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Supplier Integration in Web-Based Supply Chains
Abstract
It is increasingly being argued that in today’s competitive marketplace, an important way of securing strategic advantage for companies or original equipment manufacturers (OEMs) is the use of highly integrated supply chains. In such chains, the OEM, its key suppliers, and distributors operate as one integrated unit to effectively serve the customer. Integrated supply chains are expected to enhance productivity, lower costs, reduce response times, and lead to the development of superior new products. More and more OEMs are either already implementing or are planning to embrace such integrated Web-based Supply chains (Teach, 2002). The main responsibility for the creation of an integrated supply chain falls on OEMs. They decide which of their suppliers should become the primary or main partners in the chain and which will be secondary suppliers. The trend is to have few key suppliers for a particular part or material. Thus, suppliers who are included in the supply chain get a large share of the OEM’s business. However, OEMs, in turn, expect quite a bit from these suppliers by way of technological infrastructure, commitment, and identification with the supply chain. Generally such suppliers are expected to install sophisticated Web-based supply chain systems that are compatible with the OEM’s systems and provide open access to the OEM to their information systems, databases, drawings, and documents.
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