Supply chain decision-making supported by an open books policy

Based on a study of a buyer-seller relationship in the automotive industry, this article identifies 17 different decision-making processes where openly sharing cost data--a so-called open books policy--plays an important supporting role. These processes relate to supplier selection, various activities that occur prior to production, and the full-speed production stage of the exchange process. Overall, open books plays the greatest role in the pre-production stage, although it is found to support decision-making relating to supplier selection and decision-making during full-speed production to a greater extent than the literature recognizes.