Exploration of the Gap Problem between Planning and Execution in the Supply Chain - A Case of Taiwan IC Industry

The purpose of this study is to investigate the gap between the planning response goal and the execution outcome in supply chain management. Gaps occur due to the incompetence of supply chain partners in successively responding toward the ever-changing market environment. It is very important to check whether the decision by supply chain partner firms to cut down the level of re-integrated coordination will create an unpredictable risk to the downstream firm. In the real world practice, a firm is apt to take action to reduce the coordination level so as to save the accrued cost. The integrated circuit (IC) manufacturing industry in Taiwan is by no means an exception. Therefore, in this paper we present a case study of Taiwan’s IC industry to justify our argument. It is carried out with a comprehensive survey with the top management personnel in the related area to collect the primary data, and the outcome of the factor analysis and an LISREL analysis toward these data indicates that the reduction in the supply chain partners’ re-integrated coordination level does allow the occurrence of a gap between the planning goal and the execution outcome. Based on our findings a proposal for improvement is presented.