EMPIRICAL FINDINGS
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Sometimes, the R&D of the customers’ organisation design and develop samples that
are then sent to the supplier, but Endysis HZ has set up a design teamwith the purpose
to promote their own-designs to existing and new customers. In one case, a large or-
der was placed by a large European buyer to Endysis HZ. However, the factory that
successfully developed the production samples was not able to produce the whole or-
der due to capacity limits. Hence, Endysis HZ had to synthesize a horizontal supply
network for the production of this order, and to mobilise other suppliers. As the Op-
erations director explains, ‘in some cases when there is no existing relationship know-
how is sold from one supplier to another usually via Endysis HZ de facto decision’. In
this specific case, a single supplier designed the production samples and incurred all
costs associated to this development. However, Endysis HZ due to its close relation-
ship with a supplier from Ningbo introduced the competitive suppliers to share know-
how and jointly produce the new order. The supplier finally passed one third of the
production scale to the Ningbo supplier due to its existing relationship with Endysis.
As the Operations director explains, there was a strong interpersonal relationship be-
tween the Operations director and the general manager of the supplier and the de-
signs were given without any economic exchange. Here, it may be inferred that this
kind of action is part of the guanxi network world, and cannot be captured by a West-
ern model of actors’ relationships. Lastly, here, it should be noted that within hori-
zontal production networks, producers and suppliers involved are usually competitors.
However, in the case of horizontal supply networks suppliers may be competitive; yet
they are given an opportunity to cooperate and develop dynamic relationships.
The project network examined in this case involves Endysis and a large Chinese sup-
plier. This supplier has a large workforce and has established extensive networks in
China, offering good quality and fast lead times in high prices. The Western customer
having bought the trademark and designs from Warner Bros., requested a production
of 150 thousand sets to ICS; one trader of Endysis HZ, which belongs to Endysis HK.
Endysis HZ passed the designs to a known supplier, located in Jiangsu. The supplier
then sent to the customer via Endysis HZ its own designs. A few visits were made to
each other’s sites for negotiating the quality of the samples produced by the supplier,
payment terms as well as delivery schedules. It should be noted that a few central
actors were involved in these key relationship patterns. The first order ever placed by
Endysis to the supplier was for 150 thousand sets with an agreed planned delivery
date of 70 days. The price that was paid to the supplier for the order was $1.5m.
It should be noted that the Western buyer was not directly involved with its sub-
supplier and Endysis HZ was responsible for managing the Jiangsu sub-supplier. Eve-
rything went according to plan. For the next season, a much bigger production order
was placed to the same Jiansu supplier. However, this time Endysis was notified of late
