Buyer-Supplier Network Structure and Product Architecture

Abstract

This study seeks to understand the normative buyer-supplier network structure for varying product architectures. The hypotheses are tested on a combination of primary and secondary data from the North American automobile industry. The results suggest that correspondence between buyer-supplier networks and product architecture networks may not be conducive for product quality. While buyer network density (or tight coupling) is better suited for improving the product quality of modular systems, buyer network centrality (or loose coupling) is better suited for improving the product quality of integral systems. The implication is that greater information sharing between buyers and suppliers is more likely to improve product performance of modular products compared to integral products.