370436 Coopetitive Supply Chain Relationship Model: Application to the Smartphone Manufacturing Network

Monday, November 17, 2014
Galleria Exhibit Hall (Hilton Atlanta)
Jeremy Jie Ming Kwok1,2 and Dong-Yup Lee2, (1)NUS Graduate School for Integrative Sciences and Engineering, National University of Singapore, Singapore, Singapore, (2)Chemical and Biomolecular Engineering, National University of Singapore, Singapore, Singapore

In the era of turbulent global economy, “supply chain 2.0” has to be lean, agile and structurally flexible, thus underscoring the need of strong supply chain relationship. Most of the relationship literature focused on vertical collaboration between cooperative buyers and suppliers. However, there are some cases of stable and volatile cooperation amongst competitors such as airline alliances and Apple-Samsung product manufacturer-component supplier relationship, respectively, which is known as coopetition. Despite several qualitative studies on coopetition in general, only a handful of attempts, mainly based on game theory, have been made for quantitative characterization of such coopetitive dynamic behavior in supply chain relationship. Thus, in this regard, we developed a mixed-integer non-linear programming model describing manufacturer-supplier relationship for a cost efficient supply chain coopetition network. Notably, the coopetition factor was newly introduced to quantify the degree of coopetition taken in the supply chains and to help the end-product manufacturer determine the optimal level of coopetition to engage in. The applicability and utility of the model were successfully demonstrated through a case study of a hypothetical smartphone supply chain network. The coopetition factors of end-manufacturing firms were measured under different scenarios, as such suggesting their optimal supply chain interactions for strategic viability. Hence, the current exploratory research can pave the way in enabling manufacturers to drive coopetitive business globally.

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