First-tier Suppliers Research Articles

La inclusión de las PyMEs en la Cadena de valor de la Industria Automotriz en México en el marco del Tratado Trans-Pacífico (ttp)

Based on the consideration of the importance and multiplicity of trade agreements signed by Mexico; the importance of the Automotive Industry in the country, as well as the importance of Small and Medium Enterprises (pymes) in employment at the national level, this paper pretends review the possibility of including SMEs (pymes) in the automotive global network, within a context of latest generation trade opening agreement (Trans-Pacific Partnership, tpp).The purpose of this article is to analyze the problem of the inclusion of SMEs (pymes) in the automotive value chain, within the opportunities that trade agreements can generate.Thus, starting from the point of view of the theory of oligopoly and the study of the global production networks, this paper review the general characteristics of the automotive global network, through the analysis of the assemblers, and first-tier and second-tier suppliers and the way in which decisions are taken to enter to the global network. It is also considered that assemblers and first-tier suppliers are both the leaders and, ultimately, are the decision makers about the entry of new players into network.Thus, given the characteristics of the product, the network and the way in which production processes and decision-making are carried out, this paper concludes it is unfeasible and even unattractive for SMEs (pymes) to be included in the automotive global production network.

Piggy in the Middle: How Direct Customer Power Affects First-Tier Suppliers’ Adoption of Socially Responsible Procurement Practices and Performance

Companies are faced with a choice of which type of power to use in their efforts to persuade their first-tier suppliers to adopt socially responsible procurement practices with key second-tier suppliers. However, we know little about how first-tier suppliers will react to different types of power and which are most effective in encouraging the adoption of socially responsible procurement practices. We are also ignorant of the impact of these practices on first-tier suppliers’ performance. This paper uses bases of power theory to examine the impact of buyer companies’ power usage (non-mediated and mediated) on first-tier suppliers’ adoption of socially responsible procurement practices (process-based and market-based) with their own (second-tier) suppliers. We surveyed managers responsible for sustainable supply chain management in 156 firms and analyzed the results using structural equation modeling. Our findings show that non-mediated power use (expert and referent) influences the adoption of process-based and market-based practices, while mediated power use (coercion, legitimacy, and reward) has no significant impact on the adoption of either type of practice. Additionally, we find that the adoption of market-based socially responsible procurement practices leads to enhanced performance for first-tier suppliers who adopt these practices with their second-tier suppliers.

Difusão de inovações entre organizações: evidências de um estudo na cadeia automobilística

Além do aumento da capacidade de inovação pelas empresas, deve haver também a preocupação em difundir as inovações ao longo das redes organizacionais, de forma a potencializar seus impactos no desempenho do sistema como um todo. Este trabalho objetivou analisar o processo de difusão de inovações em produtos entre os integrantes de uma cadeia de suprimentos da indústria automobilística. Buscou-se, por meio de um estudo de caso aprofundado envolvendo uma montadora e sete outras empresas de sua rede de fornecedores, descrever e esclarecer de que forma se dá o fenômeno da difusão de inovações entre os atores integrantes da cadeia de suprimentos analisada e quais são os aspectos relacionais e estruturais que influenciam esse processo. Concluiu-se que a construção de canais de comunicação efetivos para a ocorrência de fluxos de difusão dependerá da articulação entre os fatores intra e interorganizacionais, que determinarão a abertura dos demais integrantes em participar das práticas estabelecidas pela montadora para tal fim, as quais concentram os fluxos de difusão identificados, dada a posição central desta na cadeia. Apurou-se que esses canais, contudo, permanecem restritos ao alcance do grupo formado pelos fornecedores de primeiro nível, que demonstram possuir contextos organizacionais mais favoráveis à inovação e níveis mais elevados de integração com a montadora. Isso os coloca em um posicionamento privilegiado enquanto principais agentes do processo de introdução e disseminação de novas tecnologias no sistema.

Target setting for indirect processes: a new hybrid method for the continuous improvement management of indirect processes

Indirect processes are increasingly contributing to the total cost of production in highly competitive and technology-intensive industries. Unfortunately, they are less assessable than direct processes due to the complex organisational management structure. Therefore, companies seeking to make improvements in indirect areas need decision support methods to indicate which indirect process needs to be improved and to what extent. To facilitate this task, the target setting for indirect processes (TSIP) method has been developed following the constructive research approach. TSIP is a combination of process modelling, the analytic network process, activity-based management from managerial accounting research and the value control chart from target costing research in a kaizen budgeting framework. This new hybrid method is developed and validated in cooperation with a global first-tier automotive supplier.

Managing supply chain uncertainty with emerging ethical issues

Purpose The purpose of this paper is to empirically investigate effective management strategies for 14 sources of supply chain uncertainty, with a particular emphasis on uncertainties or strategies that involve ethical issues. Design/methodology/approach Manufacturing strategy theory, underpinned by alignment and contingency theory, is used as the theoretical foundation. Multi-case study data are collected from 12 companies in the Indonesian food industry, including four focal manufacturers, four first-tier suppliers, and four first-tier customers (retailers). Findings Within the context of appropriately aligned management strategies to address 14 sources of uncertainty, three ethical issues are empirically identified: first, collusion amongst suppliers to ration supplies and increase prices; second, unethical influences on government policy; and third, “abuse” of power by large retailers at the expense of smaller competitors. Joint purchasing is argued to be a key strategy for combatting the first of these ethical issues. Research limitations/implications The study is limited to the Indonesian food industry, and so further research is needed in other cultures/contexts. Practical implications Management strategies that aim to reduce an uncertainty at its source lead to better overall supply chain performance than strategies that merely cope with uncertainty, which only have an impact on firm-level performance. Social implications The ethical issues identified have implications for fair negotiations between customers and suppliers. Originality/value This study is unique in its in-depth case study-based empirical investigation of the management of multiple supply chain uncertainties; and in its discussion of ethical issues in this context.

Dynamic supplier selection model under two-echelon supply network

With the rise in competition levels and rapid changes in customer preferences, companies feel the pressure to create an efficient and effective base of suppliers in order to achieve the competitive advantage for them. The selection parameters of suppliers do not remain constant with respect to time and moreover; with highly fluctuating market demand, the suppliers are also expected to respond to it dynamically. This paper addresses a specific dynamic supplier selection problem (DSSP) under a two-echelon supply network (TESN) for the decision maker to allocate optimum order quantities to different levels of suppliers. The problem here considers a TESN with an integrated approach where the original equipment manufacturer (OEM) selects the first-tier suppliers and in turn with their opinion decides for the second-tier suppliers. Second-tier suppliers supply raw materials/parts/components to the first-tier suppliers, and then the first-tier suppliers supply the fabricated semi-finished product to OEM. In order to solve such a kind of problem, a mixed-integer non-linear programming (MINLP) is proposed to minimize the Total Cost (TC) of procurement for satisfying the OEM's demand. The problem incorporates parameters relevant to supplier's capacity, lead time, quality level of products, and transportation costs as a function of lead time. The model is validated through two cases with randomly generated data, and sensitivity analysis is conducted through Taguchi method using LINGO 15. This method not only helps to check the robustness of the parameters involved but also to set their optimum level. The analysis shows a significant reduction in the TC of procurement and the effect of each parameter on the TC are finally identified. The methodology adopted here can be extended to other organizations.

Implementing sustainability in multi-tier supply chains: Strategies and contingencies in managing sub-suppliers

Buying firms must pay increased attention to supply chain sustainability issues, as stakeholders might hold them responsible for non-sustainable supply chain activities. Frequently, sustainability problems occur upstream at the sub-supplier level. Building on the literature on multi-tier supply chains (MSCs), we investigated the sustainability management strategies of buying firms in the food, apparel, packaging, and consumer electronics with regard to second-tier suppliers and beyond. In particular, we analyzed seven cases of global MSCs and found four different characteristic MSC types—open, closed, third party, and “don't bother”. We identified three main factors—supply chain complexity, the sustainability management capabilities of the first-tier supplier, and the type of sustainability in focus (i.e., environmental or social sustainability)—that determine when and how buying firms actually extend their sustainability strategies to their sub-suppliers.

Watch the working capital of tier-two suppliers: a financial perspective of supply chain collaboration in the automotive industry

PurposeThis paper aims to examine how lack of financial cooperation damages the operational efficiency of supply chains. The thesis is that economic and technological forces are provoking increasing financial tensions that push companies to transfer their credit needs and inventory requirements to their weakest suppliers. Thus, what might initially seem positive from an individual perspective can in fact generate losses in production efficiency for the supply chain as a whole.Design/Methodology/approachThis paper uses official data collected from 116 first- and second-tier suppliers in the Spanish automotive components sector, covering nine years (2001-2009). The relationships between the key variables are analysed using panel data estimations.FindingsSignificant differences were found between the working capital (WC) of first- and second-tier companies, proving additionally that although this approach may temporarily improve the results of first-tier suppliers, it leads to lower production efficiency in plants throughout the value chain.Practical implicationsPractitioners should avoid short-sighted attitudes when organizing the supply chain on a cooperative basis, going beyond the conventional wisdom on physical and information flows between original equipment manufacturers and their suppliers to reach upstream stages and embracing financial considerations.Originality/valueThe paper takes a novel approach to the issue of inter-organizational collaboration in the supply chain, aiming to go beyond conventional Lean Supply practices. From an empirical point of view, while much of the research on the topic utilizes key informant insights collected using psychometric data collection techniques, this study uses different financial proxies collected from secondary panel data.

Supply chain social sustainability for developing nations: Evidence from India

Economic, environmental and social aspects of sustainability have been shown to span beyond organizational boundaries, indicating the importance of managing sustainability initiatives across the supply chain. Although scholars and practitioners focus a great deal of attention toward economic and environmental sustainability in supply chains, less attention is paid to social aspects. This is unfortunate, because social sustainability not only plays an important role in enabling other sustainability initiatives, but social injustices in one echelon of a supply chain can lead to significant losses for firms across the chain. Social issues have been especially problematic in developing nations, where abusive labor practices continue to negatively affect trading partners. This research seeks to disambiguate supply chain social sustainability in developing nations by uncovering relevant dimensions of social sustainability and resultant outcomes. Using semi-structured interview data collected from supply chain executives in Indian manufacturing companies, this research uncovers dimensions of social sustainability in terms of not only the focal firm, but also first-tier suppliers and customers. Each of these dimensions is then associated to potential performance outcomes. The findings not only provide a baseline for future research, but help practitioners understand where to focus their attention to enhance social sustainability in their supply chains.

Suppliers as Stewards? Managing Social Standards in First- and Second-Tier Suppliers

Buyer–supplier relationships are often framed as principal–agent relationships, based on contractual arrangements that temporarily align the goals of both parties. The underlying notion is that the relationship between buyers and suppliers is adversarial in nature and that the supplier, acting in the role of the agent, will take advantage of the principal if not sufficiently controlled. We propose that there is empirically also another type of partnership which reflects the propositions of stewardship theory. According to this theory, suppliers are motivated to work autonomously towards contractually agreed objectives. We analyse how the agency and stewardship theories differ regarding their descriptions of autonomy, motivation, identification, authority, stakeholder orientation and short- versus long-term collaboration. We analyse the case of a first-tier supplier and four second-tier suppliers situated in Turkey in the area of Istanbul which collaborate with the aim of improving their social and environmental performance. The results show that the relationship between the partners in this case has become more collaborative over time and can now be described in terms of stewardship theory rather than in terms of agency theory. We conclude that the distinction between agency and stewardship relationships is empirically meaningful in the context of supplier–buyer relationships and adds a new aspect to our understanding of how to achieve more sustainable supply chains.

Improving Performance in Supplier Relationship Management with Lower- Tier Supplier Visibility and Management

1.IntroductionIn today's business reality, what we now have are the continuous and rapid growths and transformations of regional/national supply networks to complex global supply systems (e.g., Lambert & Cooper, 2000; Pilbeam et al., 2012; Wilhelm et al., 2016). Companies are interconnected and interdependent on each other across regions and countries. For example, Ford Motor Company maintains over 50 plants worldwide, which annually utilize 35 billion parts to produce six million cars and trucks with up to 10 tiers of suppliers between itself and its raw materials (Simchi-Levi et al., 2015). What is happening in one company may have profound and domino impact on other companies along supply chains. In other words, supply chains, in reality, involve multiple tiers, beyond the dyadic structure in most papers (e.g., Lambert & Cooper, 2000; Pilbeam et al., 2012; Wilhelm et al., 2016).The first-tier suppliers directly supply materials and services to the purchasing company while they also buy supplies from their own suppliers. These first-tier suppliers' suppliers are, to be specific, second-tier suppliers of the original purchasing company. Due to the obvious encompassing nature of supply chains, a supplier may impact others across multiple tiers (e.g., Simchi-Levi et al., 2015; Wilhelm et al., 2016). Recent incidents ranging from toys contaminated with lead paint and salmonella risk in peanut butter to sticking accelerator pedals in some cars indicate that consumers and firms are vulnerable to many quality and other risks that may occur in a global supply chain or in any of its multiple tiers (e.g., Simchi-Levi et al., 2015; Wilhelm et al., 2016).Supplier relationship management (SRM) has received significant attention from both industry and academia (Lambert & Cooper, 2000; Humphreys et al., 2001; Day et al., 2007; Atkinson, 2009; Monczka et al., 2009; Lambert & Schwieterman, 2012). Companies can achieve various benefits from SRM including higher quality, lower costs, quicker delivery, improved forecasting, better collaboration, and win-win relationships with suppliers. Plentiful research on SRM with respect to supplier identification, supplier evaluation, supplier selection, supplier performance management, information sharing, and collaboration can be found in Avery (2007), Day et al. (2008), Atkinson (2009), Monczka et al. (2009), Olorunniwo & Li (2010), and Lambert & Schwieterman (2012). However most of them are limited to the first-tier suppliers.Briscoe et al. (2004) indicate that quality could be improved if the purchasing companies would know about the capabilities of their lower-tier suppliers. Christopher and Lee (2004) point out that the visibility is one of the key components to enhancing supply chain confidence, thus mitigating the risks. Lambert & Schwieterman (2012) also show eight macro business processes across multiple tiers. Jolayemi et al. (2013) develop a composite process for establishing and for effectively and continuously maintaining end-to-end visibility in multiple multi-tier supplier network (MMTSN) systems. They reason that end-to-end multi-tier supplier visibility has to be established and continuously maintained before supply chain integration, collaboration, and risk reduction/elimination. Carter et al. (2015) theorize that a supply chain is bounded by the visible horizon of the focal company, subject to attenuation, where distance is based on factors including physical distance, cultural distance, and closeness centrality.A recent empirical research conducted by Olorunniwo et al. (2014) reveal six approaches to engender lower-tier supplier visibility. These are lower-tier supplier certification, dual function, strict contract with lower-tier supplier, multiple function oversight, empowerment with tightened control, and deep-down multi-tier probing and intra supplier collaboration (Olorunniwo et al., 2013). Olorunniwo et al. …

Modeling Loss-Propagation in the Global Supply Network: The Dynamic Agent-Based Model Acclimate

World markets are highly interlinked and local economies extensively rely on global supply and value chains. Consequently, local production disruptions, for instance caused by extreme weather events, are likely to induce indirect losses along supply chains with potentially global repercussions. These complex loss dynamics represent a challenge for comprehensive disaster risk assessments. Here, we introduce the numerical agent-based model acclimate designed to analyze the cascading of economic losses in the global supply network. Using national sectors as agents, we apply the model to study the global propagation of losses induced by stylized disasters. We find that indirect losses can become comparable in size to direct ones, but can be efficiently mitigated by warehousing and idle capacities. Consequently, a comprehensive risk assessment cannot focus solely on first-tier suppliers, but has to take the whole supply chain into account. To render the supply network climate-proof, national adaptation policies have to be complemented by international adaptation efforts. In that regard, our model can be employed to assess reasonable leverage points and to identify dynamic bottlenecks inaccessible to static analyses.

Requirements for Product-service Description at e-marketplaces in the Manufacturing Domain

Industrial procurement is exposed to an increased service-oriented supplier market. However, industrial e-marketplaces for product-services that are accepted by buying experts are rare. Possible buyer benefits of e-markets such as access to a wider range of markets, accumulation of required information, and increase of market transparency cannot be utilized. Currently, product-services are at best traded within closed silos that offer mainly manual search and comparison capabilities through a web storefront. A lack of existing “generic” industry-sector-specific concepts for service description is a main problem that the potential of e-commerce is not utilized for product-services. This article analyzes the requirements for service representation at e-markets regarding the manufacturing domain. State-of-the-art concepts of business service description are considered at the beginning of this research. Because of the heterogeneity of product-services, a case study was conducted in order to identify relevant product-services in the manufacturing domain. In order to study a real case scenario, a “first-tier supplier” in the automotive industry was used in this research study. This company is specialized in systems engineering and systems serial assembly. Typical product-services of this company source are manufactured products needed for serial production, for example, casting, milling, turning, or injecting molding parts, alongside a wide range of services. Investigating the professional purchasing department was necessary to analyze the requirements in service description throughout the complete buying process, commencing with the conceptual product design stage until the serial product delivery.

De-Embedding Buyer-Supplier Relationships: A Complexity Perspective

Research on buyer-supplier relationships has debated the advantages and disadvantages of embedded ties. We join this debate by building theory on the performance implications of temporarily relaxing embedded buyer-supplier relationships-a phenomenon we refer to as de-embedding. First, we conducted a case study of the relationship between Nissan and a strategic first-tier supplier. This case study suggests that de-embedding can lead to higher performance for both the buyer and supplier. To analyze and explain these performance implications we use complexity theory and its fundamental notion of search as a theoretical perspective. Second, grounded in the case and using our complexity theory perspective, we built an agent-based simulation model to generalize and augment the theory emerging from our case study. Our simulation experiments corroborate the case findings, and shed additional light on the trade-offs pertaining to de-embedding, as well as on the pivotal role of complexity as a contingency factor.

Sustainability in multi-tier supply chains: Understanding the double agency role of the first-tier supplier

In light of the growing complexity of globally dispersed, multi-tier supply chains, the involvement of first-tier suppliers has become instrumental in the quest for achieving sustainability compliance along the supply chain. We describe this new responsibility as the double agency role. We employ agency and institutional theory arguments to explore the conditions under which first-tier suppliers will act as agents who fulfill the lead firm's sustainability requirements (i.e., the primary agency role) and implement these requirements in their suppliers' operations (i.e., the secondary agency role). The findings from three in-depth case studies embedded in different institutional contexts highlight the importance for lead firms to incentivize each agency role separately and to reduce information asymmetries, particularly at the second-tier level. In addition, our inductive analysis reveals several contingency factors that influence the coupling of the secondary agency role of the first-tier supplier. These factors include resource availability at the first-tier supplier's firm, the lead firm's focus on the triple-bottom-line dimension (i.e., environmental or social), the lead firm's use of power, and the lead firm's internal alignment of the sustainability and purchasing function. We integrate our findings in a conceptual framework that advances the research agenda on multi-tier sustainable supply chains, and we subsequently outline the practical implications of assigning the double agency role to first tier suppliers.

A visão de um fornecedor-chave sobre a colaboração com a montadora

Resumo Este trabalho teve como objetivo descrever e discutir os elementos do processo de colaboração entre uma montadora de automóveis e um fornecedor-chave, do ponto de vista deste último. A indústria automotiva muito contribuiu para impulsionar a gestão da cadeia de suprimentos desde os anos 1990, mas a literatura nacional não descreve que patamar de maturidade tal setor industrial alcançou com os principais fornecedores de primeira camada, especialmente sob a ótica do abastecimento. Visando realizar um primeiro passo na compreensão deste fenômeno, utilizou-se do método de estudo de caso exploratório-descritivo. Os resultados indicam a existência de uma colaboração limitada ao nível operacional e de maturidade reduzida. A confiança, um input vital para o sucesso da gestão colaborativa, mostrou-se restrita, evidenciando, em alguns momentos, um comportamento ganha-perde. Pôde-se inferir que o primeiro passo em busca do estabelecimento de um relacionamento colaborativo foi realizado, no entanto existem muitas barreiras a serem superadas na consolidação de um verdadeiro relacionamento colaborativo. Isto ocorre mesmo em um ambiente de empresas ditas de classe mundial e em um setor industrial deveras sofisticado, como o automobilístico.

Exploring information sharing in the extended supply chain: an interdependence perspective

Purpose– This paper aims to empirically explore demand-related information sharing in the extended supply chain.Design/methodology/approach– Through a single, embedded case design, a range of methods are used to collect data from companies representing three different supply chain tiers, including focal company, first-tier suppliers and first-tier customers. The collected data are analysed through the theoretical lens of interdependence.Findings– The findings indicate that the supply chain actors adapt information sharing to the pooled, serial or reciprocal type of interdependence. Information sharing is thus increased with key dyadic partners representing, for example, unique offerings and high market shares as percentage of total expenditure/sales. The study also unearths several barriers to information sharing beyond dyadic ties, including problems related to dis-aggregated, misinterpreted and/or incomplete information.Research limitations/implications– The study empirically contributes to the existing literature by exploring information sharing in the extended supply chain and by suggesting different approaches to information sharing depending on the type and intensity of interdependence between supply chain partners. Further, the paper contributes to the existing literature on barriers of information sharing in supply chains by identifying barriers specific to multi-tier information sharing. “Meta-information” (i.e. information about the shared information) is needed to overcome some of the barriers of sharing information in cases of weak, pooled interdependencies in the supply chain.Practical implications– Similar to previous empirical research, this exploratory study indicates that companies, in general, refrain from sharing information beyond dyadic ties. Supply chain managers would instead mostly focus on stronger, reciprocal interdependencies and emphasise dyadic information sharing. To further guide managers, a demand profiling framework considering market share and demand uncertainty is presented. It may be interesting to engage in multi-tier information sharing in particular cases where strong interdependence exists between three or more partners.Originality/value– This study contributes to existing research on information sharing in supply chains by empirically studying information sharing in an extended supply chain, applying interdependence theory as its analytical framework and unearthing several barriers that are specific to multi-tier information sharing.

Dawn of Industrialisation? The Indonesian Automotive Industry

This article traces the development of industrial policy towards the Indonesian motor industry within the automotive global value chain. Showing the current dominance of Japanese motor assemblers in Indonesia, it notes the rather undeveloped nature of the locally owned supporting industry, particularly compared with that of neighbouring Thailand. Most investment in auto-parts production has been by foreigners. Nevertheless, Indonesia's rapid domestic-market growth has allowed it to attract foreign automotive investment without having to offer excessively generous incentives. While the continued entry of foreign suppliers of auto parts into Indonesia offers opportunities for local suppliers to upgrade their productive capabilities, it also limits their chances of becoming first-tier suppliers themselves. Japanese automotive investors are optimistic about Indonesia's export potential, more so than Malaysia's.

Supplier Selection: Impact of Multi-Tier Supplier Visibility

1. IntroductionIn order to survive in a global business environment a firm must maintain suppliers that are dependable and support the key mission of the firm. Usually a firm maintains a form of supplier relationship management (SRM). Most supply chains are multi-tier supplier networks. For example, the first-tier supplier is the OEM's immediate supplier. The OEM's second-tier suppliers are their first-tier suppliers' immediate suppliers. According to Jolayemi et al., 2013, maintaining lower-tier supplier visibility (LTSV) in SRM encompasses the ability to - on a continuous basis - know and understand the environmental situations, the financial health, the capabilities, the operational performance, the practices, and the strategic and operational activities of all tier suppliers who are the OEM's critical business links.In order to properly implement an SRM, OEM firms must distinguish which suppliers are more important to the core and continuity of its business. In other words, firms usually categorize or stratify their first-tier suppliers (Kraljic, 1983; Monczka et al., 2009; Day et al., 2010; Li et al., 2014). Although various stratification schemes exist in the literature, the most common are strategic, custom, collaborative and commodity suppliers (Li et al., 2014). When selecting suppliers, firms use a set of evaluation criteria. The number of such supplier selection criteria that have been identified and used in the literature far exceeds 50 (Chen, 2011; Hsu et al., 2006; Kannan & Tan, 2002; Dickson 1996; Weber et al, 1991). However, the emphasis put on various criteria may differ based on whether the supplier is strategic, collaborative, and custom or commodity (Li et al., 2014).Another dimension is the practice of maintaining lower-tier supplier visibility (LTSV) whereby a firm may select its first-tier suppliers by also taking into account the performance and capabilities of their lower-tier suppliers (Jolayemi et al., 2013). For example, a firm that emphasizes quality and reliability of supply may want to investigate more these issues at the lower-tier supplier level of its strategic suppliers. Therefore, the questions that form the focus of this study are:1. Would a company that seeks lower-tier visibility (LTSV) in evaluating its first tier suppliers have significantly different expectations of some of the evaluation criteria than a firm that does not seek LTSV?2. Would the significantly different expectations in (1) above, if they exist, be maintained for a given evaluation criterion for all types of stratified supplier levels (strategic, custom, collaborative and commodity suppliers)?2. BackgroundThe three issues that converge to form the basis of this research are (1) supplier selection criteria, (2) supplier stratification and (3) seeking lower-tier visibility in a multi-tier supply chains. This section will provide a brief review of the previous work in each of the three areas. It is pertinent to state that there is a rich literature in each of (1) and (2), but much fewer in (3). Therefore, this paper will not provide any exhaustive background in (1) and (2); instead, it will provide a brief overview of some directly related work sufficient to show how the issues addressed in this paper are impacted. It is to be noted here that many elements of literature review presented in this section are common to those provided by co-authors on related research as published in Jolayemi et al. (2013), Fan et al (2013) and Li et al. (2014).2.1. Supplier Selection CriteriaThe literature on supplier selection is extensive, comprising of both empirical studies of actual practice and prescriptive studies of how suppliers should be selected. However, there is lack of clarity over what exactly constitutes effective supplier selection and the appropriate criteria to use in different situations (Hsu et al., 2006). Consequently, the number of supplier selection criteria that have been identified and used in the literature far exceeds 50. …

Drivers of Supplier Sustainability: Moving Beyond Compliance to Commitment

Mounting pressure for sustainable business practices has led to a greatly increased focus on highlighting sustainability drivers throughout the supply chain. While the literature has concentrated on why downstream original equipment manufacturers (OEMs) and retailers become “sustainable,” much less is known regarding why and how upstream suppliers implement sustainability practices. Based on findings from a cross‐case analysis of eight first‐tier (FT) suppliers and an integration of resource dependency theory (RDT), this study explores the drivers and mechanisms of FT supplier engagement in sustainable supply chain management. Suppliers need to understand the sustainability priorities of customers and stakeholders to derive the effective focus and depth of further upstream integration with subsuppliers. Therefore, the integration between the two functions that manage the relevant external interfaces, namely marketing (downstream and stakeholder communication) and procurement (upstream), appears to be the essential cornerstone to move beyond FT supplier compliance to actual commitment to sustainability practices. We present findings on how (1) stakeholder‐related, (2) process‐related, and (3) product‐related drivers influence the choice and effectiveness of the procurement–marketing integration (PM integration) mechanisms. Stakeholder pressures are considered to be the principal drivers of sustainability efforts. However, on their own, they rarely provide sufficient grounds for permanent and embedded PM integration initiatives at FT suppliers. Evidence suggests that suppliers' commitment to PM integration is motivated by the opportunity to leverage sustainability initiatives in their product offerings and sustainability certificates recognizable by customers and secondary stakeholders.