Study on information sharing practices in supply chain empirical evidence from manufacturing plants in japan, korea, taiwan and vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY PHUNG THI XUAN HUONG STUDY ON INFORMATION SHARING PRACTICES IN SUPPLY CHAIN: EMPIRICAL EVIDENCE FROM MANUFACTURING PLANTS IN JAPAN, KOREA, TAIWAN AND VIETNAM MASTER’S THESIS BUSINESS ADMINISTRATION Hanoi, 2018 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY PHUNG THI XUAN HUONG STUDY ON INFORMATION SHARING PRACTICES IN SUPPLY CHAIN: EMPIRICAL EVIDENCE FROM MANUFACTURING PLANTS IN JAPAN, KOREA, TAIWAN AND VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 60340102 RESEARCH SUPERVISORS: DR PHAN CHI ANH PROF DR YOSHIKI MATSUI Hanoi, 2018 ACKNOWLEDGEMENTS The author would like to show great gratitude to all people and organizations who have helped in making this thesis successfully possible from beginning to the end Firstly, I would like to express my deepest gratitude towards my two research supervisors, Prof Dr Yoshiki Matsui & Dr Phan Chi Anh for detailed guidelines and generous support as well as valuable feedbacks, which enabled me to finish this thesis and defense it successfully Secondly, it is my pleasure to thank Vietnam Japan University (VJU), Yokohama National University (YNU), The Japan International Cooperation Agency (JICA), all of teachers and staff, who helped me a lot during my 2-year study and internship in Vietnam and Japan and during the completion of this thesis Special thanks to Master of Business Administration Program (VJU) and Graduate School of International Social Sciences (YNU) for unlimited support in both academic career and personal life Last but not least, thanks a lot to my family members and friends for helping me in many ways during the whole period of doing this thesis Sincerely, Student Phung Thi Xuan Huong TABLE OF CONTENTS ACKNOWLEDGEMENTS ABSTRACT CHAPTER 1: INTRODUCTION 1.1 Motivation of doing this research 1.2 Research objectives: 1.3 Research questions 1.4 Scope of this research 1.5 Research structure CHAPTER 2: LITERATURE REVIEW 2.1 Basic concepts 2.1.1 Supply chain and Supply chain management 2.1.2 Information sharing and information sharing in supply chain 2.1.3 Types of information shared 10 2.1.4 Operational performance 14 2.2 Relationship between information sharing and operational performance 15 CHAPTER 3: ANALYTICAL FRAMEWORK 17 3.1 Research Approach 17 3.2 Research methodology 17 3.3 Hypotheses development and Analytical framework 18 3.4 Survey Design 24 CHAPTER 4: DATA COLLECTION AND ANALYSIS 27 4.1 Data collection 27 4.2 Measurement Tests 27 4.3 Correlation Analysis 35 4.4 Hypothesis Testing 45 CHAPTER 5: FINDINGS, DISCUSSION AND IMPLICATIONS 46 5.1 Discussion of main findings 46 5.2 Managerial implications 49 CONCLUSION 50 Contributions 50 Limitations and Future research directions 50 REFERENCES 52 LIST OF THE AUTHOR’S PUBLICATIONS 59 LIST OF TABLES Table 2.1: Types and impacts information shared in supply chain .12 Table 3.1: Scale of information sharing practices 22 Table 3.2: Measurement of Constructs of Information Sharing Scales 25 Table 3.3: Measurement of Operational Performance Scales .27 Table 4.1: Descriptive and Reliability Analysis Results .31 Table 4.2: Validity test for information sharing practice scales (pooled sample) 32 Table 4.3: Validity test for operational performance scales (pooled sample) .33 Table 4.4: Information sharing practices and Operational performance across countries 34 Table 4.5: Correlation analysis results (Pooled sample) .37 Table 4.6: Correlation analysis results (Japan sample) 39 Table 4.7: Correlation analysis results (Korea sample) 41 Table 4.8: Correlation analysis results (Taiwan sample) .43 Table 4.9: Correlation analysis results (Vietnam sample) .45 Table 4.10: Summary of Hypothesis Testing 47 Table 5.1: Summary of correlation analysis results .48 LIST OF FIGURES Figure 3.1: Analytical Framework 23 ABSTRACT This thesis studies about information sharing practices in supply chain by manufacturing plants in countries: Japan, Korea, Taiwan and Vietnam and their linkages with operational performance Based on literature review, an analytical framework has been proposed to illustrate the linkages between information sharing practices and aspects of operational performance Data for analysis in this study was retrieved from database of the international joint research initiative namely High Performance Manufacturing (HPM) project This study use data collected from 103 manufacturing plants in three industries: automobile; electrical/electronics and machinery in Round (2013-2015) of HPM project Data was analyzed using oneway ANOVA and correlation analysis The results indicate that Delivery, Quality and Demand information is most frequently shared among supply chain partners; Information sharing practices have positive linkages with aspects of operational performance although the linkages are different among countries Practices of sharing Production and Inventory information are found to have positive linkages with all five aspects of operational performance Besides addressing the gap in literature review about information sharing practices in supply chain among countries, this research also makes contribution by providing practical management implications for manufacturing plants to improve operational performance through appropriate implementation of information sharing practices with suppliers and customers in their supply chain Keywords: Information sharing practices, Supply chain management, operational performance, High Performance Manufacturing (HPM) CHAPTER 1: INTRODUCTION 1.1 Motivation of doing this research In such a fierce competitive environment, the business competition is no longer between companies and companies but among supply chains Therefore, to achieve competitive advantage, partners in supply chain need to collaborate in more aspects Supply chain collaboration usually refers to the voluntary cooperation between companies compared to supply chain integration which implies contractual cooperation relationship (Nyaga et al., 2010) There are three kinds of flow in supply chain management, they are all of great significance Three flows include financial, material and information flows To make all the flows become smooth and effective, it is crucial to keep three above-mentioned flows always smooth For smooth information flows, information sharing is an important practice to be implemented and accordingly enhance performance of individual firms and improve the overall performance of the whole supply chain Baihaqi & Sohal (2013) argued that information sharing is considered to be among major means to enhance performance of a supply chain through better coordinated activities That means shared information providing linkages among partners in supply chain could be used to synchronize activities Information sharing can reduce inventories and facilitate smooth production, for instance Rashed et al., (2010) found that information sharing is “prerequisite for knowledge sharing” However, the benefits of information sharing are still under controversy Information sharing itself brings lots of benefits for both information sharing side and receiving side, but sometimes the information is not exact, is inaccurate or obsolete which cause negative effects of information sharing within supply chain There are previous studies that have already pointed out the negative side of information sharing in supply chain such as the bullwhip effect, information distortion (Klug, 2013; Chatfield et al., 2004), However, majority of supply chain information sharing studies find out the contribution of information sharing in supply chain participants’ performance or the improved overall performance of the whole supply chain This study’s main purpose is to compare the information sharing practices between countries including Japan, Korea, Taiwan and Vietnam and study the linkage between sharing practices corresponding to six types of information shared with and by customers/suppliers on operational performance of manufacturing plants The analysis of data from countries allows comparisons of these linkages to see country effects on information sharing practices The research is aimed to fill the gaps existing in Vietnam and over the world about information sharing practices in manufacturing firms’ supply chain:  Lack of literature on current practices of information sharing between manufacturing plants and their suppliers and customers  Lack of research which compares the current practices of information sharing in manufacturing supply chains among Vietnam, Japan, Korea and Taiwan  Lack of analytical framework on the linkage between information sharing practices in supply chain and operational performance of manufacturing firms Based on this context and current literature, the author proposes models to evaluate: (1) information sharing practices in supply chain of manufacturing companies in countries Japan, Korea, Taiwan and Vietnam; (2) the linkages between information sharing practices and operational performance of manufacturing plants in countries 4.4 Hypothesis Testing From the correlation analysis results, it could be concluded which hypothesis is supported, partially supported or not supported The hypothesis testing results are summarized in Table 4.7 Table 4.10: Summary of Hypothesis Testing Pooled sample Hypothesis H1: Cost information sharing has positive linkage with operational performance H2: Production information sharing with/by suppliers has positive linkage with operational performance H3: Production information sharing with/by customers has positive linkage with operational performance H4: Demand information sharing has positive linkage with operational performance H5: Delivery information sharing has positive linkage with operational performance H6: Inventory information sharing has positive linkage with operational performance H7: Quality information sharing has positive linkage with operational performance Note: S: Supported, PS: Partially supported, NS: Not supported 45 Japan Korea Taiwan Vietnam PS NS NS NS PS S NS NS NS S S S PS S S PS NS NS NS S S NS PS PS S S NS NS PS S S NS PS PS PS CHAPTER 5: FINDINGS, DISCUSSION AND IMPLICATIONS 5.1 Discussion of main findings From the correlation analysis results, a number of general finings could be summarized as follows: Table 5.1: Summary of correlation analysis results Quality Cost Speed On-time Flexibility performance performance performance performance performance CostINFO P, VIE P, VIE P P, VIE, (JPN) ProdSUP P, VIE P, VIE P, VIE P, VIE P, VIE ProdCUS P, KOR, TWN, VIE P, TWN, VIE P, KOR, TWN, VIE P, KOR, TWN, VIE P, KOR, TWN, VIE DemandINFO VIE P, JPN, VIE P, VIE P, VIE P, VIE DeliveryINFO P, TWN, VIE P, VIE P, KOR, VIE P, TWN, VIE P, TWN, VIE InventoryINFO P, TWN, VIE P, VIE P, VIE P, VIE P, VIE QualityINFO P, KOR, TWN, VIE P P, VIE P, KOR, TWN, VIE P, KOR, VIE P: Pooled sample, JPN: Japan; KOR: Korea; TWN: Taiwan, VIE: Vietnam 46 The analysis results indicate the linkage between information sharing practices between manufacturing plants and partners in supply chain and operational performance of those plants regarding aspects quality, cost, on-time delivery, speed delivery and flexibility Those aspects of operational performance of manufacturing plants are measured as level of customer’s need fulfillment Firstly, sharing cost information is found to have positive linkage with 4/5 aspects of performance except quality performance This finding is in agreement with study of Huang et al., (2017) which found that sharing cost information with supply chain partners would likely to improve cost for manufacturers It was somewhat surprising that correlation between cost information sharing practice and flexibility performance was positive for pooled sample and Vietnam case but was negative in the case of Japan sample It is difficult to explain this result, but it might be related to the low level of sharing information cost (smaller than 2, which means almost no sharing) It seems possible that these results are due to the cultural factors of Japan which considers cost- related information is top sensitive information This could be referred to the Nationality Specificity perspective which have been discussed by Rungtusanatham et al (2005) to explain for country effects Secondly, two-way production information sharing practice between manufacturers and suppliers has been found to have positive linkage with all aspects of operational performance These results are consistent with findings of Huang et al., (2003) which showed that sharing production –related information would improve the operations of firms by better production planning and activity coordination Similarly, two-way production information sharing practice with/by customers is also found to have positive linkage with operational performance of plants This finding collaborates the ideas of Benz & Höflinger (2011) who suggested that sharing production information with supply chain downstream partners would benefit the manufacturing companies 47 Thirdly, the practice of sharing demand information (demand forecast, demand change) with suppliers and customers is found to have positive linkage with operational performance of manufacturing plants These findings further support the idea of Bian et al (2016) and Li et al (2001) which indicate that sharing demand forecast in supply chain brings benefits to manufacturers This results confirms that demand information sharing is generally beneficial to manufacturers as described in research of Nagashima et al., (2015) and Goh and Eldridge (2015) without considering accuracy of demand forecast or intensity of collaboration Fourthly, the practice of sharing delivery information is positively correlated to operational performance of manufacturing plants It is encouraging to compare this figure with that found by Li et al (2001) and Zhang et al (2006) who found that there is a positive relationship between delivery (shipment) information sharing in supply chain with overall performance of firms and supply chain In addition, there are similarities between the positive correlation between inventory information sharing practice between manufacturers and suppliers/customers expressed in this study and those described by Huang et al., (2017) and Li et al (2001) Both studies have proved that when manufacturers share inventory information with supply chain partners, they would usually benefit from better flows of inventory and reduced inventory and smaller storage costs Lastly, quality information sharing practice is confirmed to have positive correlation with operational performance of manufacturing firms This accords with earlier observations by Wu et al., (2011), which indicates the benefits of shared quality information for customers (buyers) and suppliers (in this case, suppliers are manufacturers who supply products for buyers) In general, the results of this research have similar patterns with previous studies about various aspects of supply chain management They share the country differences in analysis results for practices or performance indicators (Raghunathan et al., 1997) Possible explanation might be that countries are in different stages of 48 industrialization and development For instance, Japan is a developed country with matured manufacturing technologies and infrastructure compared to Vietnam is a developing country trying to adopt good management practices from other advanced industries Therefore, it is understandable that some management practices could be highly practiced in Vietnam but less important in more developed countries like Japan, Korea and Taiwan 5.2 Managerial implications From the table above, there are several significant implications for managerial board at manufacturing plants The summary results show that information practices impacts on operational performance are different Understanding this different in detail, the managerial of manufacturing plants in each country could choose to share or ask their supplier partners to share information in order to maximize the impact of practices on aspects of performance Therefore, they could successful improve the target performance of their plants For examples, firms who wants to cut costs to meet the low price requirements of customers could focus on information practices such as Production information sharing with/by customers, demand information’s sharing, and inventory information sharing as those practices are found to have positive correlation with cost performance of firms 49 CONCLUSION Contributions This study contributes to the literature on information sharing practices in supply chain and relation between those practices with operational performance of manufacturing plants This study has synthesized the current literature review about information sharing practices in supply chain (types of shared information, how information shared, effects of information sharing) From the analysis results, it is indicated that delivery, quality and demand information is most frequently shared among supply chain partners Comparisons of information sharing practices in the investigated 4-country sample show that information sharing practices is generally most popular in Vietnam and least popular in Japan In addition, positive strong and moderate correlations between information sharing practices and aspects of operational performance are found in all country sample and pooled samples but the level of correlations is different for each investigated sample Last but not least, empirical evidence from this study provides implications about information sharing practices for supply chain managers of manufacturing plants, not only in countries but also for other manufacturers in all over the world Limitations and Future research directions Findings in this study are subject to at least two limitations Firstly, although the sample size has crossed the threshold set by literature, it is still quite small It is recommended that further research could eliminate this limitation by investigating the larger sample of manufacturing plants which belongs to larger range of industries in more countries This would increase the reliability and enhance the generalizability of research results as well as practical management implications Another limitation is the number of types of information sharing practices investigated in analytical framework Although the analytical framework in this study has covered most popular practices of information sharing in supply chain, a further research might 50 better explore more sharing practices corresponding to more types of shared information in supply chain, which would provide more interesting findings 51 REFERENCES Andrew C., Glyn W., Chris L & Joe S (2004), Managing appropriately in power regimes: relationship and performance management in 12 supply chain case, Supply Chain Management: An 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28: 164-175 Yu Z., Yan H., Cheng T.C.E., Benefits of information sharing with supply chain partnerships Industrial Management & Data Systems, 2001; 101: 114-121 57 Zhou, H and Benton, Jr W.C (2007) “Supply chain practice and information sharing”, Journal of Operations Management, Vol 25, pp 1348-65 Rungtusanatham, M., Forza, C., Filippini, R and Anderson, J C (1998), “A Replication Study of a Theory of Quality Management underlying the Deming Management Method: Insights from an Italian Context”, Journal of Operations Management, Vol 17 No 1, pp 77–95 Raghunathan, T.S., Rao, S S., Solis, L E (1997), “A comparative study of quality practices: USA, China and India”, Industrial Management & Data Systems, Vol 97 No 5, pp 192-200 58 LIST OF THE AUTHOR’S PUBLICATIONS Nguyen Thu HA, Phung Thi Xuan HUONG (2017), The effect of customer service on customer retention: A case study from beauty service in Vietnam, Proceedings of ICECH 2017 - International Conference on Emerging Challenges: Strategic Integration 01/12/2017 at Hanoi University of Science and Technology, pp 462-470 Assoc.Prof Nham Phong Tuan; Ms Phung Thi Xuan Huong, (2017), The impact of organizational culture on innovation: case study of company X, Proceedings of International Conference “Creativity Development and Opportunities for Business and Startup Ideas”, University of Education, Hanoi National University, 11-12/08/2017, pp 759-772 Nguyen Thi Tuyet Mai, Nguyen Anh Hao, Phung Thi Xuan Huong (2016), The role of social media in the apparel retail sector in Vietnam: A study of Facebook fan pages, Journal of Digital & Social Media Marketing, Vol.4, No/3, Autumn/Fall, pp 292-309 (18) Dr Nham Phong Tuan, Phung Thi Xuan Huong (2015), Critical success factors of ecommerce: International experiences and lessons for Vietnam, Proceedings of National Conference “10 years of teaching ecommerce and direction for future development”, 19/06/2015, Thuong mai University, pp 329-336 (paper in Vietnamese) 59 ... countries in Cost information sharing, production information sharing with suppliers, Demand information sharing, delivery information sharing, inventory information sharing and quality information sharing. .. supply chain into three information group: product information, customer demand and transaction information, and inventory information Barut et al (2002) classified information in supply chain. .. 2.1 Basic concepts 2.1.1 Supply chain and Supply chain management 2.1.2 Information sharing and information sharing in supply chain 2.1.3 Types of information shared