Measuring Supply Chain Coordination in Milk and Dairy Industries: A Confirmatory Factor Model

Abstract

Coordination within the supply chain is a strategic weapon to the problem that occurs due to lack of supply chain coordination. Since supply chain consists of various organizations, it can satisfy customers’ needs, only when the whole of its partners becomes coordinated. To cope up and endure in a business environment where competition is high, firms should decrease the flow of interruption within upstream and downstream supply chain activities. This kind of endurance in such business environment can only be achieved by means of organized supply chain coordination. In this paper, we investigated empirically the major factors affecting supply chain coordination in milk and dairy industries. Based on an extensive literature review, the study created 15 measured variables and offered a comprehensive model to examine four key constructs. The data were collected from 330 milk suppliers, processors, and retailers in the central part of Ethiopia and the result were validated using rigorous statistical techniques. To approach this, an exploratory factor analysis (EFA) has been applied to classify factors for major constructs. And also, Structural Equation Modeling (SEM) was employed to assess the convergent validity through Confirmatory Factor Analysis (CFA) using AMOS version 4.