“APPLICATION OF INFORMATION TECHNOLOGY

ENABLED TOOLS IN SUPPLY CHAIN MANAGEMENT

PRACTICES OF MANUFACTURING INDUSTRIES”

A THESIS

Submitted by
RAM KRISHNAN S.

In partial fulfillment for the award of the degree of

DOCTOR OF PHILOSOPHY

Under the guidance of

PROF. (DR). B. CHANDRACHOODAN NAIR

DEPARTMENT OF MANAGEMENT STUDIES

NOORUL ISLAM CENTRE FOR HIGHER EDUCATION
(Declared as Deemed-to-be-University under section 3 of U.G.C Act 1956)

NOORUL ISLAM UNIVERSITY

KUMARACOIL, TAMILNADU-INDIA 629 180
OCTOBER 2017
ACKNOWLEDGEMENTS
First of all, I am grateful to ‘The Almighty God’ for having made everything
possible for me to complete this research work.

It is with immense gratitude that I acknowledge the help and guidance of my

Mentor and Research Supervisor Prof. (Dr) B. Chandrachoodan Nair, Former Director,
Faculty of Management Studies, Noorul Islam University, Kumaracoil - 629180,
Kanyakumari District, Tamilnadu, whose guidance and encouragement crowned this
effort with success. Without his valuable guidance, direction, advice and support
extended to me spontaneously and decidedly beyond the call of supervision the present
work would not have seen concluded.

I am under an obligation to thank Dr. K. A Janardhanan (Dean, Professor &

Director- HRM),Dr. M. Dev Anand (Director, Research) Dr. D. Kinslin (HOD,
Department of Management Studies) and all other faculty members and staff of Faculty
of Management Studies, Noorul Islam University, Kumaracoil - 629180, Kanyakumari
District, Tamilnadu, for their continuous support and warm cooperation at every stage of
the completion of the present research study.

I thank Dr. R. Jayalakshmi, my mentor, who supported me at every stage of

research and all the time granted to me to keep away from office to complete my
research.

I am also thankful to all the professionals from manufacturing firms, who

supported and contributed with their inputs. I am also grateful to all the respondents and
appreciate their contribution for bestowing their valuable time in submitting their
responses.

I would like to extend my gratitude to all the people who helped to bring this
research project to fruition. This thesis would not happen to be possible unless without
the support of my family.
RAM KRISHNAN S
TABLE OF CONTENTS
NAME OF THE CHAPTER CONTENTS Page No:

LIST OF TABLES LIST OF TABLES i

LIST OF CHARTS LIST OF CHARTS ii
1.1 INTRODUCTION TO THE STUDY 1
1.2 PROBLEM STATEMENT 4
1.3 SCOPE OF THE STUDY 5
1.4 LITERATURE GAP 5
1.5 ANALYSIS FRAMEWORK 6
1.6 RESEARCH GOAL 7
CHAPTER 1
INTRODUCTION 1.7 VARIABLES UNDER STUDY 7
1.7.1. AWARENESS OF IT ENABLED 7
TOOLS
1.7.2 COST REDUCTION THROUGH IT 7
ENABLED TOOLS
1.7.3 CRM THROUGH IT ENABLED TOOLS 7
1.7.4 OVERALL SCM EFFECTIVENESS 8
1.7.5 CLASSIFICATION OF INDUSTRY 8
BASED ON SYSTEM OF
MANUFACTURING
1.8 OBJECTIVES OF THE STUDY 8
1.9 HYPOTHESES 9
1.10 THEORETICAL FRAMEWORK 10
1.11 RESEARCH DESIGN 11
1.11.1 POPULATION 12
1.11.2 DATA SOURCES 12
1.11.2.1 PRIMARY DATA 13
1.11.2.2 SECONDARY DATA 13
1.11.3 PILOT STUDY 13
1.11.4 SAMPLE FRAME 14
1.11.5 SAMPLING TECHNIQUE 14
1.11.6 SAMPLING DESIGN 14
1.11.7 TOOLS USED FOR ANALYSIS 15
 1.12 LIMITATIONS OF THE STUDY 16
1.13 CONCLUSION 16
1.14 SCHEME OF CHAPTERS 17
CHAPTER 2 2.1 INTRODUCTION 18
REVIEW OF LITERATURE 2.2 SUPPLY CHAIN MANAGEMENT 18
2.3 SCM AND ITS AWARENESS 22
AMONG
MANUFACTURERS
2.4 SCM AND IT 24
2.5 SCM AND COST REDUCTION 27
2.6 SCM AND CRM 29
2.7 SCM EFFECTIVENESS 32
2.8 SCM AND OTHER ASPECTS 33
CHAPTER 3 3.1 INTRODUCTION TO INDIAN 35
SUPPLY CHAIN MANUFACTURING INDUSTRY
MANAGEMENT 3.2 IMPORTANCE OF 37
MANUFACTURING SECTOR IN
GROWTH OF ECONOMY
3.3 KERALA MANUFACTURING 38
SECTOR
3.4 SCM AND MANUFACTURING 40
SECTOR
3.5 IT AND SUPPLY CHAIN PRACTICES 40
3.6 IT ENABLED TOOLS IN PRACTICE 42
3.7 CONCLUSION 45
4.1 INTRODUCTION 46
CHAPTER 4
DATA ANALYSIS AND 4.2 DESCRIPTIVE ANALYSIS OF 47
INTERPRETATION SAMPLES
4.3 INFERENTIAL ANALYSIS OF 74
SAMPLES
4.4 SEM MODEL 118
CHAPTER 5 5.1 SUMMARY OF FINDINGS 126
FINDINGS, RECOMMENDATIONS 5.2 RECOMMENDATIONS 137
AND CONCLUSION 5.3 CONCLUSION 141
5.4 SCOPE FOR FUTURE RESEARCH 142
APPENDIX I – REFERENCES

II- QUESTIONNAIRE

III - LIST OF PUBLICATIONS

 LIST OF TABLES
Table No: Table Title Page
No:
1.1 Table Of Hypotheses 9
1.2 Total Number Of Registered Companies Under Kerala 15
Government
4.1 Classification of Manufacturing Industries in Kerala based on 46
Nature of Product
4.2 Classification of Manufacturing Industries in Kerala based on 47
Scale
4.3 Classification of Industries in Kerala With Respect to System 48
of Manufacturing
4.4 Area of Operation of Manufacturing Industries in Kerala 49
4.5 Source of Raw Materials of Manufacturing Industries in 50
Kerala
4.6 Level of Automation Manufacturing Industries Practice 51
4.7 IT Enabled Tools Used in Manufacturing Industries 52
4.8 Level of Improvement in Supply Chain Practices 53
4.9 Mean And Standard Deviation Of Factors Of Data 54
Warehousing

4.10 Mean And Standard Deviation Of Factors Of Logistics 55

Decision
4.11 Mean And Standard Deviation Of Factors Of Facilities 56
4.12 Mean And Standard Deviation Of Factors Of Operations 57

4.13 Mean And Standard Deviation Of Factors Of Sourcing 57

4.14 Mean And Standard Deviation Of Factors Of Pricing 58

4.15 Mean And Standard Deviation Of Factors Constituting Cross 59
Functional Aspects
4.16 Mean And Standard Deviation Of Factors Constituting 59
Information Costs
4.17 Mean And Standard Deviation Of Factors In Purchasing 60
Costs
4.18 Mean And Standard Deviation Of Factors In Logistics Costs 61

4.19 Mean And Standard Deviation Of Factors In Operations Costs 61

4.20 Mean And Standard Deviation Of Factors In Quality Costs 62
4.21 Mean And Standard Deviation Of Factors In Customer Data 63
4.22 Mean And Standard Deviation Of Factors In Feedback 64

4.23 Mean And Standard Deviation Of Factors In Goals 65

Achievement
4.24 Mean And Standard Deviation Of Factors In Service 65
Orientation
4.25 Mean And Standard Deviation Of Factors In Competitive 66
Advantage
4.26 Mean And Standard Deviation Of Factors Constituting 67
Present Level of Effectiveness In Supply Chain Practices
Through Implementation Of IT Enabled Tools
4.27 Overall Percentile Rates Of Medians 68

4.28 Frequency Distribution Of Level Of Awareness About IT 69

Enabled Tools In SCM Practices Of Manufacturing
Industries In Kerala
4.29 Frequency Distribution Of IT Enabled Tools In Cost 69
Reduction Of Manufacturing Industries In Kerala
4.30 Frequency Distribution Of Level Of Effectiveness Of IT 71
Enabled Tools In CRM
4.31 Frequency Distribution Of Present Level Of Effectiveness Of 72
IT Enabled Tools In SCM Practices
4.32 Overall Mean And SD Of Effectiveness Of Information 73
Technology Enabled Tools In Supply Chain Management
Practices Of Manufacturing Industries In Kerala

4.33 T Test For Significant Difference Between Bulk And Discrete 75

Nature Of Products With Respect To The Factors Of SCM
Practices Of Manufacturing Industries In Kerala
4.34 ANOVA For Significant Difference Among Industry Scale 77
With Respect To Factors Of SCM Practices Of Manufacturing
Industries In Kerala
4.35 ANOVA For Significant Difference Among Manufacturing 80
Classification With Respect To Factors Of SCM Practices Of
Manufacturing Industries In Kerala
4.36 ANOVA For Significant Difference Among Area Of 83
Operation With Respect To Factors Of SCM Practices Of
Manufacturing Industries In Kerala
4.37 ANOVA For Significant Difference Among Sourcing Of Raw 87
Materials With Respect To Factors Of SCM Practices Of
Manufacturing Industries In Kerala
4.38 ANOVA For Significant Difference Among Level Of 91
Automation With Respect To Factors Of SCM Practices Of
Manufacturing Industries In Kerala
4.39 ANOVA For Significant Difference Among IT Enabled Tools 95
Used In The Company With Respect To Factors Of SCM
Practices Of Manufacturing Industries In Kerala
4.40 Chi-Square Tests For Association Between Level Of 99
Awareness Of IT Enabled Tools In SCM Practices And Level
Of Effectiveness Of IT Enabled Tools In Cost Reduction
4.41 Chi-Square Tests For Association Between Level Of 101
Awareness Of IT Enabled Tools In SCM Practices And Level
Of Effectiveness Of IT Enabled Tools In CRM

4.42 Chi-Square Tests For Association Between Level Of 102

Awareness Of IT Enabled Tools In SCM Practices And Level
Of Effectiveness Of IT Enabled Tools In SCM Practices

4.43 Chi-Square Tests For Association Between Level Of 104

Effectiveness Of IT Enabled Tools In Cost Reduction And
Level Of Effectiveness Of IT Enabled Tools In CRM
4.44 Chi-Square Tests For Association Between Level Of 105
Effectiveness Of IT Enabled Tools In Cost Reduction And
Level Of Effectiveness Of IT Enabled Tools In SCM
Practices
4.45 Chi-Square Tests For Association Between Level Of 107
Effectiveness Of IT Enabled Tools In CRM And Level Of
Effectiveness Of IT Enabled Tools In SCM Practices

4.46 Friedman Test For Significant Difference Among Mean Rank 109
Towards Factors Relating To Awareness Of IT Enabled Tools
In Supply Chain
4.47 Friedman Test For Significant Difference Among Mean Rank 109
Towards Factors Relating To Effectiveness In Cost Reduction

4.48 Friedman Test For Significant Difference Among Mean Rank 110
Towards Factors Relating To Effectiveness Of IT Enabled
Tools In CRM

4.49 Pearson Correlation Coefficient Between Factors Of 111

Awareness Of IT Enabled Tools In Supply Chain And Overall
Effectiveness In SCM Practice
4.50 Pearson Correlation Coefficient Between Factors Of 113
Effectiveness In Cost Reduction And Overall Effectiveness In
SCM Practice
4.51 Pearson Correlation Coefficient Between Factors Of 114
Effectiveness Of IT Enabled Tools In CRM And Overall
Effectiveness In SCM Practice
4.52 Variables In The Multiple Regression Analysis 116
4.53 Coefficients Of SEM 121
4.54 Measurement Of Fit Indexes 124
4.55 Model Fit Summary Of Structural Equation Model 125
 LIST OF CHARTS

Chart Chart Title Page No:

No:
Classification of Manufacturing Industries in Kerala based on nature 47
4.1
of product
4.2 Classification of Manufacturing Industries in Kerala based on scale 48
4.3 Classification of Industries in Kerala With Respect to System of 49
Manufacturing

4.4 Operating Area Classification of Manufacturing Industries in Kerala 50

4.5 Source of Raw Materials of Manufacturing Industries in Kerala 51
4.6 Level of Automation of Manufacturing Industries in Kerala 52

4.7 Level of Improvement of Supply Chain Practices 53

4.8 Level of Improvement of Supply Chain Practices 54
4.9 Level of Awareness about IT Enabled Tools 69
4.10 Level of Effectiveness of Cost Reduction Through IT Enabled Tools 70
in Supply Chain Practices of Manufacturing Industries in Kerala
4.11 Level of Effectiveness in CRM 71
4.12 Level of Effectiveness of IT Enabled Tools in SCM Practices 72
LIST OF FIGURES

Figure Figure Title Page No

No
1.1 Conceptual representation of Supply Chain Management 4

1.2 Theoretical Framework – Effective SCM Practices 11

5.4 SEM of SCM practices based on standardized 120

coefficients
ABBREVATIONS

CRM CUSTOMER RELATIONSHIP MANAGEMENT

ERP ENTERPRISE RESOURCE PLANNING

EOQ ECONOMIC ORDER QUANTITY

IT INFORMATION TECHNOLOGY

RFID RADIO FREQUENCY IDENTIFICATION

SCIS SUPPLY CHAIN INFORMATION SYSTEM

SCM SUPPLY CHAIN MANAGEMENT

 ABSTRACT
Manufacturing sector has been under tremendous development since last two centuries.
Establishment of mass production facilities that started in mid 1700s are still on the run
for developing new products and tapping new markets. Late 1990s have been listed as a
critical era of development through introduction of internet and optical cables. Since then,
technology has been developing like anything. Computerization in manufacturing sector
has created wonders over the years. This change has been seen all around the world.
Indian is one such country, where technological advancement had its late start and a
speedy implementation. After independence, Indian manufacturing sector have been
under pressure to sustain and during 1960s and 1970s it collapsed due to natural
calamities. Early 1980s and 1990s were the golden time where the country found its
balance of growth. Since then, India has emerged as one of the fastest developing nation.
The contribution of manufacturing sector to the national GDP is increasing year by year.
Globalization has drawn new lines of development in the country. World class players
started their manufacturing in India and international practices were introduced in
manufacturing. Development of internet and information technology has given a new
mode of information sharing practice through which the developments and innovations
that occur worldwide can be studied immediately.

Kerala is a state in India, which is situated at the south most part of the country. Kerala is
considered as one of the smallest states in the country with a variety of cultural diversity.
Manufacturing sector of the state is considered to be one of the smallest in the nation.
This is because of the unfriendly political environment that prevails in the state. But after
late 1990s, government understood the significance of manufacturing sector and started
focusing on giving necessary aid to them. The Kerala State Industrial Development
Corporation, Department of Commerce etc, are ventures by the Government of Kerala to
uplift the manufacturing sectors in the state.

The research here is to find the Effectiveness in Application of Information Technology

enabled tools in Supply Chain practices of manufacturers in the state. . The study is
carried out over a period of four years with all the districts in the state taken as Area of
Sample. The present study includes an analysis of important factors that creates the
Awareness of IT enabled tools, Effectiveness in Cost Reduction and Effectiveness in
CRM practices.

The qualitative research approach was used in this study and it is descriptive in nature.
The research was based on the Primary data collected from the manufacturers through a
well structured questionnaire and Secondary data from all available sources. The sample
survey of the study consisted of 360 respondents from manufacturing sector which
includes 300 Small scale industries, 30 Medium scale manufacturing units and 30 Large
scale manufacturing units. The respondents were the officials who were responsible for
Production and Supply Chain activities.

Statistical tools were used for the analysis with the application of SPSS. A new model for
achieving Effectiveness of SCM practices through Application of IT enabled tools was
developed using AMOS software. The study has found the Level of Awareness, Level of
Effectiveness in Cost Reduction and Level of Effectiveness in CRM in manufacturers
while using IT enabled tools in SCM practices.

The output of the study is quite unique and it states that all the manufacturers of Kerala
state are not fully aware of the developing IT enabled tools in SCM practices. They prefer
traditional practices due to the lack of market knowledge and fear of failure. The research
again points out that those manufacturers with high level of awareness regarding these
tools are reaping benefits and succeeding in industry. So the Government should take
initiatives to develop a research wing to develop awareness among the manufacturers and
should support the manufacturing sector to excel in becoming global brands. The study is
first of its kind in the state and future researchers and academicians can use this research
as a reference for their studies.