Complementarities in Supply Chain Collaboration

Abstract

Supply chain collaboration often results in better economic value when chain members collaborate with each other on multiple tracks of improvement initiatives. However, there is a lack of previous research explaining the economic impact of various interacting design variables of collaboration. The purpose of this paper is to explain the economic effects of complementarities on a model of supply chain collaboration which demonstrates interactions among design variables of collaboration to the value of collaboration. This research adopts concepts from complementarity theory to explain the economic impact of supply chain collaboration on the value of collaboration through choice of complementary design variables which consist of innovative processes, collaborative decision-making, incentive alignment, collaborative performance system, and information sharing. The findings will help researchers and practitioners build a sound explanation of relationships amongst design variables of collaboration, which is currently insufficiently explained.

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