Original Equipment Manufacturers are increasingly focusing on cooperation with a small number of risk-sharing partners who co-design and deliver key subsystems of the finished product. This trend increases collaboration activities throughout the supply chains involving suppliers of all sizes, including innovative small to medium-sized enterprises. The movement to Industry 4.0 concept such as “lot size of one” and demand-responsive production means these collaborations would be formed “on the fly” to respond to fast changing market needs and ever shorter product lifecycles.
Research has created models and approaches claiming to provide effective software support for such collaborations on demand (also known as instant virtual enterprises); however, these have yet to be implemented and widely applied by suppliers and manufacturers. Research literature, whilst still praising the theoretical advantages and transformative nature of dynamic value chains, is starting to note (as yet undisclosed) economic, managerial and technological concerns that impede uptake of these ideas.
In this paper we analyze exploratory interviews with a number of suppliers in the aerospace industry, and reveal key barriers such as lack of trust, switching costs, information asymmetry and path dependencies that prevent the uptake of short-term collaborations and present them in the sequence they appear forming supplier collaborations on demand.