Improving delivery reliability in non-hierarchical manufacturing networks: Testing the prerequisites of an intelligent supply chain design

In order to flexibly respond to market demands and changing business environments, today’s European machinery and equipment manufacturers are organized in agile, non-hierarchical business networks. As a consequence, relationships with suppliers are often highly volatile, instable and inapprehensible, which in turn causes turbulences with respect to reliability of deliveries. Following the design research paradigm, both practical and knowledge problems are considered by this paper. First, from a practical point of view, a new intelligent supply chain design for non-hierarchical manufacturing networks is developed, that pledges to improve the delivery reliability. Second, from a knowledge point of view, the underlying hypotheses that go along with this new design are validated using structural equation modeling. The results confirm several previously proposed assumptions, including the importance of an electronic procurement process as well as the use of incentive mechanisms for influencing a supplier’s delivery reliability.