Qualitative thesis

SUPPLY CHAIN MANAGEMENT PRACTICESON ORGANIZATION PERFORMANCE
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SUMMITED TO SIR TEHSEEN JAVAID
IMPACT ON ORGANIZATION PERFORMANCE
BY UTILIZING THE SUPPLY CHAIN MANAGEMENT PRACTICES
– CASE STUDY OF MANUFACTURING INDUSTRIES OF PAKISTAN
SIR TEHSEEN JAVAID
ATIF AHMED - 1228
SYED AHMED ALI – 0538
MUHAMMAD FARRUKH EJAZ – 0251
SHAKIR ULLAH - 0159
SALEEM ABBASI - 0243
The purpose of this paper is to examine is there any impact of Supply Chain
Management Practices on Organization Performance in Manufacturing Industries
of Pakistan. We perform that study on the sample of 60 questionnaires.

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ABSTRACT
Purpose: - The purpose of this study is to determine the relationship between the supply chain
management practice on organization performance among purchasing practice, supplier relation
and information system, this studies specially emphasis on in manufacturing industries of
Pakistan.
Methodology: - Data were collected from a sample of 60 questionnaires from different
companies of manufacturing for this study. We have applied a Data Validity Test, Factor
Analysis Test and Regression Test on it.
Finding: - The method for collecting the data and questionnaire is correct because data
reliability is according to the standard. Factor analysis test is also successful and questions select
by us are according to our topics.
Research Limitation: - This study based on narrow focus because we have concentrate only in
the manufacturing sector and ignore the remaining sectors.
Practical Implications: - From the result, we conclude that if the organization uses the supply
chain strategy like betterment or enhancement with the relation from suppliers, sharing the
information and choose the correct way to purchase the goods then the organization performance
becomes comparatively better than the other competitors or even they can take the edge on it.
Keywords: - Supply Chain Management – Organization Purchase – Purchasing Practical –
Supplier Relation – Information System -
Paper Type: - Research Paper

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ACKNOWLEDGEMENT
We are deeply grateful to Almighty Allah for enabling us to accomplish this research project.
Our sincere thanks to our supervisor and advisor Sir Tehseen Javiad without his help and
guidance this study would not have been possible.
Further, the respondents are also equally thanked for their support in carrying out this research.
We are also thankful to those who guided us throughout the project.
Last but not the least; we would render great thanks to our Family and others who had directly
and indirectly cooperated with us throughout our research.

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TABLE OF CONTENTS
Introduction…………………………………………………………………….………….………5
Literature Review …………………………………………………………………..….…………6
Methodology……………………………………………………………..………………………13
Estimation and Results………………………………………………….………….…….………13
Conclusion & Recommendation……………………………………………...….………………20
Data Sources……………………………………………………………………….……….……21
Appendix…………………………………………………………………………………………22

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INTRODUCTION
World become a global village and because of its worldwide a competition is started. Due to
huge advancement in the technologies, a concept of “waste” is converted into the massive
productivity gains. Transportation, sharing of information, identifying the customer’s demand
and enhance the productivity by using the concept of Lean and just in time inventory system,
they all come under the umbrella of Supply Chain Management. Nowadays, the entire advance
corporate especially all the manufacturing companies are collaborate with supplier’s customers
and competitors, share and gather information too. The manufacturing companies using the
supply chain concept and do the practice of purchasing practice, sharing the information, making
a strong supplier relations, analyzing the long term relationship with their suppliers, customers,
transportations, competitors and others so on.
Supply chain management is nowadays live blood for every organization. Purchasing practice
helps them to reduce the costs and make a better quality of goods and services. Lean practice and
just in time, helps them to improve the internal process of an organization. Information system
would help them to tracking the products when they are under the process of logistics, improved
efficiency in the process of transmitting the information in security, fast-tracked quotation and
ordering, customer satisfactory and scrutinizing the vendors. In the year 2002, Ulusoy in her
paper, after the concept of supply chain whole world become a global village, it encourage and
boost the economy of many countries, especially all the manufacturing companies reduces their
waste, enhance their inventory and utilize their resources properly. First, transfer of machinery,
equipment and technologies helps them to reduce their waste. Secondly, with the passage of

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time, there are able to reduce their cost of production as well as help them help them to control
their inventories system and select the best possible vendors and share their information with
them, so, they are able to purchase the goods on time (especially the automobile and fast moving
company group companies).
The purpose of this study is to determine the underlying dimensions of supply chain management
of organization practices. We have also done the empirical review literatures on the relationships
among the purchasing practice, information relation and supplier relationship with special
emphasis on manufacturing companies in Pakistan. Manufacturing companies play a very crucial
role to the economies of Pakistan.
1- LITERATURE REVIEW
2.1- Review of Theoretical Literature
The supply chain management implements the organization practice, which have the direct and
indirect impact of purchasing practice, information system and supplier relationship. Patric fung
(1999) had published paper-managing purchasing in a supply chain context evolution and
resolution in Nvo-1999. He argued that purchasing is best practiced a value added service in the
supply chain through a lean supply infrastructure, when management of operation among
internal and external supply chain members help to fulfill the strategic goals of the company. He
applied “Range of task for purchasing and supply chain management” test in his study. He
concluded that, purchasing management is important in supply chain management and mangers

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must define their roles in supply chain context. Professionals purchasing must focus on total cost
reduction, on-going quality improvement, restoring to configuration and coordination of different
material management activities of supply chain members. Purchasing and supply chain
management must develop teamwork with corporate and business to match firms; strategies.
Purchasers can achieve theirs objectives only through an analysis of the supply chain system and
performing value-added activates based on that system.
Kabossa A.B. Msimangira (2003) had a published a paper in Nov-2003, the topic was
“purchasing and supply chain practices in Botswana (Developing country)”, this paper was
discussed supply chain practices with emphasis on purchasing in Botswana. The focus is on
problems which is faced by business operations and how to improve the situation. It was
surveyed study and majority of respondent in supply chain management had worked in
purchasing and stores sections in their organizations. He concluded that purchasing practices in
developing countries, particular organizations in Botswana, did not consider as profession and in
some organization and purchasing practices were performed by untrained people in purchasing
and supply chain.

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2.1.1- Supply Chain Management RelatedOrganization Performance
The objectives of organization performance in the short term are essentially to enhance
productivity and reduce the inventory and lead-time. While, on the long term, are to increase the
market share and integration of supply chain for all the customers, suppliers and competitor.
There is a vast criterion to calculate the organization performance under the umbrella of supply
chain management; strategic supplier partnership, information sharing, customer relationship,
quality control, internal lean practices. It depends on strategic supplier partnership; build the
long-term relation with the customer (complaint handling, customer satisfactory).
HO1: Organization performance has an insignificant impact between industries.
HA1: Organization performance has a significant impact between industries.
SUPPLY CHAIN
MANAGEMENT
DEPENDENT
VARIABLES
INDEPENDENT
VARIABLES
ORGANIZATION
PRACTICE
SUPPLIERS
RELATIONSHIP
INFORMATION
SYSTEM
PURCHASING
PRACTICE

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2.1.2- Impact of Purchasing Practice over Organization Practices
Purchasing is on the key factor in every organization but in the manufacturing sector, purchasing
is just like a blood because if the suppliers provide the goods on time then cycle of trade would
be run otherwise no manufacturing companies is able to run their business. For that purpose, it is
essential that goods are purchased from the right buyer at the right time and delivered it at the
right place with right condition. If a trust level with the supplier is higher than the organization is
able to take a risk for cost cutting or for the development of their organization.
HO2: Purchasing practices has insignificant impact on organization performances.
HA2: Purchasing practices has significant impact on organization performances.
2.1.3- Impact of Information System over Organization Practices
Sharing of information means of remitting of words i.e. communication between partners, if it
accurate, adequate, timeliness which means quality of information without any buffer, it would
create a successful relationship for the bright business. Lean and just in time, practice would be
implemented to the organization particularly for the manufacturing sector for eliminating the
waste, low inventory, small lots size and on time delivery. Just in time is very necessary and
essential for them. Postponement is the delay differentiation of products
HO3: Information system has insignificant impact on organization performance.
HA3: Information system has significant impact on organization performance.

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2.1.4- Impact of Suppliers Relationship over Organization Practices
Coordinate with the supplier is necessary nowadays, all the industries depends on the suppliers
but manufacturing sector is entirely depends on it, if inventory is not transported on the right
time, it would not only effect on the business but the edge swing towards the competitor side.
Selection criteria depends of the VDI concepts in which best vendor is selected because it could
reduce the waste, deliver the goods on time, cross training workforce, process and selection of
routes for deliveries the goods on time, etc. The new technologies, innovation and development
of a new product are also achieved with joint effort in such ways closer control also take place
because transactions are could be managed more centrally in supply chain management.
HO4: Supplier relationship has insignificant impact on organization performance.
HA4: Supplier relationship has significant impact on organization performance.
2.2- Review of Recent Empirical Literature
Kenneth W. Green JR, Dawayane Whitten and R. Anthony Inman had published paper in 2008
and the title is “The impact of logistics performance on organizational performance in a supply
chain context’’. This paper aim was to theorize and assess a logistics performance model
incorporating logistics performance as the focal construct with supply chain management
strategy as antecedent and organizational performance, both marketing and financial, as
consequences. In this paper sample data was taken from 142 plant operations managers and
analyzed using structural equation modeling methodology. They concluded that to compete at

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the supply chain level, coordination of key external processes such as purchasing, selling, and
logistics with supply chain partners. Their focus was limited to the impact of logistics
performance on organization performance within the supply chain context.
Blandine Ageron, Angappa Gunasekaran and Alin researched study and published a paper in
May- 2012 and their title was “IS/ IT as supplier selection criterion for upstream value chain”.
The purpose of study was to examine and evaluate the importance of IS/IT criterion in the
suppliers arising from the integration of these criterions and to determine difficulties companies
face resulting from this deployment. In this study data was collected from 90 French companies
and subsequently analyzed to understand the IS/IT criterion used for supplier selection along the
upstream value chain. Their finds and suggestions were that IT/IS is a significant supplier
selection criterion within supply chain context because of the rapid proliferation of information
sharing across upstream chains.
Forza (1995) investigates the relationship between the factor information systems on quality
performance by using sample contract strategy. The collection of data is done through
questionnaire, by the different 19 respondents per plane relationship between quality
management practices and quality performance, quality management practices and quality
information flows and quality performance and the combination of quality management
practices, quality information technologies for quality has been studied in this study. The test
applied on this study is correlation and canonical correlation analysis to study the relationship
between the variables. The result indicates that quality management has positive significant
relationship with information system and the upstream with supplier and downstream

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management of quality. It has been recommended that further empirical studies need to be
conducted on the same topic to get deep understanding the relationship of variables with
information system.
Seth and Tripathi (2005) investigate the relationship between TQM and TPM implementations
factors and business performance of manufacturing industry in India. The empirical study based
on sample size of 108 manufacturing companies. The variables study in this research are Focus
on customer satisfaction, Leadership for improvement, strategic planning for improvement,
employee and training, information architecture performance measurement system, materials
management equipment management, process management and management of financial
resources. The test applied on this study is multiple regression rests or reliability validity and
identification of factors, test for content validity and test for construct validity; factor analysis.
Result indicates that factors are grouped in two categories. The first group factors are universally
significant for performance in India and second category includes specific factors like equipment
management for TPM and focus in customer satisfaction as well as employee empowerment and
involvement for TQM.

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2- Methodology
The model estimates the impact of brand image, brand association and brand attitude on brand
loyalty of product in parametric form is defined as follows:
Y = α0 + α1 PP + α2 IS + α3 SR + e
Where Y is the Organization Practice, PP is the Purchasing Practice and SR is the Supplier
Relationship. e is representing the error term. The model is estimated by using 60 questionnaire
fill by random sampling.
3- ESTIMATION AND RESULTS
4.1- RELIABILITY TEST
We use Reliability test (Cronbach's alpha) is the most common measure of internal consistency
("reliability"). It is most commonly used when you have multiple Likert questions in a
survey/questionnaire that form a scale and you wish to determine if the scale is reliable. If you
are concerned with inter-rater reliability, we also have a guide on using Cohen's (κ) kappa that
you might find useful.

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4.1.1- Reliability Test All Variable wise
To check reliability test we see Cronbach’s alpha value, our results shows the value of
Cronbach's Alpha is 0.947 which is greater than the benchmark which is 0.7 and its means that
our results are reliable.
Reliability Statistics
Cronbach's Alpha N of Items
0.947 17
4.1.2- Reliability Test Variable wise
To more confirm our data reliability we check all variable separately and apply Cronbach's alpha
test
Table 4.1.2.1- Purchasing Practice
0.83 4

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Table 3.1.2.2- Information system
Information system
0.807 2
Table 4.1.2.3- Responsiveness
Responsiveness
0.799 3
Table 4.1.2.4- Supplier Relationship
0.847 3

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Table 4.1.2.5- Organization Performance
0.885 5
After checking all variable, our results shows that all
variable are reliable our have confirm it.
4.2- FACTOR ANALYSIS
KMO should be > 0.5
Bartlett’s should be significant <0.05
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.896
Bartlett's Test of Sphericity
Approx. Chi-
Square
761.26
df 136.00
Sig. 0.00
Our Result shows that KMO value is 0.896, which is greater than 0.5and Bartlett’s value is 0.00
which less than 0.05. It means that our data is reliable as well as our questionnaire is also correct
that is why only signal component is made.

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Component Matrixa
Component
1
All raw materials arrive within the range of required date .783
The quality of material purchased in inventory meets the company's quality
performance objective
.807
All raw materials are purchased on best cost .704
Our major suppliers situated near our factory location .701
Suppliers have access to our production schedules and plans .643
There is a visibility to access supplier's operations related to quality of product .627
On time delivery performance is better in comparison of our competitors .772
We achieve the planned daily production targets .784
Our accuracy rate of order processing for customer is high .731
The company hold long term relationship with suppliers .751
Being a manufacturing industry, material delivery from suppliers is on
frequent basis
.775
Company works on supplier's development to become efficient .816
The company evaluates management performance annually .772
The Products and services delivery is faster than our competitors .779
The Products and services quality is better than our competitors .767
The operating cost are lower than our competitors .738
Our Company is continiously increasing market share .674
Extraction Method: Principal Component Analysis.
a. 1 components extracted.

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4.3- REGRESSION ANALYSIS
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .815a .665 .641 .45992
a. Predictors: (Constant), SR, ISV, Re, PP
ANOVA
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 23.093 4 5.773 27.293 .000b
Residual 11.634 55 .212
Total 34.727 59
a. Dependent Variable: OP
b. Predictors: (Constant), SR, ISV, Re, PP

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Coefficients
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig.B
Std.
Error Beta
1 (Constant) .597 .211 2.828 .007
PP .151 .153 .153 .983 .330
ISV -.010 .079 -.015 -.132 .896
Re .365 .145 .357 2.523 .015
SR .351 .127 .379 2.754 .008

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4- CONCLUSION & RECOMMENDATION
The overall result suggests that there is highly impact of Impact of Supply Chain Management
Practices on Organization Performance in Manufacturing Industries of Pakistan. Result of
Cronbach’s Alpha of both (Reliability Test of overall variables and reliability test of single
variables) are excellent, the sig value of the entire test is above 0.5. Factor analysis Our Result
shows that KMO value is 0.896 that is greater than 0.5 and Bartley value is 0.00 which less than
0.05. The outcome of factor analysis is satisfactory because the value of KMO is greater than 0.5
and the Bartkley value is less than 0.5. The result of regression is also worthy. In the model
summary, the value of R indicates the value of correlation that means that how much our
multiples independence variables are correlated with the dependent variables. Our result is 0.815
means 81.5% our independent variables correlated with the dependent variable. The result of
coefficient of determination (statistical measure which tell us that how well our regression line
approximates with our real data points) which is represented by R Square is 0.665 which means
that 66.5%. So, each and every organization there should be supply chain implemented and the
organization has to practice it. Through, the sharing of information with the suppliers, customer
and competitors they are able to deal with the customers on time and able to use the lean concept
in their organization. Making a relationship strong with the suppliers, so, would be able to
advance them or take a risk for the cost cutting or innovated in their manufacturing. Purchasing
from the right buyer is important because if the suppliers provide the right goods at the right time
and at the right place, give the organization edge on competitor and able them to spread in the
market.

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5- DATA SOURCES
Seth, D., & Tripathi, D. (2005). Relationship between TQM and TPM implementation factors
and business performance of manufacturing industry in Indian context. International Journal of
Quality & Reliability Management, 22(3), 256-277.
Forza, C. (1995). The impact of information systems on quality performance: an empirical
study. International Journal of Operations & Production Management, 15(6), 69-83.
Ageron, B., Gunasekaran, A., & Spalanzani, A. (2013). IS/IT as supplier selection criterion for
upstream value chain. Industrial Management & Data Systems, 113(3), 443-460.
Green Jr, K. W., Whitten, D., & Inman, R. A. (2008). The impact of logistics performance on
organizational performance in a supply chain context. Supply Chain Management: An
International Journal, 13(4), 317-327.
Msimangira, K. A. (2003). Purchasing and supply chain management practices in
Botswana. Supply chain management: An international journal, 8(1), 7-11.

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6- Appendix
1- RELIABILITY TEST
1.1- Reliability Test Considering entire variables
Case Processing Summary
N %
Cases
Valid 60 98.4
Excludeda 1 1.6
Total 61 100
a. Listwise deletion based on all variables in the procedure.
Cronbach's
Alpha
N of Items
0.947 17
1.2- ReliabilityTestVariable wise
Purchasing Practice
N %
Cases
Valid 60 98.4
Excludeda
1 1.6
Total 61 100
0.83 4

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Information system
N %
Cases
Valid 60 98.4
Excludeda
1 1.6
Total 61 100
0.807 2
Responsiveness
N %
Cases
Valid 60 98.4
Excludeda
1 1.6
Total 61 100
0.799 3

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Supplier Relationship
N %
Cases
Valid 60 98.4
Excludeda
1 1.6
Total 61 100
0.847 3
Organization Performance
N %
Cases
Valid 60 98.4
Excludeda
1 1.6
Total 61 100
0.885 5
2- FACTOR ANALYSIS
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy.
0.896
Bartlett's Test
of Sphericity
Approx. Chi- Square
761.26
df 136
Sig. 0

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3- REGRESSION ANALYSIS
Variables Entered/Removed
Model Variables Entered
Variables
Removed
Method
1 SR, ISV, Re, PP Enter
b. All requested variables entered.
Model Summary
Model R R Square
Adjusted
R
Square
Std. Error of
the Estimate
1 .815a 0.665 0.641 0.45992
a. Predictors: (Constant), SR, ISV, Re, PP
ANOVA
Model
Sum of
Squares
df Mean Square F Sig.
1
Regression 23.093 4 5.773 27.293 .000b
Residual 11.634 55 0.212
Total 34.727 59
b. Predictors: (Constant), SR, ISV, Re, PP
Coefficients
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B
Std.
Error
Beta
1
(Constant) 0.597 0.211 2.828 0.007
PP 0.151 0.153 0.153 0.983 0.33
ISV -0.01 0.079 -0.015 -0.132 0.896
Re 0.365 0.145 0.357 2.523 0.015
SR 0.351 0.127 0.379 2.754 0.008

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QUESTIONAIRE
IMPACT ON ORGANIZATION PERFORMANCE
BY UTILIZING THE SUPPLY CHAIN MANAGEMENT PRACTICES
– CASE STUDY OF MANUFACTURING INDUSTRIES OF PAKISTAN
Respondent's Profile
Name Gender
Designation Age
Contact
Details
(optional)
Education
Company
Please tickthe responsesthatshowyouropinionabouthow youroperationalperformance comparestoits
competitorsinyourindustry.
Sr.
No
Strongly
Agree
Agree
Neither
agree
nor
disagree
Disagree
Strongly
Disagree
1 2 3 4 5
Purchasing Practice
1
All rawmaterialsarrive withinthe range
of requireddate
2
The qualityof material purchasedin
inventorymeetsthe company'squality
performance objective
3
All rawmaterialsare purchasedonbest
cost
4
Our majorsupplierssituatednearour
factorylocation
Information System (Visibility)
5
Suppliershave accesstoourproduction
schedulesandplans
6
There isa visibilitytoaccesssupplier's
operationsrelatedtoqualityof product

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Responsiveness
7
On time deliveryperformance isbetterin
comparisonof our competitors
8
We achieve the planneddailyproduction
targets
9
Our accuracy rate of orderprocessingfor
customerishigh
Supplier Relationship
10
The company holdlongtermrelationship
withsuppliers
11
Beinga manufacturingindustry,material
deliveryfromsuppliersisonfrequent
basis
12
Companyworkson supplier's
developmenttobecome efficient
Organization Performance
13
The company evaluatesmanagement
performance annually
14
The Products andservicesdeliveryis
fasterthan ourcompetitors
15
The Products andservicesqualityis
betterthanour competitors
16
The operatingcost are lowerthanour
competitors
17
Our Companyiscontinuouslyincreasing
marketshare
Thanksfor yourprecioustime .. .

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