Lateral Collaboration in Semiconductor Industry Supply Networks: A Procurement Perspective

The interactive emphasis of vertical and horizontal collaboration in the semiconductor industry supply chain (SSC) support the buyer(s) performing procurement activities with supplier(s) through joint planning and decision-making, information sharing, resource sharing and incentive alignment. The paper proposes a framework to explore the resource sharing conditions under which enterprises are motivated to collaborate and the conditions in which such collaboration would be successful. A lateral collaboration scheme is proposed, which can be operated by the e-market intermediary to motivate buyers and suppliers to collaborate under competion. The results of this study demonstrate that the proposed collaboration mechanism yields an effective infrastructure for each members of the supply chain that supports efficient exchange of information and resources among all members. It is expected that the proposed scheme would enable the optimal capacity decision among competing suppliers for minimum expected total cost of the supply chain by appropriate selection of ordering quantity and penalty cost as imposed by the e-market intermediary. It is argued that the managerial decision-making in procurement perspective contribute to the matching between supply and demand for gaining mutual benefits.