Supplier transparency: scale development and validation

• DOI: https://doi.org/10.1108/IJLM-01-2017-0018
• Pages: 959-984
• Published date: 09 July 2018
• Date: 09 July 2018
• Author: Tyler R. Morgan,Robert Glenn Richey Jr,Alexander E. Ellinger
• Subject Matter: Logistics,Management science & operations

REGULAR PAPER

Supplier transparency: scale

development and validation

Tyler R. Morgan and Robert Glenn Richey Jr

Department of Systems and Technology, Harbert College of Business,

Auburn University, Auburn, Alabama, USA, and

Alexander E. Ellinger

Department of Marketing, Culverhouse College of Business,

University of Alabama, Tuscaloosa, Alabama, USA

Abstract

Purpose –The purpose of this paper is to create an instrument for conducting future supply chain

transparency research by developing and validating a measure of supplier transparency. Specifically, the

research develops a two-dimensional measure of supplier transparency that builds on previous studies that

independently examine visibility and traceability in supply chain management (SCM)/logistics.

Design/methodology/approach –The scale development process is carried out over three stages (item

generation, scale purification, scale validation). Survey methods are used with two separate data collection

phases involving a total of 358 managers from multiple and diverse industries.

Findings –The new supplier transparency measure is a concise, two-dimensional scale that has the potential

for significant usage in the development and testing of SCM theory.

Research limitations/implications –This study implemented a purposefully general sampling

procedure. However, different industries may have additional, specific constraints regarding what it means to

be a transparent supplier. Additional opportunities for future research include applying the new supplier

transparency measure to examine supply chain frameworks, regulatory compliance, supply chain

relationships and the implementation of information technology.

Practical implications –Firms are under increasing pressure to be transparent about partner sourcing,

resource utilization and other transactional issues related to the products and processes in their supply

chains. The new measure may be utilized to address these issues as well as the interaction between supply

chain operations and stakeholders by facilitating a quantitative assessment of supplier transparency.

Originality/value –Drawing on the established constructs of supply chain visibility and traceability, a

measure of supplier transparency is developed, supported by a review of the literature, input from subject

matter experts and interviews with supply chain managers. Suggestions are made for future validation of

supplier transparency within established supply chain frameworks.

Keywords Survey, Scale development, Transparency, Information technology, Traceability, Visibility,

Product provenance

Paper type Research paper

Introduction

As technological advances have opened access to knowledge about supply chain activities,

multiple stakeholders (e.g. supply chain participants, employees, regulators, NGOs) up and

down the supply chain have become increasingly interested in product origin or provenance

(Wolf, 2013). Industry practices that may have previously gone unreported are no longer

safe from scrutiny as products and services can be tracked from cradle to grave (New, 2010).

Marketplace demand for information about the origin and history of products has grown so

that even price sensitive firms, like Walmart and Target, are reporting their supply chain

practices and abandoning suppliers that do not measure up (Schwartz, 2013). Lack of

transparency about supply chain practices has implications for regulation, ethics and risk

that are manifested by the occurrence of corporate and government scandals over the last

The International Journal of

Logistics Management

Vol. 29 No. 3, 2018

pp. 959-984

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-01-2017-0018

Received 27 January 2017

Revised 3 August 2017

29 November 2017

Accepted 1 December 2017

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

This paper forms part of the regular section.

959

Supplier

transparency

15 years (e.g. Doorey, 2011; Tyson, 2014). Hiding questionable practices from a very

interested community has become difficult as supply chain blunders with both economic

and societal consequences are quickly disseminated and made public (Vittorio, 2014).

Supply chain transparency (SCT) is reporting to and communicating with key

stakeholders to provide traceability regarding the history of the product and visibility

about current activities throughout the supply chain while also incorporating stakeholder

feedback for supply chain improvement (adapted from Carter and Easton, 2011; Carter and

Rogers, 2008). SCTcan reduce negative market signals by providing an open communication

about how the firm is addressing sensitive topics such as environmental or social challenges

(Gold et al., 2010).Lamming et al. (2004) describestrategic transparency as “planninga project

or relationshipon the basis of what needs to be shared andin what manner, at what time, for

the purpose to be achieved and potential (or latent) value to be realized”(p. 202). SCT offers

marketplace participants and other stakeholders the opportunity to assess regulatory and

voluntary compliance. Thus, SCT enables firms to redirect product evaluations beyond the

final product to include the entire process involved withdeveloping and bringing products to

market (Gold et al., 2010). Improving SCT in one supply chain can positively impact other

firms horizontally across the full supply network(Carter and Rogers, 2008).Nevertheless, SCT

is subject to growing complexity that is created as popular practices such as outsourcing

reduce transparency among supply chain participants (Kim and Davis, 2016).

The need to consider the social impact and long-term implications of supply chain operations

(Park-Poaps and Rees, 2010; Quarshie et al., 2015) has led many firms to consider becoming more

transparent about their supply chain activities. Stakeholder demands for increased transparency

have led researchers to investigate transparency through measurement, models and frameworks

in many disciplines (e.g. accounting, Cheung et al., 2010, ethics, Kaptein and Schwartz, 2008,

government corruption, Park and Blenkinsopp, 2011, leadership, Bandsuch et al., 2008 and

relationships, Fox, 2007). Although transparency is characterized as a supporting pillar of

supply chain management (SCM) (Carter and Easton, 2011), SCT research is still relatively

new (e.g. Egels-Zandén et al., 2015; Baldassarre and Campo, 2016). Moreover, measurement

instruments for SCT are lacking and tend to be restricted to specific areas (e.g. agri-food

industry, Bastian and Zentes, 2013). Yet, a recent study ranked transparency/visibility as the

fourth most understudied, yet important, theme in SCM research (Wieland et al., 2016).

Drawing on Freeman’s (1984) stakeholder perspective as the theoretical motivation for

firms to engagein transparent supply chain practices, and building on previousresearch that

examines supply chain visibility and traceability, this research advances the concept of SCT

by focusing on supplier transparency. The results of this study provide three primary

contributions. First, SCT is defined with a focus on how transparency in the supply chain

requires traceability and visibility from suppliers. Second, a scale development is undertaken

to cultivate and validatea supplier transparency measurement instrument. Finally, areas for

future validation of the supplier transparency scaleare proposed with broad implications for

the development and testing of SCM theory, as well as practical application of SCT and

supplier transparency in supply chains and other service provision contexts.

Literature review

Supply chain transparency

SCT involves reporting to and communicating with key stakeholders to provide traceability

regarding the history of the product and visibility about current activities throughout the

supply chain while also incorporating stakeholder feedback for supply chain improvement

(Carter and Rogers, 2008; Carter and Easton, 2011). This conceptualization incorporates

supply chain traceability and visibility as enablers of transparency that provide product

provenance to a broad audience of stakeholders. Carter and Rogers’(2008) description of

SCT emphasizes the communication that stakeholders provide to foster supply chain

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