Supplier Visibility: Important Relationship-Specific Capability for Buying Firms

Abstract:Obtaining visibility into key suppliers is considered of utmost importance for manufacturers. However, the term supplier visibility has been underdeveloped. For better future studies and application of the concept, we need to clarify it theoretically and practically. This paper endeavors to fill in the gap by providing a conceptualization of supplier visibility which is built on extant theories. Specifically, our literature review on this concept has shown that the term has usually been used interchangeably with other concepts such as information sharing. We stress, however, that to be qualified for supplier visibility, the concept needs to take information sharing as a prerequisite, but goes beyond it and requires the efficacy conditions. Moreover, as suggested by extant theories, supplier visibility may be multi-dimensional. Thus, we conceptualize supplier visibility as the degree to which a focal buying firm is able to access timely, accurate, and relevant information about its supplier’s operational and strategic issues. To illustrate the working of the concept in practice, a case study in the automotive industry contrasting the approaches used by the U.S. and Japanese manufacturers is presented. Directions are also recommended for future studies.