Original Equipment Manufacturing Suppliers Research Articles

“Fulfilled by Amazon”: A Strategic Perspective of Competition at the e-Commerce Platform

Problem definition: This paper examines the economic effects of the fulfillment services offered by Amazon (FBA) to the third-party sellers on its retail platform. Academic/practical relevance: Logistics is critical for e-commerce. It is intriguing that the third-party sellers that use FBA may directly compete with Amazon. By FBA, their service levels are substantially improved and so is their competitiveness. Such a phenomenon has been little investigated in prior literature. Methodology: We develop a strategic competition model where Amazon and a representative third-party seller engage in both price and service competition. Results: Interestingly, we find that although FBA may intensify the service competition between Amazon and the third-party seller, it can mitigate their price competition besides the direct revenue Amazon collects from the service. The latter effects dominate the former when the cross-service sensitivity of the consumers is either sufficiently low or sufficiently high. Therefore, not only the third-party sellers but also Amazon may benefit from FBA. Moreover, because the sales of Amazon’s products may increase because of FBA, its OEM (original equipment manufacturer) supplier may gain from FBA also. These findings extend to the settings where the third-party seller is Amazon’s OEM supplier, cross-price and cross-service sensitivities are correlated, or the parties set their retail prices sequentially. Managerial implications: Our analysis provides insights about when FBA is more likely to be beneficial and when it can be harmful. They are useful for understanding the impacts of FBA on both Amazon and the third-party sellers.

Roles of strategic orientations in radical product innovation

PurposeBecause of relatively short product life cycles, radical product innovation has more significant influences on firms' competitive advantages in dynamic environments. Past studies identified various cultural characteristics of a firm, which are key drivers of developing radical product innovation on an ongoing basis. However, few studies have investigated the interaction between organizational culture and external market feedback in developing radical product innovation.Design/methodology/approachTo address the identified research gaps, this empirical research began by presenting conceptual foundations that lead to the hypothesized model and then analyzed survey data from 201 original equipment manufacturer suppliers in search of evidence supporting the hypotheses.FindingsThe results suggested that a supplier's entrepreneurial orientation and long-term orientation significantly and positively affected proactive market orientation, with proactive market orientation significantly and positively correlated with radical product innovation. The study confirmed that a proactive market orientation is essential in order for entrepreneurial orientation and long-term orientation to affect radical product innovation. Additionally, this study found that supplier–customer electronic integration has a moderating effect on proactive market orientation and radical product innovation.Originality/valueRadical product innovation is a topic of great interest for both academia and industry, yet a comprehensive conceptual framework for its antecedents is still lacking. To fill this theoretical gap, the present study extended the studies on radical product innovation and examined the relationship between different strategic orientation types in terms of supplier–customer strategic behaviors to determine how suppliers enhance radical product innovation.

A Best Practice Guideline for Inspecting Precision Machined Parts by Using Several Coordinate Measuring Machines (CMMs)

Currently in Thailand, original equipment manufacturers (OEM) who produce precision-machined parts face a serious problem about product rejection from customers. This is because measuring results from the OEM supplier differ from the measuring results from the OEM buyer. Normally, for precision-machined parts, OEM suppliers and OEM buyers use CMM machines as an inspection tool. One major cause of the difference in measurements is that suppliers and buyers use different CMM machine, operators and measuring methods. In order to mitigate the difference in measurements, the standard guideline for measuring precision-machined parts by CMM machines needs to be improved. In this research, the guideline was developed by studying the best practices of five successful companies, who could minimize rejection due to the differences in the CMM machine operators and measuring methods. Validation results indicated that when manufacturers who had precision problems used this guideline, the product rejection could decreased significantly.

Electronic integration and capability widening for OEM suppliers

PurposeThe purpose of this paper is to investigate the effect of original equipment manufacturing (OEM) suppliers’ electronic integration with global customers on their capability widening, following the literature on electronic integration, firm innovativeness, product modularity and dynamic capabilities. It also examines the moderating roles of supplier innovativeness and product modularity in the proposed relationship.Design/methodology/approachThis study conducts empirical examination on a sample of OEM suppliers in Taiwan. It collects 201 self-reported responses via mailed surveys of 1,069 electronics companies listed in the 5000 Largest Firms in Taiwan, and the archival data are obtained from the Taiwan Economic Journal database.FindingsThe results show that electronic integration with global customers affects capability widening negatively, whereas supplier innovativeness affects capability widening positively. In addition, product modularity plays a moderating role in the relationship between electronic integration and capability widening.Research limitations/implicationsThis study contributes to the electronic integration literature by providing empirical evidences on how OEM suppliers’ electronic integration affects their capability widening. This study also adds to the supply chain management literature by demonstrating the relationship between OEM suppliers’ innovativeness and their move into higher value-added activities, as well as how product modularity interplays with electronic integration between customers and suppliers on suppliers’ capability widening in global supplier‒customer relationships.Practical implicationsFor OEM suppliers with a low level of product modularity, they may widen their capabilities by exploring other value-added activities (e.g. original design manufacturing or original brand manufacturing). For OEM suppliers with a high level of product modularity, the improvement of their manufacturing capabilities is a helpful approach to create competitive advantage.Originality/valueThis study is one of the first to examine the interplay between electronic integration and product modularity on capability widening of OEM suppliers from an emerging market. Meanwhile, this study provides support for the relationship between supplier innovativeness and innovative activities in the global supply chain context.

An agent-based approach to evaluate collaborative strategies in milk-run OEM operations

The management of transport operations is a promising field for agent-based applications. Acting in a collaborative way, the agents can be seen as a multi-agent system that enables vehicles to handle new information perceived during the operation along cargo collecting routes. Traditional research in this field usually focus on the servicing of new transportation demands, in this paper the agents could detect the presence of unexpected traffic congestions and deciding about the transference of tasks to others vehicles. This article evaluates collaborative strategies for applying the agent-based approach to a dynamic vehicle routing formulation, where vehicles are assigned to picking-up components and parts from Original Equipment Manufacturer suppliers. A sequential probabilistic ratio test is used to predict eventual unperformed collecting tasks. Two evaluating criteria are simultaneously used to select a specific collaborative strategy: the service level, represented by the average percentage of performed tasks, plus the average daily operating cost of the vehicle fleet. The evaluation of collaboration strategies between vehicles allowed understand the functioning of distributed decision making, contributing to the adoption of autonomous control methods of transportation operations.

Original equipment manufacturer (OEM)-supplier integration to prepare for production ramp-up

PurposeAlthough prior research provides evidence that production ramp-up is often disrupted by supplier-related problems, it fails to discuss how the original equipment manufacturer (OEM) and various types of suppliers integrate their functions and operations to secure preparations for production ramp-up. The purpose of this paper is to investigate OEM–supplier integration in a new product development (NPD) project to prepare for production ramp-up.Design/methodology/approachThe results presented in this paper are based on a real-time, longitudinal study of a single collaborative NPD project in the mechanical engineering industry. The NPD project involves seven suppliers and it is carried out in a large Swedish company (the OEM) and fits the theory-elaborating approach of this research.FindingsThis study argues that the aspect of timing in OEM–supplier integration, the OEM’s research and development (R&D) attitude toward collaboration and the OEM’s (R&D) operating procedure are challenges affecting the preparation for production ramp-up. The following three mechanisms to facilitate OEM–supplier integration in order to prepare for production ramp-up are also discussed: the mediator’s role, the OEM’s face-to-face meeting at the project level and suppliers’ formal face-to-face meetings with the OEM and internally.Originality/valueThis paper elaborates on and extends prior research on production ramp-up by conducting an empirical analysis that incorporates supplier integration in NPD. It bridges the gap between the literature on production ramp-up and on supplier integration in NPD and clearly indicates that supplier integration is an important prerequisite for successful production ramp-up.

Suppliers’ local network embeddedness and buyers’ joint innovation

PurposeThe purpose of this paper is to investigate the effects of original equipment manufacturing suppliers’ local network embeddedness on buyers’ relative attention and joint innovation through service innovation competence.Design/methodology/approachA structural equation model was analyzed using AMOS 21 with data derived from 165 buyers in the Taiwanese electronics industry.FindingsFrom the buyer perspective, suppliers with embedded network relationships in emerging markets are perceived to be service oriented and to have relative attention and joint innovation that are attractive to buyers. In addition, the findings of empirical testing conducted in this study suggest that perceived exploitative and explorative service innovation competence partially mediate the relationship between perceived network embeddedness and relative attention, while explorative service innovation competence partially mediates the influence of perceived network embeddedness on buyers’ joint innovation.Originality/valueThis study innovatively employed a buyer perspective to examine the servitization of manufacturing suppliers and the effects of this on the buyer–supplier relationship, providing new insights into the role of service innovation competence as well as important theoretical and managerial implications.

Coordination Mechanisms and Overseas Knowledge Acquisition for Chinese Suppliers: The Contingent Impact of Production Mode and Contractual Governance

Abstract This article examines how production mode and contractual governance moderate the effects of two distinct interfirm coordination mechanisms on overseas knowledge acquisition for suppliers in offshore cooperation. An investigation of 204 offshore suppliers in China finds that the positive effect of technology-based coordination mechanism (TCM) on overseas knowledge acquisition for an original equipment manufacturing (OEM) supplier is stronger than that for an original design manufacturing (ODM) supplier. By contrast, the positive effect of personal coordination mechanism (PCM) on overseas knowledge acquisition for an ODM supplier is stronger than that for an OEM supplier. Besides, as the degree of contractual control grows, the positive effect of TCM on overseas knowledge acquisition becomes stronger, whereas the positive effect of PCM becomes weaker. Further, when considering coordination, production, and governance jointly, we find that the strengthening effect of contractual control on the influence of TCM for OEM is stronger than that for ODM, and that the weakening effect of contractual control on the influence of PCM for ODM is stronger than that for OEM.

The Impacts of Competence-Based Marketing Capabilities

For original equipment manufacturing suppliers, competences must be identified and communicated to ensure that they are successfully translated into competitive advantages. The present study aims t...

Multinational enterprise buyers’ choices for extending corporate social responsibility practices to suppliers in emerging countries: A multi-method study

When managing a global supply chain, one critical challenge encountered by multinational enterprises (MNEs) is the extension of corporate social responsibility (CSR) practices to suppliers in emerging countries. In this study, we use a multi-method approach to explore 1) the nature of suppliers’ CSR heterogeneity based on the various components of CSR in emerging countries, and 2) the choices of MNEs for extending CSR to different types of suppliers in dynamic environments. We begin with a survey of Chinese original equipment manufacturers (OEMs) servicing MNEs to examine how these suppliers vary in CSR implementation based on cluster analysis results. To understand the choices made by MNE buyers for extending CSR to their OEM suppliers, we conduct an agent-based simulation study considering the dynamics of a system with multiple agents (i.e., MNE buyers, OEM suppliers, and the government). The cluster analysis results show that CSR practices implemented by Chinese OEMs differ significantly from one another and can be classified into three clusters (i.e., Leader, Follower, and Laggard). The simulation results provide insights into how the adaption costs (e.g., upgrade cost and cost saved by downgrading) and punitive (inspection with possible penalties) and supportive (subsidies) tactics adopted by the government affect the choices made by MNE buyers for extending CSR practices to suppliers in emerging countries. Moreover, we demonstrate when supportive tactics are more effective than punitive tactics under varying conditions and extend the model to investigate the consequences of switching between these two types of tactics in a sequential simulation.

The influence of collaborative competence and service innovation on manufacturers’ competitive advantage

PurposeWhile service innovation is an important issue for manufacturers, relatively little research lends empirical support to the perspective that service innovation enhanced by collaborative competence may impact the competitive advantage of original equipment manufacturing (OEM) suppliers. This study aims to advance a service-dominant logic by empirically investigating the linkage between collaborative competence, service innovation and competitive advantage for OEM suppliers.Design/methodology/approachSurveys were completed by representatives of 142 Taiwanese OEM suppliers in the electronics industry.FindingsThe results of path analysis suggest that information competence and coordination competence have positive effects on both exploitative service innovation and explorative service innovation. There only appears to be a significant relationship between joint innovation competence and explorative service innovation. Furthermore, two-pronged service innovations contribute to a supplier’s internal and external competitive advantage.Originality/valueThe empirical findings have important research and practical implications that help elucidate the antecedents and outcomes of OEM suppliers’ service innovation.

Market orientation, competence-based marketing capability and firm development

Purpose - The topic of competence-based marketing has attracted much attention from business scholars, further exploration of competence-based marketing capability is especially important. The main purpose of this study is to address and investigate the relationship between market orientation and original equipment manufacturer (OEM) suppliers’ competence-based marketing capability, along with the impact of competence-based marketing capability on product-linked development and relation-linked development. Methodology - Based on a sample of 119 Taiwan's OEM suppliers, we used Smart PLS 2.0 to perform SEM and to evaluate both the quality of the measurement model and the interrelationships of the constructs. Findings - Empirical testing of 119 OEM suppliers suggests that a proactive market orientation has a positive influence on the development of competence-based marketing capabilities. Furthermore, the development of competence-based marketing capability leads OEM suppliers to engage in product-linked and relationship-linked development. Conclusion - The topic of competence marketing has attracted much attention from business scholars; however, no empirical studies have measured companies’ capabilities in competence marketing. Therefore, the framework of this study followed linkages developed from the resource-based view (strategic orientation → organizational capabilities → organizational performance) for the purpose of exploring the antecedents and effects of CBMC.

The use of asset specific investments to increase customer dependence: A study of OEM suppliers

Making asset specific investments without sufficient economic safeguards is usually seen as a poor managerial practice according to transaction cost economics. However, in practice, many suppliers still invest in asset specificity to satisfy their major customers' requirements, who do not make sufficient investment commitments. The objective of this study is to explore how suppliers that make asset-specific investments maintain long-term relationships with their customers and even make their customers reliant on them. Empirical analysis of data from a sample of Taiwanese original equipment manufacturer (OEM) suppliers shows a significant positive indirect effect of asset specificity on the dependence of customers on suppliers, mediated through joint learning capacity. In addition, a positive link between a proactive market orientation and the degree of customer dependence on the supplier was found. This investigation finds evidence that joint learning capacity and proactive market orientation play critical roles in linking asset specificity to customer dependence.

Interactions, innovation, and services

ABSTRACTAlthough research has acknowledged the importance of supplier–buyer relationships for goods innovation, empirical evidence on the extent and nature of the effects of original equipment manufacturing (OEM) supplier–buyer relationships on service innovation remains scarce. Based on a survey of 152 suppliers in Taiwan, this study concludes that the interaction orientation of OEM suppliers is a key factor influencing the development of two competencies: joint innovation competence and cross-functional information dissemination competence. These two competencies contribute to OEM suppliers’ exploitative service innovation and explorative service innovation, respectively. In other words, applying a resource-based view, this study provides clarity regarding the linkages shown below (an organization’s strategic orientation influences its development of organizational capabilities and results in organizational performance) for the purpose of exploring the relationship between interaction orientation and service innovation.

Impacts of exchange rate risk and transportation cost on a globally coordinated production plan for an OEM

Transportation costs and exchange rate risk have been significant factors in selection of suppliers in global supply chain management. In this study, we investigate the effects of both of these factors on a global supply chain planner's strategic decisions on working with local or international suppliers. We develop an optimisation model to analyse the impacts of transportation cost and exchange rate risks and show for a coordinated production plan for an original equipment manufacturer (OEM), 1st tier and 2nd tier suppliers located locally or globally. We specifically focus on China (Pearl River Delta and Inland regions), India (Chennai) and Mexico (Baja) for the location of the OEM and its suppliers. We show that appreciation of Chinese currency and higher oil prices would make OEMs in Inland region of China and Mexico more attractive, respectively. India is very cost effective for the global strategic planner to locate OEM if oil prices decrease significantly. Moreover, we investigate the strategic benefit of relocating the OEM, 1st tier and 2nd tier suppliers for a global supply chain planner.

Antecedents of SCM practices in ASEAN automotive industry

Purpose– The purpose of this paper is to examine how corporate entrepreneurship, social capital and resources contribute to the implementation of supply chain management (SCM) practices in Association for Southeast Asian Nations (ASEAN) automotive industry.Design/methodology/approach– A conceptual framework of antecedents of SCM practices and several research hypotheses were proposed. Hypotheses were tested with data from original equipment manufacturers suppliers in the ASEAN automotive manufacturing industry. Confirmatory factor analysis and multiple linear regressions were used to test the hypotheses.Findings– The analysis of survey data suggests that corporate entrepreneurship theory and social capital theory play a key role in motivating and preceding SCM practices. However, traditional resource-based explanations of SCM decisions by western manufacturing firms do not always apply to ASEAN automotive suppliers.Research limitations/implications– This paper may have excluded some crucial constructs that affect SCM practices. This study also suffers from the common limitations of empirical research, including the reliance on a single respondent. Prior studies suggest that firms with better resources are likely to create more effective SCM operations. This study contributes to the literature by adding behavioral explanations to the research stream. That is, drawing on corporate entrepreneurship and social capital theories, the authors’ link firm behavioral factors to their resources and thus help explains SCM practices.Practical implications– This study provides some notable managerial implications. The study shows that to implement successful SCM practices, emerging ASEAN automotive suppliers should exploit both the internal and external antecedents of SCM. Internal antecedent in the form of corporate entrepreneurship that measures a firm's innovativeness and proactiveness, and external antecedent in the form of social capital that measures a firm's relationships with its supply chain members are important factors that affect SCM practices. Also, these factors are important in counteracting the adverse forces of the environmental uncertainty to improve performance.Originality/value– These findings extend prior research by establishing the importance of the relationships between SCM practices and its antecedents. Also, this is one of the few studies that specifically examined the ASEAN automotive industry.

OEM supplier impact on buyer competence development

Purpose – The purpose of this paper is to examine whether original equipment manufacturing (OEM) suppliers can affect the development of buyer competence by manipulating two environmental factors: the development of competence in OEM supplier's external business relationships and the competitive pressure of the OEM supplier environment. Design/methodology/approach – The sample population consisted of 1,000 OEM suppliers in the Taiwanese information technology (IT) industry. Partial least squares analysis was used to examine the causal relationships among the variables. Findings – The empirical results revealed that the pressure of the external environment pushes OEM suppliers to develop competence through external business relationships. This competence in turn affects the development of buyer competence. Furthermore, OEM supplier impact on buyer competence development is positively associated with the importance of OEM supplier in outsourcing relationship. Originality/value – The paper empirically examines whether the impacts of the OEM supplier derived from different sourced environments play distinct roles in the development of the OEM supplier's power.

The impact of the OEM supplier on buyer competence and performance

In this paper we examine whether original equipment manufacturing (OEM) suppliers can affect the development of buyer competence by manipulating two environmental factors: the development of compet...

Cause mapping of simple and complex marketing strategies

Business-to-business relationships between original equipment manufacturing (OEM) suppliers and customers (brand name buyers) are an often studied issue; however, theoretical and empirical studies seldom focus solely on the suppliers' perspective. This paper examines OEM suppliers' perspectives and reports on the phenomenon of some suppliers choosing single customers while others focus on multiple customers to achieve the adaptive selling as their profit making that cause the parsimonious and complex customer strategies through the empirical studies. The study also uses mental models to analyze two specific cases of OEM suppliers within Taiwan's shoe industry in relation to what kinds of environmental changes that successful managers apply to their parsimonious and complex customer strategies. Mental models are used to map the evolution of these two OEM suppliers' customer strategies, along with their culture, competitive advantages, cooperation relationships, and environment. The study explores these five core propositions to show suppliers to employ different approach to customer strategies, and map the evolution of strategic development of Taiwan shoes companies from the 1970s through to the present day.

La colaboración en I+D en la industria auxiliar del automóvil en Cataluña. Análisis según el tamaño empresarial

This article discusses theoretically why companies cooperate in carrying out their R&D, and doing so with several external agents. From a sample of original equipment manufacturers suppliers (OEMS) located in Catalonia, we checked if they incorporated products innovation, research, design, product development phases, and if they collaborated with external agents in doing their R&D, differentiated by property capital (domestic versus foreign) and company size. It was shown that large companies are those who performed R&D in greater proportion, however, and the smaller ones the least. A very small number of firms cooperate with the external agents considered, and they are all large companies.