Assessing Effectiveness of Supply Chain Collaboration: An Empirical Study

A traditional arms-length approach to business partnership is not an acceptable or effective approach in the present forceful and aggressive global business environment (Bowersox et al., 2000). Innovative strategies are required to create a competitive advantage that allows for cost reductions, revenue enhancements, and flexibility when dealing with financial uncertainties. Supply chain management presents that opportunity through collaborative relationships that maximize desired service levels, minimize costs, and generate benefits to customers (Bowersox et al., 2000; Mentzer et al., 2001). Several cross-sectional studies have reported that higher levels of collaboration tend to provide a competitive advantage to the firms in the supply chain (Heikkila, 2002; Sandberg, 2007; Sheu et al., 2006; Simatupang & Sridharan, 2005; Singh & Power, 2009; Vickery et al., 2003; Zacharia et al., 2009).