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The impact of supply chain management practices on competitive advantage and organizational performance

Author

Listed:
  • Li, Suhong
  • Ragu-Nathan, Bhanu
  • Ragu-Nathan, T.S.
  • Subba Rao, S.

Abstract

Effective supply chain management (SCM) has become a potentially valuable way of securing competitive advantage and improving organizational performance since competition is no longer between organizations, but among supply chains. This research conceptualizes and develops five dimensions of SCM practice (strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement) and tests the relationships between SCM practices, competitive advantage, and organizational performance. Data for the study were collected from 196 organizations and the relationships proposed in the framework were tested using structural equation modeling. The results indicate that higher levels of SCM practice can lead to enhanced competitive advantage and improved organizational performance. Also, competitive advantage can have a direct, positive impact on organizational performance.

Suggested Citation

  • Li, Suhong & Ragu-Nathan, Bhanu & Ragu-Nathan, T.S. & Subba Rao, S., 2006. "The impact of supply chain management practices on competitive advantage and organizational performance," Omega, Elsevier, vol. 34(2), pages 107-124, April.
  • Handle: RePEc:eee:jomega:v:34:y:2006:i:2:p:107-124
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    References listed on IDEAS

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    1. Feldmann, Martin & Müller, Stephanie, 2003. "An incentive scheme for true information providing in Supply Chains," Omega, Elsevier, vol. 31(2), pages 63-73, April.
    2. Rudberg, Martin & Olhager, Jan, 2003. "Manufacturing networks and supply chains: an operations strategy perspective," Omega, Elsevier, vol. 31(1), pages 29-39, February.
    3. Beamon, Benita M., 1998. "Supply chain design and analysis:: Models and methods," International Journal of Production Economics, Elsevier, vol. 55(3), pages 281-294, August.
    4. Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
    5. Childerhouse, Paul & Towill, Denis R., 2003. "Simplified material flow holds the key to supply chain integration," Omega, Elsevier, vol. 31(1), pages 17-27, February.
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