Asia pacific journal of information systems

The Korea Society of Management Information Systems (한국경영정보학회)
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Studies on Determinant Factors of SCM Performance: From the Supplier Perspective

SCM 성과 결정요인에 관한 통합적 연구: 공급업체 관점으로

  • Park, Kwang-Oh (Division of Business Administration, Pusan National University) ;
  • Chang, Hwal-Sik (Division of Business Administration, Pusan National University)
  • Published : 2011.03.31
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Abstract

In an attempt to cope with widespread, dynamic, and accelerating changes in both internal and external business environments, companies often utilize information technologies such as SCM(Supply Chain Management). To date, SCM research has mainly focused on the effects of dynamic factors on SCM success and emphasized adoption strategies and critical success factors. Consequently, the effects of more static factors such as interdependency between SCM partners have been largely ignored. The purpose of this study, therefore, is to examine the effects of both dynamic and static factors on SCM performance by controlling for information quality and partnership quality. The five factors examined in this study include innovative ness, mutual dependency, quality of information, partnership quality, and SCM performance. All factors were examined from the perspective of part suppliers, except the mutual dependency which was examined from two aspects: supplier's dependency on customer and customer's dependency on supplier. Data was collected through five hundred survey questionnaires distributed to the part supplier companies that have implemented SCM systems for at least one year. As a result, a total of 170 valid responses were obtained. A structural equation research model was fitted using SAS 9.1.3 and SMART-PLS 2.0. The results of this study can be summarized as follows. First, innovativeness positively affected SCM information quality. SCM partnership quality, and ultimately SCM performance. The path coefficient between innovativeness and information quality was 0.387, with a t-value of 3.528. Innovativeness also had a positively direct effect on partnership quality. The path coefficient was 0.351 with a t-value of 3.366. The total effect of innovativeness on partnership quality was significant, although its indirect effect on partnership quality by altering information quality was negligible. The total indirect effect of innovativeness on SCM performance by affecting information quality and partnership quality was significant with a p-value of 0.014. Innovativeness played an important role in determining SCM performance. Second, mutual dependency showed no significant effect on SCM information quality. This result contradicts the earlier assertion that the more dependent two companies are, the more accurate and timely the information they exchange ought to be. This study showed that this may not be the case; a partner may provide information of poor quality even when it is strongly dependent on the other. Mutual dependency showed significant effect on partnership quality. However, when the mutual dependency perceived by suppliers was divided into two parts, one being a supplier's dependency on its customer company and the other being a customer's dependency on the supplier, the latter showed a significant impact on the perceived SCM partnership quality. This result indicates that a customer company can hardly improve the partnership quality perceived by suppliers by making them more dependent. It improves only when the suppliers perceive that their partners, typically having more bargaining power, are more dependent on them. The overall effect of mutual dependency of any kind on SCM performance, however, was not significant. Although mutual dependency has been mentioned as an important static factor influencing almost every aspect of cooperation on a supply chain, its influences may not be as significant as it was initially perceived to be. Third, the correlation between information quality and partnership quality was 0.448 with a p-value of less than 0.001. Information quality had a path coefficient of 0.256 to partnership quality with a t-value of 2.940. The quality of information exchanged between partners may have an impact on their partnership quality. Fourth, information quality also had a significant impact on SCM performance with a path coefficient of 0.325 with a t-value of 3.611. In this study, SCM performance was divided into four categories: product quality, cost saving, service quality, and order fulfillment. Information quality has Significant impacts on product quality, cost saving and service quality, but not on order fulfillment. Fifth, partnership quality, as expected, had a significant impact on SCM performance. The path coefficient was 0.403 with a t-value of 3.539. Partnership quality, like information quality, had positive impacts on product quality, cost saving and service quality, but showed no impact on order fulfillment. It seemed that order fulfillment is the hardest category of performance that SCM can satisfy. One major limitation of this study is that it surveyed only the suppliers. To better understand the dual aspects of SCM, it is important to survey both suppliers and the assemblers, especially in pairs. This research, to our best knowledge, was the first attempt to study the level of dependency between the two groups by measuring the dual aspects of SCM and studying mutual dependency from the categories of suppliers and assemblers each.. In the future, a more comprehensive and precise measurement of SCM characteristics needs to be achieved by examining from both the supplier's and assembler's perspectives.

Keywords

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