Working toward a seamless supply chain: an exploratory analysis of the impact of supply chain on company performance

Abstract

INTRODUCTION Supply chain management has become an important topic to both practitioners and researchers alike. Practitioner definitions of supply chain management are numerous and emphasize different aspects of firm relationships. For example, the definition may emphasize meeting the "real needs of the end customer" (Wisner, Leong and Tan, 2004) or it may emphasize logistics-type processes as suggested by the Supply Chain Council definition: Managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer (Wisner, Leong and Tan, 2004). Yet another definition (Council of Supply Chain Management Professionals, 2006) emphasizes the strategic nature of supply chain across firms but does not mention the end customer: Supply Chain Management is the systemic, strategic coordination of traditional business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. None of these definitions mentions firm performance yet supply chain management has firm performance as an implicit goal. In the academic Literature, supply chain management emphasizes both cost reduction and increased customer value (Brewer and Speh, 2000) leading to sustainable competitive advantage (Mentzer et al., 2001). More recently, a survey of supply chain professionals was undertaken in an attempt to better define supply chain management (Gibson, Mentzer, and Cook, 2005). Yet even this most recent work suggests that "only time wiU teU if it [CSCMP definition] becomes the consensus definition of SCM." Perhaps because of lack of a consensus definition and a lack of consistent management understanding, there remains a question of the connection between a high-performing supply chain and individual company performance. The lack of adequate understanding is likely due to the multifaceted and complex nature of supply chain relationships and the lack of firm-spanning metrics with which to measure these relationships. Cooper, Lambert, and Pagh (1997) suggest a conceptual supply chain framework consisting of business processes, management components, and supply chain structure and further suggest how to operationalize the framework using case studies (Lambert, Cooper, and Pagh, 1998). While managing the supply chain from point of origin to point of consumption is indeed a difficult task, the introduction of technology that improves information flow may help with firm integration across the supply chain (Walton and Miller, 1995). Further, many executives believe that profitability could increase if key business processes are linked and managed across multiple companies (Lambert, Cooper, and Pagh, 1998). The present research explores the importance of business processes, including customer service, business process documentation and measurement and management components such as accurate information exchange to firm performance using data collected from an online survey of high-level supply chain managers. The remainder of this work is organized as follows. First, the supply chain literature is briefly reviewed before describing the methodology. Next, the results are presented followed by a discussion of the managerial implications and recommendations for future research. LITERATURE REVIEW Business process documentation and measurement is found to vary with the importance of the process to the focal companies (Lambert, Cooper, and Pagh, 1998). A process may be defined as "a structured and measured set of activities designed to produce a specific output for a particular customer or market" (Davenport, 1993). While not all supply chain processes can be managed and documented in their entirety, for the more important processes this documentation will certainly decrease transaction costs and add to firm profitability. …