A number of existing models and processes aim to measure supply chain relationships. Some have remained as theoretical exercises while others have become tools that are used in the commercial field. The commercialisation is not in itself a recommendation for the model although this may point to a larger base of measured dyads. Not all the systems reviewed aimed to measure the whole of the relationship; some focused on a single element such as trust or collaboration. Other approaches mixed measurement areas that covered the state of the relationship with output-based measures such as inventory performance or capacity utilisation (Ramanathan et al., 2011).
There are several relationship assessment models that focus on one side of the relationship, for example, Meena and Sarmah (2012) explicitly state the limitation of their model: that it only focuses on supplier satisfaction with the relationship. Likewise, Boniface (2012) has a similar limitation as well as being narrowly focused on a particular industry, the Malaysian Dairy sector. In both cases, the focus is on insights at the industry level rather than at the individual dyad. These models focus on a wider set of elements than those that make up a supply chain relationship.
Three approaches, the Supply Chain Collaboration Index (SCCI) (Humphries et al., 2007), the Interpretive Structural Modelling (Thakkar et al., 2008) and the Relationship
Measurement Matrix (RMM) (http://www.adsgroup.org.uk) have the stated aim of
measuring the relationship rather than outcome or performance issues. Others, such as the system for measuring trust in supply chain relationships developed by Laeequddin et al. (2010), are explicitly focused on one element. Most of the processes reviewed have a high-
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level element of a relationship which is then supported by a series of sub-questions. Table 2.4 provides a comparison of the high-level categories in each system.
Table 2.4 Comparison of Relationship Elements in Current Measurement Systems Source
=
ADS (UK Trade Association) (Humphries et al., 2007) (Simatupang and Sridharan, 2005) (Roberts et al., 2003) (Thakkar et al., 2008) System Name = Relationship Management Matrix Supply Chain Collaboration Index Collaboration Index Measuring Relationship Quality Interpretive Structure Modelling Hg h L ev el R elatio n sh ip C ateg o ries
i1 Communication Creativity Information
Sharing Trust in Partners Honesty Business growth – long- term perspective 2 Capability Management Stability Decision Synchronisation Trust in partners benevolence Mutual understanding and closeness 3 Continuous Improvement Communication Incentive Alignment Affective Commitment Meeting customer/ market requirements
4 Commercial Reliability Satisfaction Role in
decision making 5 Value Affective Conflict Risk/profit sharing
Looking at the list at this high level does not show any degree of similarity apart from perhaps communication. To understand whether there are common themes between the models, it is necessary to drop down to the individual questions and assessment criteria. Because the models “Collaboration Index” and “Measuring Relationship Quality” are only focused on a few elements of a relationship, they will be excluded from this next stage in the analysis. The remaining three models work on the same approach by asking respondents to answer questions on a five-point Likert scale that ranges from “strongly agree” to “strongly disagree”. The example questions on the subject of communication in Table 2.5 show that the SCCI questions provide more context for the respondent to consider, while the other two provide less information regarding the meaning of the question. For example, in the case of “Information Exchange” under the RMM model the respondent would be choosing the extent of agreement, across a five-point scale, that information was being shared in the relationship.
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Table 2.5 Comparison of Depth of Questions Between Existing Measurement Systems Relationship
Management Matrix (RMM)
Supply Chain Collaboration Index (SCCI) Interpretive Structure
Modelling (ISM) Communication
Planning
3. Communication – transparency for business success.
Directionality of communication Information
Exchange
Where the other party has proprietary information that could improve the performance of the joint business, it is freely available
We would welcome a shared data ‘environment’ where market, planning, technical and pricing information are made freely available
We understand the information requirements of all participants in the supply chain from suppliers to customers Exchange of information in this
relationship takes place frequently and informally – not just according to specified agreement
Objective performance measurement is an important part of this relationship
We are aware of the performance requirements for all participants in the supply chain from suppliers to customers We provide the other party with regular information including long-range up to date forecasts and market developments to enable him to do his business better
The number of questions in each model is relatively similar at 20, 38 and 32 respectively and at this level of analysis, similarities can be found. There are some factors that only exist in one model but as the following analysis (Table 2.6) shows there are more common items within the SCCI model and the other two models than there is between either the RMM or ISM models and the other two.
Table 2.6 Comparison of Elements
Relationship Element RMM SCCI ISM
Communication ✓ ✓ ✓
Information Exchange ✓ ✓
Risk & Opportunity Sharing ✓ ✓ ✓
Trust ✓
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Process & Continuous Improvement ✓ ✓ Innovation ✓ ✓ Value ✓ ✓ Future Intentions/Strategic Alignment ✓ ✓ ✓ Fairness/Justice ✓ ✓ Commercial Relationship ✓ ✓ Commitment ✓ ✓ Mutuality/Interdependence ✓ ✓ Responsiveness ✓ ✓ ✓
In aligning the elements, we have looked beyond the specific wording and instead sought out the underlying concept. So, for example, the concept of “fairness” used within the SCCI model is deemed to be the same as the concept of “justice” used by the ISM model. In terms of output, the RMM and SCCI models provide a series of gap analyses, graphs and other outputs that enable the reader to quickly find areas of concern, opportunities for improvement or elements that indicate strength in the relationship. The ISM, on the other hand, provides a more theoretical and mathematically described output that requires the reader to undertake the analysis. As pointed out earlier this may point to a process that has been enhanced with the end user in mind and eventual commercialisation. This is clearly the case with the RMM that has been developed by a Trade Association for use by its members.
Based on the review of elements contained in the above systems and their output, the
following is a list of elements from the SCCI model that could be considered as the elements that make up a supply chain relationship. This list has been chosen because of the greater commonality between the SCCI model and the other models assessed:
• Creativity
o The standard definition of creativity is bipartite: Creativity requires both originality and effectiveness (Runco and Jaeger, 2012). In the context of SCDRs, it relates to the development of new approaches to the promotion of quality, innovation and a long-term focus on high performance (Mena et al., 2009)
• Stability
o Stability refers to the alignment of objectives and the development of confidence in the other party (Mena et al., 2009). The expectation that
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the parties will work in a cooperative rather than an adversarial way will assist in building relationship stability (Ryals and Humphries, 2007)
• Communication
o Communications between members of different organisations is seen as a critical predictor of overall supply chain performance (Gligor and Autry, 2012). Promoting high quality, open, frequent, trustworthy information sharing is a contributor to SCDR success (Ryals and Humphries, 2007).
• Reliability
o In the context of SCDRs reliability refers to the basic tasks of delivering the required services or products. It also includes the important issue of reducing costs and building trust in competence (Mena et al., 2009).
• Value
o The concept of value relates to both whether the parties are receiving value from the relationship but also how such gains are distributed. It is the latter point that can negatively impact the relationship as the more powerful party in the SCDR appropriates value from the weaker party (Chicksand and Rehme, 2018)
• Long-term Orientation
o Having a long-term orientation is an important social aspect of cooperative relationships. It represents the expectation of working together in the future (Lui and Ngo, 2012). The expectations of the future have been highlighted earlier as having importance to SCDR success (section 2.3)
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o As interdependence increases, the parties view the relationship as important and not only invest in the relationship but also avoid taking actions likely to jeopardise the relationship (Griffith et al., 2017).
• C3 Behaviour (cooperation, collaboration & coordination)
o C3 behaviour is defined as working together to bring resources into a relationship to achieve effective outcomes in alignment with the objectives of the parties involved, therefore delivering mutual benefit (Humphries and Wilding, 2004)
• Trust
o Trust is a critical element for SCDR success. It is made up of both cognitive trust, competency, integrity and goodwill. And affective trust, relational and intuitive (Dowell et al., 2015).
• Commitment
o Commitment is about focusing efforts on building task– knowledge, process alignment and process flexibility to improve the performance of the relationship (Chou et al., 2015). It is based upon the belief that a relationship is worth the effort required to maintain that relationship (Ulaga and Eggert, 2006). Commitment is also defined as the parties in a dyad having a strong focus on the continuation of the relationship with both parties committing to working together on maintaining and extending the relationship (Chen et al., 2011)
• Adaption
o dyadic adaptations are defined as behavioural or organisational
modifications carried out by one party in the dyad, which are designed to meet specific needs of the other party in the dyad (Brennan et al., 2003).
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o The communications between SCDR organisations are essentially communications between employees of those organisations. The success or failure of these communications can, therefore, rely on the personal relationships that build up between these employees. A failure in these interpersonal relationships can have an impact on the
performance of the SCDR (Gligor and Autry, 2012)
There are only minor elements that are excluded, for example, the relative size of the firms involved or an assessment of the contracts in place between the parties. Examples of questions employed by existing SCDR assessment models are included in Appendix I.
Examples of predictive relationship measurement systems found in other disciplines do not approach the subject in a way that is useful for this research. Using broad search terms such as ‘predicting relationship success’ or ‘measuring relationship success’ has found that some work has been carried out in the area of predicting success or failure of romantic or marriage relationships between individuals. These do not have any bearing on the subject of this thesis.