How can supply chain optimization and improvement be achieved in an automotive sector modular consortium?

Purpose Anchored in transaction cost theory and the resource-based view, this study aims to present original insights from primary data on optimizing and improving supply chain management methods within a modular consortium in the automotive industry of an emerging economy (Brazil). Thus, this study explores aspects of supply chain firms and transactions that facilitate optimization and improvement in a modular consortium. Design/methodology/approach This study carried out a significant case study on a modular consortium from the automotive industry with a leading automotive assembler and ten of its leading suppliers in Brazil. This study interviewed the key stakeholders, such as the plant’s supply chain manager, managers of the leading automotive assembler and ten suppliers. This study performed the data analysis and coding using best practices for the selected content analysis method. Findings This study research presents several significant findings, such as: it elucidates the distinction between the concepts of optimization and improvement, demonstrating the specific techniques applied in the case study for each concept; it emphasizes the critical role of continuous improvement methodologies, particularly lean practices, within the context of a modular consortium; it reveals that the complexity of processes and the size of suppliers considerably impact the adoption and efficacy of optimization and improvement methods in such a consortium, offering valuable insights for supply chain managers in the automotive industry; and it provides a theoretical framework for managing suppliers based on their contribution, indicating that higher contributions warrant greater attention from the lead company. Research limitations/implications This paper indicates that the adoption and effectiveness of optimization and improvement programs in a modular consortium may depend on the supplier size and process complexity of supply chain transactions. Originality/value This study introduces a novel framework to evaluate the degree of supplier contribution to supply chain improvement and optimization. This framework is underpinned by two robust theoretical perspectives in transaction cost theory and the resource-based view, adding to the academic discourse on supply chain management in the automotive industry.