—Supply chain management (SCM) has been
increasingly recognized as a critical factor in improving
bottom-line performances. In addition, more and more firms
are making use of SCM to improve their performance. The
study aims to understand and determine critical variables of
SCM that would be able to enhance product quality and
business performance in manufacturing companies in Malaysia.
The study measures senior production or SCM managers’
perceptions regarding SCM and level of performances in their
companies. Two hundred and fifty responses are received and
data are analyzed using SPSS. The study specifically
investigates relationships between SCM, product quality and
business performance and these associations are investigated
utilizing parametric statistical analyses such as Pearson’s
correlations and structural equation modeling (SEM). The
SEM result demonstrates that SCM dimensions namely ‘lean
production’, ‘new technology and innovation’, ‘strategic
supplier partnership’ and ‘postponement concept’ appear to be
of primary importance and exhibit significant effects on
product quality and business performance. Findings of the
study provide a striking demonstration of the importance of
SCM in enhancing bottom line performances of Malaysian
manufacturing companies. The result indicates that
manufacturing companies should emphasize greater attention
to the waste elimination program through lean production as
well as the technological aspects of SCM and a greater degree of
management support for SCM implementation initiatives.
—Supply chain management, product quality,
business performance, Pearson’s correlations, structural
Arawati Agus is with the Graduate School of Business, Universiti
Kebangsaan Malaysia, 43600 Bangi, Malaysia (firstname.lastname@example.org).
Cite:Arawati Agus, "The Structural Influence of Supply Chain Management on Product Quality and Business Performance," International Journal of Trade, Economics and Finance vol.2, no.4, pp. 269-275, 2011.