Academic journal article Global Business and Management Research: An International Journal

Effects of Supply Chain Management Practices on Customer Satisfaction: Evidence from Pharmaceutical Industry of Bangladesh

Academic journal article Global Business and Management Research: An International Journal

Effects of Supply Chain Management Practices on Customer Satisfaction: Evidence from Pharmaceutical Industry of Bangladesh

Article excerpt

Introduction

These days the competitive edge of a company over its rivals depends heavily on its ability to cope with multiple challenges to rein in cost, enhance product quality and offer superior customer service (Lei, 2007). With the changes in the current environment being unleashed at an exponentially faster rate, companies are thus bound to discard their conventional means of doing things in order to be more nimble, in a bid to garner the benefits of what Sull (2009) calls 'the upside of turbulence'. A very compelling reason for this is attributed to the fact that the competition is now being waged between or across supply chains, and not confined to only between companies any more (Seth et al., 2006; Fynes et al., 2005; Vickery et al., 2003). As the pharmaceutical marketplace confronts daunting challenges with various stakeholders demanding the pharmaceutical products to be affordable, strategic planning would be of the essence (Holdford, 2005; Birdwell, 1994). For the pharmaceutical industry, it assumes special significance as medical commodities would require to be delivered through the supply chain timely and within the reach and means of the consumers to meet their needs and satisfaction (Enyinda, 2009).

The pharmaceutical industry in Bangladesh is one of the fastest growing sectors, which is on the brink of attaining self-sufficiency in meeting the country's domestic demand. Dominated mainly by the local manufacturers with their market share of around 87% and the rest by the multinational companies, the export earnings by the drug manufacturing firms now stand at approximately $27.54 million to more than 90 countries globally (Muktadir, 2011). This has been partly helped by the fact that Bangladesh, as a least developed country, currently enjoys some benefits in drug manufacturing as it is exempted by the Doha declaration from complying with patent protection until 2016 (Chowdhury, 2010). As this flexibility under the TRIPS (trade-related aspects of intellectual property rights) agreement will expire in a couple of years, this is likely to put the pharmaceutical industry in stiff challenges from its regional counterparts. As this industry in Bangladesh is playing such a vital role in country's economy through employment generation and boosting foreign exchange reserve, it is of utmost significance that the factors influencing the various dimensions of supply chain management (SCM) practices are looked into. The research questions set for this study are, therefore, two-fold: first, what are the influencing factors of SCM practices as being currently observed? Second, how do these factors impact on one aspect of organizational outcome, i.e., such as customer satisfaction (CS) of the drug manufacturers in the pharmaceutical industry of Bangladesh? The objective of the study is to address these two questions. This is very pertinent as there is a significant lack of studies performed in this regard, particularly from the perspective of a developing country.

The paper is structured as follows: following this introduction, a literature review is provided first, on the theories adopted in this study, and then on the dimensions of supply chain management practices and their impact on customer satisfaction demonstrating the theoretical framework of the study. Next, in the methodology section, instrumentation of the measurement items concerning the SCM practices and customer satisfaction is provided by mentioning the articles that have been reviewed for this purpose. Besides, how data were collected and analyzed is also stated. In the findings section, first, the reliability measures of the pertinent variables are presented. Factor analysis for the dimensions representing the SCM practices is then highlighted. The three hypotheses are tested and illustrated through structural equation modelling technique. This is followed by a discussion of the findings vis-a-vis prior empirical studies and their managerial implications. …

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