Study on information sharing practices in supply chain empirical evidence from manufacturing plants in japan, korea, taiwan and vietnam

ABSTRACT This thesis studies about information sharing practices in supply chain by manufacturing plants in 4 countries: Japan, Korea, Taiwan and Vietnam and their linkages with operatio

VIETNAM NATIONAL UNIVERSITY, HANOI

VIETNAM JAPAN UNIVERSITY

PHUNG THI XUAN HUONG

STUDY ON INFORMATION SHARING PRACTICES IN SUPPLY CHAIN:

EMPIRICAL EVIDENCE FROM

MANUFACTURING PLANTS IN JAPAN, KOREA, TAIWAN AND VIETNAM

MASTER’S THESIS BUSINESS ADMINISTRATION

Hanoi, 2018

VIETNAM NATIONAL UNIVERSITY, HANOI

VIETNAM JAPAN UNIVERSITY

PHUNG THI XUAN HUONG

STUDY ON INFORMATION SHARING PRACTICES IN SUPPLY CHAIN:

EMPIRICAL EVIDENCE FROM

MANUFACTURING PLANTS IN JAPAN, KOREA, TAIWAN AND VIETNAM

MAJOR: BUSINESS ADMINISTRATION

Secondly, it is my pleasure to thank Vietnam Japan University (VJU), Yokohama National University (YNU), The Japan International Cooperation Agency (JICA), all

of teachers and staff, who helped me a lot during my 2-year study and internship in Vietnam and Japan and during the completion of this thesis Special thanks to Master

of Business Administration Program (VJU) and Graduate School of International Social Sciences (YNU) for unlimited support in both academic career and personal life

Last but not least, thanks a lot to my family members and friends for helping me in many ways during the whole period of doing this thesis

Sincerely,

Student

Phung Thi Xuan Huong

TABLE OF CONTENTS

ACKNOWLEDGEMENTS

ABSTRACT

1 CHAPTER 1: INTRODUCTION 1

1.1.Motivation of doing this research 1

1.2.Research objectives: 3

1.3.Research questions 3

1.4.Scope of this research 3

1.5.Research structure 4

2 CHAPTER 2: LITERATURE REVIEW 6

2.1.Basic concepts 6

2.1.1 Supply chain and Supply chain management 6

2.1.2 Information sharing and information sharing in supply chain 7

2.1.3 Types of information shared 10

2.1.4 Operational performance 14

2.2 Relationship between information sharing and operational performance 15

3 CHAPTER 3: ANALYTICAL FRAMEWORK 17

3.1.Research Approach 17

3.2.Research methodology 17

3.3.Hypotheses development and Analytical framework 18

3.4.Survey Design 24

4 CHAPTER 4: DATA COLLECTION AND ANALYSIS 27

4.1.Data collection 27

4.2.Measurement Tests 27

4.3.Correlation Analysis 35

4.4.Hypothesis Testing 45

5 CHAPTER 5: FINDINGS, DISCUSSION AND IMPLICATIONS 46

5.1.Discussion of main findings 46

5.2.Managerial implications 49

CONCLUSION 50

Contributions 50

Limitations and Future research directions 50

REFERENCES 52

LIST OF THE AUTHOR’S PUBLICATIONS 59

LIST OF TABLES

Table 2.1: Types and impacts information shared in supply chain 12

Table 3.1: Scale of information sharing practices 22

Table 3.2: Measurement of Constructs of Information Sharing Scales 25

Table 3.3: Measurement of Operational Performance Scales 27

Table 4.1: Descriptive and Reliability Analysis Results 31

Table 4.2: Validity test for information sharing practice scales (pooled sample) 32 Table 4.3: Validity test for operational performance scales (pooled sample) 33

Table 4.4: Information sharing practices and Operational performance across countries 34

Table 4.5: Correlation analysis results (Pooled sample) 37

Table 4.6: Correlation analysis results (Japan sample) 39

Table 4.7: Correlation analysis results (Korea sample) 41

Table 4.8: Correlation analysis results (Taiwan sample) 43

Table 4.9: Correlation analysis results (Vietnam sample) 45

Table 4.10: Summary of Hypothesis Testing 47

Table 5.1: Summary of correlation analysis results 48

LIST OF FIGURES

Figure 3.1: Analytical Framework 23

ABSTRACT

This thesis studies about information sharing practices in supply chain by manufacturing plants in 4 countries: Japan, Korea, Taiwan and Vietnam and their linkages with operational performance Based on literature review, an analytical framework has been proposed to illustrate the linkages between 7 information sharing practices and 5 aspects of operational performance Data for analysis in this study was retrieved from database of the international joint research initiative namely High Performance Manufacturing (HPM) project This study use data collected from 103 manufacturing plants in three industries: automobile; electrical/electronics and machinery in Round 4 (2013-2015) of HPM project Data was analyzed using one-way ANOVA and correlation analysis The results indicate that Delivery, Quality and Demand information is most frequently shared among supply chain partners; Information sharing practices have positive linkages with aspects of operational performance although the linkages are different among countries Practices of sharing Production and Inventory information are found to have positive linkages with all five aspects of operational performance Besides addressing the gap in literature review about information sharing practices in supply chain among countries, this research also makes contribution by providing practical management implications for manufacturing plants to improve operational performance through appropriate implementation of information sharing practices with suppliers and customers in their supply chain

Keywords: Information sharing practices, Supply chain management, operational performance, High Performance Manufacturing (HPM)

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1 CHAPTER 1: INTRODUCTION

1.1 Motivation of doing this research

In such a fierce competitive environment, the business competition is no longer between companies and companies but among supply chains Therefore, to achieve competitive advantage, partners in supply chain need to collaborate in more aspects Supply chain collaboration usually refers to the voluntary cooperation between companies compared to supply chain integration which implies contractual cooperation relationship (Nyaga et al., 2010)

There are three kinds of flow in supply chain management, they are all of great significance Three flows include financial, material and information flows To make all the flows become smooth and effective, it is crucial to keep three above-mentioned flows always smooth For smooth information flows, information sharing is an important practice to be implemented and accordingly enhance performance of individual firms and improve the overall performance of the whole supply chain Baihaqi & Sohal (2013) argued that information sharing is considered to be among major means to enhance performance of a supply chain through better coordinated activities That means shared information providing linkages among partners in supply chain could be used to synchronize activities Information sharing can reduce inventories and facilitate smooth production, for instance Rashed et al., (2010) found that information sharing is “prerequisite for knowledge sharing”

However, the benefits of information sharing are still under controversy Information sharing itself brings lots of benefits for both information sharing side and receiving side, but sometimes the information is not exact, is inaccurate or obsolete which cause negative effects of information sharing within supply chain There are previous studies that have already pointed out the negative side of information sharing in supply chain such as the bullwhip effect, information distortion (Klug, 2013; Chatfield et al., 2004),

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However, majority of supply chain information sharing studies find out the contribution of information sharing in supply chain participants’ performance or the improved overall performance of the whole supply chain

This study’s main purpose is to compare the information sharing practices between 4 countries including Japan, Korea, Taiwan and Vietnam and study the linkage between

7 sharing practices corresponding to six types of information shared with and by customers/suppliers on operational performance of manufacturing plants The analysis of data from 4 countries allows comparisons of these linkages to see country effects on information sharing practices

The research is aimed to fill the gaps existing in Vietnam and over the world about information sharing practices in manufacturing firms’ supply chain:

 Lack of literature on current practices of information sharing between manufacturing plants and their suppliers and customers

 Lack of research which compares the current practices of information sharing in manufacturing supply chains among Vietnam, Japan, Korea and Taiwan

 Lack of analytical framework on the linkage between information sharing practices

in supply chain and operational performance of manufacturing firms

Based on this context and current literature, the author proposes models to evaluate: (1) information sharing practices in supply chain of manufacturing companies in 4 countries Japan, Korea, Taiwan and Vietnam; (2) the linkages between information sharing practices and operational performance of manufacturing plants in 4 countries

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1.2 Research objectives:

The main objectives of this research includes:

 To synthesize theoretical background on supply chain information sharing practices, especially about what information is shared in supply chain

 To study about information sharing practices in developed countries (Japan, Korea, Taiwan) and the current practices in Vietnam, make the comparisons and indicate managerial implications for manufacturing plants in Vietnam

 To investigate the linkages between supply chain information sharing practices and operational performance of manufacturing plants in 4 countries: Japan, Korea, Taiwan and Vietnam

1.3 Research questions

Research question 1: What information has been shared in supply chain?

This question would be answered by reviewing, systemizing literature on current practices of information sharing in supply chains of manufacturing firms as well as analyzed the collected data in 4 countries

Research question 2: What are the linkages between information sharing practices and operational performance?

This research question would be answered by analyzing the collected data by correlation analysis to find out the relations between each practices of information sharing with 5 elements of operational performance

1.4 Scope of this research

Content of this thesis focused on:

 Theoretical bases, approaches to supply chain management, supply chain collaboration of manufacturing firms through information sharing with customers and suppliers by integrating from theoretical literatures on supply chain management and supply chain collaboration

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 The linkage of supply chain information sharing practices on operational performance of manufacturing plants in 4 countries: analysis results, comparisons among countries and managerial implications

The survey was conducted according to the framework of the international joint research initiative called High Performance Manufacturing (HPM) project The data

in this research were retrieved from High Performance Manufacturing Code Book (Round 4, 2013-2015) The respondents are upstream and downstream supply chain mangers of 103 manufacturing plants in 4 countries: Japan, Korea, Taiwan and Vietnam

All of these plants belong to one of the following three industries: (1) automobile; (2) electrical/electronics and (3) machinery

Chapter 2: Literature Review

In this chapter, the author would make a synthesis of previous studies’ results about important concepts and linkage including definitions of supply chain management, information sharing, and operational performance; types of information shared, the linkage between information sharing practices and operational performance

Chapter 3: Research Design

This chapter would first explain the approach for the research design, then propose the analytical framework and relevant hypothesis and also explain in details about the survey

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Chapter 4: Data Collection and Analysis

In this chapter, the author would describe the process of data collection and data processing method

Chapter 5: Findings, Discussions and Implications

In this chapter, the author would summarize the findings from the data analysis, compare this with previous studies and give some implications for management

Conclusion

This chapter would summaries the contribution of this research and point out the limitations as well as suggest some directions for future research

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2 CHAPTER 2: LITERATURE REVIEW

2.1 Basic concepts

2.1.1 Supply chain and Supply chain management

According to Chopra M (2001), supply chain management is the management of flows between processes in a supply chain with the purpose of maximizing profits This definition indicates that supply chain management refers to management of three main flows in any supply chain: product flow, information flow and financial flow These flows are considered in both directions: downstream (towards customers) and upstream (towards suppliers)

From 19th century to 2000s, there was many studies investigating collaboration activities among participants of the supply chain, including information sharing activities, identification the best practices to link and integrate supply chain management processes, application information system and internet to improve performance, productivity and quality in the whole supply chain (Robinson and Malhotra, 2005)

Since the middle of 20th century, studies about supply chain management have become increasingly popular The literatures about supply chain management largely covers topics such as the principles and practices for managing the supply chain, practices to improve the performance of the whole supply chain, the relationship between supply chain management and performance of the firms

Regarding to the topic of collaboration or partnership in supply chain, there are various studies that focus on the relationship between firms and suppliers; firms and customers; information sharing within the supply chain, such as: Kim et al (2010); Flynn et al (2010); Giannakis (2007); Ou et al (2010); Simpson and Power (2005); Mihalis Giannakis (2007); Cox et al (2004); Forslund & Jonsson (2007); Visich et

al (2009); Fawcett et al (2007), Kaipia and Hartiala (2006); Sezen (2008), Weber (1996)

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Recently, many studies have investigated the relationship between information sharing practices and different aspects of firm performance such as production costs, on-time delivery, and production flexibility capabilities

When the competition beyond a company operations scope and more appears in the supply chain, the main focus should be shifted from the internal control to external control The supply chain managers, therefore, need to integrate internal practices (product design, process management, and Kaizen) with external activities of customers and suppliers (Flynn and Flynn, 2005; Kannan and Tan, 2005; Robinson and Malhotra, 2005; Sila et al., 2006) It is also confirmed that companies which achieve higher level of data utilization have better financial performance compared

to their rivals (Barrat et al., 2015)

It has also been shown that companies with a higher degree of data utilization compared to their competition outperform their competitors in financial terms (Barrat

et al., 2015)

2.1.2 Information sharing and information sharing in supply chain

Manufacturing plays an important role in any economy To thrive in such competitive environment as today’s manufactures need to do more than good practices within the firms They need to communicate and collaborate with partners in their network Other terms refer to this idea include supply chain coordination and supply chain integration

There is “theory of integration” developed by Schoenherr and Swink (2012) which states that firms receive significant benefit from interconnecting with partners in supply chain While information sharing is considered to be the crucial factor of supply chain integration (Lofti et.al, 2013) and for supply chain collaboration (Barrat, 2004; Himmelman, 1996; Liker et al., 1996;) According to Lofti et.al (2013), information sharing could be considered as the distribution of useful information for systems, people or organization units According to this definition, the term information sharing is interchangeable with “knowledge sharing”, information

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exchange or information integration To achieve effective information sharing practices in supply chain, a high level of trust among participating organizations is required

Information sharing requires a high level of trust between collaborating parties in the chain (Tsanos & Zografos, 2016)

Effective information sharing practices and other supply chain practices contribute to the overall improvement of supply chain and it is advisable for firms to put efforts on both information sharing and other supply chain practices, simultaneously (H Zhou, W.C Benton, 2007) Information could be shared vertically, horizontally and completely which indicates the sharing or exchange of information between buyers and sellers (vertical information sharing); between buyers and buyers, sellers and sellers (horizontal information sharing) and even competitors and competitors (Huang et al., 2017)

Rashed, Caa et al (2013) and Zhou et al (2007) consider information sharing in 2 major aspects: information content (information shared between buyers and suppliers) and information quality (quality of information shared) Fawcett S.E et al (2007) consider information sharing in 2 dimensions: connectivity and willingness They found both dimensions have influence on operational performance of firms

From the viewpoint of lean supply, information (cost) transparency was originally introduced as “sharing of costing information between customer (buyer) and supplier, including data which would traditionally be kept secret by each party, for use in negotiations” (Rashed, Caa et al., 2013)

Sometimes, information sharing in supply chain is studied under the term of

“information exchange” among firms in a supply chain which together with the coordination of strategies to bring reduced logistics costs and increased values delivered to customers (Brewer and Speh, 2000)

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According to Rached et al (2015), the existing studies about information sharing differs widely from structure of supply chain, types of information shared, sense of sharing

There are many studies that discussed the benefits of information sharing in supply chain and the main roles of information sharing includes: essential for firms to achieve superior performance (Baihaqi, Imam, Sohal, Amrik S., 2013); better inventory management, reduce costs (Mourtzis D., 2011; ,Lee et al., 2000 ,Lee et al, 2004); reduce uncertainties and bullwhip effect (Lee et al., 2004; Yu et.al, 2001); early problem detection (Lee, et al., 2004; Jauhari V., (2009); Grabot et al., 2011); expand network and capacity utilization (Lee et al., 2004); reduce cycle time from order to delivery (Bagchi et al., 2004); increase productivity and efficiency (Mourtzis D., 2011; Yang et al., 2011; Lee et al., 2004; Bagchi et al., 2004); improve overall supply chain and firms’ performance (Qrunfleh & Tarafdar, 2014)

From the work of Lotfi et al (2013), benefits of each types of information sharing are determined: sharing sales data might eliminate order cancellations and represent customer demand; sharing sales forecasts help to more precise predictions of orders; sharing order information would helps with increase the quality of customer service and explore the “bottleneck” in supply chain; sharing new product information would help to smooth the material flows in supply chain through timely supply of inputs from suppliers as soon as the manufacturing firms realize the real demand from retailers

In some cases, the information sharing might be less beneficial or critical such as suppliers could get the accurate forecast of the market demand from analyzing historical purchase orders effectively Other barriers to information sharing is that customers might be reluctant to share timely information because of the fear for reduced revenue and profits once important information leaked to competitors (Kong

et al., 2013)

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It is also noteworthy that information sharing between manufacturers and their customers was investigated in a supplier-retailer context because manufacturers are called “suppliers” of their customers in supply chain

There are various technologies available for information sharing between supply chain partners including RFID Radio frequency identification, electronic data interchange (EDI), the Internet, wireless application protocol, mobile computing (Baihaqi &Sohal, 2013)

2.1.3 Types of information shared

Information sharing is a broad definition which include but not limited to the sharing

of many types of information such as the costs of production, cost of transportation, the demand and orders (Huang et al., 2017) Other study discusses more types of

shared information in supply chain Lee and Whang (1998) investigate more than 5

types of shared information including (1) inventory level, (2) sales data, (3) demand forecasts, (4) production/delivery schedule, (5) others (performance metrics: product quality data, lead times, queuing delays at workstations and service performance…)

According to Rashed et al., (2013), the buyers would be more interested in sharing information such as quality, price, future demand forecast if they receive the continuous flows of information like quality, price, future demand forecasting information Lofti et al (2013) list 7 types of information that can be shared within a supply chain: (1) Inventory Information; (2) Sales Data; (3) Sales Forecasting; (4) Order Information; (5) Product Ability Information; (6) Exploitation Information of New Products; and (7) Other Information

Ovalle and Marquez (2003) categogized the types of shared information in supply chain into three information group: product information, customer demand and transaction information, and inventory information

Barut et al (2002) classified information in supply chain into 2 types: information sharing with suppliers and information sharing with customers Under this viewpoint,

11 both types include two flows of information: information that company receive from its suppliers/customers and information that it provides to its suppliers/customers

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Table 2.1: Types and impacts information shared in supply chain

Types of

Inventory level: lowering the inventory level in

the supply chain

Continuous replenishment programmes (CRP), vendor-managed inventory (VMI)

Apple -Fritz’s supplier hub

Sales data

manufacturers can better forecast the demand and develop a better production plan that lowers the overage and underage costs

POS data –Point-of-sales data electronically transferred to manufacturers

Seven Eleven, Japan

Order status for

Customer calling retailers or visit their website to find out the order status

Sales forecast

(Demand forecast)

Forecasts serve as advanced notification for future orders to the suppliers, who use such information to develop their production plans

Quantity-flexible (QF) contracts HP, Texas Instrument

Motorola had a program called

‘Scheduling Sharing’, whereby computer and peripherals;

manufacturers that are the customers of Motorola’s chip division would share their production schedules with the company

Motorola develop its own production plans based on the information shared by their chip suppliers which eliminate the chance of Motorola’s production would be disrupted by lack

(2) Capacity information

Sharing capacity information with downstream partners so that they could better prepare to protect against shortages

Semiconductors foundries frequently share their capacity status with customers to cope with large fluctuations in demand

(Source: Lee & Whang, 1998)

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2.1.4 Operational performance

Operational performance is a popular concept in literature about manufacturing industry but it is difficult to determine a unique definition for that term Operational performance of manufacturing supplier in the research of Rash et al., (2013) is considered to be the combination of 6 main factors: (1) on-time delivery; (2) perfect order fulfillment rate; (3) delivery reliability; (4) quality; (5) speed of response; (6) manufacturing capacity This research investigates the combined effects of information and knowledge sharing on supplier’s operational performance The above-mentioned measurement would be appropriate to be applied in the case manufacturing plants are supplier of their corporate customers

Operational Performance can be considered as “the process of quantifying the efficiency and effectiveness of action” In that definition, effectiveness refers to “the extent to which customer requirements are met”, while efficiency is “a measure to how economically to firms’ resources are utilized when providing customer satisfaction” (Kanorio, K C., 2014)

According to Richard et al (2009), performance is “the actual outputs or results of an entity as compared against its intended outputs” (or projected goals/objectives”) Performance of a firm could be evaluated either in operational aspect or financial aspect Vanpoucke et al (2017) investigated the relationship between information exchange, operational integration and firm’s performance in which operational performance was measured in 3 aspects: flexibility performance, delivery performance and cost performance

Combining the various viewpoint of operational performance, in this study, the author approach performance of manufacturing plants in terms of operational aspect, namely operational performance with the aim to reflect the “effectiveness”: how well firms fulfil customer’s requirements

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In this study, operational performance is measured in 5 dimensions corresponding with 5 abilities of the manufacturing plants to meet customer requirement about quality/cost/speed delivery/on time delivery and flexibility needs

From here, the author would mention 5 dimensions of operational performance as quality performance, cost performance, speed performance, on time performance and flexibility performance for short

2.2 Relationship between information sharing and operational performance

In the literature review, there have been studies looking at the relationship between information sharing and operational performance However, in those case, information sharing refers to internal flows of information from managers to employees, from employee to employee and vice versa

Recently, there also have studies that shift their focus externally when studying about information sharing and operational performance They look at how information sharing among companies and their supply chain partners (customers and suppliers, sometimes competitors) influence performance of operational performance

There are scientific papers that research about one specific information sharing practice (one type of information shared) to operational performance of firms but there also exists research works that not only study the multi-dimensional operational performance of firms but also consider various types of information shared: Baihaqi, Imam, Sohal, Amrik S., (2013); Mourtzis D (2011); Lee et al (2000); Lee et al (2004); Yu et.al (2001); Jauhari V., (2009); Grabot et al., (2011); Bagchi et al., (2004); Yang et al., (2011)

Wiengarten et al., (2014) found that if smooth management of material and information flows results in cost savings and shorter lead times and also improve operational performance of firms regarding on-time delivery and flexibility It is common findings that operational performance of firms could be improved somehow

by implement the information sharing practices (Mourtzis D., 2011; Lee et al., 2000,

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Jauhari V., 2009; Grabot et al., 2011) Under the viewpoint of supply chain integration, information is one of integration practices and could improve operational/business performance (Vanpoucke et al., 2014) Qrunfleh &Tarafdar (2014) found contributions of information sharing in supply chain to performance of both firms and supply chain

Therefore, current literature is lack of a broader study that could bring insights about information in different contexts, make the comparisons and increase the generality

of results This research is intended to fill this gap by studying the 7 information sharing practices and their impact on operational performance of manufacturing plants in 4 countries: Japan, Korea, Taiwan and Vietnam and then make the comparisons and find out the similarities and differences among those countries From the results, several practical implications for management could be established

3.3 Hypotheses development and Analytical framework

The benefits of information sharing by retailers (customers) in helping to reduce costs for the suppliers (manufacturers) have been studied and proved in Huang et al., (2017) Similar findings are found by Ma et al (2017) which proved that manufacturer’s use

of shared cost information by their retailing customers results in higher profits whereas the effect of this shared information on retailing customers is unknown Accordingly, hypothesis 1 is proposed as follows:

H1: Cost information sharing has positive linkage with operational performance

Usually considered to be less sensitive than cost information, production information

is more frequently shared among supply chain partners and found to have positive relationship with performance of manufacturers Benz & Höflinger (2011) studies the effects of sharing information of various types including production processes information on firm’s operations In this study, production information includes production lead time, process steps, production duration which together assist in production planning and other steering activities This finding is in line with study by Huang et al (2003) which made a review of literature about impacts of sharing production information on supply chain dynamics and find positive relations between production information sharing and performance of manufacturing firms Therefore, the author propose Hypothesis 2 and Hypothesis 3 as follows:

in distribution network and supplier network) would “improve the overall performance of supply chain of customizable products when the variability of demand mix is high” Therefore, the author proposes Hypothesis 4

Hypothesis 4: Demand information sharing has positive linkage with operational performance

Delivery information sharing which is sometimes known as shipment information sharing has been investigated in Li et al (2001) and Zhang et al (2006) with focus placed on shipment quantity information Both studies showed a positive relationship between delivery (shipment) information sharing in supply chain with overall performance of firms and supply chain in general

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Delivery lead-time information as discussed in Rached et al., (2015,2016) is found to help reduce the level of uncertainty of replenishment arrival time and contribute to better order quantity decisions Other delivery information such as product location tracking data is also found to contribute to more precise estimation of replenishment arrival time (Bryan & Srinivasan, 2014) In addition to the contribution in inventory decisions, information sharing regarding the level of inventory could also help to coordinate transportation (Ruiz-Benítez et al., 2014) Accordingly, the author developed hypothesis 5 as follows:

Hypothesis 5: Delivery information sharing has positive linkage with operational performance

Inventory information sharing together with cost information sharing between manufacturers and their retailer (customers) has been proved beneficial in studies by Huang et al., 2017 Li et al (2001) studied about inventory information sharing with each partner in supply chain and this sharing leads to improved performance of firms and overall performance of supply chain Therefore, the author propose Hypothesis

Hypothesis 7: Quality information sharing has positive linkage with operational performance

Based on literature review, the author has synthesized to develop groups of information shared in supply chain into 7 groups – 7 practices of information sharing Table 3.1 provides details description of each measurement scales

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Table 3.1: Scale of information sharing practices

CostINFO

Cost information sharing with suppliers, with customers and by suppliers

Baihaqi & Sohal (2013); Huang et al., (2017); Shen et al (2005)

DeliveryINFO

Delivery information sharing with suppliers, with customers and by suppliers

Baihaqi & Sohal (2013); Lofti et al (2013) ; Rashed et al., (2013)

DemandINFO

Demand information sharing with suppliers, with/by customers (demand change, demand forecast)

Baihaqi & Sohal (2013); Hau et al., 1998; Huang et al., (2017); Rashed

et al., (2013), Lofti et al (2013) ; Chan & Prakash (2012); Barlas & Gunduz (2011);

InventoryINFO Inventory information

Baihaqi & Sohal (2013); Huang et al., (2017); Lee &Whang (1998)

QualityINFO Quality information

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(Source: Proposed by the author)

Figure 3.1: Analytical Framework

Similarly, based on the literature review and the survey framework of High Performance Manufacturing Project, measurement for operational performance includes 5 dimensions/aspects as follows:

 Ability to meet customers’ quality needs: the ability of manufacturing plants to

achieve customer’s requirements about quality of products and associated services

OPERATIONAL PERFORMANCE

 Quality

 Cost

 On time delivery

 Speed of delivery

 Flexibility

COST Information sharing

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 Ability to meet customers’ cost needs: the ability of manufacturing plants to

reduce cost level to lower the product prices and influence on buying decisions of customers

 Ability to meet customers’ on-time delivery needs: the ability of manufacturing

plants to deliver just-in-time for customers’ needs and this capability of plants are crucial criterion for customers to choose one plant to be their supplier

 Ability to meet customers’ speed needs: the ability of manufacturing plants to

provide fast delivery and plant’s reputation for fast delivery is an important criterion for them to be selected to become supplier of their customers

 Ability to meet customers’ flexibility needs: the ability of manufacturing plants

to be chosen by their customers for reputation about flexibility

1 Cost information sharing with suppliers

2 Cost information sharing by suppliers

3 Cost information sharing with customers

ProdSUP

Production information sharing with suppliers

1 Information about plant manufacturing capabilities sharing with suppliers

2 Production capacity information sharing with suppliers

3 Productivity information sharing with suppliers

4 Schedule information sharing with suppliers

5 Production capacity information sharing by suppliers

6 Productivity information sharing by suppliers

7 Schedule information sharing by suppliers

ProdCUS

Production sharing with customers

1 Information about plant manufacturing capabilities sharing with customers

2 Production capacity information sharing with customers

3 Productivity information sharing with customers

4 Schedule information sharing with customers

5 Production capacity information sharing by customers

6 Productivity information sharing by customers

7 Schedule information sharing by customers

DemandINFO

Demand Information Sharing

1 Demand change information sharing with suppliers

2 Demand forecast information sharing with suppliers

3 Demand change information sharing with customers

4 Demand forecast information sharing with customers

5 Demand change information sharing by customers

6 Demand forecast information sharing by customers

1 Delivery information sharing with suppliers

2 Delivery information sharing by suppliers

3 Delivery information sharing with customers

InventoryINFO

Inventory information sharing

1 Inventory information sharing with suppliers

2 Inventory information sharing by suppliers

3 Inventory information sharing with customers

4 Inventory information sharing by customers

QualityINFO

Quality information sharing

1 Quality information sharing by suppliers

2 Quality information sharing with suppliers

3 Quality information sharing with customers

Accordingly, Table 3.3 also provide details about measurement items of operational performance scales

Table 3.3: Measurement of Operational Performance Scales

3 Our customers can rely on us for quality products

4 We are selected by our customers because of our reputation for quality

2 Our customers involve us in their cost reduction efforts

3 Our customers can rely on us for low cost products