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Journal of Business Logistics, 2011, 32(4): 332344

 Council of Supply Chain Management Professionals

Supply Chain Integration and the SCOR Model


Honggeng Zhou1, W. C. Benton, Jr.2, David A. Schilling2, and Glenn W. Milligan2
1
2

University of New Hampshire


The Ohio State University

he Supply Chain Operations Reference (SCOR) model has been widely adopted in many companies. Anecdotal evidence and trade
journals have reported signicant improvements after rms have adopted the SCOR model. Although practitioners have been
enthusiastic about implementing and using the SCOR model in their operations, the SCOR model has not been empirically validated.
The purpose of this study is to empirically validate the SCOR model (i.e., test the structure of the SCOR model). Data from 125 North
American manufacturing rms were collected. The results show that the relationships among the supply chain processes in the SCOR
model are generally supported. The Plan process has signicant positive inuence on the Source, Make, and Deliver processes. The
Source process has signicant positive inuence on the Make process and the Make process has signicant positive inuence on the
Deliver process. The Source process mediates the impact of the Plan process on the Make process and the Make process mediates the
impact of the Plan process on the Deliver process. The ndings provide managers with empirical evidence that the SCOR model is in
fact valid.
Keywords: Supply Chain Operations Reference (SCOR) model; supply chain management; business strategy

INTRODUCTION
The Supply Chain Operations Reference (SCOR) model was
developed by the Supply Chain Council in 1996. The SCOR
model focuses on the supply chain management function
from an operational process perspective and includes customer interactions, physical transactions, and market interactions. In the past decade, the SCOR model has been widely
adopted by many companies including Intel, General Electric
(GE), Airbus, DuPont, and IBM. According to the Supply
Chain Councils (2010) website, While remarkably simple, it
[the SCOR model] has proven to be a powerful and robust
tool set for describing, analyzing, and improving the supply
chain. In the literature, several recent studies have reviewed
the SCOR model (Huang et al. 2004, 2005). Many other
studies (McCormack 1998; Lockamy and McCormack 2004;
Supply Chain Council 2010) have attempted to measure the
SCOR models impact on business performance. Trade journals have also reported the benets of using SCOR model
(Davies 2004; Malin 2006).
To date, the SCOR model has been used by companies
throughout the world. Intel is one of the rst major U.S.
corporations to adopt the SCOR model (Supply Chain
Council 2010). In 1999, Intel started its rst SCOR project
for its Resellers Product Division. Later, they expanded the
SCOR model implementation to the Systems Manufacturing
Division. Several other SCOR projects were conducted
afterward. The benets of implementing the SCOR model
included faster cycle times, less inventories, improved visibility of the supply chain, and access to important customer
information in a timely fashion. GE implemented the SCOR
model in its Transportation Systems unit, which reported
Corresponding author:
W. C. Benton, Jr., Department of Management Sciences, Fisher
College of Business, The Ohio State University, 2100 Neil Avenue, Columbus, OH 43210, USA; E-mail: benton.1@osu.edu

sales of $2.6 billion in year 2001. The use of the SCOR


model streamlined the purchasing process with its suppliers,
which led to shorter purchasing cycle time and lower cost.
Davies (2004) report that since 1999 Philips Lighting has
used the SCOR model in its overall business framework,
which directly resulted in improved customer service and
reduced inventories. In Europe, Degussa (a German chemical
company) used the SCOR model to streamline its newly
merged businesses. Specically, Degussa set up a team of
cross-functional employees to implement the SCOR project.
After a three-week pilot project, the SCOR team found
opportunities in the existing supply chain processes. It was
reported that the SCOR project was expected to save the
rm millions of euros.
The SCOR model is used not only in manufacturing operations, but also in service operations. As Malin (2006)
reports, a New York hospital used the SCOR model to
dene, measure, and improve supply chains. The rst phase
of the project led to 2% reduction in overall drug inventory
the rst year. The hospital reported an 810% reduction in
excess and obsolete inventory during the next two years.
Meanwhile, the improved visibility and planning generated
21% capacity increase and an 8% increase in demand. The
prep times for key procedures were reduced by as much as
40%, which resulted in reduced labor costs.
Although the SCOR model has been widely practiced by
many companies in dierent processes of supply chains and
anecdotal evidences have shown the value of adopting the
SCOR model, no large-scale empirical research has been
conducted to systematically examine the relationships among
the supply chain processes as suggested by the SCOR model.
Thus, the purpose of this study is to empirically validate the
SCOR model (i.e., to conrm the structure of the SCOR
model).
The results of this study show that the relationships
among the supply chain processes in the SCOR model are
generally supported. The Plan process has signicant positive

Supply Chain Integration and SCOR Model

inuence on the Source, Make, and Deliver processes. The


Source process has signicant positive inuence on the Make
process and the Make process has signicant positive inuence on the Deliver process. Among the four supply chain
processes, the Plan process has received the least attention
from the implementation rms. The ndings from this study
provide practitioners statistical condence in the implementation and use of the SCOR model.
In the next section, literature review and research hypotheses will be presented. The theoretical underpinnings for the
research hypotheses are also discussed in the second section.
In the third section, the research methodology and measurement scale development are presented. In the fourth section,
the analysis results are given. The research ndings and managerial implications are discussed in the fth section. Finally,
concluding comments and future research directions are presented in the concluding section.

LITERATURE REVIEW AND RESEARCH


HYPOTHESES
In this section, we review the literature of the SCOR model.
Based on the literature review, the research hypotheses are
proposed. The literature review provides the theoretical foundation for this research. The theoretical foundation is
reected in the literature taxonomy given in Table 1.
As the SCOR model is the main framework in this study,
a brief introduction of the SCOR model is necessary. The
SCOR model diagram is given in Figure 1. Level 1 consists
of ve supply chain processes: Plan, Source, Make, Deliver,
and Return. As the Return process was not in the rst four
versions of the SCOR model and is not as mature as the
other four processes, this study focuses on the other four
processes (Plan, Source, Make, and Deliver), which have
been widely adopted by practitioners. Level 2 of the SCOR
model describes core processes. Level 3 of the SCOR model
species the best practices of each process. According to the
denition in the SCOR model, Plan includes the processes
that balance aggregate demand and supply to develop a
course of action which best meets sourcing, production, and
delivery requirements. Source includes the processes that procure goods and services to meet planned or actual demand.
Make is comprised of the processes that transform product
to a nished state to meet planned or actual demand. Delivery includes all processes which provide nished goods and
services to meet planned or actual demand (Supply Chain
Council 2010). The following subsections review the literature of the four processes and develop the research hypotheses.

333

Table 1: Literature review taxonomy


Supply chain practice
Authors
Ahmad and Schroeder (2001)
Benton and Shin (1998)
Blackburn (1991)
Chen and Paulraj (2004)
Carr and Pearson (1999)
Choi and Hartley (1996)
Cua et al. (2001)
Dong and Xu (2002)
Ferrari (2001)
Flynn et al. (1999)
Fullerton and McWatters (2001)
Fullerton et al. (2003)
Garcia et al. (2004)
Gi et al. (1990)
Goldsby and Stank (2000)
Gurin (2000)
Ha et al. (2003)
Hahn et al. (1983)
Hausman et al. (2002)
Hayes and Wheelwright (1984)
Henig and Levin (1992)
Hill (1994)
Hines (1996)
Kaynak and Hartley (2008)
Lee et al. (1997)
Li et al. (2005)
Lockamy and McCormack (2004)
MacDue et al. (1996)
Makatsoris and Chang (2004)
McKone and Schroeder (2001)
Nakajima (1988)
Nair (2006)
Pande et al. (2000)
Powell (1995)
Prahinski and Benton (2004)
Rungtusanatham et al. (1997)
Samson and Terziovski (1999)
Schonberger (1990)
Shah and Ward (2003)
Shah and Ward (2007)
Stalk et al. (1992)
Supply Chain Council (2010)
Wemmerlov and Hyer (1989)
Womack et al. (1990)

Plan Source Make Deliver


*
*
*
*
*
*
*
*
*

*
*
*
*
*

*
*
*
*

*
*

*
*

*
*

*
*
*
*
*

*
*

*
*

*
*

*
*

*
*
*
*
*
*
*
*
*
*
*
*
*

*
*

*
*

Plan (planning)
Supply chain planning process uses information from external and internal operations to balance aggregate demand
and supply. The SCOR model suggests that the capability to
run simulated full stream supply demand balancing for
whatif scenarios is important for supply chain planning.
Whatif analysis helps rms to perform sensitivity analysis

for various possible scenarios. Another important ability is


to get real-time information and rebalance supply chains
using updated information. Information sharing in supply
chains can lead to improved performance (Fawcett et al.
2011). According to Narasimhan and Kim (2001), the use of
information systems can improve supply chain integration.
From the process perspective, it is important to have a desig-

334

H. Zhou et al.

Figure 1: Supply Chain Operations Reference (SCOR) model.


Level
#

Schematic

Descripon

1
Top Level
(Process
Types)

Plan

Source

Supply-Chain Operaons Reference-model

Return

A companys supply chain can be


configured-to-order at Level 2 from
core process categories. Companies
implement their operations strategy
through the configuration they choose
for their supply chain.

Configuration
Level (Process
Categories)

Process
Element Level
(Decompose
Processes)
P1.1
Identify, Prioritize, and
Aggregate Supply-Chain
Requirements

P1.2

Level 1 defines the scope and content


for the Supply Chain Operations
Reference-model. Here basis of
competition performance targets are
set.

Return

P1.3

P1.4

Balance Production
Resources with SupplyChain Requirements

Establish and
Communicate
Supply-Chain Plans

Level 3 defines a companys ability to


compete successfully in its chosen
markets, and consists of:
Process element definitions
Process element information
inputs, and outputs
Process performance metrics
Best practices, where
applicable

Identify, Assess, and


Aggregate Supply-Chain
Requirements

4
Not
in
Scope

MakeDeliver

Comments

Implementation
Level (Decompose
Process Elements)

nated supply chain planning team. Womack et al. (1990) nd


that one primary reason that Japanese automobile rms have
an advantage over traditional U.S. automobile rms is that
they used designated planning teams to coordinate dierent
functions. Furthermore, the literature suggests that interfunctional coordination within a rm is critical for supply chain
planning because the alignment between the functions is necessary to achieve a rms strategic goals (Supply Chain
Council 2010). For example, many studies (Hill 1994; Hausman et al. 2002) have found the importance of aligning marketing and manufacturing operations to improve
performance.
Source (buyersupplier relationship)
Sourcing practice connects manufacturers with suppliers and
is critical for manufacturing rms. The academic literature
and the SCOR model have identied several sourcing
practices as best practices (Carr and Pearson 1999; Chen and
Paulraj 2004; Prahinski and Benton 2004; Li et al. 2005;
Benton 2010). Establishing long-term supplierbuyer relationship and reducing the supplier base are good sourcing
practices. The role of key suppliers in a supply chain should

Companies implement specific


supply-chain management practices at
this level. Level 4 defines practices to
achieve competitive advantage and to
adapt to changing business conditions.

be assured through long-term relationship (Treleven 1987;


Benton 2010). Hahn et al. (1983) show that companies benets gained by giving larger volume of business to fewer suppliers using long-term contracts outweigh the costs. Just-intime (JIT) delivery from suppliers is also considered a good
sourcing practice. The benets of JIT delivery have been
widely documented (Benton and Shin 1998; Ahmad and Schroeder 2001; Dong et al., 2001). Furthermore, providing
feedback about suppliers performance evaluations is a good
sourcing practice. According to Carr and Pearson (1999),
supplier evaluation systems have a direct positive impact on
buyersupplier relationship, and an indirect impact on rm
nancial performance. More recently, Prahinski and Benton
(2004) studied the role of communication in supply chain
management. They found that executives at buying rms
need to incorporate indirect inuence strategy, formality,
and feedback into supplier development programs.
Make (transformation process)
The Make process includes the practices that eciently
transform raw materials into nished goods to meet supply
chain demand in a timely manner. Both academic literature

Supply Chain Integration and SCOR Model

(Shah and Ward 2007; Benton 2011b) and the SCOR model
include four groups of practices for the Make process: JIT
production, total preventive maintenance (TPM), total quality management (TQM), and human resource management
(HRM). JIT production includes several practices: pull system, cellular manufacturing, cycle time reduction, agile manufacturing strategy, and bottleneck removal (Wemmerlov
and Hyer 1989; Blackburn 1991; Powell 1995; MacDue
et al. 1996; Benton and Shin 1998; Flynn et al. 1999; Fullerton and McWatters 2001; Fullerton et al. 2003; Benton
2011a). The review of quality management literature has led
to the identication of good quality management practices:
TQM, statistical process control (SPC), continuous improvement program, and six-sigma techniques (Benton 1991; Powell 1995; Rungtusanatham et al. 1997; Pande et al. 2000; Cua
et al. 2001; Nair 2006; Kaynak and Hartley 2008). TPM is a
manufacturing program that primarily maximizes equipment
eectiveness throughout its entire life (Nakajima 1988; Cua
et al. 2001). Several studies have explored the good practices
of TPM and their positive relationship with business performance (Cua et al. 2001). The literature review led to the
identication of the following eective TPM practices: preventive maintenance; safety improvement program; planning
and scheduling strategies; and maintenance optimization.
The HRM practices emphasize employee team work and
workforce capabilities. Employee team work is important for
improving production, because frontline employees working
as a team can leverage the experience of all employees and
greatly contribute to process and product improvement
(Hayes and Wheelwright 1984). Workforce capability is
another important measurement for workforce management
(Gi et al. 1990; Schonberger 1990).
Deliver (outbound logistics)
The extant literature and anecdotal evidence show that delivery has become a critical link in supply chain management
(Gurin 2000; Ha et al. 2003). Goldsby and Stank (2000)
review the world class logistics competencies and capabilities.
One capability is sharing real-time information with supply
chain partners, which increases the real-time visibility of
order tracking. Agility is also an important competence of
world class logistics. Gurin (2000) describes how Ford partnered with the United Parcel Service to develop and implement an Internet-based delivery process, signicantly
improving Fords delivery performance. An Internet-based
delivery system can signicantly enhance the real-time order
tracking capability. Other best delivery practices identied
by the SCOR model include a single contact point for all
order inquiries, order consolidation, and the use of automatic identication. The bar code technology signicantly
improves the relationship between suppliers and buyers and
allows some emerging inventory management programs such
as vendor-managed inventory program. Ahmad and Schroeder (2001) identify several factors that aect delivery performance. The factors include JIT management, quality
management, production instability, and so on. However,
Ahmad and Schroeder (2001) do not use a scale to measure
the good practices in delivery process.

335

Relationships of the four supply chain processes in the SCOR


model
Both the SCOR model and the literature suggest the relationship among the four supply chain processes as illustrated in
Figure 2. First, eective supply chain planning practices are
expected to inuence the implementation of eective sourcing, production, and delivery practices (Lockamy and McCormack 2004). The planning process is expected to balance
the aggregate supply chain demand and supply. The ability
to balance demand and supply in real time can enhance a
long-term relationship with suppliers who can better respond
to the demand supply changes (Ferrari 2001). It also supports the implementation of an eective production system,
which includes practices such as JIT, TPM, TQM, and
HRM. For example, without a good planning process, a JIT
production would be impossible. The interfunctional coordination such as the alignment between marketing and manufacturing is important for an eective JIT production.
Eective supply chain planning also drives eective delivery
process. To respond to customer demand changes quickly,
rms need the ability to track the order delivery status in real
time (Makatsoris and Chang 2004). Based on the SCOR
model and the literature, the hypotheses are proposed as follows.
H1: Plan process positively inuences Source process.
H2: Plan process positively inuences Make process.
H3: Plan process positively inuences Deliver process.
Second, sourcing process positively inuences the use of
Make process (St. John and Young 1991; Hines 1996; Benton 2010). A good long-term relationship with suppliers can
help rms implement JIT production. Without a good JIT
delivery from suppliers, a JIT production system would be

Figure 2: Supply
model.

Chain

Operations

Reference

(SCOR)

Source
H1
H4
Plan
H2

Make

H5
H3
Deliver
Source: Supply Chain Operations Reference Model, Supply
Chain Council (2010).

336

impossible. A good relationship with suppliers also helps


control the quality of the inputs, which helps the use of
TQM program. For example, a major automobile manufacturer does not examine the quality of some incoming components, because it has a good relationship with its suppliers
and has enough condence on its suppliers quality. Finally,
a good delivery from suppliers allows manufacturers to schedule preventive maintenance in an eective way. Therefore,
the following hypothesis is proposed.
H4: Source process positively inuences Make process.
Third, the Make process positively inuences the delivery
process (Henig and Levin 1992; Garcia et al. 2004). A good
JIT production system produces products in a timely manner
according to customer needs, which is essential to the
implantation of JIT delivery. A good TQM program and
knowledgeable employees are also necessary to facilitate the
use of JIT delivery. In addition, an eective production system can help increase the visibility of order tracking
throughout the whole supply chain system. Therefore, the
following hypothesis is proposed.
H5: Make process positively inuences Deliver process.
Although H1H5 are directly from the SCOR model, the
empirical validation of the SCOR model contributes to the
academic literature and provides value to the practitioners.
Taken together, H1, H2, and H4 suggest that Source process
mediates the inuence of Plan process on the Make process.
The mediation eect suggests that the Plan process drives
better Make process at least partially because good supply
chain planning practices have positive inuence on sourcing
practices. Similarly, H2, H3, and H5 together suggest that
Make process mediates the inuence of Plan process on the
Deliver process. Thus, this study will use Sobel tests to
directly examine these two mediation eects.
H6: The inuence of Plan process on Make process is mediated by Source process.
H7: The inuence of Plan process on Deliver process is
mediated by Make process.

RESEARCH METHOD
Sample
The research objectives were achieved by obtaining responses
from manufacturing professionals holding senior-level positions. Contact information for qualied informants was identied with the assistance of the Supply Chain Council (2010).
The surveyed rms include Xerox Corp., Dow Corning
Corp., Owens Corning, Nachi Robotic Systems, Windsor
Mold Inc., and Minntech Corporation. The respondents
were senior executives and held titles such as CEO, President, Vice President, and Director. The average number of
employees in the respondents rms was about 5,000. Eight

H. Zhou et al.

companies had more than 10,000 employees. The median


annual sales value, as reported by the respondents, was
between $100 million and $500 million. Five companies had
annual sales of more than $5 billion. Four academic experts
and three industry experts were asked to review the survey
instrument (questionnaire) to ensure the relevance and clarity
of the survey instrument. The industry experts who reviewed
the questionnaire also provided insights as to the type of job
titles that may reect probable knowledge of the SCOR
model. Utilizing this guidance, the sample was selected based
upon job titles and job descriptions available. Employing the
multiple contact strategy as suggested by Dillman (2007), a
total of 745 manufacturing professionals were invited to participate in the study.
Four contacts were made with the selected informants.
The purpose of the initial postcard contact was to verify the
accuracy of the mailing address and make the selected
respondents aware of the forthcoming questionnaire. Two
weeks after the initial postcard was mailed, the rst round
survey packages were mailed. According to Dillman (2007),
at least two weeks are needed between contacts to allow
enough time for the postcards with wrong addresses to be
returned to us. The survey packages contained three items:
the personalized letter of introduction about the importance
of the study, an eight-page booklet of the survey questionnaire, and a prepaid business reply envelope. The third contact, mailed one week after the rst round survey packages,
were reminder postcards. The postcards were used to thank
those who had returned the questionnaire and remind those
who had not returned the questionnaire. Two weeks after
sending the reminder postcards, the second round questionnaires were mailed to the informants who had not replied.
As before, the survey package included: a personalized letter,
the questionnaire, and the prepaid business reply envelope.
Two weeks after the second round questionnaires were
mailed, those companies who had not replied were contacted
by telephone. Several insights were gained from the successful telephone conversation. First, respondents in many of the
companies, the informant forwarded the questionnaires to
others within the company to complete. However, if the
respondent who received the questionnaire could not respond
to certain questions, the respondent would most likely forward the questionnaire to another person who can answer
the questionnaire. It is expected that if the questionnaire was
forwarded, the return rate is greatly reduced. This process
also resulted in signicantly longer cycle times (Dillman
2007). Second, many respondents who were interested in the
study could not locate the questionnaire that was sent to
them. Thus, a replacement survey package was sent to them.
Third, we found that it is important to have direct contact
with the executives who had the authority to decide whether
to participate in the study. Finally, many companies could
not participate in the study because of company policies.
Measurement scales
The survey questions and the descriptive statistics for each
measurement scale are in Table 2. The Make process has
four indicators (JIT, TQM, TPM, and HRM). This section

Supply Chain Integration and SCOR Model

rst describes the multiple criteria that are used to validate


the measurement scales. Then, the nal results of the scale
analysis are presented.
Scale validity and reliability
The measurement scale development process supports the
validity and reliability of the measurement scales. First,
exploratory factor analysis was performed. Then, conrmatory factor analysis (CFA) was performed. The content
validity of the scales was established by the literature. In
addition, both academicians and practicing managers
assessed the survey questionnaire content validity before the

337

surveys were distributed. Construct validity ensures that the


conceptual constructs are operationalized in the appropriate
way. To ensure construct validity, exploratory factor analysis
with principal component method is used. According to Hair
et al. (1998) and Carmines and Zeller (1979), the factor loadings need to be at least .3. Only one factor in each construct
can have an eigenvalue that is larger than 1.00 and the variance explained by the rst factor in each construct is at least
40%. Reliability is dened as the extent to which the measures can yield same results on other replication studies. The
internal consistency measured by Cronbachs alpha is used
to measure the construct reliability in this study. The lower

Table 2: Survey questions and descriptive statistics


Survey question
To what extent have the following planning practices been implemented in your company
[1 = not implemented, 7 = extensively implemented]
Plan1. Whatif analysis has been implemented for supply demand balancing
Plan2. A change in the demand information instantaneously recongures the
production and supply plans
Plan3. Online visibility of supply chain demand requirements
Plan4. The designation of a supply chain planning team
Plan5. Both marketing and manufacturing functions are involved in supply chain
planning process
To what extent have the following sourcing practices been implemented in your company
[1 = not implemented, 7 = extensively implemented]
Source1. Long-term relationships with strategic suppliers
Source2. Reduction in the number of suppliers
Source3. Just-in-time delivery from suppliers
Source4. Frequent measurement of suppliers performance
Source5. Frequent performance feedback to suppliers
To what extent have the following production practices been implemented in your company
[1 = not implemented, 7 = extensively implemented]
JIT1. Pull system
JIT2. Cellular manufacturing
JIT3. Cycle time reduction
JIT4. Agile manufacturing strategy
JIT5. Bottleneck constraint removal
TPM1. Preventive maintenance
TPM2. Maintenance optimization
TPM3. Safety improvement programs
TPM4. Planning and scheduling strategies
TQM1. Total quality management
TQM2. Statistical process control
TQM3. Formal continuous improvement program
TQM4. Six-sigma techniques
HRM1. Self-directed work teams
HRM2. We use knowledge, skill, and capabilities as criteria to select employees
HRM3. Direct labor technical capabilities are acknowledged
HRM4. Employee cross-training program
To what extent have the following delivery practices been practiced in your company
[1 = not practiced, 7 = extensively practiced]
Deliver1. We have a single point of contact for all order inquiries
Deliver2. We have real-time visibilities of order tracking
Deliver3. We consolidate orders by customers, sources, carriers, etc.
Deliver4. We use automatic identication during the delivery process to track order status

Mean

SD

3.41
3.21

1.98
2.18

3.35
3.65
3.70

2.05
2.15
2.08

5.51
4.69
4.29
4.75
4.44

1.52
1.87
1.92
1.83
1.94

3.97
3.42
4.40
3.10
4.02
4.98
4.08
5.57
5.02
4.88
4.19
4.75
3.36
3.69
5.14
4.67
4.76

2.11
2.25
1.96
2.04
1.83
1.75
2.00
1.65
1.50
1.84
2.16
2.06
2.20
1.93
1.60
1.72
1.51

5.12
4.41
4.59
3.26

1.82
2.17
2.03
2.19

338

H. Zhou et al.

limit of .7 is considered acceptable (Nunnally and Bernstein


1994; Hair et al. 1998). The results in Table 3 show that all
factor loadings meet the criterion of larger than .3. The fac-

tor analysis results from Table 3 also show that all constructs satisfy the unidimensionality requirement. For all
scales except Deliver process, only one eigenvalue is larger

Table 3: Final results of measurement validation


Scale name

Variable name

Factor loading

Plan

Plan1
Plan2
Plan3
Plan4
Plan5

.75
.72
.74
.80
.75

Source

Source1
Source2
Source3
Source4
Source5

.59
.58
.66
.87
.87

JIT1
JIT2
JIT3
JIT4
JIT5
TPM1
TPM2
TPM3
TPM4
TQM1
TQM2
TQM3
TQM4
HRM1
HRM2
HRM3
HRM4
Deliver1
Deliver2
Deliver3
Deliver4

.57
.79
.86
.77
.84
.90
.79
.83
.77
.79
.85
.89
.84
.68
.78
.88
.75
.68
.83
.78
.68

JIT
TPM
TQM
HRM

.79
.87
.87
.82

Make
JIT

TPM

TQM

HRM

Deliver

Make

Scale statistics
Cronbachs alpha: .80
Largest eigenvalue (variance explained): 2.80 (56%)
Second largest eigenvalue (variance explained): .77 (15%)
Average variance extracted: .46
Reliability, q: .81
Average variance shared, c2: .34
Cronbachs alpha: .76
Largest eigenvalue (variance explained): 2.62 (52%)
Second largest eigenvalue (variance explained): .82 (16%)
Average variance extracted: .44
Reliability, q: .78
Average variance shared, c2: .39
Cronbachs alpha: .82
Largest eigenvalue (variance explained): 2.99 (60%)
Second largest eigenvalue (variance explained): .87 (17%)

Cronbachs alpha: .89


Largest eigenvalue (variance explained): 2.70 (68%)
Second largest eigenvalue (variance explained): .67 (17%)
Cronbachs alpha: .86
Largest eigenvalue (variance explained): 2.83 (71%)
Second largest eigenvalue (variance explained): .50 (12%)
Cronbachs alpha: .77
Largest eigenvalue (variance explained): 2.40 (60%)
Second largest eigenvalue (variance explained): .70 (18%)
Cronbachs alpha: .73
Largest eigenvalue (variance explained): 2.22 (56%)
Second largest eigenvalue (variance explained): 1.01 (25%)
Average variance extracted: .61
Reliability, q: .86
Average variance shared, c2: .45
Cronbachs alpha: .86
Largest eigenvalue (variance explained): 2.81 (70%)
Second largest eigenvalue (variance explained): .52 (13%)
Average variance extracted: .42
Reliability, q: .74
Average variance shared, c2: .40
Degree of freedom 130
Chi-squared statistics 267
Normed chi-square 2.06
Nonnormed t index (NNFI) .91
Comparative t index (CFI) .93
Incremental t index (IFI) .93
Root mean square error of approximation (RMSEA) .09
All loadings signicant at p < .05

Supply Chain Integration and SCOR Model

than 1.00 and the variance explained by the largest eigenvalue is larger than 40%. For the Deliver process, the second
largest eigenvalue is slightly larger than 1.00. The scree test
suggests that one factor is the most appropriate for this set
of items. Thus, the Deliver process is determined to be unidimensional. For the reliability, Table 3 shows that all scales
have Cronbachs alpha values of .7 or higher. Thus, it is concluded that all measurement scales are reliable.
After performing the exploratory factor analysis, CFA
was performed to conrm the measurement model of the
structural equation model. As Table 3 shows, reliability rho
scores for all constructs exceed the threshold of .7 (Fornell
and Larcker 1981). For each construct, the average shared
variance is smaller than the average variance extracted.
Moreover, the overall CFA model statistics (comparative t
index [CFI] = .93, incremental t index [IFI] = .93, nonnormed t index [NNFI] = .91, and root mean square error
of approximation [RMSEA] = .09) suggest that the proposed construct structure has a reasonably good t. It is to
be noted that JIT, TPM, TQM, and HRM do not have the
three CFA-related measures (i.e., average variance extracted,
shared variance, and reliability rho) because they are the
measurement items for the latent variable Make in the CFA
model. For example, JIT value in the CFA model is the
average of the ve JIT items (i.e., JIT1, JIT2, JIT3, JIT4,
and JIT5) in Table 3.
As we used a single informant to answer all questions,
potential common method bias is checked. The items comprising the scales of planning, sourcing, JIT, TPM, TQM,
HRM, and delivery were not highly similar in content. The
respondents are familiar with the constructs. Harmans onefactor test of common method bias (Podsako and Organ
1986; Podsako et al. 2003; Hochwarter et al. 2004) found
several distinct factors for the variables, which suggested that
common method variance bias was not a problem.
Summary of research methodology
This study used a survey research method. The analysis was
based on 125 useable responses from U.S. manufacturing
rms. The survey followed the standard process suggested by
Dillman (2007) to ensure that a good and representative
sample was obtained. After the sample was obtained, the statistical analysis has been performed to ensure that the measurement scales are valid and reliable before the
measurement scales have been used in further statistical analysis such as structural equation model. Other measurement
concerns such as common method bias have been addressed
in this research methodology stage.

ANALYSIS RESULTS
Descriptive statistics
The descriptive statistics in Table 2 show that the mean of
the supply chain planning and JIT practices are relatively
low compared with the practices of the Source, TPM, TQM,
HRM, and Deliver processes. The means of the planning

339

and JIT practices are 3.46 and 3.78, respectively, while the
means of the Source, TPM, TQM, HRM, and Deliver practices are 4.74, 4.91, 4.30, 4.57, and 4.34, respectively. For the
ve planning practices, all of them are below 4.00. In contrast to that, all ve sourcing practices have scores above
4.00. In the Make process, it is quite surprising to see that
the mean of the pull system, cellular manufacturing, agile
manufacturing strategy, six-sigma techniques, and self-directed work teams are below 4.00, since the lean manufacturing
has been introduced to North America for more than
20 years and many studies have reported extensive implementation of lean practices in North American rms (Powell
1995; Flynn et al. 1999; Shah and Ward 2003). It seems that
the rms are doing well in the TPM area and most aspects
of TQM and HRM. The factor analysis for the four indicators (JIT, TPM, TQM, and HRM) of the Make process supports the idea of lean manufacturing bundles in Shah and
Ward (2003). Regarding the delivery process, the rms are
doing well on all practices except automatic identication. In
sum, the descriptive statistics suggest that rms are doing
well overall in sourcing, delivery, TPM, TQM, and HRM,
the means of which are above 4.00. But the rms are not
doing as well on supply chain planning and JIT production,
the means of which are below 4.00.
Structural equation model
We use the structural equation model method to test the
hypotheses H1H5 about the relationships among the four
supply chain processes and the results are shown in Figure 3.
The results are summarized in Tables 3 and 4. Then we use
Sobel tests to test the two mediation eects hypothesized in
H6 and H7. The results are shown in Table 5.
Before running the structural equation model, the score
for JIT, TPQ, TQM, and HRM were calculated according to
the average of the items with related factor. Therefore, JIT,
TQM, TPM, and HRM are considered as indicators for
Make construct. A number of t statistics were used to evaluate the models because no single measure was adequate
(Bollen and Long 1993). A normed chi-square below one
indicates that the model is overtted (Joreskog 1969), while
a value larger than 3.0 (Carmines and McIver 1981) to 5.0
(Wheaton et al. 1977) indicates that a model does not adequately t the data. The normed chi-square adjusts the sample discrepancy function by the degree of freedom. Hair
et al. (1998) provide guidelines for interpreting the RMSEA
Table 4: Results of hypotheses tests
Path in the structural
model

Path coecient
estimate (t-value)

Outcome

Plan Source (H1)


Plan Make (H2)
Plan Deliver (H3)
Source Make (H4)
Make Deliver (H5)

.46*
.31*
.44*
.63*
.38*

Supported
Supported
Supported
Supported
Supported

Note: *Signicant at p < .05.

(3.27)
(3.35)
(3.13)
(3.71)
(2.80)

340

H. Zhou et al.

Table 5: Mediation test for Source and Make processes


Tests for Source process
Variable

Tests for Make process

Plan

Source

Variable

Plan

Make

Model 1 (dependent variable: Make) .405* (.062)


Model 1 (dependent variable: Deliver) .504* (.075)
Model 2 (dependent variable: Source) .392* (.067)
Model 2 (dependent variable: Make) .405* (.062)
Model 3 (dependent variable: Make) .212* (.059) .493* (.071) Model 3 (dependent variable: Deliver) .334* (.103) .419* (.103)
Sobel test statistics is: .493 .392 sqrt (.4932 .0672 + .3922 Sobel test statistics is: .419 .405 sqrt (.4192 .0622 + .4052
.0712) = 4.5
.1032) = 3.5
Notes: The numbers within parentheses are the standard errors of the coecients.
*Signicant at p < .05.

Figure 3: Supply Chain Operations Reference (SCOR) model


with results.
Source
H1: 1=.46*
H4: 1=.63*
H2: 2=.31*
Make

Plan

H5: 2=.38*
H3: 3=.44*
Deliver

Note: * Indicates significance at p < .05

as follows: RMSEA < .05, good model t; .05 <


RMSEA < .10, reasonable model t; RMSEA > .10, poor
model t. Hair et al. (1998) also suggest that the model t is
good if NNFI and CFI are above .9. Both NNFI and CFI
adjust the sample discrepancy function by the degree of freedom. The IFI is similar to NFI but it has a correction in the
denominator to decrease the sample size eect (Bollen 1989).
It is desirable to have IFI no less than .9. As shown in the
bottom of Table 3, the t indices of our model were:
v2 = 267 with df = 130 (i.e., the normed chi-square is 2.06),
NNFI = .91, CFI = .93, IFI = .93, and RMSEA = .09.
All t statistics fell in the desirable ranges and suggested that
the model had a reasonably good t. Based on the structural
equation model, the results of the ve hypotheses are shown
in Figure 3 and Table 4. According to the t-values in
Table 4, all ve hypotheses were supported at the .05 signicance level. In addition to a good t of the structural model,
a good structural equation model needs to have a good measurement model (i.e., the path coecients of all indicators to
the related latent variables are signicant at the .05 level).

According to the SEM results, all path coecients are significant at the .05 level and the t-values are larger than 2.0.
Mediation eect
To test the two mediation eects, the Sobel tests are used.
For each mediation test, three regressions are required. Take
the mediation eect of Source process as an example (see
Table 5). First, Plan process must have signicant inuence
on Make process. Second, Plan process must have signicant
inuence on Source process. Third, the inuence of Plan process on Make process must change signicantly when Source
process is entered into the regression model. Then a Sobel
test is performed to test the signicance of the mediation
eect (Venkatraman 1989).
Model 1 in Table 5 shows that the Plan process has a signicant inuence on Make process. The regression coecient
is .405, which is signicant at the 5% level. Model 2 shows
that the Plan process has a signicant inuence on the
Source process. The coecient is .392, which is signicant at
the 5% level. Model 3 shows that the coecient of the Plan
process on the Make process is reduced to .212 when Source
process is entered into regression together with the Plan process. To test whether this reduction is signicant, a Sobel test
is performed. The calculation of the Sobel test statistics is
shown in Table 5. The result shows that the Sobel test statistic is 4.5. The p-value of this Sobel test is smaller than .05.
This means that the Source process signicantly mediates the
inuence of the Plan process on the Make process. Similar
regression analysis is performed for the mediation eect of
the Make process. The results are summarized in Table 5.
The Sobel test statistic is 3.5. The p-value of this Sobel test
is smaller than .05 as well. Thus, we conclude that the Make
process signicantly mediates the inuence of the Plan process
on the Deliver process.
Summary of analysis
This analysis section rst provides the descriptive statistics of
all measurement items, which gives the readers an overall
picture of the data set. Using the measurement scales validated in the third section, the structural equation modeling
analysis tests the relationships among the four processes in

Supply Chain Integration and SCOR Model

the SCOR model. The statistics in Tables 3 and 4 generally


support the relationships proposed in the SCOR model.
Finally, regression analysis is used to test the mediation role
of the Make process and the Source process in the SCOR
model.

RESULTS AND DISCUSSION


This study marks the rst empirical study that tests the validity of the relationships among the supply chain processes in
the SCOR model. According to the results in Figure 3 and
Table 4, the relationships of the supply chain processes in
the SCOR model are supported as expected (Supply Chain
Council 2010). The Plan process has signicant positive inuence on Source, Make, and Deliver processes. Source process
has signicant positive inuence on Make process while
Make process has signicant positive inuence on Deliver
process. The strongest link is from the Source process to the
Make process while the weakest link is from the Plan process
to the Make process.
The relatively weak link from the Plan process to the
Make process reveals some issues in the SCOR model. While
the Make process in the SCOR model does include the
HRM and TPM practices, the Plan process of the SCOR
model does not cover the planning about HRM and TPM
(Supply Chain Council 2010). The Plan process primarily
focuses on sourcing, JIT production, and delivery practices.
In the future, the SCOR model might need to include the
planning activities for HRM (leadership) and TPM to keep
the SCOR model consistent with itself.
The results in Table 5 support the hypotheses that (1)
Source process mediates the inuence of Plan process on
Make process, and (2) Make process mediates the inuence
of Plan process on Deliver process. The signicant mediation
eect suggests that an eective Source process plays a critical
role in the relationship between Plan process and Make process and an eective Make process plays a critical role in the
relationship between Plan and Deliver processes. According
to Table 5, the indirect inuence that Plan process has on
the Make process through the Source process is
.392 .493 = .193 (.392 from Model 2 and .493 from Model
3). The direct inuence that Plan process has on the Make
process is .212 (from Model 3). The total inuence (direct
inuence + indirect inuence) that Plan process has on the
Make process is .193 + .212 = .405. Table 5 shows that
about 34% (1 ) .334 .504 = .34) of the total inuence that
Plan process has on the Deliver process is the indirect inuence through the Make process when Make process is
entered into the regression.
To our best knowledge, this is the rst study that
empirically tests the relationships among all four supply
chain processes in the SCOR model. Very few studies
(Lockamy and McCormack 2004; Huang et al. 2005) conceptually discussed the SCOR model. To date, this is the
only study that has comprehensively addressed the relationships among all four supply chain processes. This
study contributes to the literature by providing a holistic
view of the supply chain management from the process

341

perspective and oers an integrative analysis of the supply


chain processes.
For practitioners, the ndings provide rigorous empirical
evidence in support of the SCOR model. The nding gives
practitioners statistical condence in the implementation and
use of the SCOR model. For example, this study reveals the
rms insuciency in the supply chain planning practices,
although the Plan process is shown to be important for all
other three processes. This study identies the quantitative
relationships among the four supply chain processes, which
can help rms assess their supply chain strengths and
weaknesses. The descriptive statistics can also help rms to
benchmark themselves with other rms.

CONCLUSION AND FUTURE RESEARCH


This study marks the rst empirical eort to examine the
validity of the SCOR model. It has been shown that the relationships among the supply chain processes in the SCOR
model are generally supported. With data from 125 North
America manufacturing companies, the Plan process has signicant positive inuence on the Source, Make, and Deliver
processes. The Source process has signicant positive inuence on the Make process and the Make process has signicant positive inuence on the Deliver process. The Source
process mediates the impact of the Plan process on the Make
process and the Make process mediates the impact of the
Plan process on the Deliver process. Among the four supply
chain processes, it appears that the Plan process has received
the least attention from the rms so far, although it does
have signicant inuence on all the other three processes.
This study contributes to both academic literature and
practitioners. Several recent studies have addressed the issue
of supply chain integration and governance (Chen et al.
2009a,b; Richey et al. 2010). As Chen et al. (2009b) mentioned, the SCOR model is an illustration of the process
approach to supply chain integration. This study provides a
holistic view of supply chain integration from an empirical
survey research methodology perspective. It reveals the
quantitative relationships among the four components of the
SCOR model. Richey et al. (2010) suggested that the supply
chain governance which balances the self-interest and interdependency in supply chains can help improve performance.
Through the Source and Deliver components of the SCOR
model, this study enhances our understanding of the importance of working with suppliers and customers in supply
chain management.
For practitioners, the empirical validation of the SCOR
model structure gives practitioners more condence in applying the SCOR model to the real business world. The study
also reveals the weaknesses in using the SCOR model such
as in the planning area. The statistics in this study provides
practitioners a quantitative sense of the various linkages in
the SCOR model and also help rms to benchmark themselves with other rms. The quantied relationships among
the four components of the SCOR model can help rms balance their investments in dierent components of the SCOR
model and optimize their supply chain investment returns.

342

As this study is the rst empirical eort to validate the


SCOR model, this study primarily focuses on the relationships among the four supply chain processes in Level 1 of
the SCOR model. The measurement items are used to operationalize the concepts in Level 1 of the SCOR model. This
limits the richness of this study. Future studies can investigate Level 2 or below of the SCOR model with more details
such as information sharing and coordination.
Information sharing and coordination is an important
aspect of supply chain management (Chen and Paulraj 2004;
Li et al. 2005; Sahin and Robinson 2005). Future research
can address this topic with respect to the use of the SCOR
model. For example, Level 3 of the SCOR model does specify the information inputs and outputs of process element.
How this information sharing among supply chain partners
can inuence the coordination among supply chain partners
and therefore impacts the value of the SCOR model is an
interesting topic.
Last, although the SCOR model was initially developed
for manufacturing rms, more service organizations have
begun to use SCOR model as well (Malin 2006). This study
only collected data from manufacturing rms. Future study
can extend the SCOR model to service operations and see
how the dierences between manufacturing and service operations inuence the relationships among the supply chain
processes.

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SHORT BIOGRAPHIES
Honggeng Zhou (PhD The Ohio State University) is an
Associate Professor in the Whittemore School of Business
and Economics at the University of New Hampshire, where
he teaches courses to undergraduates and MBA students.
His primary research interests include supply chain management and operations management. He has published in Journal of Operations Management, Decision Sciences,
International Journal of Production Economics, etc.
W. C. Benton, Jr. (PhD Indiana University) is the Edwin
D. Dodd Professor of Management Sciences in the Max M.
Fisher College of Business at The Ohio State University
where he teaches courses in health care delivery, operations
management, purchasing, and supply chain management to
undergraduates, MBAs, and doctoral candidates. He has
published numerous articles in the elds of health care, supply chain management, and sustainability.
David A. Schilling (PhD Johns Hopkins University) is a
Professor of Management Science at the Fisher College of
Business, The Ohio State University. He has published
numerous articles in the elds of transportation, location
analysis, and multi-objective programming.
Glenn W. Milligan (PhD The Ohio State University) is an
Emeritus Professor of Management Sciences at the Fisher
College of Business, The Ohio State University. He has
served as the Chair of the Department of Management
Sciences. He has published numerous articles in the elds of
quality management classication and log-linear models.

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