Fast evolving industries (FEI), such as those of electronics, semiconductors, high performance materials, fast consumer goods, biomaterial and pharmaceutical goods, music, advertisement, video games, etc., are characterised by high level of innovation and differentiation (Humphrey & Schmitz, 2002) and high products variety and low product life/replenishment cycles (Bilgen and Günther, 2010). FEI, therefore, covers a wide variety of high added-value technology-based industries and a large proportion of progressing and prospering industries in Europe. Although FEI has been receiving much research efforts in science and technology, they yet need much further management studies. These industries often need a set of well-tuned supply chains, for which the interaction and integration between the suppliers are vital to the existence of the chain; and therefore, supply chain management (SCM) is of extremely high importance to their competitive advantage and survival.
Short product life cycles, high variety of the products, fast technology obsolescence, high level of uncertainty and market volatility make supply chain design and planning of a significant management effort in these industries (Christopher et al., 2004); and therefore, high control level, as opposed to flexibility and responsiveness is required in these industries. These measures are inherently in trade-off, which yet again adds to the complexity of supply chain management in EFIs.
Integration with suppliers is now widely considered as the core of successful supply chain management (SCM) in arguably all industries, including FEI (Richey Jr et al., 2009, p. 827). Nevertheless, the level of required integration in FEI has yet remained widely undiscussed in academia and practice.
Here at Nottingham Business School, where we actively work with many companies in these industries, we have recently developed a strategic SC integration model for FEIs, as briefed below (Stephens, Sabet and Yazdani 2014), which links the required level of integration to the importance of the supplied product/service to the core business and the SC uncertainty and risk.
Strategic partnership and vertical integration, depending on the supply risk, are the main practices in this industry, when the importance of the supplied product is critical to the core business. These two strategic decisions are relatively better discussed in the literature (Suzuki et al 2011).
Thus, the focus of this study remains on the situations where the importance of the supplied products/services are not critical but still important to the core business. It is in this condition that many alternative strategic decisions can be employed, depending on the market situation, supply risks, the nature of the businesses and the organisational and internal policies. Therefore, to further develop and then verify this decision-making model, this research will be structured as followed:
• Aim & Objective 1: Understanding the market configuration and industry structure of FEIs.
How to achieve: A survey study and a wide comparison analysis against different industries within FEI, in the context of their market needs, to find the common structures and differences
Output: A framework to categorise different FEI industries, their structures and their market demands
• Aim & Objective 2: to understand how FEI companies integrate with their suppliers in different situations, linking with their structure and external pressures.
How to achieve: A set of case study as well as interviews with directors and SC executives will be conducted to study decision-making behaviours and strategies of different FEIs in different situations, after a real-option base survey study to establish the general patterns and common decisions.
Output: patterning decision-making behaviour and supply chain integration of FEIs, verifying, and extending the above-mentioned model.
For informal enquiries about this project, please contact: Dr Ehsan Sabet: [email protected]