Exploring Business Value through Information Quality of Collaborative Supply Chain Practices and Performance in Context of Pharmaceutical Industry of Bangladesh

Abstract

In Bangladesh, Pharmaceutical sector is one of the most developed high-tech sector which is contributing in the country's economy. Nowadays, this sector is providing 95% of the total medicine requirement of the local market. The professional knowledge, collaborative supply chain management practices, thoughts and innovative ideas of the pharmacists working in this sector are the key factors for these developments. Recently, researchers have highlighted the multidimensional nature of collaboration that goes beyond the exchanged of information. Collaborative practices should also incorporate joint decision-making and the alignment of incentives [1, 2]. With regard to information exchanged, the pharmaceutical industry has shared information for many years to arguably an unparalleled level compared with other industries. However, information quality has been largely overlooked by previous research. Research has thus essentially oversimplified the complex nature of supply chain collaboration. There appears to be a gap in the literature acknowledging the multidimensional and complex nature of collaboration and linking it to information quality. This research paper aims to explore the complex nature of collaboration and the role of information quality in the collaboration practices and performance relationship in Bangladesh pharmaceutical industry.

Specifically, this research focuses on the following research question: does the impact of collaborative practices on operational performance depend on the quality of the information exchanged in terms of its timeliness, accuracy, relevance and added value in context of pharmaceutical industry in Bangladesh. However, the findings suggest that the collaborative practices of information sharing, incentive alignment and joint-decision making do not equally improve performance. In addition, some aspect of collaboration appear to only become important performance drivers if the information exchanged between supply chain partners is of high quality; the quality of information being dependent on its timeliness, accuracy, relevance and added value. Therefore, this study makes a significant contribution to practice by revealing how the specific elements of collaboration impact differently on operational performance. In addition, this work draws particular attention to the practical importance of information quality and its pivotal role for the success of collaboration practice. Specifically, incentive alignment and joint decision-making only significantly improve operational performance when the information is timely, accurate, relevant and adding value, i.e. of high quality. At the same time as information sharing improves operational performance under low and high quality conditions; its impact is significantly stronger when the exchanged information is of high quality. Therefore, to gain the full potential benefits from collaborative initiatives, companies need to priorities investment towards improving the quality of information shared and exchanged between supply chain partners.