Impact of SCM Practices of A Firm on Supply Chain Responsiveness and Competitive Advantage of A Firm.pdf

The Journal of Applied Business Research – March/April 2013 Volume 29, Number 2 2013 The Clute Institute / 499 Impact Of SCM Practices Of A Firm On Supply Chain Responsiveness And Competitive Advantage Of A Firm Ashish A. Thatte, Gonzaga University, USA Subba S. Rao, University of Toledo, USA T. S. Ragu-Nathan, University of Toledo, USA ABSTRACT Today’s supply chains are expected to respond rapidly, effectively, and efficiently to changes in the marketplace to sustain, succeed and create competitive advantage in this increasingly global marketplace by focusing on time, flexibility, and speed of response. The focus of this study is the supply chain responsiveness construct and a firm’s practices to respond to customer’s demands and constantly changing market conditions to create competitive advantage. This research conceptualizes three dimensions of supply chain responsiveness and develops a reliable and valid instrument for measuring this construct. The study further tests the relationships between supply chain management (SCM) practices, supply chain responsiveness, and competitive advantage using structural equation modeling based on 294 responses from industry professionals in the manufacturing and supply chain area. Research findings point out that higher level of SCM practices can lead to improved supply chain responsiveness and enhanced competitive advantage of a firm. Also supply chain responsiveness can have a direct positive impact on competitive advantage of a firm. Keywords: Supply Chain Responsiveness; Supply Chain Management (SCM); Competitive Advantage; Structural Equation Modeling 1. INTRODUCTION he environment in which today’s manufacturing firms operate is characterized by growing world competition and increasingly demanding customers (Rich and Hines, 1997). The new competitive environment is more global, technologically oriented and customer driven, with shrinking product life cycles, ever faster tim