Power Relationships and Schedule Flexibility - Case Studies on Two Supply Chain Modules

This paper presents the results of six case studies in two modules, one in the automotive industry and the other in the laptop computer industry. Each module contains a company and two of its suppliers. The objective of the study is to find out the effect of the customer’s power on the supplier’s choice of scheduling practice and response strategy to unexpected schedule changes. Managers in each firm were interviewed to examine five issues: customer power, customer’s purchase practice, information sharing, supplier’s process flexibility, and supplier’s master production schedule practice. We found that supply chain power relationship is a significant, albeit latent factor in the formulation of master production schedule. Supplier’s process flexibility attenuates the influence of customer power, while the customer’s extent of information sharing and commitment to the purchase quantity do not necessarily depends on power. We develop some propositions as a result of this study, which may pave the way for large-scale, theory-testing field studies.