Responding to schedule changes in build‐to‐order supply chains

Abstract

This multiple case study explores the reaction strategies suppliers use to respond to short‐term dynamics of schedule changes in build‐to‐order supply chains. We examine the relationship and supply chain processes between a notebook computer manufacturer and five component suppliers. Two distinct reaction strategies emerge from these five buyer–supplier dyads. The “reduce uncertainty” strategy emphasizes supply contracts with a high degree of restrictiveness, relatively infrequent schedule revisions, and a high level of form postponement. The “cope with uncertainty” strategy emphasizes flexible supply contracts, relatively frequent schedule revisions, and low levels of form postponement. Eight propositions are formulated to understand the linkage between a supplier's power, its short‐term process flexibility, and the elements of its reaction strategy. The paper concludes by proposing future research directions.