Extent and Effect of Horizontal Supply Chain Collaboration among Construction SME

Abstract

The majority of companies involved in value delivery in the Swedish housing industry are Small- and Medium-sized Enterprises (SME). An SME is often managed in an informal way with focus on sales and production. Many SME are also financially vulnerable as they are strongly dependent on a few key customers and key products. As variation will always exist, SME should learn to deal with variation instead of try eliminating it. This paper hypothesises that structural flexibility in SME supply chains through horizontal collaboration leads to a regional environment of economical growth from which all active SME will benefit. The hypothesis is examined through two case studies; a Swedish supplier network that has worked together six years and a four year old Norwegian supplier network. A benefit of collaboration is knowledge sharing that lessens the economical strain of keeping up with the “latest”. Other examples of collaboration are shared production resources in case of low capacity. Collaboration within supplier tier networks is considered to mark the emergence of a “collective strength” that improves individual suppliers bargaining position towards their customers. This evolution is considered an indication of the emergence of a “Lean Enterprise” within the house building sector.