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The Relationship between Supply Chain Fit and Return on Assets of the Firm
International Journal of Operations and Logistics Management
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| Title |
The Relationship between Supply Chain Fit and Return on Assets of the Firm
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| Creator |
iDavid, Michael J.
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| Subject |
Supply Chain Fit; Return on Assets; performance; Pakistan
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| Description |
Purpose: The decisive point of financial encroachment of supply chain management has been an ongoing interest. Forming on the operations strategy literature, this study examines the links between the supply chain fit (i.e. strategic consistency between the product „supply and demand uncertainty and emphasizing on supply chain tructure/design) and financial performance of the firm. We define firms with supply chain fit as firms where the products‟ supply and demand uncertainty and supply chain responsiveness perfectly match the outcome.Methodology: The study consists of a survey questionnaire and data was collected from seventy three managerial level employees of eight organizations located in Faisalabad. The instrument consists of items relevant to supply chain fit and financial performance of the firm. The construct were gone through EFA and CFA to check reliability and validity, respectively. In order to test the hypotheses, hierarchical regression was used. Results: The data supports the hypothesis that supply chain fit is positively linked with financial performance of the firm. Contrary to it, supply chain misfit (negative misfit and positive misfit) has a negative relation with firm‟s performance. Nnegative misfit is defined as firms that designed their supply chains to support responsiveness while the products‟ supply and demand is quite certain and the products are predictable. Positive misfit is defined as firms that designed their supply chains to support efficiency while the products‟ supply and demand is rather uncertain and the products are unpredictable. Implications: If the organization shows a positive interest towards the supply chain fit, they go towards the improvements and more return on the Asset and if the organization shows the negative misfit, the objectives which are set by the firm can‟t be achieved. A fit between Supply chain and financial condition positively impacts the performance of a firm. The framework developed can be used by managers to assist in thinking through possibilities to link supply chain fit and return on assets. Research contribution: This is an infant study in Pakistan and there is room for large working in the field .since supply chain is in many ways an outgrowth of operations strategy research, we built our study on a established foundation and extended the operations and manufacturing towards a supply chain strategy research. As such, we argument some recent published empirical work on supply chain strategy. Employing multivariate analysis techniques to test the core hypotheses and further driving groups of firm with supply chain fit with negative misfit and with positive misfit we develop replicable taxonomies of configuration. Future research direction: This is the first research which has empirically tested in context of Pakistan. The propositions were based on an extensive supply chain research literature. The present study is of unique nature in this area but still it needs a lot of dimensions to be explored keeping in mind nature of data and analysis approach. Future studies can be conducted taking into account longitudinal data accompanied by multilevel statistical techniques. This study is limited in its scope and generalizeability due to small sample size.
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| Publisher |
Academy of Business & Scientific Research
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| Date |
2013-06-03
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://absronline.org/journals/index.php/ijolm/article/view/6
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| Source |
International Journal of Operations and Logistics Management; Vol 2 No 2 (2013): June; 1-16
2309-8023 2310-4945 |
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| Language |
eng
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| Relation |
http://absronline.org/journals/index.php/ijolm/article/view/6/6
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| Rights |
Copyright (c) 2014 International Journal of Operations and Logistics Management
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