Article Review on

Customer focus, supply-chain relational capabilities and performance

by Augustine A. Lado Antony Paulraj
Injazz J. Chen

Reviewed by:
Melkamu Solomon Mulualem Tizazu Natnael Aklilu Sharew Kebede Shemekit Demelash Yetaseb Degu

Presentation Highlights
Part I- Introduction Part II- Overview of the article Part III- Article Review

Part I-Introduction
1.1 Definition of key words
Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product & service package required by end customers. Supply Chain Management spans all movements and storage of raw material work-in-process inventory & finished goods from point of origin to point of conception.

Intro Cont...
Consumer focused definition of SCM: a total systems view of linkages in the chain that work together efficiently to create customer satisfaction at the end point of delivery. As a consequence cost must be lowered throughout the chain by driving out unnecessary cost and focussing attention on on adding value.

Intro Cont
Customer focus is quite literally and quite obviously focusing on customer that means thinking about them when decision are made, policies are implemented and employees are trained. Customer focused business think about what they can do to make customers happy at all time and think about how they can make customers experience better.

Intro cont...
Financial Performance is a subjective measure of how well a firm use assets from its primary mode of business and generate revenue. This term also used as a general measure of a firm overall financial health over a given period of time & can be used to compare similar firms across the same industry. Measurement ways could be revenues from operation, cash flow & total unit sale.

Intro Cont...
Marketing capabilities is related to seek out and identify new opportunities & market niches to develop interactive relationships and to adopt customer relationship management practice.

Part II- Overview of the article

2.1 Introduction
Most authors suggest that business firms to adopt a customer oriented mission such as to satisfy customer group; what & how the offering will satisfy the customer matters. Firms has to view customers not only as a source of revenues and profits but also as a source co-producer and user. Firms also view providers as co-workers for gaining and sustaining competitive advantage. It is increasingly important for business executives and researchers to embrace a systematic, ongoing change to help organizations transcend existing product-based on geographic silos and, in some cases, replace them with customer-oriented ones.

Overview Cont...
Firms increasingly seeking to gain & sustain strategic advantage through working collaboratively with supply chain partner.

2.2 Research Objective

The research objective in this paper is to empirically investigate the extent to which customer focus drives supply-chain relational capabilities and performance. Thus, the researchers propose and test a model that places customer focus at the forefront of the supply-chain system. Specifically, customer focus is proposed to drive supply-chain relational capabilities and financial performance.

Overview Cont...
2.3 Model and hypothesis The construct of customer focus is a staple of relationship marketing, which refers to the process of identifying and establishing, maintaining, enhancing, and when necessary terminating relationships with customers and other stakeholders Accordingly the researchers forwarded the following hypotheses:

Overview Cont...
H1. Customer focus is positively related to supply-chain relational capabilities. H2. Customer focus is positively related to customer service. H3. Supply-chain relational capabilities are positively related to customer service. H4. Customer service is positively related to financial performance.

Overview Cont...
2.4 Methodology
Data for this study were collected via a crosssectional mail survey of a sample of firms in US manufacturing industries. Seven-point Likert-type scales with anchors ranging from strongly disagree to strongly agree were used to measure the study variables. The outcome variable was measured in terms of change in performance over a three-yeartime period.

Overview Cont...
A thousand surveys (including a cover letter and postage-paid return envelopes) were mailed to the respondents in two waves, followed by reminder postcards. Of these surveys, 48 were returned due to address discrepancies and 232 completed surveys were returned. However, 11 of these returned surveys were discarded due to incomplete information, resulting in an effective response rate of 23.2 percent (221/952).

Overview Cont...
2.5 Findings of the research According to the research the following findings are identified Supply chain to be more customer oriented in order enhance firms competitiveness Market orientation is not typically a lever that can be pooled to directly to increase performance

Overview Cont...
As per the investigation there is a significant relationship between customer focus & Supply chain rational capabilities As per the investigation there is a significant relationship between customer focus & supply chain rational capabilities, consumer service and financial performance The supply chain need to become more customer focused in order to enhance firms competitiveness

Overview Cont..
2.6 Limitation of the study
the cross-sectional nature of the data used in this study limits the researchers ability to make causal inferences. In the future, other researchers would need to conduct longitudinal investigations in order to more precisely assess the extent to which customer focus positively impacts the mobilization of relational competencies within supply chain contexts. Second, the researchers reliance on key informants as sources of data for all of the variables under investigation makes it difficult to rule out any bias due to common method variance.

Overview Cont...
Finally, it is important to reiterate that our key independent variable of interest customer focus is but only one of several facets of a broader construct of strategic orientation

Overview Cont..
2.7 Conclusion The research advices to conduct a supply chain management research using multiple and complementary theoretical perspective including strategic management and relationship marketing in order to gain better understanding problems involved strategic collaboration among supply chain partners

Overview Cont...
The study suggests that in order to be effective supply chain partners must continually developed and leverage the rational competence needed to create and deliver superior value to customers

Part III- Article Review

Key article review criteria
1) Matching the research with research content (weight 9%)

Remark
The research topic which is Customer focus, supply-chain relational capabilities and Performance matches with the research content (Introduction, Methodology, Findings ) Key words are not clearly defined The Objective of the study is not presented independently rather it is mentioned under the introduction part.

Evaluation %
9%

2) Clarity of the abstract (weight 7%) 3) Clarity of the objective (weight 9%)

5% 8%

4) Hypothesis compatibility As per our review we found that the hypothesis ( weight 9%) is compatible with the research objective. But the research questions are not clearly stated.

7%

Article Review Cont...

Key article review criteria
5) Clarity of the methodology (Weight 9%)

Remark
The methodology of the research is clearly stated & it is divided in to five sub sections (data collection, measures, non-response bias & common method variance, construct validity & reliability, hypothesis test & result) But, out of the thousand mails only 232 (22.2%) is effective response rate and we do not believe it would be enough to draw conclusion and recommendation out of it. Even though the respondent rate is too small, we found that the finding is properly presented on the article Some limitations that should have been included are overlooked. ( such as sample size, respondent rate, and geographic limitations)

Evaluation %
7%

6) Proper presentation of findings (weight 8%) 7) Proper presentation of limitation of the study (weight 8%)

8%

7%

Article Review Cont...

Key article review criteria
8) Clear presentation of the analysis ( weight 8%) 9) Proper presentation of Research conclusion (weight 9%)

Remark
The analysis is clearly presented by using various analytical techniques

Evaluation %
8%

The tested hypotheses are not clearly elaborated, discussed and draw a conclusion from it.

7%

10) Proper presentation of recommendation ( weight 8%)

It clearly states future areas of studies like competitors technological orientation should be considered

8%

Article Review Cont...

Key article review criteria Remark Evaluation %
5%

11) Enough and recent usage The researchers used 108 references out of of reference which 80 were published before year 2000 (weight 8%) the remaining 28 after year 2000, which indicates that most of the reference are not current since the article was written on 2011

12) Proper and consistent reference writing style (weight 7%)

The references are presented alphabetically and the researchers used Harvard style reference writing
TOTAL

7%

86%