Identifying the pivotal role of participation strategies and information technology application for supply chain excellence
| DOI | https://doi.org/10.1108/02635570610666476 |
| Pages | 739-756 |
| Published date | 01 June 2006 |
| Date | 01 June 2006 |
| Author | Chinho Lin,Hojung Tseng |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Identifying the pivotal role of
participation strategies and
information technology
application for supply chain
excellence
Chinho Lin and Hojung Tseng
Department of Industrial and Information Management,
National Cheng Kung University, Tainan, Taiwan, Republic of China
Abstract
Purpose – To propose a conceptual structural equation model to demonstrate the direct and indirect
impact of supply chain participation strategy (SCPS), information technology application (ITA),
manufacturing participation strategy (MPS) on customer satisfaction (CS) and organizational
performance (OP) from a strategic perspective.
Design/methodology/approach – An empirical study is conducted through surveys of 109 senior
managers from the top 800 manufacturing firms in Taiwan and the data collected are used to test the
relationships expressed in the proposed structural equation model.
Findings – MPS planning plays a pivotal role in achieving OP in implementing the supply chain
system. This demonstrates the strategic importance of integrating manufacturing (operations) with
suppliers and customers in a supply chain system.
Research limitations/implications – The current data were collected in Taiwan, and the
distribution of the scale of the firms surveyed may be quite different from that in other countries. But it
can be useful for managers’ reference, especially for those whose firms are located in other countries
where the circumstances are similar to those in Taiwan.
Practical implications – This application of conceptual structural equation model is a very useful
source of information and a notice for managers to achieve greater success in implementing the supply
chain systems.
Originality/value – This paper provides a useful conceptual structural equation model and points
out a critical pivotal variable for managers to implement SCM more effectively to enhance the
competitive advantage.
Keywords Supply chain management, Communicationtechnologies, Customer satisfaction,
Organizationalperformance, Manufacturing industries, Taiwan
Paper type Research paper
Introduction
Supply chain management is the integration of key business processes among a
network of interdependent suppliers, manufacturers, distribution centers, and retailers.
The supply chain management enables firms to enhance the flow of goods, services,
and information from the original suppliers to the final customers, to reduce
The current issue and full text archive of this journal is available at
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This study was funded by a grant from the National Science Council, Taiwan, ROC
(No. NSC-91-2416-H-006-010).
Supply chain
excellence
739
Industrial Management & Data
Systems
Vol. 106 No. 5, 2006
pp. 739-756
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570610666476
system-wide costs and maintain required service levels (Simchi-Levi et al., 2000).
Immediate supplier and customer participation activities have thus played an
important role in the development of effective supply chain management strategies
(Tracey et al., 1999; Tracey and Tan, 2001; Winser, 2003). This implies that in the
process of establishing their strategy firms can focus on not only the traditional
aspects of product, market, location, and competitive ability; but a broader approach
involving supply chain participants and manufacturing personnel. The involvement of
there two groups is needed to ensure that customers will be more satisfied in an
environment of rapidly changing requirements.
Many studies have emphasized the partial relationships among SCPS, information
technology application (ITA), manufacturing participation strategy (MPS), customer
satisfaction (CS), and organizational performance (OP) (Narasimhan and Kim, 2001;
Kuei et al., 2001; Lin et al., 2003; Choy et al., 2003; Soliman and Youssef, 2003; Droge
et al., 2004; Gunasekaran and Ngai, 2004; Chen et al., 2004; Kannan and Tan, 2005).
However, a structural framework for these constructs is seldom found. For example,
Chen et al. (2004) utilized a structural equation model approach to examine the links
among strategic purchasing, supply management, and firm performance. Kannan and
Tan (2005) exploited correlation analysis approach to discuss that linkages and impact
of JIT, TQM, and SCM on business performance. Droge et al. (2004) examined the
effects of integration practices reaching across firm boundaries to involve suppliers
and customers on time-based performance and on overall firm performance (financial
and market share). However, none of the above studies considered these aspects, such
as manufacturing factors, ITA issues, and OP. Kuei et al. (2001) presented an empirical
study of the relationship between supply chain management and OP, and some papers
have explored the relationship between information systems and supply management
performance (Narasimhan and Kim, 2001; Lin et al., 2003; Coronado, 2003;
Gunasekaran and Ngai, 2004; Helo and Szekely, 2005).
In spite of the recent research focus, one area of SCPS that has not bee n adequately
addressed is the direct and indirect influence of ITA, and MPS on CS and OP. Synthesis
of previous studies finds that an integrative model for combining SCPS, ITA, and MPS,
CS, and OP, still missing. Therefore, the study first identifies how researchers and
practitioners, based on the literature, define and operationalize SCPS, ITA, MPS, CS,
and OP. Second we propose a conceptual structural equation model to link the direct and
indirect impact of SCPS, ITA, and MPS on CS and OP. Finally, this research surveys 109
senior managers from the top 800 manufacturing firms in Taiwan and the data collected
are used to test the relationships expressed in the proposed structural equation model.
Research constructs
This section reviews the literature to identify relevant practices comprising each
operation strategy and operationalizes the supply chain participation stategy (SCPS),
ITA, MPS, CS, and OP.
Supply chain participation strategy
Prescriptions for modern organizations call for organizational flexibility and high
levels of participation in decision-making activities. Pfeffer (1994) argued for achieving
competitive advantage through widening the circle of people who participate in
making decisions and with whom organizations share information. The concept of
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