• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing:  ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2011 Vol.2(4): 269-275 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2011.V2.115

The Structural Influence of Supply Chain Management on Product Quality and Business Performance

Arawati Agus
Abstract—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.

Index Terms—Supply chain management, product quality, business performance, Pearson’s correlations, structural equation modeling.

Arawati Agus is with the Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 Bangi, Malaysia (araa@ukm.my).


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.

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