Supply Management Practices Research Articles

A strategic skill based model of supplier integration and its effect on supply management performance

Supplier integration is a tool to help organizations gain competitive advantage. Strategic supply management skills and the supply management function's perceived status are hypothesized as antecedents to supplier integration leading to supply management performance. The sample for this study includes 152 executive level supply management professionals. The empirical results suggest that strategic skills and perceived status are essential antecedents to supplier integration and subsequent performance. Further, the relationship between strategic skills and performance is mediated by supplier integration. Results of a dominance analysis also suggest which strategic skills are most likely to explain status integration, and performance. These findings have significant implications for supply management theory and practice.

Mediated effect of environmental management on manufacturing competitiveness: An empirical study

The extant literature has not thoroughly examined the inter-relationships among continuous improvement (CI), supplier management (SM), environmental management (EM), and manufacturing competitiveness. This study posits that environmental management is partially an extension of advanced manufacturing practices, continuous improvement and supplier management, since a significant portion of EM programs is based on the foundations of those practices. Therefore, EM can be regarded as a mechanism through which CI and SM practices reinforce their contribution to manufacturing competitiveness. A meditational regression model is constructed and the statistical results suggest that firms with closer supplier partnerships and solid continuous improvement practices are more likely to develop a proactive EM program, which in turn enhances competitive advantage through cost savings, quality improvement, and process/product innovation. The influences of SM and CI on cost and delivery performance are lessened with the presence of EM programs. Environmental management must not function separately from SM and CI. Finally, the effect of culture and industry is discussed with suggestions for future research.

ISO 14001 in environmental supply chain practices

This paper focuses on the role of ISO 14001 in environmental supply management practices in Swedish companies. It discusses the existing and potential role of ISO 14001 for three key operational tasks of environmental supply chain management: to communicate the requirements to the supplier, to motivate and enable the supplier, and to verify that the supplier follows the requirements. The study used three different research methods: interviews with environmental managers, focus group discussions and a survey of two multinational companies and their operating units in several countries. It concludes that cooperation between the purchasing and environmental functions within a company is frequently not sufficiently achieved in implementation of ISO 14001; this makes the communication of customer requirements to suppliers less efficient. Building close relationships with suppliers is important to overcome initial difficulties, but this often conflicts with having a large supplier base. For the supplier to have an ISO 14001 certificate is seldom an absolute requirement, however, preference is often given to such suppliers. The value of the ISO 14001 certificate, as a proof of environmental performance, is a combination of the supplier's environmental ambitions, the advancement of supply chain practices of the customer and the ambitions of the certification bodies. Supplier audits are not commonly used as they are resource-consuming. Monitoring and verification approaches need further development.

Strategic purchasing, supply management practices and buyer performance improvement: an empirical study of UK manufacturing organisations

Purchasing is increasingly seen as an important strategic activity of the firm. However, there is little evidence examining the effects of strategic purchasing on a firm's inter-organisational supply management practices and performance. The purpose of this paper is to examine the effect of strategic purchasing on the supply management practices of socialisation, supplier integration and supplier responsiveness, together with relationship performance. Using empirical data collected from 111 United Kingdom purchasing executives, a structural equation model is used to test the theoretical framework. The results provide support for four of the six hypotheses developed. Strategic purchasing was found to have an indirect, significant effect on improving buyer performance, acting through supplier integration. Strategic purchasing also had a significant effect on the use of socialisation mechanisms, but not on supplier responsiveness. Our research indicates that close, long-term supplier relationships can lead to the creation of relational rents. Implications for future research and suggestions for improving the rigour of strategic purchasing research are made.

Current status of CSR in the realm of supply management: the case of the Korean electronics industry

PurposeThe purpose of this study is two‐fold: to survey research on supply management and corporate social responsibility (CSR) reported over the past two decades; and to carry out an empirical study of the current status of supply management and CSR in the Korean electronics industry.Design/methodology/approachThe study is based on an explorative approach, wherein “triangulation” is adopted, combining quantitative and qualitative methods. A questionnaire survey with a 132‐company sample is employed as a quantitative method and the telephone interviews with 23 samples are used as a qualitative method. By adopting a triangulation approach, rich data and explanatory power can be obtained to answer the research question.FindingsThe results of the study show that “environmental” pressures and standards are widely accepted and implemented for supply management in the Korean electronics industry. However, “social” pressures and standards are still not commonly used and there is a lack of implementation in the entire supply chain in the industry. The main reason for adopting CSR standards is to identify risks and problems in the supply chain, and to avoid or at least reduce the consequences for the final manufacturer. Although most manufacturers in the Korean electronics industry demand certified environmental standards such as ISO 14001 from their suppliers, there is generally a lack of integration of social standards in supplier management or requirements.Practical implicationsCompanies today face a growing number of restrictions from national legislations and international standards influencing the environment, labour standards, and human rights issues. Within the Korean electronics industry as a whole there appears to be consensus that it is not easy being “socially responsible”. Vague notions about CSR issues for supply management practices have not provided suppliers with adequate guidance as they seek to improve their performance vis‐à‐vis company standards. The development of evaluation standards to assess suppliers can be a critical factor in improving a firm's performance. Another critical factor is documenting all CSR activities for external requirements such as auditors.Originality/valueThis study is the first empirical attempt to explore CSR adoption and implementation in supply management in the Korean electronics industry.

A strategy to improve skills in pharmaceutical supply management in East Africa: the regional technical resource collaboration for pharmaceutical management

BackgroundInternational initiatives such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, the President's Emergency Plan for AIDS Relief and the President's Malaria Initiative have significantly increased availability and access to medicines in some parts of the developing world. Despite this, however, skills remain limited on quantifying needs for medications and ordering, receiving and storing medications appropriately; recording medications inventories accurately; distributing medications for use appropriately; and advising patients on how to use medications appropriately. The Regional Technical Resource Collaboration for Pharmaceutical Management (RTRC) has been established to help address the problem of skills shortage in pharmaceutical management in East Africa.MethodsThe initiative brings together academic institutions from four East African countries to participate in skills-building activities in pharmaceutical supply management. The initiative targeted the institutions' ability to conduct assessments of pharmaceutical supply management systems and to develop and implement effective skills-building programmes for pharmaceutical supply chain management.ResultsOver a two-year period, the RTRC succeeded in conducting assessments of pharmaceutical supply management systems and practices in Kenya, Rwanda, Tanzania and Uganda. In 2006, the RTRC participated in a materials-development workshop in Kampala, Uganda, and contributed to the development of comprehensive HIV/AIDS pharmaceutical management training materials; these materials are now widely available in all four countries. In Tanzania and Uganda the RTRC has been involved with the training of health care workers in HIV/AIDS pharmaceutical management. In Kenya, Tanzania and Uganda the RTRC has been conducting operations research to find solutions to their countries' skills-shortage problems. Some of the interventions tested include applying and evaluating the effectiveness of a novel skills-building approach for pharmaceutical supply management.ConclusionNurturing collaboration between regional institutions in resource-limited countries to build in-country skills in pharmaceutical supply management appears to be an effective intervention. Support from local programmes and technical assistance from organizations and institutions with the necessary expertise is critical for success, particularly at inception. The skills acquired by local institutions can be incorporated into both pre-service and in-service teaching curricula. This ensures long-term availability of skills in-country. The ability of trained institutions to mobilize their own resources for skills-building activities is crucial for the success and sustainability of these programmes.

Supply relationship evaluation:: The relationship assessment process (RAP) and beyond

In this article we argue that the common purchasing and supply management practice of evaluating supplier performance may be inappropriate in situations of supply partnerships, as it focuses on evaluating the performance of the supplier rather than the supply relationship. We explore a conceptual framework for supply relationship evaluation, discussing lessons from past attempts to develop relationship evaluation models, focusing particularly on the so-called Relationship Assessment Process (RAP) model (Lamming et al., 1996). The article critically evaluates the RAP model, discussing experiences of implementation from 1995 onwards. Building on the reflections on RAP, we propose a new conceptual framework for supply relationship evaluation. This is constructed on the basis of a synthesis of literatures grounded predominantly in industrial marketing and purchasing (IMP), and purchasing and supply management (PSM) research, and thus adopts a network rather than a dyadic perspective on relationship evaluation. We conclude by discussing the implications of the proposed framework.

Strategic supply management: The relationship between supply management practices, strategic orientation and their impact on organisational performance

A theoretical model is presented for conceptualising the relationship between the management of supply, strategic orientation at the business-unit level and their proposed link with firm performance. The shortcomings of existing approaches in accounting for the wide variety of purchasing practices in a comprehensive supply management framework are discussed as well their alignment with strategic orientation. The paper concludes by presenting a model and propositions concerning firm-level supply management, strategic orientation and firm performance.

The role of Guanxi in supply management practices

Guanxi has been identified as having an important influence on business behavior. This paper investigates the influence of guanxi on three elements of supply chain management: strategic purchasing, outsourcing, and supplier development. Survey data was collected from 175 companies in the electronics sector of Hong Kong. The results indicate that guanxi has a significant influence on these three supply management constructs. The managerial implications are examined from a relationship perspective and in terms of transaction cost economic theory. The failure to appropriately assess the impact of guanxi-based supply management practices can have a detrimental effect on organizations attempting to enter the Chinese market.

Water Management in Singapore

Water has become an issue of national security for most countries of the world, Singapore being one of them because of its dependence on imports of water from Malaysia. In order to reduce its dependence on external sources, this city–state has developed and implemented extremely efficient demand and supply management practices. In addition to imports of water and land reclamation, this strategy is a combination of rainfall storage, desalination and very sophisticated technology for recycling used water. As the paper analyses, Singapore has successfully managed to find the right balances between water quantity and water quality considerations; water supply and water demand management; public sector and private sector participation; efficiency and equity considerations; strategic national interest and economic efficiency; and strengthening internal capacities and reliance on external sources.

Water Management in ArRiyadh

ArRiyadh is a good example of rapid transformation of a small city, with an area of less than 100 km2 and a population of less than 400 000 in 1970, to a big city with an area of about 1600 km2 with a population of 4.26 million in 2004. The population of ArRiyadh is expected to be more than 10 million by 2020. The rapid development of the city has lead to a major rise in demands on water and sanitation services. During the late 1970s until the mid-1990s, supply management practices were used to satisfy the rapid growth in water demands. With the financial support of about US$20 billion from the government, the growing domestic demands of more than 500 million m3/year have been satisfied. About 47% of the water supplied is groundwater pumped from local aquifers, and the remaining 43% comes from costly desalinated sea water from the Jubail plant on the Arabian Gulf coast, 466 km from the city. Sanitation services cover no more than about 35% of the city due to the rapid expansion of its area and the related high costs of infrastructure construction. The leakage from water networks, excess irrigation water from landscaping and seepage from septic tanks have contributed to a rise in the groundwater table, resulting in several negative impacts. A more effective water management approach has been experienced in the city since the establishment of the new Ministry of Water and Electricity in 2001 whose focus has shifted to water demand management and conservation. The results of such new approaches have been positive and promising in meeting the water challenges and in achieving sustainable developments under severe arid conditions.

Supplier management and its relationship to buyers' quality management

PurposeThe purpose of this article is to focus on dyadic buyer‐supplier relationship as part of supply chain management (SCM) and to relate implementation of supplier management practices to intra‐firm implementation of quality management (QM) practices. The aim is to identify possible relationships between the two sets of management practices.Design/methodology/approachA survey was conducted in the Greek manufacturing industry, with the use of questionnaires, examining the relationship between supplier management in the SCM context and intra‐firm QM implementation.FindingsResearch findings, which represent buyers' point‐of‐view, reveal a positive correlation between supplier management practices and QM practices, providing an empirical support to the basic research hypothesis.Research limitations/implicationsThere was only one respondent in each buyer company. Also, only a mail survey was used as a research technique and only buyers' perspective was reflected in the data. Future research can be based on both buyers' and suppliers' perspective, asking more than one person and using case studies and phone or face‐to‐face interviews.Practical implicationsThe study aims to encourage firms to adopt a QM philosophy and implement QM practices in their way to SCM implementation. Quality practices are widely accepted to result in intra‐firm coordination and integration. Given that internal integration is a prerequisite for thorough SCM implementation, QM can serve as a strong base for SCM implementation.Originality/valueThe research verifies that intra‐firm adoption of the quality philosophy can lead firms to better supplier management in the SCM context. Managers should focus on QM in their way to SCM implementation.

Effects of Firms’ Relationship-Oriented Behaviors on Financial Performance: A Case of the Restaurant Industry

The business-to-business and business-to-customer relationship marketing literature includes little effort to develop a conceptual framework for understanding both supplier and customer relationship-oriented behaviors. The purpose of this study is to investigate how a firm’s supplier and customer relationship-oriented behaviors affect its financial performance through three relationship performance outcomes: supplier relationship performance, product and service quality performance, and customer relationship performance. The authors critically revisit extant knowledge on the subject, develop a conceptual framework integrating supplier and customer relationship management practices, and test the framework in the independent restaurant industry context. Results support the usefulness of the framework and suggest that building relationships with suppliers and customers plays an important role in providing values to restaurant firms and stakeholders such as suppliers and customers, leading to high financial performance of the restaurant firms.

An institutional theory perspective of business continuity planning for purchasing and supply management

Supply chains are increasingly susceptible to unplanned, unanticipated disruptions. With the implementation of the practices of lean systems, total quality management (TQM), time-based competition and other supply chain improvement initiatives, managers now realize that their supply chains are fragile, particularly to environmental disruptions outside their control. As a result of recent events including 11 September 2001, a system is now emerging in purchasing to manage supply risk characterised as having a very low probability of occurrence, difficult to predict, and with a potentially catastrophic impact on the organization. This paper presents case study research findings examining how and why firms create business continuity plans to manage this risk. Propositions are then presented from an institutional theory perspective to examine how various isomorphic pressures result in firms having similar risk management practices embedded in their supply management practices over time.

Procurement push and marketing pull in supply chain management: The conceptual contribution of relationship marketing as a driver in project financial performance

The agenda for supply management practices on construction projects originated from clients. It is largely procurement driven, the dominant strategy of contractors being to emulate the client approach, and hence push the procurement model along the chain. This procurement push along the supply chain translates the intrinsic client interest in value into a contractor interest in repeat business from the same client or through referral markets, the consequence being: (i) loss of interest in adding further value along the chain, (ii) continuous improvement prematurely reaches the law of diminishing returns through a primary cost reduction focus, (iii) supply chains may be rationalised in terms of the number of suppliers for each link in the chain, yet the procurement push increases chain length in order to squeeze the lowest costs possible, hence those doing the work at the bottom of the chain will not have the resources to add value nor necessarily be aware of the strategic principles at the top of the chain. Marketing is the other side of the same “procurement coin” relationship marketing (RM) soliciting a pull in the supply chain, potentially adding value for continuous improvement. Finally, the RM approach will be related to the theoretical and actual decoupling point for construction, with the potential to move the point towards the start of the chain, hence increasing the potential for agile manufacturing

Water management for a megacity: Mexico City Metropolitan Area.

The paper presents an overview of the present situation of the Mexico City Metropolitan Area (MCMA). The analysis indicates an urgent need to radically improve the current water supply and wastewater management practices, to become sustainable. The MCMA is one of the most rapidly growing urban centers of the world, with a population of about 21 million people, a very high rate of immigration and numerous illegal settlements. In order to meet the increasing water demand, successive governments have focused almost exclusively on supply management and engineering solutions, which have resulted in investments of hundreds of millions of USD and the construction of major infrastructure projects for interbasin water transfer. Environmental, economic and social policies associated with water management are mostly inadequate and insufficient, which is resulting in increasing deterioration in the environment, health and socioeconomic conditions of a population living in one of the largest urban agglomerations of the world. Surprisingly, however, no long-term strategies on demand-management, reuse, conservation, and improved water-management practices have been developed so far.

The development of global supply management capabilities in the automotive industry: the transfer of supply management practices in the People's Republic of China

There is evidence pointing out that automotive multinational firms are increasingly engaged in transferring their supply management practices (SMP) across countries within their global network of operational units. The main goal of this article is to provide a mainly empirical contribution to the understanding of international supply management practices by developing in-depth qualitative analysis on the SMP transfer outcomes and on the relevant factors shaping such process. This article reports preliminary results of empirical research on SMP transfer concerning a specific component in the People's Republic of China (PRC) by a major multinational automotive vehicle-maker. The analysis shows that the transfer process has concerned mainly the supply chain decision-making procedures and those areas more linked to the production phase (delivery/logistics, quality control) and has been implemented during the various suppliers' selection processes. Both local institutional and economic factors and firm-level variables (organisational setting, knowledge management practices) seem to have influenced the transfer process.

Exploring the Effect of Supplier Management on Performance in the Korean Automotive Supply Chain

SUMMARYThis article explores the relationship between supply management practices and performance from a supply chain perspective. A conceptual model of suppliermanagement practices and performance was developed and tested using covariance structural modeling. Survey data were gathered from first‐tier suppliers in the Korean automotive industry. The results showed that in a supply chain, the suppliermanagement practices adopted by first‐tier suppliers affected second‐tier suppliers' performance. Second‐tier suppliers' performance consequently influenced both first‐tier suppliers' quality and delivery performance. These findings suggest that best practices in supplier management should be transferred upstream in the supply chain to improve overall performance of the entire supply chain.

Supplier management in German manufacturing companies ‐ An empirical investigation

A key issue for manufacturers is supplier management, i.e. organising the optimal flow of high quality, value‐for‐money materials or components from appropriate innovative suppliers. Many companies now recognise the central role that supplier management plays in achieving long‐term competitive advantage. This paper presents the results of a study of supplier management practices in Germany, contrasted against those in the UK. It identifies a key difference – German manufacturers have not reduced their supplier base as much as the companies in the UK. However, it appears that German manufacturers will be reducing their supplier base in the near future, although they are likely to follow a policy of multiple sourcing rather than single‐sourcing from suppliers. The results of the research have strong implications for German companies as they clearly indicate the potential for performance improvement through the adoption of best practices in the field of supplier management.

Relationship marketing in Japan: the buyer‐supplier relationships of four automakers

Examines the individual buyer‐supplier relationships of the four major Japanese automobile manufacturers. Building on the relationship marketing and the interorganizational trust literature, relates their supplier management practices to the type of supplier organizations they use, the relative sales revenues, number of employees, and profitability of both buyers and suppliers, and the level of equity held by automakers in their suppliers. Major finding reveals that the major Japanese automakers have far more diversity than commonality in their supplier policies, and suggests that a comparison of major Japanese companies individually, not collectively, is a rich area of research into buyer‐supplier relationships.