Supplier development and its incentives in infrastructure mega-projects: A case study on Hong Kong-Zhuhai-Macao Bridge project

Abstract

In this paper the Hong Kong-Zhuhai-Macao Bridge project is taken as a case to analyze supplier development in infrastructure mega-projects. Compared with manufacturing industry, the characteristics of supplier development in infrastructure mega-projects is analyzed in term of development motives, supplier selection, quality management, production mode, owner participation and risks. The critical factors influencing the construction supplier development are identified, which include incentives, collaboration, future market, trust and bilateral communication. Furthermore, focusing on the incentives for the supplier’s product quality and production capacity improvement, decision-making framework models are proposed to design the incentive mechanisms.

Keywords

infrastructure mega-project / supplier development / critical success factors / incentives / case study

References

[1] Banker R D, Khosla I, Sinha K K (1998). Quality and competition. Management Science, 44(9): 1179–1192

[2] Basar T, Olsder G J (1982). Dynamic Noncooperative Game Theory.London: Academic Press

[3] Bresnen M, Marshall N (2000). Building partnerships: Case studies of client–contractor collaboration in the UK construction industry. Construction Management and Economics, 18(7): 819–832

[4] Cachon G P, Lariviere M A (2001). Contracting to assure supply: How to share demand forecasts in a supply chain. Management Science, 47(5): 629–646

[5] Dyer J H, Nobeoka K (2000). Creating and managing high performance knowledge sharing networks: The Toyota case. Strategic Management Journal, 21(3): 345–367

[6] Hahn C K, Watts C A, Kim K Y (1990). The supplier development program: A conceptual model. Journal of Purchasing and Materials Management, 26(2): 2–7

[7] Handfield R B, Krause D R, Scannell T V, Monczka R M (2000). Avoid pitfalls in supplier development. Sloan Management Review, 40(2): 37–49

[8] Krause D R (1999). The antecedents of buying firms’ efforts to improve suppliers. Journal of Operations Management, 17(2): 205–224

[9] Krause D R, Ellram L M (1997). Critical elements of supplier development—The buying-firm perspective. European Journal of Purchasing & Supply Management, 3(1): 21–31

[10] Krause D R, Handfield R B, Scannell T V (1998). An empirical investigation of supplier development: Reactive and strategic processes. Journal of Operations Management, 17(1): 39–58

[11] Krause D R, Scannell T V, Calantone R J (2000). A structural analysis of the effectiveness of buying firms’ strategies to improve supplier performance. Decision Sciences, 31(1): 33–55

[12] Laffont J J, Martimort D (2002). The Theory of Incentives: The Principal-Agent Model. Princeton: Princeton University Press

[13] Lascelles D M, Dale B G (1989). The buyer-supplier relationship in total quality management. Journal of Purchasing & Materials Management, 25(2): 10–19

[14] Li W, Humphreys P K, Yeung A C, Edwin Cheng T C (2007). The impact of specific supplier development efforts on buyer competitive advantage: An empirical model. International Journal of Production Economics, 106(1): 230–247

[15] Mahapatra S K, Das A, Narasimhan R (2012). A contingent theory of supplier management initiatives: Effects of competitive intensity and product life cycle. Journal of Operations Management, 30(5): 406–422

[16] Mead J, Gruneberg S (2013b). Programme Procurement in Construction: Learning from London 2012. Oxford: Wiley-Blackwell

[17] Modi S B, Mabert V A (2007). Supplier development: Improving supplier performance through knowledge transfer. Journal of Operations Management, 25(1): 42–64

[18] Nagati H, Rebolledo C (2013). Supplier development efforts: The suppliers’ point of view. Industrial Marketing Management, 42(2): 180–188

[19] Ross A, Goulding J (2007). Supply chain transactional barriers to design cost management. Construction Innovation, 7(3): 274–287

[20] Sako M (2004). Supplier development at Honda, Nissan and Toyota: Comparative case studies of organizational capability enhancement. Industrial and Corporate Change, 13(2): 281–308

[21] Tang W, Duffield C F, Young D M (2006). Partnering mechanism in construction: An empirical study on the Chinese construction industry. Journal of Construction Management and Economics, 132(3): 217–229

[22] Tapiero C S (2005). Value at risk and inventory control. European Journal of Operational Research, 163(3): 769–775

[23] Tomlin B (2003). Capacity investments in supply chains: Sharing the gain rather than sharing the pain. Manufacturing & Service Operations Management: M & SOM, 5(4): 317–333

[24] Toni A D, Nassimbeni G (2000). Just-in-time purchasing: An empirical study of operational practices, supplier development and performance. Omega, 28(6): 631–651

RIGHTS & PERMISSIONS

The Author(s) 2018. Published by Higher Education Press. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0)