The influence of supplier capabilities and technology uncertainty on manufacturer-supplier collaboration - A study of the Korean automotive industry

Abstract

Purpose - The purpose of this paper is to identify the manufacturer-supplier collaboration (MSC) types in the automotive industry and factors that affect such collaboration. Design/methodology/approach - The unit of analysis is 1st tier suppliers registered with Hyundai-KIA Motors Corporation (HKMC); a survey was conducted targeting these 1st tier suppliers. Then, hypotheses were tested using a hierarchical multiple regression analysis. Findings - First, five distinct MSC types were identified as follows: collaborative communication, collaboration in new car development, collaborative problem solving, strategic purchasing, and supplier development. Second, contrary to previous studies, suppliers' customer proliferation capability is found to affect MSC positively. Of suppliers' capabilities, flexibility, dependability improvement, module, design, and 2nd tier supplier development/coordination capabilities affect MSC positively. Third, while technology uncertainty is found to have a significant moderating effect on the influence supplier capabilities exercise over collaborative problem solving and strategic purchasing, it has no direct impact on any MSC type. Research limitations/implications - Sampling is limited to a relatively small number of HKMC's 1st tier suppliers. Of note is that this study examined factors affecting MSC, focusing on supplier capabilities. In terms of methodology, surveys, and interviews were conducted concurrently to ensure reliability of results. Practical implications - First tier suppliers can review their MSC activities and identify which capabilities they need to develop in order to strengthen their MSC with due consideration of technology uncertainty. Auto manufacturers can also benefit from the empirically tested MSC typologies. Originality/value - This study not only considered technology uncertainty as a moderator of the impact that supplier capabilities have on MSC, but also improved the understanding of MSC through empirical examination.