Information technology and the number of suppliers in a supply chain: Is there a relationship?

Jason Dedrick, Sean Xin Xu, Kevin Zhu

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Scopus citations

Abstract

This work addresses how the number of suppliers employed by a manufacturer relates to its use of electronic procurement (e-procurement). Using data from the U.S. manufacturing industry, we find a surprising result that there is non-correlation between e-procurement and number of suppliers at the aggregate level. However, when we distinguish the type of goods purchased, we find that e-procurement is associated with using more suppliers for custom goods while fewer suppliers for standard goods. The finding for custom goods may sound contradictive to the prior literature proposing a "move to the middle," but is consistent with a TCE-based notion that custom goods procurement involves more asset-specific relationships than standard goods. Further, the positive association between e-procurement and number of suppliers of custom goods is negatively moderated by the degree of buyer-supplier systems integration, which is consistent with the argument that deeper integration of buyer and supplier information systems can help buyers obtain better "fit" for their customized requirements. This is an alternative to achieving better fit by employing more suppliers as proposed in the extant literature.

Original languageEnglish (US)
Title of host publicationProceedings of the 41st Annual Hawaii International Conference on System Sciences 2008, HICSS
DOIs
StatePublished - Sep 16 2008
Externally publishedYes
Event41st Annual Hawaii International Conference on System Sciences 2008, HICSS - Big Island, HI, United States
Duration: Jan 7 2008Jan 10 2008

Publication series

NameProceedings of the Annual Hawaii International Conference on System Sciences
ISSN (Print)1530-1605

Other

Other41st Annual Hawaii International Conference on System Sciences 2008, HICSS
CountryUnited States
CityBig Island, HI
Period1/7/081/10/08

Keywords

  • Custom goods
  • Electronic procurement
  • Number of suppliers
  • Supply chain relationships
  • Systems integration
  • Transaction costs economics

ASJC Scopus subject areas

  • Engineering(all)

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