Impact of Supply Chain Strategies on Performance

Impact of Supply Chain Strategies on PerformanceIntroductionThe concept of Supply Chain Management (SCM), introduced to hook the electric receptacle of integration of organizational functions ranging from the ordering and receipt of raw materials through the manufacturing processes to the distribution and delivery of products to customers with a view to enable organizations to achieve higher step in products and customer service and to lower inventory cost, has attracted considerable coifferial attention in recent times mainly because of its huge potential combative impact (Stevens, 1989). Experience, however, demonstrates that managers adopt a variety of disparate approaches to SCM implementation. In this context, figure of speech of an effective emerge chain network has become a crucial issue for any attach to to survive in a fiercely competitive market. The SCM concerns with issues and characteristic features of several inter cogitate factors and activities of an organizat ion, such as demand forecasting, procurement, manufacturing, distribution, inventory, transportation, and customer service, and the resulting integrate approach is extended to customers and suppliers (Christopher, 1992). Considering the implications of all these aspects, a number of issues in SCM do assumed importance in the context of prevailing industrial scenario in India in order to make SCM more effective.Numerous papers have been published in the literature advocating the principles and the benefits of SCM Beesley (1997), Lurquin (1996), Mason-Jones and Towill (1998), and Towill (1996). Many case studies have also been published evidencing the benefits of SCM Arntzen, et al., (1995), Calza and Passaro (1997), and lee and Billington (1995). There are several studies on SCM practices in different countries reported in the literature Gilmour et al. (1995), Handfield and Withers (1993), Cilliers and Nagel (1994), McMullan (1996), Cox (1999), and it is felt that an effort on de sign and development of SCM practices including issues, such as IT application, motion good deals used, and barriers of SCM implementation is very much needed in India.On reviewing the existing SCM literature, several major weaknesses in the conceptuality and modeling of SCM are prepare. In particular, the SCM construct is perceived as an extension of integrated purchasing and emerge management, or integrated logistics and transportation management. It appears that a dogged view on SCM concept has yet to develop in the existing literature, and it makes a prerequisite to conduct a ac lodge on the in-chief(postnominal) issues of SCM onward a comprehensive methodology for tot chain performance measurement and evaluation system for the Indian tire manufacturing industries is prescribed. This paper reports the details of a questionnaire-based survey to study the status and scope of SCM practices in Indian Tyre manufacturing companies and also provides a brief overview of the s imilar surveys on SCM already undertaken in different industries.Objectives of the subject areaThe primary objective of the survey is to explore and understand, in quantitative terms wherever possible, the issues in SCM practices and concerns of the Tyre manufacturing industries in India.In specific terms, the objectives are related to the following aspects Present status and scope of SCM practices Role of Information Technology (IT) in SCM Performance measures used in SCM, Benefits of employing SCM practices and Specific issues hindering SCM practices.It is assumed that addressing the preceding(prenominal) issues, as all of them are related to SCM strategies and practical constraints, would lead to understanding the status and scope of SCM practices in Indian Tyre manufacturing industries. Presently, the majority of the Indian companies have a weak alignment of supply chain strategy with business strategy. This is primarily so because the companies are rigidly structured along fu nctional lines with department-specific performance measures.Survey MethodologyA survey instrument, in the form of a questionnaire, is used in order to fulfill the objectives as mentioned. The questionnaire designed for the survey, will be conducted during December, 2010, for honorablely 18 companies covering Tyre manufacturing industry in various regions of the country. Various lists of manufacturing companies, Internet websites of the companies, and personal contacts were the main sources for obtaining information about the companies and creating a database. The companies were selected promiscuously from the database. Although the survey will be conducted for a specific time period, the issues considered remain highly relevant for understanding the operating principles, norms, problems, and implementation aspects of SCM practices in the Indian Tyre manufacturing companies.The questionnaire is designed to know about the responding companies, their main objectives of employing SCM , positions of companies in the supply chain for their primary products, and views of the respondents on the principles of effective SCM practices. The questionnaire was divided into two sections scratch A and Section B. Section A was designed for the companies which have already implemented the SCM concepts like information sharing with suppliers and customers, or have decided to implement SCM concepts in near future, contains questions pertaining to several important issues related to SCM practices, such as a companys role in servicing customers needs, its role as a customer to its suppliers, the role of IT in SCM, the performance measures used in supply chain performance evaluation, and the activities or actions hindering SCM practices. Section B presents the items related to several types of barriers and government policies commonly found in implementing SCM practices in the Indian Tyre manufacturing industries.A combination of checks, yes/no, Likert scale, and multiple choice questions are framed against the issues as mentioned.The following specific tests will be employed on the data obtained Two-Tailed Significance Test-this provides a level of significance for differences between two groups to a question requiring a response using a Likert scale. Bivariate Correlation (Pearson) Coefficient-this tests the relationships between responses to two different questions. The test provides a p value indicating the strength of the relationship. A value of p=0 represents no relationship, and p=1 a strong relationship, and shows the significance level of the relationships. Reliability Analysis-In order to assess the homogeneity and inter-correlations of the factors used in an item, Cronbach alpha (a) Cronbach (1951), a measure of internal consistency often used in cases where participants respond to questions on a Likert scale The value of a lies in the range (0, 1).For the purpose of analysis, the survey responses are divided into three categoriesCategory 1 Que stions that need ranking of alternatives (Likert-scale questions)The importance of the alternatives under each issue is established based on the values of statistics obtained.Category 2 Questions requiring degree of agreement (multiple choice questions)For the questions requiring degree of agreement, Specific issues such as main objectives of SCM, principles of effective SCM practices, integration of divisional areas in the supply chains, information communication tools with suppliers and customers, area of IT applications, and barriers of SCM implementation are included in this category. The percent responses of all the alternatives under each issue are computed and the rankings of the alternatives are make based on the percent responses resulting in identifying the important alternatives.Category 3 Yes/No type questionsFor this category, two yes/no type close-ended questions have been framed against different issues. The percent responses of Yes/No is computed against each issue, which provide the general views of the respondents on a particular issue.Company DetailsApollo Tyres LtdShanmugham Road Cochin, KL 682031 Phone +91-0484-2381902/2381903/ 2380720/ 2372767/ 2363760Birla TyresSyed Amir Ali Avenue Kolkata, WB 700019 telecommunicate emailprotectedPhone +91-33-22814516Ceat TyresCeat Tyres. D 6/5, SMB ENGINEERS, TTC INUSTRIAL AREA MIDC TURBHE NAVI MUMBAI, MH 400705 Phone +91-22-27622079Elgitread (India) LtdElgitread (India) Ltd 2000 Trichy Road Coimbatore, TN 641005 Email emailprotectedPhone +91-422- 4321000Falcon Tyres LtdFalcon Tyres Ltd K. R. S. Road Metagalli Mysore, KK 570 016 Email emailprotectedPhone +91-821-2582453/ 2582055/ 2582041Govind refuge throttleGovind Rubber Limited G -15,Creative Industrial Estate,Sitaram Mill Compound,72-N. M. Joshi Marg Lower Parel Mumbai, MH 400 011 Email emailprotectedPhone +91-22-2309 5641/1784 / 309 21124 / 309 21126JK TyresJK Tyres 3 Bahadurshah Zafar Marg New Delhi, DH 110002 Phone +91-11-2331111 2/7Malhotra Rubbers LimitedMalhotra Rubbers Limited D-4, Sector 11 Noida, UP 201301 Email emailprotected,emailprotected,emailprotectedPhone +91-120-2543028/2543029/2553724Metro TyresMetro Tyres Metro House, 134/4, 135/5 Zamrudpur Kailash Colony New Delhi, DH 110 048 Email emailprotected,emailprotectedPhone +91-11-6219097/98Modi RubberModi Tyres Company Pvt. Limited.NH-58, Meerut Roorkee RoadModipuram 250110MEERUT (Uttar Pradesh)MRF TyresMRF LIMITED KOTTAYAMMANUFACTURING UNITSP.B.No.2, Vadavathoor P.O.,Kottayam,Kerala 686 010Tel 0481-2570461 (12 Lines)DID 2575196/97/98,Royal TyresRoyal Tyres C-11 Mugappair Industrial Estate(East) Chennai, TN 600037 Email emailprotected Phone +91-44-26565643/42690079/42690089TVS Srichakra LtdTVS Building 7-B West Veli highroadMadurai, 625001India+91-45-2420461 (Phone)Questionnaire forThe Impact of Supply Chain Strategies on the Performance of Indian Tyre Manufacturing CompaniesPart 1 Company Profile1. Name of Company2. A ddress3. earth4. Tel5. Fax6. Website7. Contact person9. E-mail8. Position in companyNo of employees______Turnover 2009 _________________Part 2 Theme 1How do you manage your supply chain? Tick all that apply1Close partnership with suppliers2Close partnership with customers3JIT supply4e-procurement5EDI6Outsourcing7Subcontracting83PL9Plan strategically10Supply Chain Benchmarking11Vertical integration12Few suppliers13Many suppliers14Holding safety stock15Use of external consultants16Other, please specifyHow successful do you think is your company in managing its supply chain in general?Not successful at allNot successfulSomewhat successfulSuccessful really successful12345Which of the following you think that your company needs to do in order to manage its supply chain better? Tick all that apply.ImproveStart ImplementingSatisfied alreadyNot appropriateClose partnership with suppliersClose partnership with customersJIT supplye-procurementEDIOutsourcingSubcontracting3PLPlan strategicall ySupply Chain BenchmarkingVertical integrationFew suppliersMany suppliersHolding safety stockUse of external consultantsOther (specify)Does your company have a clear logistics strategic innovation? YES NOPart 3 Theme 2What types of systems are mensesly in use in your company to support Supply Chain Management?Custom-madeStandard packageNot in useMaterial Requirements Planning (MRP)Manufacturing Resources Planning (MRPII) green light Resource Planning (ERP)Warehouse Management arrangement (WMS)Supply Chain Management (SCM)Customer Relationships Management (CRM)Supplier Relationships Management (SRM)Advanced Planning System (APS)Just In Time (JIT)Other (specify)How much did you actually benefit from using these systems?Not at allLittleAverageGreatlyA lotDont know(1)(2)(3)(4)(5)Better quality of informationBetter quantity of informationFlexibilityReduced lead-time in productionCost saving forecastingResource planningBetter operational efficiencyReduced inventory levelMore accurate costingincrease coordination between departmentsIncreased coordination with suppliersIncreased coordination with customersIncreased salesBetter quality of informationBetter quantity of informationFlexibilityIn what level your company is facing the problems below when using SCM systems?No problem at allLittle problemSome problemSignificant problemSerious problemDont know(1)(2)(3)(4)(5)Resistance to heighten from employeesInsufficient vendor supportHidden costIntegration with existing systemIntegration with suppliers systemIntegration with customers systemOther (specify)What types of systems do you plan to implement in the near future (within the next 2 years)?Custom-madeStandard packageNot going to implementE-commerceE-businessDecision support / dependable systemRadio Frequency Identification (RFID)Bar codingOther (specify)Part 4 Theme 319 How satisfied are you with the current public policy regarding SCM and IT?Not at allSomewhatSatisfiedQuite satisfiedVery satisfied12345How impo rtant are the following future measures for supporting your company effort in SCM and IT?Not at allsomewhatimportantimportantquite importantvery important(1)(2)(3)(4)(5)More education, e.g. formal qualificationMore funding and financial supportBetter infrastructure e.g. telecommunications, road, etcImproved information provisionIncreased regional cooperation between institutions, e.g. chamber of commerceCloser cooperation between companies and governmentsOther (specify)