Abstract
Purpose: This study aims to identify whether the degree of fit of the correlation between high supply chain and manufacturing strategy will result in a better performance.Design/methodology/approach: Strategic alignment test between the functions uses 102 SMEs in Yogyakarta as, Indonesia with purposive sampling technique. The data are collected by distributing questionnaires to the companies that qualify the criteria of the sample, respondent target are procurement manager, production and IT.Findings: Samples are grouped into two ideal types of strategies used mean split technique. 53 SMEs adopt ASCS (Agile Supply Chain Strategy) and 49 SMEs adopt LSCS (Lean Supply Chain Strategy). Two of the strategy groups have a low value of misfit score; it means that the degree of fit between supply chain strategy and manufacturing strategy is high. The result of simple regression test by using one side technique shows that a regression coefficient values is negative both in LSCS and ASCS group, but the hypothesis test is only proven on ASCS group while LSCS group is not significant.Research limitations/implications: (1) The empirical finding of bivariate fit model test encourage a research space to explore the other contingent variable besides manufacturing strategy. For example, business and information technology strategy; (2) The measurement of the company performance becomes the objective of the success of the alignment of supply chain strategy with the contingent variable which should be specified using the performance variable of the supply chain.Originality/value: The use of Euclidean distance formula is expected to cover the technical limitations of contingency test by using interaction approach between the complex variables; the value of misfit score reflects the extent to which program alignment between the company functions.
Highlights
Globalization has an impact on the level of business competition that is increasingly competitive and has changed the phenomenon of business competition which is no longer based on the ability of individual companies, but based on the supply chain
Two of the strategy groups have a low value of misfit score; it means that the degree of fit between supply chain strategy and manufacturing strategy is high
Generic type linkages of Supply chain strategy are examined by Hallgren and Olhager (2009) and the results provide empirical evidence that Lean Supply Chain Strategy (LSCS) types will produce better performance when companies implement a make-to-stock production system, while Agile Supply Chain Strategy (ASCS) types have contradictory priorities more suited to make-to-order production system
Summary
Globalization has an impact on the level of business competition that is increasingly competitive and has changed the phenomenon of business competition which is no longer based on the ability of individual companies, but based on the supply chain. The focus of research on supply chain strategy sees interdependency issues among companies as a critical issue that needs to be managed well in an effort to improve company performance. The empirical concept of strategic alignment or strategic fit in the past two decades has prompted a number of researchers because of empirical evidence that the direct impact of supply chain strategy on performance has not been conclusive. Considering the critical role of the strategy as the direction for the company in order to achieve the short-term business goals and encourage the company's ability to survive in an increasingly competitive era, some strategy management researchers are more interested in assessing the effect of strategic alignment on performance rather than assessing the strategy practice directly on performance
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