Developing Measurement of Collaboration Between the Supplier and Client Firms

Abstract

This study recommends a suitable model for evaluating supply chain collaboration in the natural forest products industry. We follow a two-step analysis: The first-order measurement model is leveraged to assess collaboration level, and the second-order confirmatory factor analysis develops the collaboration level by using four indicators representing customer and supplier firms as well as two specific indicators for each of them. Four items are common practices for both sides: joint sales forecasting, exchange of basic information, joint planning, and joint delivery improvement. Two practices are highly oriented toward customers: resource sharing of logistics assets and exchange of performance evaluation. Business-to-business practices engaged mostly with suppliers include the implementation of replenishment systems and joint new product development. Collaboration measurement between suppliers and client firms contributes to effectively manage the relationship between the supplier and client firms and can improve the competitiveness of participating firms in the network.