The strategic fit of supply chain integration in the TFT‐LCD industry

Abstract

Purpose The purpose of this paper is to identify what kind of supply chain integration strategies can support TFT‐LCD manufacturers seeking to break through the cost constraints and complex co‐operation relationships between manufacturers, suppliers and set plants/distributors, and further satisfy the market requirements in terms of cost, quality, delivery, and flexibility. Design/methodology/approach The paper encompasses in‐depth interviews with 20 TFT‐LCD industry executives in three of the largest Taiwan TFT‐LCD manufacturing firms. Findings Several different supply chain integration strategies have been identified for operational‐level improvement of TFT‐LCD manufacturing, including direct or indirect investment in suppliers; “made in‐house” and “made by resident suppliers” arrangements, “quasi‐cluster” formation, and new module assembly line set‐up at set plant. Research limitations/implications This study involves only three multinational corporations of Taiwanese origin. Practical implications Based on the analysis of the TFT‐LCD supply chain structure, the strategic fit of supply chain integration leads to the improvement of TFT‐LCD manufacturers' capability to satisfy customer requirements and then attain competitive advantage. Their experience provides guidance for other hi‐tech industries. Originality/value The paper provides insights into the strategic formulation of supply chain integration in the real world of the TFT‐LCD industry and identifies directions for further empirical research.

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