Dissertation on the factors influencing the success of Supply Chain Management

Dissertation on the factors influencing the success of Supply Chain Management

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Introduction

Businesses should focus on enhancing the efficacy of operational operations through effective supply chain management to compete effectively in the global market. To compete in global markets, small and medium-sized exporters (SMEs) must work effectively with their customers and suppliers, as well as be competitive in terms of pricing, quality, innovation, and delivery. Successful supply chain management (SCM) implementation can play a crucial part in overcoming these difficulties, and SMEs should have an effective supply chain strategy(Kumar, 2015). The management of upstream and downstream activities, resources, and connections between suppliers and customers that are required to deliver products or services is known as supply chain management or logistics management. In theory, if done correctly, this will result in a competitive advantage through differentiation and cheaper costs (Talib, 2015). The factors contributing to the success of SCM encompass a wide range of techniques intended to boost the productivity and competitiveness of SMEs.

Supply chain Management is not a one-size-fits-all notion or approach. Instead, new developments and strategies for supply chain management continue to increase. This phenomenal rise in new ideas and procedures is beginning to affect and transform company business processes and models. As a result, businesses have numerous options for picking supply chain management programmes. Companies must plan for good supply chain management while making decisions in order to achieve a competitive advantage (Kumar, 2015).
This Master dissertation focuses on the factors influencing the success of supply chains, which can be used to inform higher management in businesses that can help them set a competitive edge in the market.

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Literature review

1.1 The Definition of Supply Chain Management

Leenders and Fearon (1997) define Supply chain management as “the systems approach to managing the entire flow of information, materials, and services from the raw materials suppliers through factories and warehouses to the end customer.” Supply chain management is about competing on value and cooperating with customers and suppliers to build a market position based on the value obtained from end consumer needs. The primary objectives of supply chain management are to create value for customers, competitive advantage, improved profitability for supply chain firms, dimensions of value that may be important to customers, and mechanisms for achieving competitive advantage and improved profitability. There are many benefits of supply chain management. Customer value is developed within an organization through collaboration and cooperation to increase efficiency (lower cost) or market effectiveness (added benefits) in the most beneficial ways to customers.
Value is not inherent in goods or services but in how the client perceives or experiences them. To compete by providing customer value, a corporation must identify and supply the value recognized as significant by its customers. Enterprises in a supply chain influence customers to make choices and behave in ways that benefit the financial performance of the supply chain and the enterprises within it by satisfying customers and gaining a competitive advantage (Ambe, 2009).

1.2 Factors Leading to Success in Supply Chain Management

There have been studies on the factors that lead to the success of Supply Chain Management in large scale industries, which are explained as follows:

a. Collaboration

The purpose of supply chain collaboration is to establish a consistent, transparent, and visible demand pattern that arrives in various formats. Furthermore, collaborative cooperation in the supply chain is an important activity in which enterprises must include their customers and suppliers (Holweg, 2005). Vertical (supplier-customer) and horizontal (competitor) collaboration are required (Giménez, 2005). Furthermore, a successful collaboration in the supply chain can save costs, improve service efficiency and effectiveness, increase revenue, and allow for better operational flexibility (Flynn, 2010).
However, supply chain collaboration is not assured because it is challenging to implement due to a lack of understanding on when or with whom to collaborate and trust concerns amongst partners.

b. Information technology

Information has always been critical to the successful management of logistics, but technology has made it the driving force behind competitive logistics strategy. Using a web-based information system in SCM reduces communication barriers and allows for accurate customer or supplier profiling. Other evidence that IT is crucial for SCM includes improved supply chain performance, increased efficiency, and better integration.
However, the lack of correct information and application of IT among consumers can be a potential barrier to the use of IT in SCM (Talib, 2016).

c. Support from the Top Management

Support from the top management is vital for the success of SCM (Dinter, 2013). The support from the top management manifests itself in the allocation of resources, rewards, and time, the support of strategic purchasing, the development of strategic supplier relationships, and the pursuit of information technology adoption. Furthermore, top management assistance in supply chain quality management (SCQM) includes communication, encouragement, commitment, and sustained implementation.
However, the barriers to support from top management include the lack of understanding of the need to support SCM (Talib, 2016).

d. The role of Human Resources

The importance of a skilled workforce cannot be emphasized enough for the success of Logistics and Supply Chaim Management, for they contribute to profit growth and customer satisfaction and help deliver the goods/ services on time. According to Lönngren (2010), investing in a skilled workforce is more important than investing in an information system. In addition, the employees must be trained to hone their skills, which will benefit the supply chain process in the long run (Fawcett, 2008).

1.3 Gaps in the Literature:

The studies described the factors contributing to the success of Supply Chain Management in large scale industries. However, there is a need to understand whether these factors are present in small and medium-sized exporters and whether the entrepreneurs are aware of those factors. In addition, there is also a need to understand whether small and medium-sized exporters prioritise training that enables the employees o be more skilled.

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Objectives

The dissertation explores whether there is an awareness among small and medium-sized exporters regarding the factors influencing the success of Supply Chain Management which helps them gain a competitive edge.

Methodology

A qualitative research methodology will be employed for this dissertation since it focuses on small and medium-sized exporters. Supply chain management comprises of various techniques. Therefore, selecting supply chain factors and approaches can be a challenging procedure. It is preferable to use a qualitative research approach using case studies to grasp the situation in such a dynamic setting.
The questionnaire is based on the approach by Watson and Frolick for interviewing entrepreneurs. Respondents are asked to score both the expected relevance of a factor and the perceived factor performance of each supply chain element in this technique. A method like this allows for measuring gaps between the expected importance and perceived performance of elements. The responses to the questions are assessed on a Likert scale for importance and performance. The research topic and the research questions are as follows:

Research Topic

What factors influence the success of supply chain management in small and medium-sized exporters?

Research Questions

  1. What are the various factors influencing the success of Supply Chain Management in small and medium-sized exporters?
  2. What are the differences in the factors between the small and medium-sized exporters?

Case Selection

Small and medium-sized exporters are selected in this study since there is an increase in consumer preferences for products made in small scale businesses, like handicrafts, decorative items, and organic consumer products. These products are often shipped across various countries, so well-designed supply chains must be in place. Since all the respondents hail from small and medium-sized exporters, a small number of cases is sufficient, enabling comparison of the factors between them. Six companies that manufacture upcycled goods like bags, purses, soap cases, and keychains were selected for the study.

Data Collection

Questionnaires are the primary data-gathering tool in this dissertation. Other sources of evidence, such as internal company records, company websites, and information from secondary sources, such as Internet websites, are supplemented and triangulated with these data.
The data were entered in Microsoft Excel, which helps improve the reliability and validity of the dissertation. The companies’ identities were concealed using the alphabets F, J, M, S, T, and U. The interviewees were named I-1, I-2, I-3, I-4, I-5, and I-6, respectively. These enable the coding of the data.

Results & Discussion

The data was analysed using the MAXQDA software once all the important data were collected. The data were condensed, simplified, and structured. Tabulation, drawing diagrams, and listing helped in this process. The results were presented in tables.
It was observed that all the firms were aware of the factors contributing to the success of Supply Chain Management. However, there were differences in prioritisation of the factors.
F and J prioritised collaboration and Human resources and took measures to train their workforce on a regular basis. However, both I-1 and I-2 felt a need to improve on top management support and information technology. I-2 planned to improve customer service via chat support and WhatsApp. I-1 decided to improve the user interface on their website.

M gave equal importance to all the factors and fared better than other businesses in Supply Chain Management. I-3 seeks to improve Human Resources by periodically appraising their performance. In addition, I-3 regularly assesses the company’s performance and takes necessary measures to improve its products further.
S had employees who were updated with the advancements in technology and were able to address customer grievances. However, the number of employees was relatively less, impacting efficiency, and I-4 felt a need to recruit more employees. T and U prioritised more on collaboration and support from the top management. While I-5 felt a need to improve more on recruiting and training a skilled workforce, I-6 felt that their website needed to be reworked, making it friendlier for users.

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Ethical Issues

  • Informed Consent

    • The participants were given complete information about the research before proceeding with the interview.

  • Confidentiality

    • High standards of honesty and confidentiality have been maintained to ensure the accuracy of the data. Furthermore, the respondents’ and their companies’ privacy and confidentiality were protected.

    Conclusion

    To conclude, the dissertation gave a brief idea of the awareness of the factors crucial for supply chain management among entrepreneurs in small and medium-sized exporters. The findings emphasised the interdependence of these four components and their overall influence on strategic objective achievement and competitive advantage.
    Organisations prioritising and investing in these factors will be better positioned to overcome obstacles, capitalise on opportunities, and achieve long-term success. Future studies can delve deeper into the specific tactics and best practices businesses can use to optimise these factors and improve their overall performance and competitiveness in a fast–changing world.

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    References

    1. Ravinder Kumar, Rajesh K. Singh, Ravi Shankar, Critical success factors for implementation of supply chain management in Indian small and medium enterprises and their impact on performance, IIMB Management Review, Volume 27, Issue 2, 2015, Pages 92-104, ISSN 0970-3896, https://doi.org/10.1016/j.iimb.2015.03.001.
    2. Ab Talib, M. S., Abdul Hamid, A. B., & Thoo, A. C. (2015). Critical success factors of supply chain management: a literature survey and Pareto analysis. EuroMed Journal of Business, 10(2), 234–263. doi:10.1108/emjb-09-2014-0028 
    3. Leenders, M.R & Fearon, HE, (1997), Purchasing and supply chain management Chicago: Irwin, (11th ed)
    4. Ambe, I. M. (2009, July). Agile supply chain: strategy for competitive advantage. In THE PROCEEDINGS OF 5 Th INTERNATIONAL STRATEGIC MANAGEMENT CONFERENCE (pp. 659-670).
    5. Holweg, Matthias & Disney, Stephen & Holmström, Jan & Småros, Johanna. (2005). Supply Chain Collaboration: Making Sense of the Strategy Continuum. European Management Journal. 23. 170-181. 10.1016/j.emj.2005.02.008.
    6. Giménez, Cristina & Ventura, Eva. (2005). Logistics-Production, Logistics-Marketing and External Integration: Their Impact on Performance. International Journal of Operations & Production Management. 25. 20-38. 10.1108/01443570510572222.
    7. Flynn, Barbara & Huo, Baofeng & Zhao, Xiande. (2010). The Impact of Supply Chain Integration on Performance: A Contingency and Configuration Approach. Journal of Operations Management – J OPER MANAG. 28. 58-71. 10.1016/j.jom.2009.06.001. Ab Talib, Mohamed Syazwan & Abdul Hamid, Abu Bakar. (2014). Application of Critical Success Factors in Supply Chain Management. International Journal of Supply Chain Management. 3. 21-33.
    8. Dinter, Barbara. (2013). Success factors for information logistics strategy — An empirical investigation. Decision Support Systems. 54. 1207–1218. 10.1016/j.dss.2012.09.001.
    9. Lönngren, Hans-Martin & Rosenkranz, Christoph & Kolbe, Harald. (2010). Aggregated construction supply chains: Success factors in implementation of strategic partnerships. Supply Chain Management: An International Journal. 15. 404-411. 10.1108/13598541011068297.
    10. Fawcett, Stanley & Magnan, Gregory & Mccarter, Matthew. (2008). Benefits, Barriers, and Bridges to Effective Supply Chain Management. Supply Chain Management: An International Journal. 13. 35-48. 10.1108/13598540810850300.

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