Customer Facing Supply Chain Practices The Impact Of Demand And Distribution Management On Supply Chain Success

1416 words - 6 pages

Rexhausen, Daniel, Richard Pibernik, and Gernot Kaiser. "Customer-Facing Supply Chain Practices -- The Impact of Demand and Distribution Management on Supply Chain Success." Journal of Operations Management 30.4 (2012): 269-81. Print.

Research Classification:
The authors of this research performed an empirical based study and outlined three objectives to their study:
1. …to provide empirical evidence of whether or not demand management (DeM) does indeed have such a substantial positive impact on supply chain performance;
2. …the simultaneous evaluation of the impact of customer-facing SCM practices related to both DeM and distribution management (DiM);
3. …the analysis of a ...view middle of the document...


To test their hypotheses, data was collected from 116 multi-national companies, all of which were based in Europe, and created a structural equation model (recreated below), (p272).

Types of Operations Management/Decision Science Techniques:
The first part of the authors’ research and design methodology was a survey instrument. Performing a comprehensive review of literature to determine scales uses in past studies, the authors created “[new] scales based on the literature and Churchill’s (1979) paradigm of developing effective measures for theoretical constructs,” (p273).

To collect the data, a combination of mail, sent via first class mail, and online surveys was utilized. To ensure the response rate would be high, the authors offered the targeted sample several ways in which to fill out and return the questionnaire. Mailings and online surveys were sent to directors/heads of supply chain management across several different types of firms. Firm types included consumer goods manufacturers, raw materials, chemical products, machinery, pharmaceutical and healthcare products, high-tech, electronic and other electronical equipment, automotive products, retail and wholesale trades, (p273). A total of 817 surveys were mailed, and 137 were returned due to address error/director no longer with company; this reduced the sample size down to 681, (p273). Of the 681 mailings, 116 responses were returned, (p273).

The constructs in this study are identified as management practices and performances and were specified to be selective, (p273-4). Knowing that they faced in obstacle in collecting objective data on operational and financial issues, for purposes of this study, the authors looked to past SCM studies. Former SCM research relies primarily on subjective measures of performances; thus, the authors followed a similar approach and used a 5-point Likert scale, (p274). Further, to test for common method variance, the authors conducted Harman’s single factor test; they did not find any one variable that accounted for the majority of the variance, (p274).

A partial least squares structural equation model was used to test the authors’ research model, (p274). Using various debility testing techniques, the authors “conclude[d] that none of the constructs shar[e] more variance with another construct than with its own indicators, thus exhibiting sufficient levels of discriminant validity,” (p274).

Evaluation of the Usefulness of the Above Operations Management/Decision Science Techniques:
The authors report the following results (figure recreated from p276):

Based on the figure, the authors were able to conclude that the latent variable for DeM performance, with an R2 = 0.60, and DiM performance, with an R2 = 0.59 are substantial, (p274). However, the R2 for supply chain was weak to moderate as the R2 = 0.20, (p274). Conversely, the authors state...

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