Performance improvement through supply chain collaboration in Europe

Purpose – The purpose of this paper is to empirically test the relationship between supply chain (SC) collaboration and performance improvement. Design/methodology/approach – In keeping with the extant literature, hypotheses were developed incorporating dimensions of supplier and customer collaboration and performance improvement. Factor analysis and linear statistical models for correlation and analysis of variance were used to test the hypotheses with IMSS 2001 data on 374 firms from the engineering/assembly industry across 11 European countries. Findings – Only weak empirical support was found for the hypothesized positive relationships between supplier (or customer) collaboration and performance improvement. There was partial empirical support for the impact of collaboration, both with suppliers and customers, on rates of improvement. For information exchange, performance improvement in respect of cost, flexibility, quality, and procurement was supported, whereas for structural collaboration, only improvement in respect of flexibility and procurement was supported. There was strong empirical support for the hypothesized higher levels of collaboration among companies showing higher performance improvement. Research limitations/implications – Using cross‐sectional (versus longitudinal), perceptual (rather than absolute) data, coming from a principal firm (rather than from each collaborative entity). Practical implications – This study indicates that firms need to adopt a concerted approach to collaboration both with suppliers and customers in order to reap maximum performance improvement benefits in the area of cost, flexibility, quality, delivery, procurement, and time‐to‐market. Originality/value – This study goes beyond analytical modeling and case‐study research on the relationship between SC collaboration and performance improvement and offers industry‐based empirical results on consolidated practical and theoretical insights.