An Empirical Study on Absorptive Capacity, Perceived Incentive Benefit and the Quality of Collaboration in Project-based Supply Chain

Abstract

Supply chain management for engineering project focuses on planning acquisitions, identifying and choosing the right suppliers and subcontractors, planning and negotiating appropriate contracts, and administering the collaboration with the suppliers and subcontractors. This paper aims to identify the determinants of SCM performance of the suppliers and subcontractors participating in the project-based supply chain. This study proposes the absorptive capacity, fairness of suppliers' evaluation, the quality of collaboration and incentives as major research variables, and collected the survey responses from the suppliers and subcontractors having experiences with major engineering projects. The statistical results indicate that the incentives, absorptive capacity and the quality of collaboration influence SCM performance of suppliers, and that the fairness of suppliers' evaluation has some impact on the incentives and the absorptive capacity. But on the contrary to our expectation, the incentives have no significant impact on the level of absorptive capacity.