The Effect of Supply Chain Management Strategy on Operational and Financial Performance

Abstract

Given that small and medium manufacturing enterprises (SMEs) are key to national economic development, the application of supply chain strategies that support their sustainability is critical. This study aims to identify the effects of supply chain management (SCM) on the operational performance of SMEs in Korea, specifically considering organizational competencies. To achieve this, an empirical survey was conducted on 300 Korean manufacturing SMEs that had introduced SCM strategies. The relationships between the variables were analyzed through structural equation modeling. These show that specific SCM strategies and organizational competencies had a significant effect on overall business performance. Furthermore, the SCM strategies had a significant effect on SME organizational competencies. Additionally, we analyzed the mediating effect of organizational competencies on the effect of SCM strategy on overall business performance. We found that organizational competence mediated the effect of SCM strategy on operational performance, but not on financial performance. The study shows that introducing SCM strategies directly improves business performance and is closely related to competencies such as research and development, technology commercialization, production capability, and marketing capabilities. Consequently, a combination of SCM strategies and organizational competencies can generate sustainable overall business performance among SMEs.

Prioritisation of barriers for supply chain management implementation in the Malaysian automotive industry

“…This finding is corroborated with the findings of Lee (2021) whereby automotive companies in Malaysia should prioritise their resources in addressing the Strategic Barrier (C1). Lee (2021) declares that strategies of SCM have major impacts on organisations including the automotive industry. Addressing the Strategic Barrier (C1) enables the Malaysian automotive industry to create a clear vision and direction for the organisation.…”

Impact of supply chain 4.0 and supply chain risk on organizational performance: An empirical evidence from the UAE food manufacturing industry

“…Successful business operations require high-level process integration. Supply chain efficiency can only be improved if all parties and activities are linked together (Lee, 2021). An increase in integration might substantially impact costs, quality, variety, and service (Joghee et al, 2021;Karimi & Rafiee, 2014).…”

The effect of supply chain organizational and supply agility on supply chain performance: The mediation role of supply chain strategy in retail shops

“…According to Abbasi et al (2021) and Ryu et al 2016), supply chain strategy is positively correlated with supply chain management commitment. According to Lee (2021), supply chain strategy improves supply chain management and capabilities in logistics, this could result in improved business performance. Supply chain strategy, according to (Dubey et al, 2018a;Patel, 2017), rules both things at the same time (regulation of universality and integration in the business of doing business).…”

“…According to Kalaitzi et al (2018), inter-company supply chain methods have been demonstrated to be efficient in attaining common goals across all departments, from procurement to production, distributors, retail, and consumers (Lee, 2021). Organizations are beginning to recognize that increasing efficiency within a company alone will not be enough in today's dynamic global market environment; the entire supply chain must be competitive (Moradinasab et al, 2018).…”