Empirical Research Design on the Influencing Factors of Supply Chain Performance and their Relationships

Abstract:

Supply chain has become a leading role in this severely competitive market, while the research on supply chain performance has not been paid enough attention to improve overall operational abilities and effectiveness. Based on the view of an integrated supply chain, we develop a theoretical model of factors affecting supply chain performance from the points of material flow, commercial flow and information flow. It also describes the main procedure to finish this empirical research on this subject and explores hypothetical model building and measurement development. In this way, we pave the way for doing further empirical research on this subject.

• Periodical: Advanced Materials Research (Volumes 482-484)
• Pages: 331-342
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.482-484.331
• Online since: February 2012
• Authors: Jing Li, Wen Liang Bian
• Keywords: Collaborative Relationship, Empirical Research Design, Logistics Integration, Supply Chain Performance

References

[2] 2 Supply chain cooperation relationships Supply chain cooperation relationships is a kind of partnership that two or more independent enterprises in supply chain share information and resources, take risks and profits together in a certain period and can add value continually[[] Liru Fu,Research on Supply Chain Collaborate Relationships and its Invisible Affecting Factors[Doctor Paper], Capital University of Economics and Businesses,2008( in Chinese) ]. According to the different positions in a supply chain, the relationship can be divided into two kinds—horizontal and vertical. The familiar position is horizontal and also known as Alliance. Enterprises in upstream and downstream are in vertical relationships. Generally, cooperation relationships that always be researched is meant to be vertical relationship. Some researchers have done responding empirical researches on the relationships between cooperation and supply chain or enterprise performance. For example, Chenlin Liao studied the relationships among cooperation, agile supply chain and enterprise performance based on the data of 242 companies in China [[]Chenglin Liao, Mingquan Chou etc. An empirical study on the relationship among collaborative relationship，agile supply chain and business performance[J], Systems EngineeringTheory and Practice, 2008,6:115-128 ( in Chinese) ]. The results showed that cooperation had a positive effect on agile supply chain and enterprise performance. Wenjie Zeng and Shihua Ma used Structural Equation Modeling to test the impact of supply chain relationship on collaboration and supply chain performance with data collected from 163 manufacturing firms. The results showed that supply chain relationship exhibited a strong positive effect on collaboration, at the same time, supply chain relationship and collaboration had a positive effect on supply chain performance． Based on the analysis above, we can conclude that: H3: Supply chain cooperation relationship has a positive effect on supply chain node enterprise performance. H4: Supply chain cooperation relationship has a positive effect on supply chain total performance. Businesses are run with various functional departments, but its efficient operation needs them to work together across the functions. Theodore P. Stank proved that cooperation of different departments within the enterprise can promote internal integration in logistics or marketing [[] Theodore P. Stank ,Marketing/Logistics Integration and Firm Performance[J], the International Journal of Logistics Management,1999,10(1):11-24 ]. Similarly, a supply chain is constituted by independent enterprises and by cooperation with each other to achieve a common goal. There is reason to believe that better mutual communication and cooperation among partners will boost supply chain logistics integration. So we put forwards the hypothesis: H5 Supply chain cooperation relationship has a positive effect on supply chain logistics integration capability.

[2] 3 Supply chain information sharing As market competition intensifies and supply chain operation matures, the importance of information sharing is increasingly being recognized and caught more attention. Information sharing has been singled out as the most important factor in supply chain management [[] Bowersox, D.J. Closs and T.P. Stank. "Ten Mega-Trends That Will Revolutionize Supply Chain Logistics" Journal of Business Logistics, 2000,21(2):1-16 ]. The information that can be shared covers a large area, including sales forecasting, order management, operation information, sales figures, and even technical, strategy and competitive information. Most of the researchers believed that information sharing can reduce "bullwhip effect", then improve supply chain performance [[] Lee H.L, Padmanabhan V.,Whang,S.. Information Distortion in a Supply Chain: The Bullwhip Effect [J]. Management Science. 1997. 43(4):546-558 ], [[] Qingli Da,Qin Zhang, Houcai Shen. Research on Bullwhip Effect in Supply Chain[J]. Journal of Management Sciences in China. 2003.6(3):86-93 (in Chinese) ]. Zhou found that information sharing had a notable effect on supply chain practice by empirical research [[15] Honggeng Zhou, W.C. Benton Jr. Supply Chain Practice and Information Sharing[J],Journal of Operations Management, 2007:1348-1365 ]. And effective information sharing and supply chain practice is the key to improve supply chain total performance. Antony Paulraj also found that information communication among partners had a positive effect on suppliers' performance [[] Antony Paulraj. Inter-organizational communication as a relational competency [J],Journal of Operations Management, 2008:45-64 ]. Richard Klein proved real time exchange between supply and demand had an apparent effect on enterprise performance [[] Richard Klein, Customization and real time information access in integrated e-Business supply chain relationships [J], Journal of Operations Management, 2007:1366-1381 ]. Zhao pointed that information sharing can affect supply chain performance by reducing sustainable cost [[18] Xiande Zhao. The impact of forecasting model selection on the value of information sharing in a supply chain[J], European Journal of Operational Research, 2002:321-344 ]. To some extent, the more information is shared, the better supply chain performance will be. We propose the hypotheses: H6 Supply chain information sharing has a positive effect on supply chain node enterprise performance. H7 Supply chain information sharing has a positive effect on supply chain total performance. At the same time, information sharing is an important part in supply chain integration and also necessary in logistics operation. Supply chain logistics integration needs logistics and other corresponding information shared from the first tier supplier to the end customer. As a result, high level information sharing can boost supply chain logistics integration. Kuo-chung Shang[[] Kuo-chung Shang, Peter B. Marlow. Logistics capability and performance in Taiwan's major manufacturing firms [J],Transportation Research Parte,2005,41:217-234 ] used SEM to study the relationships among logistics capability, logistics performance and financing performance based on data collected from 1200 manufacturing enterprises in Taiwan. The results showed that information-based capability played a very important role because of its affection on benchmarking capability, flexible capability and logistics performance. And it had an indirect effect on financial performance through logistics performance. Then, we propose the hypothesis as below: H8 Supply chain information sharing has a positive effect on supply chain logistics integration capability. Some researchers also find out supply chain cooperation can affect information sharing. The companies in an alliance must share more information than those in interim relationships, for they have more knowledge about each other which come out to be trust, and high level information sharing will bring benefits to the partners in return. So this beneficial relationship will promote information sharing [[] Münc R. Sociological theory :from the 1850s to the present[M].Chicago: Nelson Hall Publishers ]. Maloni and Benton pointed that the independent relationship in an organization can affect information flow [[] Maloni M., W.C., Benton. Power Influences in the Supply Chain [J]. Journal of Business Logistics. 2000. 21 (1):261-269 ]. Antony concluded long-term cooperation had a notable positive effect on communication across organizations based on the research to 200 enterprises in the USA [15]. Thus, we propose another hypothesis: H9 Supply chain cooperation relationship has a positive effect on information sharing.

[2] 4 Supply chain node enterprise performance and total performance As a major subject in this competitive market, supply chain is a network formed by a lot of partners who cooperate with each other to achieve a common goal. Supply chain can gain better performance as a whole than single enterprise which has been proved in real practice. Briefly, supply chain can integrate many independent participants (including suppliers, manufactures, distributors, dealers and customers etc.) to operate synchronously, making all the resources in supply chain achieve optimal allocation. In this way, supply chain total performance is promoted by improving commercial efficiency, logistics efficiency and so on. At the same time, each partner is benefited from this cooperation, for they can focus on their core advantage and get productivity improved. All in all, performance of each node in a supply chain must be influenced by the total performance. Accordingly, we posit: H10 Supply chain total performance has a positive effect on each node performance. We synthesize our hypotheses as a conceptual model in Fig.1. Fig 1 Theory Model for Relationships between factors affecting supply chain performance Measurement design

[3] 1 Initial measurement All the measurement items are measured by Likert-5point scale, where 1 represents "fully agreed" and 5 represents "totally disagreed". All these measurement scale are mature used.

[3] 1.1 Supply chain cooperation relationships For the measurement of cooperation, most researchers agreed with a 6-dimension scale, which includes trust, communication, commitment, dependence, adaption and cooperation [[] Brian Fynes,etc. The impact of supply chain relationship quality on quality performance [J]. International Journal of Production Economics. 2005(96):339-354 ]. Chenlin Liao deleted two measurement items including dependence and commitment in his research on relationships of cooperation and supply chain performance. Because of the similarity of research subject, we choose his measurement scale as our initial one to measure supply chain cooperation relationships.

DOI: 10.1016/j.ijpe.2004.05.008

[3] 1.2 Supply chain logistics integration capability As explained above, supply chain logistics integration is constituted by two dimensions—internal and external. According to the measurement scale generated by Stock, it can be measured by 6 questions, where the first three are to measure internal integration capability and the last three are to measure external logistics integration which happens among node enterprises [8]. So we adopt this measurement scale according to the understanding of supply chain logistics integration capability.

DOI: 10.4135/9781446214312.n6

[3] 1.3 Supply chain information sharing The extent that information shared can affect the coordination of a supply chain. In order to reduce the frequency of bullwhip effect and the happening of other incidents caused by the failure of information sharing, quite a few researchers have put forwards EDI(Electronic Data Change), CPFR(Collaborative Planning Forecasting and Replenishment), VMI(Vendor Managed Inventory), JMI(Joint Managed Inventory) etc. to solve responding problems[[22] Youning Wan, Xinyu Sun etc.Information Sharing and Collaboration in a Supply Chain[J].Industrial Engineering and Management,2003,1:30-33 (in Chinese) ]. We can conclude that the level of information sharing in a supply chain can be seen through the software how they communicate (for example EDI) and the contents they communicate. So we use the scale Ik- Whan G Kwon verified [[] Ik-Whan G Kwon, Taewon Suh. Factors Affecting the Level of Trust and Commitment in Supply Chain Relationship[J]. Journal of Supply Chain Management.2004. 40(2):4-14. ].

[3] 1.4 Supply chain node enterprise performance As all the operators pay much attention to enterprise performance, how to build up a performance evaluation index properly has always been the focus of the study. A tradition method is to evaluate the performance simply by its finance index. It is easy to operate but cannot evaluate systematically, dynamically, and real-timely. For one thing, finance indicators just reflect enterprise performance in the past, and do not reflect the current and future situation; for another thing, the finance indicators only cannot measure the performance and management level completely [[] Lijie Wang, Youchen Lv.Research on Building Assessment Index of Supply Chain Total Performance[J].Enterprise Management,2007：119-120( in Chinese) ]. A proper scale should reflect both the current situation and development potential. We choose a scale including items that can measure dominance performance and also potential performance.

[3] 1.5 Supply chain total performance Supply chain total performance has been studied by many a few scholars. But different researchers have different perspective on the evaluation of performance. Lummus listed KPI indicators for supply chain performance, including the efficiency of supply, transition, shipment and demand management [[26] Lummus R R,Vokurka R J,Alber K L.Strategic supply chain planning[J].Production and Inventory Managementy Journal,1998(Third Quarter):49-58. ]. Roger considered that service quality was the most important factor to evaluate supply chain total performance [[] Roger J A. Measure for measure [J].Logistics,1999 (7):111-113. ]. Zhenjia Huo built up an evaluation index system for supply chain performance [[28] Zhenjia Huo., Construction of Integrated Supply Chain Performance Measurement System[J].Journal of Tongji University,2002,3(4):495-499 ( in Chinese) ]. He thought that supply chain total performance consisted of customer value and supply chain value, while customer satisfaction is the concentrated expression for customer value. So it is proper and more scientific to evaluate supply chain performance from the perspective of service feeling by end customers. We adopt the measurement scale from Rodrigues who considered the performance by service effects from downstream [[] Alexandre M.Rodrigues, Theodore P.Stank, Daniel F.Lynch. Linking strategy, structure, process, and performance in integrated logistics[J].Journal of Business Logistics,2004(25):65-94 ]. Based on the analysis above, we reach the initial measurement scale (show as attached Table 1).

847 RLAD1 0.83 RLAD2 0.80 RLAD3 0.76 RLCM1 0.87 RLCM2 0.62 RLCM3 0.88 SCLI SCLI2 0.83

760 SCLI3 0.66 SCLI4 0.85 SCLI5 0.80 SCIS SCIS1 0.91 0.708 SCIS2 0.76 SCNP FAPP1 0.89

695 FAPP2 0.78 FAPP4 0.56 FIAP1 0.61 FIAP2 0.75 SCTP SCTP1 0.54

734 SCTP2 0.68 SCTP3 0.64 SCTP4 0.78 Further Works and Conclusions A large scale research should be carried out after the pretest. We can pick up some major manufacture enterprises and issue the adjusted questionnaires. This research must cover more subjects. Then we will do SEM analysis based on these data. SEM model consists of measurement square and structure square. Measurement square tests the relationship between measurement variables and latent variables; structure square tests that among latent variables. This analysis needs related software (LISREL, AMOS etc.). According to the inputs (sample covariance matrix S, hypothetical model, and the number of samples), LISREL will find another matrix Σ that is closest to S, and all the other parameter estimates and fit indices at the same time. By then, all the hypotheses will be supported or denied by path analysis. Supply chain performance has always been the focus of many researchers. There are many a few factors that may affect supply chain performance, but it is difficult to find the point cut. On a whole view, logistics, information flow and commercial flow are the core support for supply chain operation. This paper describes a design for this subject from empirical research. Based on theory analysis, we obtain a hypothetical model. We also construct a measurement scale based on mature questionnaire items as a research tool. Then it is revised through small-scale research. This final measurement scale and the model can be used in the future research. *Foudation items: This work was supported in part by the National Science Foundation of China under grant 71102150 and Basic Research Foundation for Center Universities of China under grant 2009JBM029 Reference