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

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. There is a need, therefore, for research studies focusing on the strategic role of supply chain management in enhancing the competitive advantage of companies. Nowhere is the need more critical than in Indonesia, where there is a scarcity of literature on the subject and where the level of concern among companies and academicians remains low. As a result, there is a gap in the literature relating to supply chain management in the manufacturing firms of Indonesia and a lack of focus on innovative and proactive activities that can boost performance and enhance competition among Indonesian firms in today's uncertain business environment. The current study aims to fill this knowledge gap. The research is motivated by three important considerations:

1. Most of the prior studies in supply chain management present a fragmented perspective of the factors that affect supply chain performance. It is rare to find an integrated study that examines the effects of supply chain management practices on competitive advantage and performance, taking into consideration today's environmental uncertainty.

2. There is still a lack of systematic empirical research that simultaneously examines the effect of management practices (strategic supplier partnership, customer relationship, level of information sharing, information quality, postponement) on competitive advantage (price, quality, delivery, product innovation, and time to market), and its influence on elements of supply chain performance from the perspective of customer facing (reliability, responsiveness, flexibility) and internal facing (expenses and assets). …

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