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Supplier-assembler Network Structure and Capability Improvement of Suppliers in Newly Emerging Vietnam’s Motorcycle Industry

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Abstract

By analyzing five in-depth case studies of suppliers in newly emerging Vietnam’s motorcycle industry, this paper explores the differences in patterns and processes of capability improvement of suppliers who participate in different kinds of supplier-assembler network with different structures (arm-length or embedded). The paper finds the correlation between the kinds of suppliers’ capabilities improved and the structure of networks they participate in. While suppliers in arm-length networks can improve more upstream capabilities (structure design, process design), suppliers in embedded networks can improve more downstream capabilities (process design, process setup, process maintenance and delivery control). Two capability improvement patterns of firms in newly emerging economy are indicated. The first pattern is asymmetrical improvement, either upstream or downstream capabilities, by participating in either arm-length or embedded networks. This pattern obstructs the suppliers to meet the requirements of new buyers who come from different kinds of network. The second pattern is symmetrical improvement by joining both arm-length and embedded networks.

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