THE IMPACT OF IMPORTANT CONTEXTUAL FACTORS ON SUPPLY CHAIN MANAGEMENT PRACTICES IN MANUFACTURING FIRMS IN SRI LANKA

Abstract

Supply Chain Management (SCM) practices have been defined as a set of activities undertaken in an organization to promote effective management of its supply chain. The objectives of the study are: to analyze the impact of important contextual factors on SCM practices, to recommend the areas to be improved for better SCM practices in manufacturing firms of different industries and different sizes. The contextual factors are: Industry, Organization Size, Length and Structure of the Supply Chain and Level of Uncertainty in the Demand. For evaluating the SC performance, the measurement instrument developed by Suhong Li et al. (2005), was used, and it includes six SCM constructs: Strategic Supplier Partnership [SSP], Customer Relationship [CR], Information Sharing [IS], Information Quality [IQ], Internal Lean Practices [ILP] and Postponement [POS] with a number of dimensions (attributes) for each construct. Identifying the impact of firm’s main contextual factors on SCM practices will help to reduce complexity in the implementation process and come across possible means to deal with the impact of the factors. This study was based on data collected through a questionnaire from 86 randomly selected manufacturing firms from apparel, food and printing industries. A formal statistical analysis including analysis of variance (ANOVA), pairwise mean comparison and rank correlation analysis was performed. The research found that: only IS and IQ practices are affected by the contextual factors; apparel manufacturers have relatively higher level of IS practice; industry and the size of the firm have a combined impact on IQ and SC structure has significant effect on both IS and IQ. The nature of these effects was also analyzed in detail. Recommendations were made on specific dimensions of SCM practices which are statistically significant among contextual factors.