The Determinants Supply Chain Management Practices and Firmss Operational Performance in Malaysia

Abstract

Purpose – The purpose of this paper is to provide empirical evidence about the relationship between practices of supply chain management (SCM) and operational performance (OP). Design/methodology/approach – The empirical data were collected through survey. The respondents of the survey are 112 workers including presidents, vice presidents, directors and managers in Malaysia. Structural equation modelling was used to validate the model with the data were collected in Malaysia. Findings – The findings showed that firms’ operational performance is influenced by customer focus, top management support and supplier management while process control and improvement does not affect firms’ operational performance. Research limitations/implications – The authors performed the survey only in Malaysia using convenience sampling method. Hence, the research results may not be generalized to other contexts. Given this, in order to test the stability of the findings in other contexts, a replication research is important to be performed in the future. Practical implications – SCM practices should be implemented as an integrated system rather than independent practices, in which they interact with each other and improve OP. Originality/value – The empirical results of this study provide an evidence to consider the SCM practices as reliable predictors for OP. According to the research, these practices interact with each other and have both direct and indirect effects on OP. In other words, through the mutual interaction among the SCM practices.