Supply chain tracking: aligning buyer and supplier incentives

Abstract

PurposeThis paper aims to present how the success of inter‐organizational systems (IOS) implementation projects can be increased by aligning the different incentives of buyers and suppliers.Design/methodology/approachThe research method employed is case study and its unit of analysis is a network of supplier and wholesaler (buyer) companies acting in the Finnish technical trade industry, which are implementing inter‐organizational tracking. The implementation project followed an implementation process model developed to execute the case study.FindingsFor a buyer, the challenge in IOS implementation is that suppliers feel the adoption more difficult and have less identifiable benefits. However, in the case study, suppliers were ready to implement tracking solution because they understand that improvements in IOS help to apply common industry data exchange standards and will lead to better supply chain collaboration, which also increases their operational performance in the long run.Research limitations/implicationsThis paper concentrates on supplier and buyer incentives but also the role of other supply chain members such as logistics providers could be analyzed to examine different factors for IOS implementation.Practical implicationsIf the buyer takes a cooperative approach to IOS integration, suppliers can be motivated to integrate tracking as a part of their own operations. This high‐level integration offers more options to improve the management and hence the performance of the whole supply chain than low‐level integration.Originality/valueIOS implementation projects are seldom studied from the perspectives of buyers and suppliers in the supply chain.