Supplierintegration (SI) can be defined as the management category which is representthat the activity which are join by supplier among each other by thetraditional performance with the retailer (Lockström et al., 2010). It was alsothe main key to the strategy for management to increase the performance ofbuyer (Danese, 2013).
For theseyears, the competitive was keep increasing to forces certain company in rethinkfor their strategy of supply chain to cause in decreasing for their costsproduction and maintain or become better in customer service in the same time.For certain industry, the production and supplier was difference in the previoustime. The outsourcing will help industry in increasing the number ofcompany. SIcan create to a faster supply network among the supplier with the structurenetwork on the performance of buyers. There has evidence with 186 manufacturingplants was has faster in network structure with the provided by supplier amongeach other. Therefore, SI can make the company more efficiency and flexibilityin their network structure.
Moreover, they are dependence each other to produceextra synergic which are influence on the time progress in attainment. The datawas shown that was disclosed about there are dangerous for investing in SIinitiatives. Therefore, SI was would be effect when the structure network ofthe company was fail to implement in shorter lead times and schedule of the SIattainment was be blocked.Inother hand, the speed for network structure will be fast when the company are investingsome outside projects. This was a best guideline to guide the manager for thoseare know how to control the supplier integration and supply network structureinitiatives will be faster ways in order to increasing the performance. 1.
1 Scope andObjection1.0 LiteraturesReview of Supply Integration Supplierintegration (SI) in management is defined as a supplier is participating in thetraditional activity that is fulfilled by resellers. These activities arehelping to make a decision, on which products are going to sell, where to sell,how much was the price be and make sure the product are deliver on time to thestores. Based on the situation, the supplier integration may be more or lessappropriate in these activities. SI is become more and more important toimprove the performance for supply chain (Lockström et al., 2010). In recentyear, the interest for SI was been increase. Inside SI has two types ofpractices which is internal practices and external practices (Das et al.
, 2006). It was alsohas imperative strategy that can help company to make improvement in theirperformance and increase competitive advantage for a company marketplace (Lin, 2009). To getcompetitive advantage, every company are creating in innovating by evolution insolution which are include both of intangible and tangible components (Zhang et al., 2016). Accordingto Yeung et al (2009), many of the researches are survey for the trust betweenthe suppliers (Yeung et al.
, 2009). Every supplieris still in largely unknown for the coercive power and trust that influencebetween the suppliers. In SI, the comprehensive for the information of supplierintegration activities needed as much as possible. The evidence is based on the173 industrial companies whose has supplementary interview with the purchasingexecutive (Wagner, 2003). The needed forthe collaboration in the team work for SI are strong (SJÖDIN and ERIKSSON, 2010b). Companycan find out the idea for decreasing the time concept in the customerdevelopment, cost reduction in new product and quality improvement by getinformation among the suppliers (Petersen et al.
, 2003). Japanesecompany was use one approach way to make successfully which are including thesupplier materials of integration for the new products. Based on the casestudy, there has 17 times of successful in manufacturing from American andJapanese.
The accuracy of information from SI is can help a company to find outthe quality of the product category by sharing information between thesuppliers (Sen et al., 2008). 3332.1 InnovationInnovation is a process of turning new knowledge andideas into service and products to create a new consumer demand in themarketplace (Andrew et al.
, 2010). The focus oncreating a new innovation for a product will bring the company into high-techof industries. The empirical of analysis was show that the creating ofinnovation is obvious in the mature industries (SJÖDIN and ERIKSSON, 2010a). The innovationconcept can help the company in development or improvement, which are includeprocess, management, products and services to the new products (He et al.
, 2014). According toCuculelli et al (2016), there has some risky for the product innovation whichis there has uncertain return in commercial (Cucculelli et al., 2016). There are manyresearch was show there are not 100% guarantee the revenue can get in thefuture after the product innovation has been created into the marketplace. Thelonger of timescale provided by development, the more risky to overtaken by thecompetitor. In additional, product innovation will bring advantage for companyin decreasing the uncertain needs in the market (Johansson and Môllefors, 2013). It can bringthe company to stay in competitive and get the benefit of competitive if thecompany can guide the innovation to the right ways.
To be successful inprocessing innovation, the most important key is ability for the company inchanging environment (Lii and Kuo, 2016). This was meanthat the company should keep evolving that they can have more equipped for thechanging in market. When a company has provided innovation in their products,every consumer in the market will keep waiting for the product with theirexpectation. Besides that, the innovation from SI will cause the whether thebusiness growth of the company will be improve or decrease.
If the innovationproduct are dissatisfaction with the consumers what they expect, the businessgrowth will be decrease. 288 2.1.1 Productinnovativeness The main capability for the innovation is the talent inproducing the innovative products, there has several studies been show theresult that there has a good or positive relationship in financial performancefor the product and the innovative of a product. McNally et al (2010) was beensurvey the conceptual study of the concept from the product innovativeness (McNally et al.
, 2010). He found thatthe product newness was the most common use in the product innovativeness. Baark et al (2011) was define the productinnovativeness as a qualification for the ability of a company in how theyintroduce their new goods to the marketplace. This was mean how theconstruct of a company should be in order to get the information aboutinnovation of a company and make a survey on their outcome performance (Baark et al., 2011). According theresearch by Mata and Woerter (2013), there was has the disadvantage for theproduct innovation which is dissatisfaction to customer with the productinnovation (Mata and Woerter, 2013). It will makedissatisfaction from consumers if the new products are not meet what theyexpected. Therefore, product innovations for a company are totally new for theconsumers in the market and it also can be survey as nature of innovation.
The highlyfor the products innovation will increase the performance of the products (McNally et al., 2010). If a companyhas fully adopted for their capabilities of production innovation, it willcause the improvement of the product performance. When a company has the highperformance for their product, it will cause every consumer like to spend theirmoney to the products. If every consumer likes to spend or use with theproducts innovation that create by SI, consumers will bring the company inincreasing in their business growth. 2812.
1.2 Sources ofinnovationVonHippel (2013) was elaborated that the innovation are not just only being withinthe company, but the source of the innovation are on external. There has builtthe innovation by using certain external sources and the high level ofunderstanding about the sources will be able transfer the highly innovation (von Hippel, 2013). There canbuild a useful service and products with the both combination of externalsource and internal source. Von Hippel (2013) was allocated the external intothree categories. Von Hippel (2013) was defining that the external sources mustinclude the performance into the innovation.
Lichtenthaler (2011) was definethe disadvantage for the innovation source which are get from the marketplace (Lichtenthaler, 2011). For certainsurvey was do in the marketplace was inaccuracy, because certain consumer willbe the loyalty consumers. What product create by the company also been like andsupport by their loyally consumers. Besides that, for all executive in thecompany are mostly agree to create innovation with continuous or unstop becauseit is the necessary for the competitive advantage in the company.
Theinformation of innovation are mostly form external sources, which are doingsurvey what or which types product needs by consumers in the marketplace. Therefore,source of the innovation are important to build some innovation products. Withthe information has, they only know what they should create to the market andwhat was the consumer are expect for. The external information from consumerson the market are important to the company to make the innovation in theirproducts, because of the company must understand what types of product arelooking for consumers in the marketplace. In addition, SI can help the companyin their business growth because of they are created the product innovationwhat consumers demand in the market. 2752.3 Earlysupplier involvement (ESI) Early supplier involvement (ESI) was processes that bringadvantage to the project of product development in certain ways. According toEisto et al (2010), the advantage of ESI can be reduce the cost for newproduct, shorter time to market, development in faster way and qualityimprovement (T.
Eisto et al., 2010). ESI wasproviding benefit in the decreasing development and manufacturing time for thenew products. Lukhoba and Muturi (2015) has elaborate that the cost ofmanufacturing for a product are mostly decided by the pattern of the products (Lukhoba and Muturi, 2015). Supplier wasbeen approve to drive in efficiency ways and helping in market to get faster byusing Original Equipment Manufacturers (OEMs) (Bakar et al., 2017).
Du et al(2011) was elaborate that there has some disadvantage for ESI which isdifficult to be process (Du et al., 2011). There aredifficult to be process if the top management in the company does not approvethe work done by ESl. If the top management did not engage with ESI, there arehard to be done by ESI with certain projects. In additional, Hamid (2006) wasdefine that the ESI can make improvement in design of the goods and process ofthe product development by using the vital product (Hamid, 2006). Therefore, theparticipation of early supplier will has difference idea to the product anddecrease the certain waste of the process to the products. By using thismethods, time of the new product to the market will be shorter and can buildthe growth of the product in the market with early time.
Participation from ESIcan help the company improving in the business growth because of them are moreunderstand the needs from the consumers in the marketplace. 274 2.3.1 Supplier development (SD) Supplier development (SD) was the integral section fromthe relationship between supplier and manufacturing. SD was play an importantrole in the element of supply chain management (Tungjitjarurn et al., 2012). In othersword, SD also can called as supplier performance.
When company are finding the suppliersthose are insufficient in their job performance, it can be assist to supplierin growing their capabilities. There has some evidence shown that the plan ofSD was increase the supplier performance such as SD plan of Otis Elevator whichare located in Indiana, the SD plan was the main activity for the supplymanagement (SM). The executive in Eaton Corporation was trust that the SD areassist to make improvement by using their supply base and decrease the cost ofsupply base, increase the capacity, increase quality and decrease the lead time(Modi and Mabert, 2007).
Abdullah(2008) was define that the SD are operation for long term period of timebetween the consumer of the company and supplier would increase in theirquality, technical, capabilities and cost delivery time (Abdullah, 2008). Every companywas increasing in their performance for their supplier with using thecommitment initiative which are transmit the ability skill to lets them dependon practicing with the production into the supply base (Sako, 2004). Moreover, Liet al (2007) was elaborate that the communication was another factor tointerface between company and suppliers.
Light in communication will cause hasproblem in supplier production and can be misunderstand for the productionbetween each other (Li et al., 2007). Worthless incommunication will cause the conflict happen in any situation, it will guide toincorrect production and misunderstandings (Modi and Mabert, 2007).
Therefore, SDis playing an important role that can make a result in improving or decreasingthe business growth in the market for the supplier. 2872.4 TotalQuality Management (TQM) Total Quality Management (TQM) was a combination way toconsists of principles, whose target is to make the improvement in the productor service quality for a company. TQM are more concentrate in improving thesatisfaction of consumers (Vanichchinchai and Igel, 2011). Ardianto et alwas define TQM as make sure the procedure are followed and satisfied byconsumers (Ardianto et al.
, 2014). It waseffectively in both downstream and upstream are very major to consumer that tofocus on corporate and it was bring the competitive benefit to the supply chain(Talib et al., 2011). There has evaluationfor the case study of TQM is responsible to realize the target of a company byappeasing the consumer and maintain the relationship with the supplierintegrated for long term period of time. Moreover, there was a necessary todetermine whether the TQM are fulfilling for successful for every types ofstrategy in the company. Successfully ofthe TQM will cause better in the competitive benefit and satisfaction formconsumer. According to the information provided by Mohammad Mosadeghrad (2014),there has the disadvantage for TQM which is demands in planning, capital andtime (Mohammad Mosadeghrad, 2014).
The amount needsin time and capital for TQM are huge amount to be spent. It needs to be spent alot for a company if they use TQM strategy to build up their business growth. Lastly,Mehra and Raganathan (2008) was state that the TQM need has a long term periodof time to make the improvement by using both information which is humanresources and financial (Mehra and Ranganathan, 2008; Joiner, 2007). TQM thatprovided by SI was the most important session to company, because of thequality product or service will cause the company in improving or decreasing inthe business growth. 279 2.5 Supplier Selection Supplierselection (SS) was a process from a company to determine, evaluate andagreement with the supplier. The reason of SS in a strategy for the decisionmaking is to carry out the goal of the company in the long term period of timein lower risk. In year 2012, Japanese car machines was faced a problem withshockwave in supply for the certain flood at the Thailand country which are inPathumthani and Ayutthya.
Both two areas was main location where the suppliersare located. Dargi et al (2014) was elaboratethat every bigger and successful company has bigger and stronger supplier inthe behind of them (Dargi et al., 2014). The way in selection rightsupplier is important to company which is can reduce or minimize the externalrisk for the company by the supplier. According to Golmohammadi et al (2009)was state that the process of the arrangement for SS needs spent a huge amountof financial resources for a company (Golmohammadi et al., 2009). It was also needs to spend alots of times and labor forces to done the procedure of SS.
In additional,there was the benefit to has process strategy of SS which is visibility form theirperception. By purchasing some product through their perception, it will helpcompany to purchase a best quality for the materials or production. 2182.5.1 Supplier selection criteria Theanalysis and certification of the standard level for the estimate and selectionfor the supplier was more concentrate on practitioners and academic. The criteriaof the supplier were dividing into two categories which are qualitative andquantitative attributes. The ways to select a criteria with adequate was dependon purchasing condition. Cost, delivery and quality was the fundamental forcriteria are still use abroad.
Moreover, the scope of criteria was developinginto the wider matrix parallel with the SCM philosophy. Thiruchelvam and Tookey(2011) was defined that the capability and performance was the two main keypoint for the abilities to a supplier (Thiruchelvam andTookey, 2011). Performance is the talent of supplier tofulfill the demand of buyer in short term period of time with the term ofquality, cost and others criteria term. The capability can defined as the talentof supplier to influence the benefit of purchaser in long term period of time.The element for the performance are quantitative and it was use to survey theproblem in the qualitative. According to Kim and Wagner (2012), there was statethat the supplier selection criteria was supply certain product to the company (Kim and Wagner,2012). If the companies need to purchase othermaterial or product to substitute those products, they do not have for it.
Becauseof the supplier criteria was provide the unique product and does not provide thesubstitute product to others. In additional, Rajesh and Ravi (2015) was mentionthat supplier criteria was help a lots for the company such as in reducingcost, high quality, faster delivery and so on (Rajesh and Ravi,2015). The Supplier criteria can make a companyimprove in the business growth because based on the cost saving and the highquality. The consumers in the market can get the high quality with the cheapercost and it will cause the business growth to increase in the marketplace