Asian Research Consortium

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1 Asian Research Consortium Asian Journal of Research in Business Economics and Management Vol. 6, No. 8, August 2016, pp Asian Journal of Research in Business Economics and Management ISSN A Journal Indexed in Indian Citation Index DOI NUMBER: / The impact of supply chain process optimization on productivity and improvement of organizational performance (Case Study: Iran Khodro Mazandaran) Mahsa Alizadeh a, Hassan Hosseini b a MSc, Industrial engineering, management and efficiency system, Mazandarann University of Science and Technology, Iran. b MSc, Financial Management, University of Tehan, Iran. Abstract During the last few years various theories and research, supply chain management as a main structure is related to organizational performance. Due to the increasing supply chain management approach, this paper examines its impact on organizational performance through process optimization using intervention's competitive advantage. For this purpose, the researchers thorough review of literature, and using descriptive method, and with the appointment of a statistical sample randomly from among the members of the Iranian car company's supply chain and research hypothesis using structural equation modeling have examined regression. The results showed that supply chain management directly affect the competitive advantage and organizational performance. It also has a significant competitive advantage and organizational performance relationship. But with the intervention of competitive advantage, greatly strengthened the relationship between supply chain management and enterprise performance. The fitness test fitness model for the appropriate model for Iran Khodro(IKCO) complex supply chain. Keywords: : supply chain management, competitive advantage, organizational performance 1. Introduction Due to industrial development world, increased variety of products and specific products have been complicated. Regarding to abundant in some parts of the product, the need to organize the production and manufacture of components is necessary, but organizing supply raw materials, machinery and human resources, a lot of problem Preparation and production of all parts within the company creates a lot of problems, most notably how to organize human resources, as well as creating additional resources and market demand in times of change. (Chopra et al. 2007) Gradually, organizations have realized that the right to organize the supply of parts, better use of resources outside the organization, so was thinking supply chain. Because manufacturing organizations can not independently found that regardless of ambient conditions, only focus on internal efficiency and short-term benefits. (Kaminsky et al. 2005) 25

2 Finally, organizations have realized that the right to organize the supply of parts, better use of resources outside the organization, Therefore, supply chain thinking was formed. Because manufacturing organizations can not independently found that regardless of ambient conditions, only focus on internal efficiency and short-term benefits. (Kaminsky et al. 2005) Supply chain management has three main processes that include: Information Management: Turn right and correct transfer of information makes the process more effective and efficient management becomes easier. It is important to coordinating the activities in the supply chain Coordinated and appropriate management information between partners will make an increasing impact on decision-making and speed, accuracy, quality and other aspects exist Logistics Management: this section all physical activities, including the activities of the procurement of raw materials to the finished product transportation, warehousing, production scheduling, etc. to be included. Relationship management: This section of the most important issues of the supply chain and the broad impact on all aspects of the supply chain and its performance, Many of the early failures in the supply chain caused by poor transmission expectations and resulting behavior that occurs between parties involved in the chain, The development of integrated supply chain, develop trust and confidence among partners and design their reliability for critical elements for business success. The study shows the evolution of the management of the Company in order to cope with drastic changes in the environment and improve organizational performance, And then gaining more market share and gain competitive advantage, supply chain management attention have, Given the vast quantity of automotive companies, automotive parts, except for the leading companies in this field have been, In our country, Iran Khodro(IKCO), the largest car manufacturer in the middle east is faced with the situation. This large complex supply chain management wants to increase business performance and competitive advantage. Study related literature suggests that, If the components and supply chain management process does not have the required effectiveness, organizational consequences will be difficult. These studies show that effective supply chain management has a Positive effects on Member, and its elements, including human resources, increased yield, and decreased customer satisfaction and competitive advantage to be pessimistic. In this article, with knowledge of the matter, seek, in the form of a research project on the effects of supply chain management, competitive advantage and organizational performance review is incumbent Iran Khodro(IKCO) Company. The following research questions have been raised in this regard: Iran Khodro components supply chain management company that deals with suppliers many are there? Is supply chain management company Iran Khodro has an impact on competitive advantage? Is the company's supply chain management can improve organizational performance? And finally the relationship between competitive advantage and performance of the company there? Which of the three processes influence information management, logistics management and relationship management on Merritt Iran Khodro is more competitive and organizational performance? In order to answer these questions, the main purpose of this study was to investigate the impact of supply chain process optimization, improve the efficiency of the organizational performance of Iran Khodro (IKCO) Company in the form of a conceptual model test was conducted. 26

3 2. The research theoretical Foundations 2.1. The concept of supply chain management Different definitions of supply chain management is provided, but it is necessary to express the concept of the supply chain. Based on the definition of supply chain includes all activities associated with the flow and transformation of goods from raw material stage (mining) To delivery to the final consumer as well as the information flows associated with them and consist of the following components: The upstream supply chain, including suppliers of fog early that they can be assembled or manufacturers and their suppliers that all this material originates. The main activity is the purchase and transportation Internal supply chain, including all processes used by an organization to organization in turn forwarding data is output by suppliers, Since the material until the final product to be distributed outside the organization move; the activities here include material handling, inventory management, manufacturing and quality control. In general, supply chain, a chain that turns all activities related to the flow of goods and materials, from the raw material stage to the final delivery to the consumer Competitive Advantage Competitive advantage from the increasing attractiveness of the company compared to competitors in terms of customer proposals Company values provide a competitive advantage to customers in a way that the values of higher customer cost Thus it can be said, the competitive advantage of an economic unit is a set of unique abilities to penetrate into desired markets and provides over rivals for that unit. So direct connection to the customer values, the values of the company and the value of the supply offered by competitors Company determines the requirements and dimensions of competitive advantage. If you compare the values supplied by the company from the client perspective, he considers consistent with the values supplied by competitors and closer, It can be said, that it participated in one or more indicators than its competitors with a competitive advantage in a way that makes this advantage, the company in the market compared to its competitors in close proximity to customers and conquer his heart is superior Organizational Performance The word is that the concept of activities that work together to do the work and the result is, in fact, the result of the action. Therefore, the performance of an overall structure that refers to how the operations. Performance can be said to behave learning become obvious. In a comprehensive definition of the function, but the efficiency of tasks, some personal data such as accident potential, the delay in the work, absenteeism and notes that can slow the appropriate criteria for evaluating their performance. 3. Conceptual model As mentioned above, supply chain management is fundamental to the productivity of factors of production in the supply chain, and while many factors related to survival and continuity of its activity, and on some organizational variables involved. Figure 1 shows that the association is composed of three components of research, conceptual framework shows, As can be seen, supply chain management has a direct impact on organizational performance. As well as supply chain management through competitive advantage will have an indirect effect on organizational performance. Supply chain management is a 27

4 strategic partnership concept has five suppliers, customer relationship, the sharing of information, quality information sharing, delaying or delay. On the other hand the main elements of competitive advantage include: price / cost, quality, product innovation, delivery reliability, time-to-market. Finally, market performance and financial performance, organizational performance measurement components have been. Figure 1: A conceptual framework 3.1. Components of the conceptual model and research hypotheses Supply chain management is a key strategic factor in increasing the effectiveness and achieving the goals of the organization. Accordingly, supply chain management should be considered one of the vital fields of management as well as other areas in need of monitoring, Supervision, diagnose, improve and ultimately led to the finding excelled, to acquire and strengthen competitive advantages, performance measurement, improvement sustained effective and efficient management it is required. For this purpose, different components used are the most important ones are as follows: The strategic partnership suppliers. Customer Relationship Management. The level of information sharing. Quality of information sharing. Delay In addition, companies in the areas of technology, management and marketing can be compared to its competitors, competitive advantage are generally competitive advantages are the following factors manufacturer: Price / cost. Performance Quality Innovation The customer responsiveness Also in the past two decades, organizational performance management has become a subject of concern and attractive. And this tendency both in research and in applied fields has led to the development of 28

5 many innovations. In this study, organizational performance as one of the main variables have been proposed. Given that the design and supply of spare parts to Iran Khodro(IKCO), one of the leading companies in the area of performance appraisal system, based on the Excellence Model, Therefore The aim of this study was to assess organizational performance, performance-based components of the system are considered models of organizational excellence. National Productivity Award and the Excellence Model is based, has nine criteria. Five criteria, the results are enablers and four other criteria. Criteria, "enabling" cover what an organization does, And results criteria, what an organization achieves. The results obtained by the implementation of empowerment and empowerment feedback of results to recover. Figure 2 shows a view of the dynamics of the model is visible. Innovation and learning help to improve enablers and improved capabilities, improved results will follow: Each of the nine criteria of the National Productivity and Business Excellence Award include more components that highlight different aspects of Benchmark. Thus, the components of which are components of conceptual models, hypotheses are as follows: Supply chain management is a significant relationship with Iran Khodro(IKCO) competitive advantage. Iran Khodro(IKCO) supply chain management with enterprise performance has a significant relationship. Iran Khodro(IKCO) competitive advantage and organizational performance in a significant relationship. Supply chain management through competitive advantages over Iran Khodro affect organizational performance. 4. Methodology This study, in terms of orientation, the type of application, in terms of strategy, the goal of the case study and descriptive. And is trying to use the data collected, which is derived from specific examples, and without interfering with the current situation, the results and findings of the sample to generalize the entire population. The study population consisted of managers, technicians and non-technical staff in 2015, is a collection Iran Khodro supply chain. On the basis of limited sample volume calculations, sample size was determined 653 people, but in order to ensure 655 questionnaires were distributed among the population and then followed up 636 questionnaires were assessed. For this purpose a three-part 29

6 questionnaire containing questions related to the main component of the research, design, and the respondents were respected. Table 1: Cronbach's alpha for the research questionnaires Title Questionnaire Supply Chain Management Competitive Advantage Organizational Performance Cronbach's alpha coefficients Results Research findings indicate that 55 percent of respondents were male and 45 percent are women. In terms of age, nearly 35 percent of respondents aged over 65 years and more than 55 percent of them have working experience of over 45 years. Also in terms of qualification were more than 26 percent of respondents had a college education. In addition, the response of the majors and had various organizational positions. Then, to test the hypothesis, first-related components conceptual model using confirmatory factor analysis were examined. Table 2. Results of confirmatory factor analysis for the independent variable output (supply chain management), confounding variable (competitive advantage) and the dependent variable (performance) index values fit with them. Table 2. Results of confirmatory factor analysis components conceptual model Component x 2 / df GFI CFI RMSEA Strategic partnership suppliers Customer Relationship The level of information sharing Sharing quality information Delay (latency) Price / cost Quality Customer responsiveness Product innovation Performance Leadership Staff Policy and strategy Partnerships and resources processes People Results Customer Results Society Results Key Performance Results x 2 / df 3, 0.05 As can be seen in Table 2, all components of model has GIF, CIF 0.9. RMSEA 0.08, These conditions indicate the proper fit of the model parameters, in other words all the indicators studied, are in satisfactory level. In addition, the direct relationship between the variables represent a direct and positive relationship between them. Figures 3, 4 and 5 show the existence of these relations: 30

7 Figure 3: The test of direct relationship between supply chain management and competitive advantage As seen in Figure 3, a direct and positive relationship management, supply chain competitive advantage. In other words, Iran Khodro supply chain management, competitive advantage and will affect the strength of these connections is 51/0. Figure 5 also show that there is a direct positive relationship between supply chain management and organizational performance. In other words, Iran Khodro supply chain management, organizational performance and increase influence or strength of these connections is Figure 4: The test of direct relationship between supply chain management and organizational performance 31

8 On the other hand the results of structural equation model in Figure 5 represents a direct and positive relationship between competitive advantage and organizational performance. In other words, supply chain management Iran khodro, affects organizational performance and strength of these connections is Figure 5: The test of direct relationship between competitive advantage and organizational performance Finally, the experiment Figure 6 shows that supply chain management through competitive advantage, affects organizational performance. 32

9 Figure 6: SEM indirect relationship between supply chain management and organizational performance As in above-mentioned models (final research model) can be seen, as variable relation competitive advantage, interfering correlation between supply chain management and enterprise performance to the 0.8 strengthened. Finally, Table 3, load index of each component of the study, along with an R2 as well as T-VALUE show: Table 3: Classification of index components based on the load factor Component Operating Name load factor 2 Supply Chain Management Competitive Advantage Organizational Performance R T VALUE Strategic partnership Suppliers Customer Relationship The level of information sharing Sharing quality information Delay (latency) Price / cost Quality Customer responsiveness Product innovation Performance Leadership Staff Policy and strategy Partnerships and resources processes People Results Customer Results Society Results Key Performance Results Discussion & Conclusion According to the statistical results, we conclude that improve the performance of supply chain management case study will improve their competitive advantage. Why the coordination and effectiveness of the supply chain of the company's activities are affecting the performance of other components and therefore, the output of activities, effective and will bring satisfaction to customers and shareholders. And supply chain to improve data collection and improves the company's competitive advantage compared to competitors. According to the statistical results, it is concluded that improve the performance of supply chain management case study, it will improve organizational performance. On the other hand due to an increase competitive advantage and improve an organization's brand, welcome customers of its products and services, as well as shareholders, the development of investment, greater and therefore, its performance continually increases. According to the results, it is concluded that the study was improvement in the company's competitive advantage, improve organizational performance it will be. Based on the results we can say that excellence and high quality of specific activities in the field of supply chain competitive advantage it provides, The 33

10 willingness of customers to buy products and services and thus encourages increased effectiveness and improved organizational performance. According to the results, the relationship between supply chain management, competitive advantage and organizational performance confirmed, In other words effectiveness and improvement in supply chain management, competitive advantage through improved organizational performance in the supply chain IKCO is set. In other words, in the case of a competitive advantage through supply chain management and enterprise performance confounding role plays, the relationship between supply chain management and enterprise performance is strengthened. References A. Lai and k. Cheng, Responsive Supply Chain, Omega, 36 (2008) D. Hoenig and J. H. Thun,An empirical analysis of supply chain risk management in the German automotive industry, International Journal of Production Economics, 131 (2012) Donlon JP., (1996), "Maximizing value in the supply chain", Chief Executive, G. Tuncel, Risk assessment and management for supply chain networks, Computers in Industry, 16 (2010) J. Fransoo and J. Fang and L. Zhao and T. Woensel, Sourcing strategies in supply risk management: An approximate dynamic programming approach, Computers & Operations Research, 40 (2013) J. Kuhn, Value-based performance and risk management in supply chains: A robust optimization approach, International Journal of Production Economics, 139 (2012) M.C. Wilson, The Impact of Transportation Disruptions on Supply Chain Performance, Transportation Research, Part E (2006) Russell, Roberta S. and Taylor, Bernard W. (2009), "Operations Management Along the Supply Chain". NJ. : John Wiley & Sons, S. Rezapour and A. Baghalian and R. Zanjirani, Robust supply chain network design with service level against disruptions and demand uncertainties, European Journal of Operational Research, 227 (2013) Scott, Kostojohn, (), "CRM Fundamentals", Brian Paulen, Mathew Johnson Tan KC,Kannan VR, Handfield RB. (1998), "Supply chain management: supplier performance and firm performance". International Journal of Purchasing and Materials Management 34