Abstract
Supply chain is system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. The purpose of this research is to study the effect of upstream supply chain management practices (supplier relationship management, customer relationship management, level of information sharing and quality of information sharing) on organizational performance of Tobinco Pharmaceuticals. The study was employed through descriptive research design in which selection of respondents were done using stratified sampling technique which is a mixture of deliberate (purposive) and simple random sampling technique. The analysis was made using descriptive statistics and the significant relationship of the independent variables with the dependent variable was made using inferential statistics (correlation and regression analysis). From the descriptive analysis result, SRM has mean of 4.06, CRM has mean of 3.77, LIS has mean of 3.89, QIS has mean of 4.14 and OP has mean of 3.94. From the correlation analysis result there were significant positive correlation between the two variables (quality of information sharing and customer relationship management) and organizational performance at (p<0.01) and (p<0.05) respectively. The other two variables (SRM and level of information sharing) have no significant correlation with organizational performance. Finally, according to the regression analysis result, only the two hypotheses (Ha2 &Ha4) which are customer relationship management and quality of information sharing has positive and significant influence on organizational performance is accepted. This implies that quality of information sharing and customer relationship management must be in the best attention of business organizations to take a proactive role in the management of their supply chain in establishing a strong position over its competitors and achieving its goals.
Key words: Supply Chain Management, Supplier Relationship Management, Customer Relationship Management, Level of Information Sharing, Quality of Information Sharing.
CHAPTER ONE
1.1. Background Of The Study
INTRODUCTION
Supply chain is system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. The Council of Supply Chain Management Professionals defines supply chain management as follows: “Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers (Ali et al, 2018).
Supply chain management is a concept that is gaining in popularity and importance and there is still much to investigate, since there is no a universally accepted definition yet. As a result of that, there are not many empirical researches on the benefits of supply chain management and certainly studies and analysis will improve if a single definition would be adopted. The evolution of the recent competitive environment resulted in an even greater interest in the management of the activities external to the production system. The new focus of managers is addressed to the synchronization of the production system with the upstream and downstream activities of the firms. There are some key factors underlying the transition from a traditional management of the internal activities to an innovative handling of the internal processes in the broader environment of a supply chain (Marco, 2015).
Supply chain management (SCM) is a management concept of the 2000´s. It includes divisions from the management concepts of previous decades. Many definitions for SCM have been presented. SCM has been and is still regarded as a synonym for logistics, supply and SC control. Today the broader definition determined by the Global Supply Chain Forum is generally accepted as a norm “Supply Chain Management (SCM) is the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders” (Ilkka, 2017).
For any business activity, such as supply chain management (SCM), which has strategic implications for any company, identifying the required performance measures on most of the criteria is essential and it should be an integral part of any business strategy. Many methods have been suggested over the years for SCM evaluation of any organization. However, a balanced approach to evaluate SCM is a source of increasing cost and concern to management as traditional methods focus only on well-known financial measures, which are best, suited to measure the value of simple SCM applications. Unfortunately, evaluation methods that rely on financial measures are not well suited for newer generation of SCM applications. These complex supply chains typically seek to provide a wide range of benefits, including many that are intangible in nature. As a result, we suggest that it may be appropriate to use a balanced approach to measure and evaluate supply chains (Beamon, 1998).
The current financial and economic situation is making increasingly necessary the collaboration between all the most critical supply chain partners, since it is no longer sufficient to approach the business in a individual logic; in addition, the recent financial and liquidity problems are still affecting almost all countries in the world. This situation is asking to extend the collaborative approach also to finance in order to introduce innovative solutions, reducing the gap between the physical and the financial supply chain; SCF is a set of non-canonical financial schemes based on the exploitation of the relationships between the supply chain partners and aimed to build a win-win situation for all the actors involved. SCF is a quite recent discipline and it is not well structured yet, since there are no universally accepted terminologies and classifications of its tools; moreover, its potential is strongly affected by the features and conditions of the different countries. In fact, the future developments of SCF depend on the number of players able to benefit from these solutions and their relevance in the economic system (Berk et al., 2017).
The profitability of the supply chain could be improved drastically via better delivery performance (improved responsiveness and reliability of deliveries, fewer stock outs, higher product quality, more receiver-friendly loads) and increased information availability (better demand insight, more predictable order cycles, accurate, real-time) at the operational level and a reduction of time-to market at the tactical and strategic level. The potential for improvement when applying SCM-concepts is based on the reduction of inventory -carrying (reduced overstocks, faster inventory turns) and transportation costs (pooling of transport), the reduction of indirect and direct labor costs and the increase of sales and sales margins (Vander, 2015).
1.2. Statement of The Problem
For any business activity, such as supply chain management (SCM), which has strategic implications for any company, identifying the required performance measures on most of the criteria is essential and it should be an integral part of any business strategy. Many methods have been suggested over the years for SCM evaluation of any organization (Bhagwat et al., 2017).
Due to the number of rival companies expanding both locally and globally, companies not only have to reestablish themselves to produce higher-quality products and services, decrease waste and are able to respond to the market but also to handle their supply chain management efficiently. Organizations are facing different kinds of challenges in their effort of competing in today’s dynamic global markets. To remain competitive, organizations must recognize the importance of supply chain practices that improve not only their own organizational performance, but also coordinate with their supply chain partners to improve their joint performance. Yet, despite the significant advances in research and practices, many organizations continue to struggle to understand the complex issues associated with the coordinated planning and supply activities amongst the members of their supply networks (Makena, 2014).
Globalization has expanded and is no longer confined to the local or regional level. Fresh produce can now be shipped to many parts of the world at competitive prices. Many research papers have been published in an attempt to develop SCM practices and to investigate their impact on operational, organizational, and supply chain performance. Researchers defined the following SCM practices: information sharing, long range relationships, advanced planning techniques, leveraging the internet, and supply and distribution network structures. They found a positive relationship between SCM practices and organizational performance with the moderating effect of upstream supply chain role (Faith, 2015).
Located at the intersection of logistics, supply chain management, collaboration, and finance, SCF is an approach for two or more organizations in a supply chain, including external service providers, to jointly create value through means of planning, steering, and controlling the flow of financial resources on an inter-organizational level. While preserving their legal and economic independence, the collaboration partners are committed to share the relational resources, capabilities, information, and risk on a medium to long-term contractual basis (Gema, 2017).
Practices of SCM will not only make impact on the overall performance of the organization, but also on the competitive advantage of the organization. These practices are supposed to improve the organization’s competitive advantage using the price/cost, the quality, the delivery dependability, the time to market, and product innovation. Prior studies had identified that some of the components of SCM practices i.e. strategic partnership with the supplier have a major impact on various forms of competitive advantage (i.e. price/cost). For example, the strategic partnership with the supplier will help in improving the supplier performance, and will help to reduce the time to the market and will also results in the responsiveness and satisfaction of the customer. Information sharing will help to high level of integration of supply chain by making enable the organizations for the dependable delivery, also for introducing new product in market quickly. Sharing of information and the quality of information contributes positively towards the satisfaction of the customers and quality of partnership (Muhammad et al, 2018).
1.3. Basic Research Questions
In this paper, the following research problems are expected to be answered.
Ø Is there relationship between supplier relations management practice and organizational performance?
Ø Is there relationship between customer relationship management practice and organizational performance?
Ø Is there relationship between level of information sharing and organizational performance?
Ø Is there relationship between level of information quality and organizational performance?
Ø How is the performance of Tobinco Pharmaceuticals while implementing supply chain management?
1.4. Objective of The Study
The general objective of this study is to know how upstream supply chain management activities affect organizational performance of Tobinco Pharmaceuticals since its implementation.
The specific objectives are to:
§ Identify the relationship of SCM practices and organizational performance
§ Describe the performance of Tobinco Pharmaceuticals while implementing supply chain management.
1.5. Significance of The Study
Typically, a SC consists of four basic processes: acquiring customer orders, purchasing raw materials and components from suppliers, producing products, and fulfilling or executing customer orders. The performance of these basic processes determines the overall performance of the business. It is thus vital to study the nature of the relationship between the SCM and performance of the firms (Faith, 2015).
To understand how supply chain management practices affect the organizational performance, this study plays a vital role and shows management how supply chain management practices are significantly related and affect the performance (marketing and financial) of the organization. The study may also show management, supply chain management needs great attention (focus) to have more satisfied customers and suppliers.
The companies are implementing supply chain management. But, they don’t relate the effect of upstream supply chain management practices with organizational performance and no evaluation is done. Therefore, the proper emphasis is not given to the implementation of supply chain management
Thus, this study will have the following importance:
ü It aids management of the company to see how supply chain management practices are related with the organizational performance.
ü It helps management of the company to evaluate the already implemented supply chain management based on its effect on the performance of the organization.
ü It serves as a spring board to conduct further and more detail study in the area. It also serves as a reference for any interested management, staff or researcher.
1.6. Delimitation/Scope of The Study
The study focuses on the effects of supply chain management on organizational performance of Tobinco Pharmaceuticals found in Accra and it would be more important if more pharmaceutical companies and more SCM variables are included in the research. And also it would be more important if it includes pharmaceutical companies in other cities of Ghana. The other limitation is survey was used as the only data collection method so it may have its own negative influence in the study.
1.7. Definition of Terms
Supply Chain: are all inter-linked resources and activities needed to create and deliver products and services to customers (Ali et al, 2018).
Supply Chain Management: Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers (Ali et al, 2018).
Supplier Relationship Management: is the supply chain management process that provides the structure for how relationships with suppliers are developed and maintained.
Customer Relationship Management: provides the structure for how the relationships with customers will be developed and maintained (Li et al., 2015).
Level of Information Sharing: refers to the extent to which critical and proprietary information is communicated to one’s supply chain partner (Ayman, 2014).
Quality of Information Sharing: include such aspects as the accuracy, timeliness, adequacy, and credibility of information exchanged (Li et al., 2015).
Organizational Performance: is the extent to which a firm achieves its market-oriented goals as well as its financial goals (Li et al., 2015).
1.8. Organization of The Study
This paper was organized into five chapters. The first chapter include introduction which includes background of the study, statement of the problem, objective of the study, basic research questions, significance of the study and scope and limitation of the study. The second chapter deals with review of related literature from different sources. The third chapter involves methodologies applied in the study. The fourth chapter presents data analysis and interpretation. The fifth chapter includes summary of the study, conclusions, recommendation and suggestion.
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