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The central premise of this paper is that collaboration, and more specifically e-collaboration, plays a major role in achieving a sustainable competitive edge. In particular, we propose here to examine the relative efficiency of electronic collaboration (e-collaboration) tools and to assess the impacts of these tools on the innovativeness and performance of individual firms positioned along an industry-specific single supply chain. Empirical data from both the upstream and downstream perspectives for firms positioned at different points of one supply chain suggest that e-collaboration and its impacts create a one-sided benefit for the upstream side of the supply chain: first, the overall relative efficiency of e-collaboration tools is higher and, second, the impacts of e-collaboration are more beneficial when used with suppliers than when used with customers. The results also point to a stage model for implementing collaboration tools in a supply chain: the level of efficiency is higher for e-collaboration tools that support more operational than strategic activities (procurement vs. capacity planning). Finally, this research suggests strongly that collaboration tools can have significant impacts on the supply chain and that these tools need to be implemented progressively, both upstream and downstream, thereby yielding different and, most probably, cumulative benefits over time.