Assignment 3Targeted journal: Strategic Management Journal Competitive advantage and organizational performance through Supply Chain Management

practices By Thanapat Panthanapratez* Keywords: Cometitve advantage, organizational performance, supply chain management practices, supply chain management, structural equation modeling *Correspondence to Thanapat Panthanapratez, !"#$ %oo&, Krisadana'orn (), Paholyothin *oad, Klong +eung, Klong ,aung, Patumthani $($(!, Thailand , e-mail address: thanapat.thanapatoffice/com

Abstract 0cecutive supply chain management 12C%3 has 4ecome a potentiially valua4le way of securing competitive advantage and improving organizational performance since competition is not longer 4etween organizations, 4ut among supply chains/ %uch of the empirical research in 2C% focuses on only the upstream or downstream side of supply chain/ This research conceptualizes and develop five dimentions of 2C% practice 1strategic supplier partnership, customer relationship, level of communication sharing, quality of infiormation sharing, and postponement3 and test relationships 4etween 2C% practices, competivie advantage, and organizational performance/ 5ata for the study will 4e collected from (6! Thai auto parts manufacturers through e- survey and the relationships proposed in the framewor' will 4e tested using strutural equation modeling/ The e7pected result is that the higher levels of 2C% practices can lead to enhanced competitive advantage and improved organizational performance/ 8lso competitive advantage can have a direct, positive imapct on organizational performance/ 1

Introduction 8s competition in the intensified and mar'ets 4ecame glo4al, so did the challenges associated with getting a product and service to the right place at the right time at the lowest cost/ 9rganizations 4egan to realize that it is not enough to improve efficiencies within an organization, 4ut their whole supplychain has to 4e made competitive/ The understanding and practicing of supplychain management 12C%3 has 4ecome an essential prerequisite for staying competitive in the glo4al race and for enhancing profita4ly 1Childhouse P. et al/, (!!&: %o4erg C*. et al/, (!!(: Power 5;. et al/, (!!$: Tan KC. et al/, (!!(3/ Council of ,ogistics %anagement 1C,%3 1Council of ,ogistics %anagement/, (!!!3 defines 2C% as the systemic, strategic coordination of the traditional 4usiness functions and tactics across these 4usinesses functions within a particular organization and across 4usinesses within the supplychain for the purposes of improving the long-term performance of the individual organizations and the supplychain as a whole/ 2C% has 4een defined to e7plicitlyrecognize the strategic nature of coordination 4etween trading partners and to e7plain the dual purpose of 2C%: to improve the performance of an individual organization, and to improve the performance of the whole supplychain/ The goal of 2C% is to integrate 4oth information and material flows seamlesslyacross the supplychain as an effective competitive weapon 1Childhouse P. et al/, (!!&: <eldmann %. et al/, (!!&3/ The concept of 2C% has received increasing attention from academicians, consultants, and 4usiness managers ali'e 1Croom 2. et al/, (!!!: <eldmann %. et al/, (!!&: Tan KC. et al/, (!!(: =an >eo' *?/, $)) 3/ %any organizations have 4egun to recognize that 2C% is the 'eyto 4uilding sustaina4le competitive edge 2

for their products and"or services in an increasingly crowded mar'etplace/ The concept of 2C% has 4een considered from different points of view in different 4odies of literature 1Croom 2. et al/, (!!!3 such as purchasing and supply management, logistics and transportation, operations management, mar'eting, organizational theory, and management information systems/ =arious theories have offered insights on specific aspects or perspectives of 2C%, such as industrial organization and associated transaction cost analysis 10llram ,%/, $))!: @illiamson 9/, $)A#3, resource-4ased and resource-dependencytheory 1*ungtusanatham %. et al/, (!!&3, competitive strategy 1Porter %0/, $) #3, and socialBpolitical perspective 12tern ,. et al/, $) !3/ >owever, despite the increased attention paid to 2C%, the literature has not 4een a4le to offer much 4y way of guidance to help the practice of 2C% 1Cigolini *. et al/, (!!63/ This has 4een attri4uted to the interdisciplinary origin of 2C%, the conceptual confusion, and the evolutionary nature of 2C% concept/ There is no generally accepted definition of 2C% in the literature 1<eldmann %. et al/, (!!&3/ The concept of 2C% has 4een involved from two separate paths: purchasing and supply management, and transportation and logistics management 1Tan KC. et al/, $)) 3/ 8ccording to purchasing and supply management perspective, 2C% is synonymous with the integration of supply 4ase that evolved from the traditional purchasing and materials functions 1Banfield 0/, $))): ,amming */, $))&3/ ?n the perspective of transportation and logistics management, 2C% is synonymous with integrated logistics systems, and hence focus on inventory reduction 4oth within and across organizations in the supply chain 18lvarado CD. et al/, (!!$: Bechtel C. et al/, $))A: *omano P. et al/, (!!$: *ud4erg %. et al/, (!!&: =an >eo' *?/, $)) 3/ 0ventually, these two perspectives evolved into an integrated 2C% that integrates all the activities along the whole supply chain/ 3

The evolutionary nature and the comple7ity of 2C% are also reflected in the 2C% research/ %uch of the current theoretical" empirical research in 2C% focuses on only the upstream or downstream side of the supplychain, or certain aspects"perspectives of 2C% 12hah *. et al/, (!!(3/ Topics such as supplier selection, supplier involvement, and manufacturing performance 1Choi TD. et al/, $))E: =onderem4se %8. et al/, $)))3, the influence of supplier alliances on the organization 12tuart <?/, $))A3, success factors in strategic supplier alliances 1+arasimhan *. et al/, $)) 3, supplier management orientation and supplier"4uyer performance 12hin >. et al/, (!!!3, the role of relationships with suppliers in improving supplier responsiveness 1>andfield *B. et al/, (!!(3, and the antecedence and consequences of 4uyerBsupplier relationship 1Chen ?;. et al/, (!!63 have 4een researched on the supplier side/ 2tudies such as those 4y Clar' and ,ee 1Clar' T>. et al/, (!!!3, and 8lvarado and Kotza4 18lvarado CD. et al/, (!!$3, focus on the downstream lin'ages 4etween manufacturers and retailers/ 8 few recent studies have considered 4oth the upstream and downstream sides of the supplychain simultaneously/ Tan et al/ 1Tan KC. et al/, $)) 3 e7plore the relationships 4etween supplier management practices, customer relations practices and organizational performance: <rohlich and @est4roo' 1<rohlich %T. et al/, (!!$3 investigate the effects of supplierBcustomer integration on organizational performance, Tan et al/1Tan KC. et al/, (!!(3 study 2C% and supplier evaluation practices and relate the constructs to firm performance, %in and %entzer F&6G develop an instrument to measure the supplychain orientation and 2C% at conceptual levels/ Cigolini et al/ 1Cigolini *. et al/, (!!63 develop a set of supply chain techniques and tools for e7amining 2C% strategies/ 07tensive case studies a4out the implementation of 2C% have 4een conducted 4y the ?T service providers 1such as 28P, Peoplesoft, i( and ;50dwards3 and the research firms 1such as 4

<orrester *esearch and 8%* *esearch3 1http:""www/supply-chain/org3 and many case histories of successful implementations of 2C% have 4een reported in the literature/ Ta'en together, these studies are representative of efforts to address various diverse 4ut interesting aspects of 2C% practices/ >owever, the a4sence of an integrated framewor', incorporating all the activities 4oth upstream and downstream sides of the supply chain and lin'ing such activities to 4oth competitive advantage and organizational performance, detracts from usefulness of the implementation of previous results on 2C%/ Two preliminary empirical studies, ,i et al/, 1(!!63 and Koh et a/l/, 1(!!A3 did the empirical studies that test a framewor' identifying the relationships among 2C% practice, competitive advantage and organizational performance and 2C% practice among, operational performance and 2C%-related organizational performance respectively/ ,t et al/, 1(!!63 identified the supply chain management practice into five dimensions, strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing and postponement with three research questions: *H$: 5o organizations with high levels of 2C% practices have high levels of organizational performanceI, *H(: 5o organizations with high level of 2C% practices have high levels of competitive advantageI, *H&: 5o organizations with high levels of competitive advantage have a high level of organizational performanceI The study finding that firms that implement 2C% practices can have a 4ottom line influence on the organizational performance which is supported question $, 2C% practice also direct impact on competitive advantage which is supported question (, firms that has higher levels of

competitive advantage may lead to improved organizational performance which is supported to question &/ The purpose of this study is the e7tending and ta'e consideration the limitations and recommendation in the aspect of limited the o4servation and enhance the research finding as is more generalization from the preliminary empirical study of ,i et al/, 1(!!63 that have 4een done to determine the underlying dimensions of 2C% practices and to empirically test a framewor' identifying the relationships among 2C% practices, competitive advantage and organizational performance with special emphasis on manufacturing firms in automotive industry in Thailand/ This study is therefore to empirically test a framewor' identifying the relationships among 2C% practices, competitive advantage and organizational performance/ 2C% practices are defined as the set of activities underta'en 4y an organization to promote effective management of its supplychain/ The practices of 2C% are proposed to 4e a multi-dimensional concept, including the downstream and upstream sides of the supplychain/ 9perational measures for the constructs will 4e developed and tested empirically, using data collected from respondents to a survey questionnaire/ 2tructural equation modeling will 4e used to test the hypothesized relationships/ ?t is e7pected that the current research, 4y addressing 2C% practices simultaneouslyfrom 4oth upstream and downstream sides of a supply chain, will help researcher 4etter understand the scope and the activities associated with 2C% and allow researcher to test the antecedences and consequences of 2C% practice/ <urther, 4y of fering a validated instrument to measure 2C% practices, and 4y providing empirical evidence of the impact of 2C% practices on an organizationJs competitive advantage and its performance, it is e7pected that this research will offer useful guidance for measuring 6

and implementing 2C% practices in an organization and facilitate further research in this area/ The remainder of this paper is organized as follows/ 2ection ( presents the research framewor', provides the definitions and theory underly ing each dimension of 2C% practices, discusses the concepts of competitive advantage and organizational performance, and develops the hypothesized relationships/ The research methodology and analysis of results are then presented, followed 4y the implications of the study/

Research framework

<igure $, the 2C% framewor' that predetermined in the preliminary study 4y ,i, et al/, 1(!!63 that proposed 2C% practices will have an impact on organizational performance 4oth directly and also indirectly through competitive advantage/ 2C% practice is conceptualized as a five-dimensional construct/ The five dimensions are strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement/ 8 detailed description of the development of the 2C% practices construct is provided in the following paragraphs/ Competitive advantage and organizational performance are concepts that have 4een operationalized in the e7isting literature 1Koufteros K8. et al/, $))A: Lhang HD/, (!!$3/ Csing literature support, the e7pected relationships among 2C% practices, competitive advantage, and organizational performance are discussed, and hypotheses relating these varia4les are developed/

SCM practices 2C% practices have 4een defined as a set of activities under ta'en in an organization to promote effective management of its supply chain/ 5onlon 15onlon ;P/, $))E3 descri4es the latest evolution of 2C% practices, which include supplier partnership, outsourcing, cycle time compression, continuous process flow, and information technologysharing/ Tan et al/ 1Tan KC. et al/, $)) 3 use purchasing, quality, and customer relations to represent 2C% practices, in their empirical study/ 8lvarado and Kotza4 18lvarado CD. et al/, (!!$3 include in their list of 2C% practices concentration on core competencies, use of inter-ganizational systems such as 05?, and elimination of e7cess inventory levels 4y postponing customization toward the end of the supply chain/ Tan et al/ 1Tan KC. et al/, (!!(3 identify si7 aspects of 2C% practice through factor analysis: supply chain integration, information sharing, supply chain characteristics, customer service management, geographical pro7imity and ;?T capa4ility/ Chen and PaulraM 1Chen ?;. et al/, (!!63 use supplier 4ase reduction, long-term relationship, communication, crossfunctional teams and supplier involvement to measure 4uyerBsupplier relationships/ Thus the literature portrays 2C% practices from a varietyof different perspectives with a common goal of ultimately improving organizational performance/ ?n reviewing and consolidating the literature, five distinctive dimensions, including strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing and postponement, are selected for measuring 2C% practice/ The five constructs cover upstream 1strategic supplier partnership3 and downstream 1customer relationship3 sides of a supply chain, information flow across a supplychain 1level of information sharing and qualityof information sharing3, and internal supplychain process 1postponement3/ ?t should 4e pointed out that even though the a4ove dimensions 8

capture the maMor aspects of 2C% practice, theycannot 4e considered complete/ 9ther factors, such as geographical pro7imity, ;?T"lean capa4ility 1Tan KC. et al/, (!!(3, crossfunctional teams, logistics integration 1Chen ?;. et al/, (!!63, agreed vision and goals, and agreed supplychain leadership are also identified in the literature/ Though these factors are of great interest, theyare not included due to the concerns regarding the length of the surveyand the parsimonyof measurement instruments/ The present study, therefore, proposes 2C% practices as a multi-dimensional concept/ Ta4le $ lists these dimensions along with their definitions and supporting literature/ 8 more detailed discussion of these dimensions is provided 4elow/ Strategic supplier partnership: is defined as the longterm relationship 4etween the organization and its suppliers/ ?t is designed to leverage the strategic and operational capa4ilities of individual participating organizations to help them achieve significant ongoing 4enefits 1Balsmeier P@. et al/, $))E: %oncz'a *%. et al/, $)) : +o4el 5/, $))A: 2heridan ;>/, $)) ,(6A: 2tuart <?/, $))A3/ 8 strategic partnership emphasizes direct, long-term association and encourages mutual planning and pro4lem solving efforts 1Nunase'aran 8. et al/, (!!$3/ 2uch strategic partnerships are entered into to promote shared 4enefits among the parties and ongoing participation in one or more 'ey strategic areas such as technology, products, and mar'ets 1Doshio %. et al/, $))#3/ 2trategic partnerships with suppliers ena4le organizations to wor' more effectively with a few important suppliers who are willing to share responsi4ility for the success of the products/ 2uppliers participating earlyin the product-design process can offer more costeffective design choices, help select the 4est components and technologies, and help in design assessment 1Tan KC. et al/, (!!(3/ 2trategically aligned organizations can wor' closelytogether and eliminate wasteful time and effort 1Balsmeier P@. et al/, 9

$))E3/ 8n effective supplier partnership can 4e a critical component of a leading edge supplychain 1+o4el 5/, $))A3/ Customer relationship: Comprises the entire array of practices that are employed for the purpose of managing customer complaints, 4uilding long-term relationships with customers, and improving customer satisfaction 1Claycom4 C. et al/, $))): Tan KC. et al/, $)) 3/ +o4le 1+o4el 5/, $))A3F6#G and Tan et al/ 1Tan KC. et al/, $)) 3 consider customer relationship management as an important component of 2C% practices/ 8s pointed out 4y 5ay 15ay N2/, (!!!3 committed relationships are the most sustaina4le advantage 4ecause of their inherent 4arriers to competition/ The growth of mass customization and personalized service is leading to an era in which relationship management with customers is 4ecoming crucial for corporate survival 1@ines ,/, $))E3/ Nood relationships with supplychain mem4ers, including customers, are needed for successful implementation of 2C% programs 1%o4erg C*. et al/, (!!(3/ Close customer relationship allows an organization to differentiate its product from competitors, sustain customer loyalty, and dramatically e7tend the value it provides to its customers 1%agretta ;/, $)) 3/ Level of information sharing: ?nformation sharing has two aspects: quantityand quality/ Both aspects are important for the practices of 2C% and have 4een treated as independent constructs in the past 2C% studies F(,6!G/ ,evel 1quantityaspect3 of information sharing refers to the e7tent to which critical and proprietaryinformation is communicated to oneJs supplychain partner 1%oncz'a *%. et al/, $)) 3/ 2hared information can varyfrom strategic to tactical in nature and from information a4out logistics activities to general mar'et and customer information 1%entzer ;T. et al/, (!!!3/ %any researchers have suggested that the 'ey to the seamless supply chain is ma'ing 10

availa4le undistorted and up-to-date mar'eting data at everynode within the supplychain F1Balsmeier P@. et al/, $))E: Childhouse P. et al/, (!!&: Towill 5*/, $))A: Turner ;*/, $))&3/ By ta'ing the data availa4le and sharing it with other parties within the supply chain, information can 4e used as a source of competitive advantage 1+ovac' *8. et al/, $))#3/ ,alonde 1,alonde B;/, $)) 3 considers sharing of information as one of five 4uilding 4loc's that characterize a solid supply chain relationship/ 8ccording to 2tein and 2weat 12tein T. et al/, $)) 3 supplychain partners who e7change information regularly are a4le to wor' as a single entity/ Together, they can understand the needs of the end customer 4etter and hence can respond to mar'et change quic'er/ %oreover, Tomp'ins and 8ng 1Tomp'ins ;. et al/, $)))3 consider the effective use of relevant and timely information 4yall functional elements within the supply chain as a 'ey competitive and distinguishing factor/ The empirical findings of Childhouse and Towill 1Childhouse P. et al/, (!!&3 reveal that simplified material flow, including streamlining and ma'ing highly visi4le all information flow throughout the chain, is the 'ey to an integrated and effective supplychain/ Quality of information sharing includes such aspects as the accuracy, timeliness, adequacy, and credi4ility of information e7changed 1%o4erg C*. et al/, (!!(: %oncz'a *%. et al/, $)) 3/ @hile information sharing is important, the significance of its impact on 2C% depends on what information is shared, when and how it is shared, and with whom 1>olm4erg 2/, (!!!3/ ,iterature is replete with e7ample of the dysfunctional effects of inaccurate"delayed information, as information moves along the supplychain/ 5ivergent interests and opportunistic 4ehavior of supplychain partners, and informational asymmetries across supply chain affect the qualityof information 1<eldmann %. et al/, (!!&3/ ?t has 4een suggested that organizations will deli4erately distort information that 11

can potentially reach not only their competitors, 4ut also their own suppliers and customers 1%ason-;ones *. et al/, $))A3/ ?t appears that there is a 4uiltin reluctance within organizations to give awaymore than minimal information 1Berry 5. et al/, $))63 since information disclosure is perceived as a loss of power/ Niven these predispositions, ensuring the qualityof the shared information 4ecomes a critical aspect of effective 2C% 1<eldmann %. et al/, (!!&3/ 9rganizations need to view their information as a strategic asset and ensure that it flows with minimum delayand distortion/ Postponement is defined as the practice of moving forward one or more operations or activities 1ma'ing, sourcing and delivering3 to a much later point in the supplychain 1Beamon B%/, $)) : ;ohnson %0. et al/, $)) : +aylor ;B. et al/, $))): =an >eo' *?/, $)) 3/ Two primary considerations in developing a postponement strategyare: 1Childhouse P. et al/, (!!&3 determining how manysteps to postpone, and 1%o4erg C*. et al/, (!!(3 determining which steps to postpone 1Beamon B%/, $)) 3/ Postponement allows an organization to 4e fle7i4le in developing different versions of the product in order to meet changing customer needs, and to differentiate a product or to modifya demand function/ Keeping materials undifferentiated for as long as possi4le will increase an organizationJs fle7i4ilityin responding to changes in customer demand/ ?n addition, an organization can reduce supply chain cost 4y 'eeping undifferentiated inventories 1,ee >,. et al/, $))#: =an >eo' *?. et al/, $)))3/ Postponement needs to match the type of products, mar'et demands of a company, and structure or constraints within the manufacturing and logistics system 1<isher %,/, $))A: <isher %,. et al/, $))6: <uller ;B. et al/, $))&: Pagh ;5. et al/, $)) 3/ ?n general, the adoption of postponement may4e appropriate in the following conditions: innovative products 1<isher %,/, $))A: <isher 12

%,. et al/, $))63: products with high monetary density , high specialization and wide range: mar'ets characterized 4y long delivery time, low delivery frequency and high demand uncertainty: and manufacturing or logistics systems with small economies of scales and no need for special 'nowledge 1Pagh ;5. et al/, $)) 3/

Competitive advantage Competitive advantage is the e7tent to which an organization is a4le to create a defensi4le position over its competitors 1%cNinnis %8. et al/, $))): Porter %0/, $) #3/ ?t comprises capa4ilities that allow an organization to differentiate itself from its competitors and is an outcome of critical management decisions 1Tracey %. et al/, $)))3/ The empirical literature has 4een quite consistent in identifying price"cost, quality, delivery, and fle7i4ility as important competitive capa4ilities 1Tracey %. et al/, $)))3/ ?n addition, recent studies have included time-4ased competition as an important competitive priority/ *esearch 4y 2tal' 12tal' N/, $) 3, >andfield and Pannesi

1>andfield *B. et al/, $))#3, Kessler and Cha'ra4arti 1Kessler 0. et al/, $))E3, Lhang 1Lhang HD/, (!!$3 identifies time as the ne7t source of competitive advantage/ 9n the 4asis of prior literature, Koufteros et al/ 1Koufteros K8. et al/, $))A3 descri4e a research framewor' for competitive capa4ilities and define the following five dimensions: competitive pricing, premium pricing, value-to-customer quality, dependa4le delivery, and production innovation/ These dimensions are also descri4ed 4y 1Cleveland N. et al/, $) ): *ondeau P;. et al/, (!!!: 2afizadeh >%. et al/, $))E: Tracey %. et al/, $))): =ic'ery 2. et al/, $)))3/ Based on the a4ove, the dimensions of the competitive advantage constructs used in this studyare price"cost, quality, deliverydependa4ility , product innovation, and time to mar'et/ 13

Organizational performance 9rganizational performance refers to how well an organization achieves its mar'etoriented goals as well as its financial goals 1Damin 2. et al/, $)))3/ The short-term o4Mectives of 2C% are primarilyto increase productivity and reduce inventory and cycle time, while long-term o4Mectives are to increase mar'et share and profits for all mem4ers of the supply chain 1Tan KC. et al/, $)) 3/ <inancial metrics have served as a tool for comparing organizations and evaluating an organizationJs 4ehavior over time 1>olm4erg 2/, (!!!3/ 8ny organizational initiative, including supplychain management, should ultimatelyl ead to enhanced organizational performance/ 8 num4er of prior studies have measured organizational performance using 4oth financial and mar'et criteria, including return on investment 1*9?3, mar'et share, profit margin on sales, the growth of *9?, the growth of sales, the growth of mar'et share, and overall competitive position 12toc' N+. et al/, (!!!: =ic'ery 2. et al/, $))): Lhang HD/, (!!$3/ ?n line with the a4ove literature, the same items will 4e adopted to measure organizational performance in this study/

Research hypotheses The 2C% framewor' developed in this study proposes that 2C% practice has a direct impact on the overall financial and mar'eting performance of an organization 1Prasad 2. et al/, (!!!: 2hin >. et al/, (!!!3/ 2C% practice is e7pected to increase an organizationJs mar'et share, return on investment 1Prasad 2. et al/, (!!!: 2hin >. et al/, (!!!3, and improve overall competitive position 1Carr 82. et al/, $))): 2tanley ,,. et al/, (!!$3/ <or e7ample, strategic supplier partnership has 4een reported to yield organization-specific 4enefits in terms of financial performance 1Carr 82. et al/, $))): 5e Toni 8. et al/, (!!!: ,amming *C/, $))E: 2tanley ,,. et al/, (!!$: 2tuart <?/, $))&: 14

2tuart <?/, $))A: Tan KC. et al/, $)) 3/ 8dvanced design and logistic lin's with suppliers are related to 4etter-performing plants 15e Toni 8. et al/, (!!!3/ Customer relation practices have also 4een shown to lead to significant improvement in organizational performance 1Tan KC. et al/, $)) 3/ The higher level of information sharing is associated with the lower total cost, the higher-order fulfillment rate and the shorter-order cycle time 1,in <. et al/, (!!(3/ The 4ottom-line impacts of 2C% practices have 4een confirmed 4yreal-w orld e7amples/ 8 recent survey finds that organizations that are 4est at 2C% hold a 6!O to E#O advantage in their cash-to-cash cycle time over average organizations and the top organizations carry #!O to #O less ?nventory than their competitors 12heridan ;>/, $)) ,(6A3/ Based on the a4ove it is hypothesized that: >ypothesis $/ <irms with high levels of 2C% practices will have high levels of organizational performance/ 2C% practices impact not onlyo verall organizational performance, 4ut also competitive advantage of an organization/ They are e7pected to improve an organizationJs competitive advantage through price"cost, quality, delivery dependa4ility , time to mar'et, and product innovation/ Prior studies have indicated that the various components of 2C% practices 1such as strategic supplier partnership3 have an impact on various aspects of competitive advantage 1such as price"cost3/ <or e7ample, strategic supplier partnership can improve supplier performance, reduce time to mar'et 1*agatz N,. et al/, $))A3, and increase the level of customer responsiveness and satisfaction 1Power 5;. et al/, (!!$3/ ?nformation sharing leads to high levels of supplychain integration 4y ena4ling organizations to ma'e dependa4le delivery and introduce products to the mar'et quic'ly/ ?nformation sharing and information quality contri4ute positively to customer satisfaction 12pe'man *0. et al/, $)) 3 and partnership quality 1,ee ;. et al/, $))): @alton ,@/, $))E3/ Postponement strategy not only 15

increases the fle7i4ility in the supply chain, 4ut also 4alances glo4al efficiency and customer responsiveness 1=an >eo' *?. et al/, $)))3/ The a4ove arguments lead to >ypothesis (/ <irms with high levels of 2C% practices will have high levels of competitive advantage/ >aving a competitive advantage generally suggests that an organization can have one or more of the following capa4ilities when compared to its competitors: lower prices, higher quality, higher dependa4ility, and shorter delivery time/ These capa4ilities will, in turn, enhance the organizationJs overall performance 1%entzer ;T. et al/, (!!!3/ Competitive advantage can lead to high levels of economic performance, customer satisfaction and loyalty, and relationship effectiveness/ Brands with higher consumer loyalty face less competitive switching in their target segments there4y increasing sales and profita4ility 1%oran @T/, $)A)3/ 8n organization offering high quality products can charge premium prices and thus increase its profit margin on sales and return on investment/ 8n organization having a short time-to-mar'et and rapid product innovation can 4e the first in the mar'et thus enMoying a higher mar'et share and sales volume/ Therefore, a positive relationship 4etween competitive advantage and organizational performance can 4e proposed/ >ypothesis &/ The higher the level of competitive advantage, the higher the level of organizational performance/ The a4ove three hypotheses, ta'en together, support the 2C% framewor' resented in <ig/ $/ Research methodology Huantitative approach will 4e applied for this study as to empirically test a framewor' identifying the relationships among 2C% practice, competitive advantage and organizational performance with special emphasis on manufacturing firms in automotive industry in Thailand/ 16

To answer research questions, the mail survey research will 4e conducted survey via electronic survey 1e-survey3/

opulation and Sample Population for this study will 4e E,6!6 of automotive manufacturing firms that located in Bang'o' and %etropolitan area/ The num4er of factory and investment of automotive industry in Thailand/ 8s the limitation of time and capa4ility therefore, this study will 4e focus only those E,6!6 factories of automotive industry which located in Bang'o' %etropolitan as it is equal to &6O of total num4er of factories as well as 66O of total investment/

Sample Size 8ccording to figure $ the using structural equation model which is estimated ma7imum ,i'elihood, they recommended the calculation of sample size 4y multiply (! times to num4er of varia4les 1@eiss, $)A(: ,indeman, %erenda and Nold, $) !:, 2tevens, $))E3/ Therefore, the target respondents of this study is at least the sample size should 4e (6! 1$( varia4les 7 (! times3 detail of varia4les as follows: five independent varia4les 1supply chain management practices as strategic supplier partnership, customer relationship, level of information sharing, level of information quality, and postponement3, five mediate varia4les 1competitive advantage as price"cost, quality, delivery dependa4ility, product innovation, and time to mar'et3 and two dependent varia4les 1operational performance as mar'eting performance and financial performance3/ ?n addition, 2e'aran 1$))(3 suggested that for most research the sample size should 4e in a range of &!-#!!/ The multivariate analysis is utilized/ The literature 17

review which related to the sample size illustrated 4y >air, et al/ 1$)) 3 who suggested accepta4le sample size 4etween (!! and 6!!/ Ta'ing the results of the principles the target respondents are (6! thus satisfying the guideline/

robability Sample 2ystematic *andom sampling 4ased on 2P22 will 4e used in this study/ 0very respondent in the population had a chance of 4eing selected/ +ormally this is an equal chance of 4eing selected/ articipants The respondent will 4e the senior officer"e7ecutive in charge of 2C% practice of the targeted companies who can 4e e7pected to have the 4est 'nowledge a4out the operation and management of supply chain practice in their organization such as =P or %anager of ,ogistics, =P or %anager of 2upply Chain, =P or %anager of %aterials, =9 or %anager of 9perations, and =P or %anager of Purchasing, Procurement and 2ourcing, include =P or %anger of 2ales and %ar'eting/ !ata collection This study will 4e hired professional we4master who cooperate with researcher and responsi4le to develop and maintain the we4site architecture/ @e4site construction will 4e tested its relia4ility/ The e-survey questionnaire will 4e posted to the we4site after pilot testing/

18

Instrument To carry out this study a structure questionnaire on @e4site will 4e developed and pretested/ The instrument is an adapted version of a questionnaire used in a previous study with organization in the C2/ 1,i, et al/, (!!63/This origin questionnaire was developed in (!!6, 4ased on literature review/ 8nd the H-sort method was used in order to assess the relia4ility/ This questionnaire is indicated a high level of relia4ility and construct validity/ Besides, it has 4een used in different conte7ts/ Three parts of questionnaire shown at appendi7 8/

Instrument !evelopment and ilot study" 8lthough the instrument was developed and used in a previous study, it will 4e translated into Thai version/ 2o, the discrimination and relia4ility should 4e reinvestigated with &! companies in order to calculate correlation of the item designed with the summated score for all items 1Corrected ?tem-Total Correlation3 for discrimination coefficient/ The values should 4e at least !/6! 1NlimePNlime, (!!&3, and to calculate Cron4achJs alpha relia4ility coefficient for internal consistency of the item in the scale 1Cron4ach, $)A!3/ The accepta4le coefficient should greater than !/A! 1+unnally, $)A 3/

!ata Analysis 5ue to the relatively large num4er of varia4les in the structure equation model/ 5ata analysis will 4e facilitated using the ,?2*0, computer software version /! pac'age

operating in conMunction with 2P22/ The ,?2*0, pac'age will allow a statistic comparison of the data and the research model/ The data analysis is divided into ( parts 19

as follows: a3 the descriptive statistic is used to descri4e the characteristic of sample: frequency, percentage, mean and standard deviation, 43 the inferential statistic used to test research hypothesized relationships are ,inear 2tructure *elationship %odeling, ,atent =aria4les Path and Test of Noodness of fit analysis with ,?2*0, version /! / ?n this study the statistic which is selected to assess fitting are Chi-square, Noodness-of-fit ?nde7 1N<?3 fit inde7 18N<?3 and *oot mean squared residual 1*%*3, respectively/ ,inear 2tructure *elationship %odel is illustrated the relationship 4etween 2upply Chain %anagement Practice, Competitive advantage and 9rganization performance 2upply from the conceptual framewor'/ Thus, causal modeling, or path analysis, which hypothesizes construct conceptual framewor' model/ 1<igure (: 2tructure 0quation %odel3 The Competitive advantage is designed to 4e manifest varia4le among 2C% Practice and 9rganization Performance/ The relationships of 2C% Practice are e7plained 4y direct effect to competitive advantage 1>(3/ 9therwise, the Competitive advantage has effect to 9rganization Performance 1>&3/ Besides, the 2C% Practice has direct effect to 9P 1>$3, as well. The ,atent =aria4les Path analysis of the latent varia4le: SCM Practice/ There are # o4served-varia4le: 2trategic supplier partnership 122P3, Customer relationship 1CP3, ,evel of information sharing 1?23, ,evel of information Huality 1?H3 and Postponement 1P923/

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<or the other ,atent varia4le: 9rganizational Performance/ There are # o4served B varia4le: Price"cost 1PC3, Huality 1H,3, 5elivery 5ependa4ility 1553 Product innovation 1P?3 and Time to mar'et 1T%3/ The last ,atent =aria4le is Competitive advantage which consists of ( o4served B varia4le: %ar'et performance and financial performance/ The o4Mective of analysis of causal analysis or path analysis or 8nalysis of ,?2*0, model which provide theory testing/ This test is 4ased to construct ,?2*0, model and e7plain causal relationship from ,?2*0, model in order to find out the size of influence and direction of the causal varia4le/ ,?2*0, is designed for structural equation modelling/ The ,?2*0, model is introduced to deal with causal relationships among latent varia4les and structural equation models for directly o4served varia4les/ The ,?2*0, program may also 4e utilized to handle standard multivariate methods, such as analysis of variance, regression analyses, and multivariate analysis of variance/ The researcher specifies a theoretical model and inputs a covariance matri7 for analysis/ The program estimates the population covariance matri7 and compares that with the estimated one/ Besides, ,?2*0, provides several powerful tools to assess fit and detect lac' of fit of a model/ 8s in all statistical analyses, the assessment of fit must 4e made with very careful su4Mective Mudgment 4ased on 'nowledge of the su4stantive area and the quality of the data/ The ne7t step, that one of important ,?2*0, analysis 4ecause this step will evaluate the model or test of goodness of fit among empirical data and the model/ The Test of Noodness of fit analysis with ,?2*0, ?n this study the statistic which is selected to assess fitting are Chi-square, Noodness-of-fit ?nde7 1N<?3 /1;Qres'og, K/N/ and 2Qr4om, 5/ ,$) )3/ 21

Analysis and result This study is in the processing of data collection therefore, there is no analysis and result part to present at this stage/

Contribution This study is additional to the 4ody of 'nowledge 4y providing new data and empirical insights into the relationship 4etween 2C% practices, competitive advantage and organizational performances/ This paper provides empirical Mustification for a framewor' that offer useful guidance for organizations to esta4lish 2C% strategies in terms of measuring and implementing 2C% practices in order to improve competitiveness and organizational performance in an organization/ This study is as well facilitate further research in this area/

Reference

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