The effect of industry clockspeed on supply chain co‐ordination

Abstract

Purpose The relevance of “industry clockspeed” to supply chain co‐ordination (SCC) has recently been stressed but hardly been researched. Taking an information‐processing perspective, the purpose of this paper is to examine the development of SCC theory under varying clockspeed circumstances. Design/methodology/approach This exploratory research project investigated four Dutch multinational firms operating in industries with different “clockspeeds”. Findings The main findings of this exploratory research suggest that, with increasing clockspeed, the use of inventory as a means of providing slack against uncertainty decreases, whereas the use of lateral relations increases. Remarkably, the role of outsourcing is substantial in both low‐ and high‐clockspeed settings, but limited in the intermediate group. Opposite to this, the role of vertical information systems is limited in low‐ and in high‐clockspeed industries, but substantial in medium‐clockspeed firms. These findings are consistent with the basic theory of organisational life‐cycle patterns. Research limitations/implications More data should be collected and analysed in subsequent research, e.g. data relating to more companies, investigated over longer periods of time, paying attention to multiple dimensions such as company age and size. Organisational solutions that may deal with accelerating industry clockspeeds are platform‐based product development, time and form postponement, and modular production networks. Practical implications Supply chain managers should be wary of one‐size‐fits‐all solutions irrespective of current industry settings or company maturity stage. Originality/value Previous research argues that the shorter the life cycles of the products that firms sell, the more rapidly they have to invent not just new products, but new ways of organising as well. This study is a follow‐up to this work with a focus on the co‐ordination within a supply chain in response to varying levels of industry clockspeed, an issue hardly considered in earlier work.

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