Supply chain collaboration and firm performance in Thai automotive and electronics industries

Abstract

This paper examines factors that encourage firms in Thai automotive and electronics industries to enter into supply chain collaborations (SCCs) and relationships between SCCs and supply chain performance (SCP) using a questionnaire survey in 2012. The results of ordinary least squares regression show that firms that established a supplier evaluation and audit system, a system of rewards for high-performance suppliers and long-term transactions, with their supply chain partners under competitive pressure cooperate more closely with their partners along the supply chain with respect to sharing information and synchronizing decisions. Our two-stage least squares regressions indicate that SCCs that arise from competitive pressure, supplier evaluation and audit, and a system of rewards for high-performance suppliers and long-term relationships influence SCP, including on-time delivery, responsiveness to fast procurement, flexibility to customers’ needs, and profit. These findings indicate that Thailand machinery industries have learned globally adopted SCM practices, and invested in tangible and intangible assets to realize potential benefits from costly SCC.