A Characterization of Lower-Tier Supplier Visibility Practices in Supplier Relationship Management

Abstract

This study explores industry perspectives on lower-tier supplier visibility (LTSV) with respect to various supplier stratifications. According to the analysis of our survey data collected from 74 companies and interviews with 19 industry executives from 15 companies, we found that companies with LTSV system are willing to expand their LTSV process to its suppliers that are of lesser overall importance rather than the traditional practice of restricting such requirement to suppliers with very high level of overall importance (i.e. strategic suppliers). Our findings also show that minimizing supply chain risks (MSCR) and ensuring supply performance (ESP) are primary motivations for companies to engender LTSV. Furthermore, we found that companies adopting LTSV process for strategic and collaborative suppliers focus on MSCR, but on ESP for custom suppliers. These findings contribute to the literature of supplier relationship management (SRM) on lower-tier supplier management and also provide a guideline for the industry to create appropriate LTSV strategies.