Academic journal article International Journal of Business and Information

Factors Influencing Supply Chain Competitive Advantage and Performance

Academic journal article International Journal of Business and Information

Factors Influencing Supply Chain Competitive Advantage and Performance

Article excerpt

ABSTRACT

This paper investigates the influence of supply chain management practices (strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement) on competitive advantage (cost, quality, delivery dependability, product innovation, and time to market) and on supply chain performance. It also explores the moderating effect of supply chain uncertainty (supplier, process, and demand) on the relationship between supply chain management practices and performance. The paper focuses on large-scale manufacturing companies in Indonesia and incorporates the Lie et al. [2006] research model as well as modified research models that include uncertainty (supplier, process, and demand) as a moderating variable. A survey questionnaire of 500 Indonesian CEOs was used to collect data.. The author developed four hypotheses, which were tested using simple regression analysis and moderated regression analysis. The results supported three of the hypotheses, but did not support the fourth. From the results, it can be concluded (1) that supply chain management practices have significant effects on both supply chain competitive advantage and performance; (2) that competitive advantage does not have a significant effect on supply chain performance; and (3) that supply chain uncertainty moderates the relationship between supply chain management practices and performance.

Keywords: Supply chain management practices, supply chain uncertainty, competitive advantage, performance

1. INTRODUCTION

The paradigm of modern business has shifted the focus of competition from independent firms to business networks such as supply chains. In this new era of competition among business networks, the role of the company has changed from a manufacturing entity that supplies domestic companies into an international market that operates through local companies [Rudberg and Olhager, 2003; Li and Whang, 2007]. To be able to win, or even to survive, in this new environment - to have products available at the right time and in the right place - a company must remain competitive. This is a difficult challenge for individual companies, which often lack the resources or competencies needed for the task. Now more than ever, therefore, it is essential for individual companies to work collaboratively to develop core resources through supply chain management.

Supply chain management includes a variety of practices carried out within an organization to achieve and maximize effectiveness by managing the flow of finished goods, services, and information from point of origin to point of consumption through a set of directly linked organizations in the chain. Such activities include strategic supplier partnerships, customer relations, information sharing, information quality, and postponement [Li et ah, 2006]. The goal of these practices is to enhance supply chain competitive advantage and performance [Stonebraker and Liao, 2004]. To achieve effective supply chain management, the companies involved in such an endeavor must coordinate and integrate these activities to ensure not only effective management strategies, but also quality of service and corporate profits.

Most of the research focusing on supply chain management has occurred in economically developed countries such as the United States and Australia. Only a few studies have been conducted in Asia, particularly in Indonesia. As an archipelago, Indonesia has geographical issues that intensify the challenge of competing successfully in today's global economy through competitive advantage and improved company performance [Anatan, 2012]. The challenge extends to supply chain management in an environment that pits Indonesian companies against competitors that are successful in expanding their markets regardless of geographical boundaries between islands, provinces, regions, and even countries.

In the new era of business networking, successful companies can no longer rely on the ability of a single business, but must be able and willing to collaborate with other companies through interconnected channels. …

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