Essays on evaluation of suppliers' capability for supply chain performance in Korean construction industry

Abstract

Firms in construction industry need to utilize various capabilities to meet customers’ different and specific requirements. They focus on their core competitiveness while looking for the partner firms with different capabilities they need and form a supply chain. Therefore, a leader firm of the supply chain need to evaluate suppliers’ capability accurately to better make decisions for effective collaboration. Meanwhile, GSCM is particularly important in the construction industry which is a representative project-based business causing severe environmental pollution. GSCM enhances competitiveness of a firm for sustainable growth and GSCM in the construction industry can be successfully implemented when contractors effectively utilize environmental capabilities of suppliers. This research investigates the shared understanding of suppliers’ capabilities including environmental management capabilities among contractor and suppliers by analyzing the consistency between the contractor’s assessment and suppliers’ assessment of the capabilities. This study looks into a supply chain of a leading construction firm which cooperates with hundreds of suppliers in Korea. Chapter 2 examines the impact which shared understanding of suppliers’ various capabilities between a contractor and a supplier on the performance of the entire supply chain and the competitiveness of a supplier firm. Unstandardized production processes, long duration of projects and discontinuity of projects have sharing understanding of suppliers’ capabilities play an important role in achieving goals in SCM for construction industry. Alignment of supplier capability evaluations reflects shared understanding of suppliers’ capabilities between a contractor and a supplier as an independent variable of the research model. The findings show that alignment of supplier capability evaluations positively influences alliance performance of supply chain which fully mediates the link between alignment of supplier capability evaluations and supplier’s firm competitiveness. Chapter 3 investigates the consistency among contractor’s and suppliers’ perspective on the environmental management capabilities of suppliers for GSCM in construction industry. The findings show that suppliers’ self-evaluations are usually higher than contractor’s evaluations. In addition, suppliers are evaluated the highest in the capabilities pertaining to relationship to the customers while the lowest in the capabilities related to relationship to the second-tier suppliers. Lastly, such factors as industry where the suppliers belong, firm size of suppliers, departments of the contractor which evaluate suppliers, and the duration of partnership with the contactor influences the consistency between contractor’s and suppliers’ perspective on the environmental management capabilities of suppliers This research has contributions to the literatures related to strategic alignment between supply chain members especially in project-based industries and provides with a new insight on suppliers’ capability management on the basis of resource-based view. In addition, this study suggests a methodology for measuring alignment of supplier capability evaluations which is essential for integrated SCM. Alignment of supplier capability evaluations in Chapter 2 is newly developed as a second-order construct to operationalize the degree of shared knowledge between supply chain members related to suppliers’ technical/operational capabilities, developmental capabilities, relational capabilities, and business capabilities. Environmental management capability in Chapter 3 can be also developed to operationalize suppliers’ capabilities related to internal and external environmental management for GSCM. Lastly, this research focuses on the suppliers in the perspective of sustainable growth, while most of studies hold a perspective of leader firms. Considering increasing interests in SSCM, the academic contributions of this research are more meaningful. Future studies can deal with the questions such as whose evaluation reflects actual capabilities of suppliers more accurately. Questions about whose evaluation is more reliable and significant in explaining sustainable growth of a supply chain and different methods for evaluation of suppliers’ capabilities can be discussed also. Empirical studies are also needed to investigate the impact of supplier’s overestimation or underestimation on the performances of supply chain.