A case of shared resources, uncertainty and supply chain integration in the process industry

Abstract

One of the main themes in supply chain management is integration along the supply chain in order to improve performance. This paper contributes to a better understanding of what business conditions determine integrative practices. A framework is developed to investigate what level and scope of integration can be achieved in a supply chain dominated by shared resources, if the type and amount of uncertainty varies for different buyers. This framework is further explored in a case study of a pigment producer and its five main buyers. In general, it was seen that uncertainty increases the need for more integration, while shared resources limit the possibility of reaching a high level of integration. The case clearly shows that shared resources limit the possibility to integration, but also that different levels of integration exist in each of the five supplier–buyer relations depending on the amount and type of uncertainty.