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An Empirical Analysis of the Financial Impact of Supply Chain Management on Small Firms

Author

Listed:
  • James C. Brau

    (Brigham Young University)

  • Stanley E. Fawcett

    (Brigham Young University)

  • Ladd Morgan

    (Brigham Young University)

Abstract

In this article we test the value proposition hypothesis of supply chain management (SCM) by examining survey results of 570 US managers. First, we find that large firms use SCM initiatives significantly more than small firms. Second, in univariate and multivariate tests, we find that SCM leads to significant improvements in asset utilization, revenue generation, and competitive performance, regardless of firm size. These two major findings suggest that managers at small firms that are not actively engaged in SCM should reevaluate their opportunity to capture the competitive benefits of SCM that many large firms currently enjoy.

Suggested Citation

  • James C. Brau & Stanley E. Fawcett & Ladd Morgan, 2007. "An Empirical Analysis of the Financial Impact of Supply Chain Management on Small Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 12(1), pages 55-82, Spring.
    • Handle: RePEc:pep:journl:v:12:y:2007:i:1:p:55-82
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    References listed on IDEAS

    as
    1. Petersen, Mitchell A & Rajan, Raghuram G, 1997. "Trade Credit: Theories and Evidence," The Review of Financial Studies, Society for Financial Studies, vol. 10(3), pages 661-691.
    2. Arend, Richard J. & Wisner, Joel D., 2005. "Small business and supply chain management: is there a fit?," Journal of Business Venturing, Elsevier, vol. 20(3), pages 403-436, May.
    3. James S. Ang, 1992. "On the Theory of Finance for Privately Held Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(3), pages 185-203, Spring.
    4. James S. Ang, 1991. "Small Business Uniqueness and the Theory of Financial Management," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(1), pages 1-13, Spring.
    5. Pooran Wynarczyk & Robert Watson, 2005. "Firm Growth and Supply Chain Partnerships: An Empirical Analysis of U.K. SME Subcontractors," Small Business Economics, Springer, vol. 24(1), pages 39-51, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    supply chain management; SCM; small business;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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