BPMN 6073 RESEARCH METHODOLOGY SUMMARY (INDIVIDUAL) JOURNAL ASSIGNMENT ARTICLE 1 1.0 Tit !

"# J"$%&' '&( A%ti) ! The impact of supply chain management practices on competitive advantage and organizational performance. This article written by Suhong Lia, Bhanu agu!"athanb, T.S. 1.1 agu!"athanb, and S. Subba aob.

O*!%*i!+ "# t,! '%ti) ! This purpose of this study is to evaluate the effectiveness of supply chain management #S$%& which has become a potentially valuable way of securing competitive advantage and improving organizational performance since competition is no longer between organizations, but among supply chain. This study is a research conceptualize and develops five dimensions of S$% practice #strategic supplier partnership, customer relationship, the level of information sharing, 'uality of information sharing and postponement& and S$% practice identified as a dependent variables. This research is tested the relationship between S$% practices #()&, competitive advantage #as independent variables&, and organizational performance #identified as independent variables&. (ata for the study were collected from *+, organizations and the relationships proposed in the framewor- were tested using structural e'uation modelling. .rom the research, the results from the findings indicate that higher levels of S$% practice can lead to an enhanced competitive advantage and improved organizational performance. This research also found that competitive advantage can have a direct, positive impact on organizational performance.

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I&t%"($)ti"&. This research is to study the effectiveness in Supply $hain %anagement #S$%& by understanding and practicing of the S$% has become an essential prere'uisite for staying competitive in the global race and for enhancing profitably. The purpose of S$% is to improve the performance of an individual organization and to improve the performance of the whole supply chain. .urther, this research is studied by providing empirical evidence of the impact of S$% practices on an organization/s competitive advantage and its performance. This research e0amines three research 'uestions1 #*& do organizations with high levels of S$% practices have high levels of competitive advantage2 #3& do organizational with high level of S$% practices have high levels of organizational performance2 #4& do organizations with high levels of competitive advantages have a high level of organizational performance5. This research was studied by choosing the respondents who can be e0pected to have the best -nowledge about the operation and management of the supply chain in his6her organization. 7t focussed to selected managers who are at higher managerial levels as respondents for the current study. The research has been done by mailing the 'uestionnaire to the respondents. The mailing lists were obtained from two sources2 the Society of %anufacturing 8ngineerings #S%8& in the 9S: and the attendees at the $ouncil of Logistics %anagements #$L%& conference in 3;;;, "ew <rleans, 9S:. The Si0 $odes industries were covered in the study2 there are .urniture and .i0tures #3=&, ubber and >lastics #4;&, .abricated %etal >roducts

#4?&, 7ndustrial and $ommercial %achinery #4=&, 8lectronic and <ther

8lectric 8'uipment #4,&, and Transportation 8'uipment #4@&. The 'uestionnaire has been distributed to 4*4@ target respondents. Aowever, there only *+, complete 'uestionnaire was responded and it represents ,.4B. 8ven though the research has a low response rate, but the ma-eup respondent pool was e0cellent. :mong the respondents, almost 3;B of the respondents are $8<6>resident6)ice >residents6(irector and about half of the respondents are managers #supply chain manager, plant manager, logistics manager, or 7T manager&. The areas of e0pertise were 4;B purchasing, ?@B manufacturing production and 4;B distribution6transportation6sales.

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Lit!%'t$%! R!*i!+ 1.3.1 .,'t +!%! t,! /0'123 t,! %!2!'%), +!%! t%4i&0 t" '((%!225 The researchers found that many of the previous researcher only focus on empirical research on the upstream or downstream side of the supply chain or certain aspects of S$%. Topics that have been researched by researchers is mostly on the supply side such as supplier selection, supplier involvement and manufacturing performance, the influences of supplier alliances on the organization, success factors in the strategic supplier alliances, the role of relationships with suppliers in improving supplier responsiveness and etc. Tan et. al e0plore the relationships between supplier management practices, customersC relations practices and organizational performance. %any research discuss in the case of histories of successful implementations of S$% have been reported. (ue to the lac- of research that study on the relationship of S$%

between competitive advantage and organizational performance, the researcher from this article ta-e an initiative to study on this topic matters. The purpose of this study is therefore to empirically test a framewor- identifying the relationship among S$% practices, competitive advantages and organizational performance.

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I(!&ti#4 R!2!'%), 7%'8!+"%9

SCM Practices Strategic Supplier Partnership Customer Relationship Level of Information Sharing Quality of Information H1

H1

Organizational Performance Market performance Financial performance H3

Competitive Advantage Price/cost Quality Delivery Depen a!ility Pro uct innovation "ime to Market

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M!t,"(" "04 The research was a 'uantitative research. 7t has been done by using instrument development methods for S$% practices include four phases1 #*& item generation, #3& pre!pilot study, #4& pilot study, and #?& large Dscale data analysis. 7nstruments that measure competitive advantage and organizational performance were adopted from Ehang. 7n the phase four, rigorous statistical analysis was used to determine the validity and reliability of the S$% practices, competitive

advantage, and organizational performance instruments. The hypotheses were then tested using structural e'uation modelling. This research was studied by choosing the respondents who can be e0pected to have the best -nowledge about the operation and management of the supply chain in his6her organization. 7t focussed to selected managers who are at higher managerial levels as respondents for the current study. The research has been done by mailing the 'uestionnaire to the respondents. The mailing lists were obtained from two sources2 the Society of %anufacturing 8ngineerings #S%8& in the 9S: and the attendees at the $ouncil of Logistics %anagements #$L%& conference in 3;;;, "ew <rleans, 9S:. The Si0 $odes industries were covered in the study2 there are .urniture and .i0tures #3=&, ubber and >lastics #4;&, .abricated %etal >roducts

#4?&, 7ndustrial and $ommercial %achinery #4=&, 8lectronic and <ther 8lectric 8'uipment #4,&, and Transportation 8'uipment #4@&. The 'uestionnaire has been distributed to 4*4@ target respondents. Aowever, there only *+, complete 'uestionnaire was responded and it represents ,.4B. 8ven though the research has a low response rate, but the ma-eup respondent pool was e0cellent. :mong the respondents, almost 3;B of the respondents are $8<6>resident6)ice >residents6(irector and about half of the respondents are managers #supply chain manager, plant manager, logistics manager, or 7T manager&. The areas of e0pertise were 4;B purchasing, ?@B manufacturing production and 4;B distribution6transportation6sales. (uring the pilot study stage, the F!sort was used to pre!assess the convergent and discriminant validity of the scales. 7n using this method, to assess the reliability of sorting is conducted by the Gudges, three different measures were used1 the inter!Gudge raw agreement

scores, $ohen/s Happa and item placement ratios. The researcher also used the $hi!s'uare statistic and >I;.;=, it was found that there were no significant differences between the two groups in employments size, sales volume and respondentCs Gob title. 7nstead of using different methods used to assess the relationship, the researcher also using $ronbach/s :lpha to test the reliabilities of S$% practice, competitive advantage and organizational performance. S$% practice is conceptualized as a second order model composed of five dimensions. Structural e'uation modelling #using L7S 8L J.4; by scientific Software 7nternational, 7nc.& was used to determine whether a higher!order factor model is appropriate for S$% practice.

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7i&(i&02 .rom the results with three hypothesized for the structural model, the findings show that >ostponement has low results, indicating that postponement may not be a strong indicator of S$% practice compared to other four dimensions. This can be true, as discussed in previous sessions, the implementations of postponement is dependent on a firm/s mar-et characteristics and the type of the products and therefore may not be applicable in all the situations. The result also shows that the value of price6cost, product innovation and delivery dependability are not as high as those of 'uality and time to mar-et. This may indicate that 'uality and time to mar-et are stronger indicators of competitive advantage than other three dimensions. The statistical significance of Aypothesis * confirms that S$% practice can have a bottom!line influence on the organizational performance. The implementation of S$% may directly improve an organizations/s financial and mar-eting performances in the long run.

Aypothesis 3 is also supported which indicates that S$% practice have a direct impact on competitive advantage. The implementation of various S$% practices, such as a strategic supplier partnership, customer relationship building, and postponement, may provide the organizationCs competitive advantage on cost, 'uality, dependability, fle0ibility, and time to mar-et dimensions. The results also indicate that higher levels of competitive advantages may lead to improved organizational performance, thus confirming hypothesis 4. This also indicates that S$% practices produce competitive advantage to the organization in the first place, and competitive advantage will, in turn, lead to improved organizational performance. 7t is also possible that enhanced competitive advantage and increased organizational performance could have improved the levels of S$% practice.

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C"&) $2i"&2 By proposing, developing and validating a multi!dimensional, the operational measure of the construct of S$% practice, and by demonstrating its efficacy in enhancing organizational performance and competitive advantages, the present study provides S$% managers with a useful tool for evaluating the comprehensiveness of their current S$% practices. Through the analysis of the relationship of S$% practices construct with competitive advantage #Aypothesis 3&, it was demonstrated that S$% practice may directly impact competitive advantages. The findings of this research thus point to the importance of S$% practices of the organization. :s today/s competition is moving from among organizations to between supply chain, more and more organizations are

increasely adopting S$% practices in the hope of reducing supply chain costs and securing competitive advantages. The findings of this research support the view that S$% practices can have a discernible impact on competitive advantages and organizational performance. Because of the limited number of observations #*+,&, the revalidation of constructs were not carried out in this research. .uture research should revalidate measurement scales developed through this research. :s the concepts of S$% is comple0 and involves a networ- of companies in the effort of producing and delivering a final product, its entire domain cannot be covered in Gust one study. .uture research can also e0pand the domain of S$% practice by considering additional dimensions such as geographical pro0imity, K7T6lean capability, cross!functional coordination, logistics integration, and agreed supply chain leadership, which have been ignored from this study. .uture research also should to see- utilize multiple respondents from each participating organization to enhance the research findings. .inally, future studies can also e0amine the proposed relationship by bringing some conte0tual variables in the model, such as organizational size and supply chain structure.