Results of this study indicate that the alignment framework explains 65% variance of supply chain collaboration complexity through product demand volatility, product life cycle, product innovativeness, product modularity and supply chain coordination complexity. Interestingly,
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product design characteristics do not seem to have a direct impact on supply chain collaboration complexity. Supply chain collaboration is conceptualised through alignment of strategy and interest, orientation of business cultures (from highly competitive to highly collaborative), substitutability of suppliers and level of trust and openness between supply chain partners. Table 8.3 below summarises the impacts of product demand and design characteristics on supply chain collaboration complexity.
Table 8.3: Standardised Effects of Impacts on Supply Chain Collaboration Complexity
Direct Indirect Total
S.E. p value S.E. p value S.E
p value Product Demand Volatility -0.392 0.008 -0.046 0.017 -0.438 0.002 Product Life Cycle 0.192 0.110 0.053 0.007 0.246 0.015 Product Innovativeness -0.172 0.050 -0.053 0.007 -0.225 0.007
Product Modularity - - -0.080 0.007 -0.080 0.007
Supply Chain Coordination
Complexity -0.198 0.009 - - -0.198 0.009
Product demand volatility with a standardised total effect -0.44, has a significant impact on
supply chain collaboration complexity. This strongly supports the second hypothesis - H2:
Product demand volatility negatively impacts on supply chain collaboration complexity. Most
of this impact is explained through a direct relationship (standardised effect -0.39) between product demand and supply chain collaboration. Furthermore, the results indicated that apart from this direct effect, product demand has a -0.05 standardised indirect effect on supply chain collaboration. Collaboration through an effective extended supply chain from point of sale backwards can greatly assist in managing high levels of product demand volatility. Ramanathan (2013) suggested that multi-dimensional collaborations with high product modularity enhances value and creates new values. Ramanathan (2013) further contended that such collaborations are critical to improving the accuracy of demand forecasts. Results of this study support previous ones in this regard. This relationship indicates that companies that have a higher volatility in their demand experience a highly aligned interest and strategy with their key suppliers, and they enjoy good cooperation with those businesses. This scenario allows them to overcome issues that could arise due to demand volatility.
Product life cycle, as one of the main drivers of supply chain decision-making components,
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impact is not significant (p value= 0.201). At the same time, results showed product life cycle has an indirect standardised effect of 0.05 on supply chain collaboration. This relationship was found to be significant. Therefore, hypothesis 6 - H6: Product life cycle positively
impacts on supply chain collaboration complexity - is supported. This indirect relationship
between product life cycle and supply chain collaboration via supply chain coordination highlights that information sharing and coordination aspects play a more significant role in supply chain alignment with product characteristics and can facilitate or improve collaboration and reduce complexity in the supply chain. Thus, supply chains of firms producing products with shorter life cycles require a more aligned strategy across the supply chain. Due to time compressions for production and distribution of these products in the market, supply chain partners require to have a high level of trust and openness in their operations while in products with longer life cycles such a relationship is not as vital.
Product innovativeness has a direct significant impact on supply chain collaboration. This is
in line with the direct relationship between product innovativeness and supply chain collaboration been suggested in the literature (e.g. Soosay et al., 2008). Results also indicated a significant indirect negative relationship (with a standardised effect of -0.17) between product innovativeness and supply chain collaboration through supply chain coordination. This highlights that supply chain coordination when aligned with level of product innovativeness could assist in supply chain collaboration. Therefore, hypothesis 9 - H9:
Product innovativeness negatively impacts on supply chain collaboration complexity – is
supported. Product innovations as a competitive advantage for firms require a higher collaboration across the extended enterprise. Thus, higher product innovativeness is a potential source of lower supply chain collaboration complexity. Findings of this research support most previous research. Product innovativeness - if it is to lead to competitive advantage for firms - requires higher levels of inter-firm collaborations across the extended enterprise. Thus, higher product innovativeness requires the supply chain collaboration to become less complex.
Product modularity has a negative indirect impact on supply chain collaboration complexity
through supply chain coordination complexity. The standardised indirect effect of product modularity on supply chain collaboration complexity is -0.08. Product modularity reduces the supply chain collaboration complexity by enabling many firms producing the modules to collaborate better and in a more aligned environment. This outcome indicates that supply
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chain coordination is the facilitator of this collaboration. This relationship was not initially hypothesised, however, results confirm Pero et al.’s (2010) proposition that product modularity reduces the supply chain collaboration complexity. This also suggests that supply chain collaboration should be aligned with level of modularity.
Supply chain coordination complexity has a significant negative relationship with supply
chain collaboration complexity. The impact of supply chain coordination on supply chain collaboration is strongly evident by the standardised effect of - 0.2. Therefore, hypothesis thirteen - H13: Supply chain coordination complexity negatively impacts on supply chain
collaboration complexity - is supported. It is evident that higher levels of supply chain
coordination further decrease the supply chain collaboration complexity levels. This is in line with Singh and Benyoucef’s (2013) contention that less coordination complexity in the supply chain results in a lower level of collaboration and more collaboration complexity. This outcome suggests that a higher level of information sharing and integration in the supply chain can lead to higher cooperation in the supply chain. It confirms the significant role of supply chain coordination in enhancing collaboration across the supply chain.