, 7 (75-89).

Dewett, T., G. R. Jones, (2001). The role of information technology in the organization: a

review, model, and assessment. Journal of Management 27(3): 313-346.

Esposito E., Raffa M., 1991, Supply in hi-tech industry: the role of the small business, in Proceedings of the 36th ICSB World Conference, Vienna, 24-26 June

Esposito E., Raffa M., 1994, The evolution of Italian subcontracting firms: empirical evidence, European Journal of Purchasing and Supply Management, 1(2), pp. 67-76

Esposito E., Raffa M., 1994-2, L’evoluzione del sistema della subfornitura nell’industria italiana, Economia&Management, n.4, Luglio

Gunasekaran A ., Patel, C., Tirtiroglu, E., (2001), Performance measures and metrics in a supply chain environment, International Journal of Operations & Production Management, Vol. 21, pp. 71-87.

Hartman, A., Sifonis, J., (2000), De Netgerichte Organisatie, Academic Service, Schoonhoven.

Heide J.B., Stump R.L., (1995), Performance Implications of Buyer-Supplier Relationships in Industrial Markets, Journal of Business Research, 32 (57-66).

Humphreys P.K., Li W.L., Chan L.Y., (2004), The impact of supplier development on buyer-supplier performance, The International Journal of Mangement Science, 32 (131-143).

Kehoe, D., Boughton, N., (2001), Internet based supply chain management. International Journal of Operations and Production Management, 21 (4).

Kehoe, D., Boughton, N., (2001-2), New Paradigms in planning and control across manufacturing supply chains, the utilization of Internet Technologies. International Journal of Operations and Production Management, 21 (5/6).

Lamming R.C., 1986, For better or for worse – impacts of technical change upon the UK automotive components sector, in “Managing Advanced Manufacturing Technology”, ed. By Voss C., Bedford, IFS

P. Rippa: Information sharing in buyer-supplier relationships

131

Lamming R.C., 2003, Oltre la Partnership. Strategie per l’innovazione e la produzione snella, ed. ESI, Napoli, Italia

Lancioni R.A., 2000, New Development in Supply Chain Mangement for the Millennium, Industrial Marketing Management, 29, 1-6

Lee, H. L., Padmanabhan, V., & Whang, S. (1997); The bullwhip effect in supply chains. Sloan Management Review, 38(3), 93-102.

Muffatto M., Payaro A., 2004, Integration of web-based procurement and fulfillment: A comparison of case studies, International Journal of Information Management, 24, 295-311

O’Toole T., Donaldson B., (2002), Relationship performance dimension of buyer-supplier exchanges, European Journal of Purchasing & Supply Management, 8 (197-207).

Olson J.R., Boyer K.K., (2003), Factors influencing the utilization of Internet purchasing in small organizations, Journal of Operations Management, 21, 225-245.

Ovalle, O.R., Marquez, A.C., (2003), The effectiveness of using e-collaboration tools in the supply chain : an assessment study with systems dynamics, Journal of Purchasing & Supply Management, 9, 151-163.

Pant S., Sethi R., Bhandari M., (2003), Making sense of the e-supply chain landscape : an implementation framework, International Journal of Information Management, 23, 201-221.

Porter, M.E., (1980), Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press, New York.

Porter, M.E., (1985), Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, New York.

Prahinski C., Benton W.C., (2004), Supplier evaluation: communication strategies to improve supplier performance, Journal of Operations Management, 22 (39-62).

Roberts B, Mackay M., (1998), IT supporting supplier relationships: The role of electronic commerce, European Journal of Purchasing & Supply Management, 4, 175-184.

Sarkis J, Talluri S, (2004), Evaluating and selecting e-commerce software and communication systems for a supply chain, European Journal of Operational Research, 159, 318-329.

Stevens, G.C, (1989), Integrating the supply chain. International Journal of Physical Distribution and Materials Management, 19, 3-8.

Tan K.C., (2001), A framework of supply chain management literature, European Journal of Purchasing & Supply Management, 7, pp. 39-48.

Tan, K. C., Handfield, R. B., (1998). Enhancing the firm's performance through quality and supply base management: an empirical study. International Journal of Production Research 36(10): 2813-2837.

Technology Atlas Team, 1987, Components of technology for resources transformation, Technological Forecasting and Social Change, 32(1), pp.19-35

Volkoff, O., Chan, Y.E., Newson, P.E.F., (1999), Leading the development and implementation of collaborative interorganizational systems, Information Management, 35 (2), 63-75.

Willcocks, L., Sauer, C.,(2000). Moving to e-business. Random House Business Book, London.

Williamson, O.E., (1975), Markets and Hierarchies: Analysis and Antitrust Implications”, Free Press, New York.

Young J.A., Gilbert F.W., McIntyre F.S., (1996), An Investigation of Relationalism across a Range of Marketing Relationships and Alliances, Journal of Business Research, 35, 139-151.

Zheng J., Caldwell N., Harland C., Powell P., Woerndl M., Xu S., (2004), Small firms and e-business: cautioness, contingency and cost-benefit, Journal of Purchasing & Supply Management, 10, 27-39.

P. Rippa: Information sharing in buyer-supplier relationships

132

Appendix A: The questionnaire to compute the Information Intensity Index (Barut et al., 2002)

P. Rippa: Information sharing in buyer-supplier relationships

133

P. Rippa: Information sharing in buyer-supplier relationships

134