Dissertation chapter 2 Sample Literature Review

2.1 Introduction

This chapter seeks to explore past studies in regards to influence of relationship quality on supply chain performance. This chapter starts with looking at the previous studies regarding the concept of supply chain and its importance. The chapter then looks at the previous studies regarding relationship quality in supply chain. The chapter then explore the previous studies about the influence of trust, communication, cooperation, and interdependence is supply chain performance.

2.2. Supply chain management

2.2.1 The concept of supply chain management

Razavi et al. (2016) defines supply chain management as the management of services, information, and goods as they move from the supplier to the point of consumption. As stipulated by Turker and Altuntas (2014), supply chain management typically play a fundamental role in an organisation, and it is one of the essential elements when it comes tom operational efficiency that can be applied to customer satisfaction as well as overall organisational success. As explicated by Searcy (2013), supply chain management typically takes into account coordination as well as integration of various flows within an organisation.  Zhou et al. (2016) have elucidated that the ultimate goals of an effective supply chain management is to reduce inventory in an organisation.  According to Seuring (2013), supply chain management flows can be cauterised into three main flows. These are product flow, information flow, and finances flow. As regards to product flow, Stadtler (2015) has explained that it includes the movement of goods from the supplier to the consumer. When it comes to information flow, Hill (2016) has explained that it usually entails transmitting orders as well as updating the status of delivery. Lastly, as regards to financial flow, Zhang and Huo (2013) has espoused that it typically consists of credit terms, consignment, payment schedules, as well as title ownership arrangements.  Irrespective of the flow, Searcy (2013) has elucidated that supply chain management usually requires effective commitment of the supply chain partners for the purpose of working closely generation of order, taking of order, as well as fulfilment of order.  Taking this into consideration, Zhou et al. (2016) have indicated that the supply chain partners normally play a significant role in creating an extended enterprise that spread far beyond the location of the producer.

2.2.2 The importance of supply chain management

As explained by Fredendall and Hill (2016), the significance of supply chain management in any organisation cannot be overlooked. On this, they indicate that supply chain management usually impact customer services through ensuring that the right products as well as quantity are delivered to the customers on time. Besides, as asserted by Stadtler (2015), through supply chain management, it becomes possible for those products to be available in locations that the customers expect. Therefore, as put across by Seuring (2013), it can be deduced that supply chain management usually play a significant role when it comes to boosting customer service, which in turn helps the organisation in creating customer loyalty. Moreover, it has been found out by Zhang and Huo (2013) that supply chain management typically has a substantial impact on the bottom line. Precisely on this, Ross (2013) has espoused that most organisations across the world usually value supply chain management due to the fact that it helps in decreasing the use of large fixed assets including warehouses, transportation vehicles, as well as plants in the supply chain. This assertion has been backed up by Morali and Searcy (2013), who have elucidated that through supply chain management there is typically increased in cash flow given the fact that the delivery of the products can be expedited. This, according to Huo et al. (2014), insinuates that profits can be received quickly. Differently, Huo, Zhao & Lai (2014) hold supply chain management also reduces inventory costs of the company. In an attempt to improve the financial position of an organisation, Christopher (2016) has indicated that supply chain management also plays a crucial role in increasing profit leverage. On this, he has indicated that most organisations usually value supply chain management given that it help in controlling as well as reducing supply chain costs. Consequently, dramatic increase in organisational profits is realised. Lastly, as found out by Miranbeigi et al. (2015), supply chain management typically plays a fundamental role when it comes to decreasing fixed assets.  With supply chain management, Stadtler (2015) has explained that firms can be in a position of decreasing the use of large fixed assets such as warehouses, plants, and transportation vehicles. This as a result can help in minimising operational costs, thus leading to increased profits.

2.2.3 Supply chain performance measure

Supply chain performance measure is the approach that is used in judging a supply chain system. This is according to Christopher (2016) who has demystified that supply chain performance is usually measured through qualitative as well as quantitative measures.  Qualitative measures usually take into account subjective measures such as customer satisfaction as well as product quality (Hill, 2016). On the other hand, quantitative measures typically involve objective measures such as supply chain response time, resource utilisation, order-to-delivery lead time, and delivery performance (Hoejmose et al., 2012). Supply chain performance measure is fundamental owing to the fact that it affects those behaviours that impact supply chain management.  This is according to Turker and Altuntas (2014), who add that performance measurement typically provides the means by which organisations can access whether their supply chains have improved or degraded.  This as a result, as explained by Ross (2013), helps in improving the overall supply chains in the organisations.

2.3 Relationship quality

2.3.1 The concept of relationship quality

Relationship quality, as explained by Christopher (2016), refers to the measure of the strength of the relationship between a buyer and a supplier. In light of this, Turker and Altuntas (2014) have explained that relationship quality typically measure how strong the relationship between the two parties is, thus assuring the buyer to continue making purchases from a specific supplier. As stipulated by Seuring (2013), business performance is significantly affected by the relationship between the two parties. Therefore, just as asserted by Fredendall and Hill (2016), the quality of relationship between members of the supply chain management is fundamental when it comes to the success for the entire supply chain. As emphasised by Miranbeigi et al. (2015), through maintaining close relationships supply chain partners are essentially able to share rewards, risks and even maintain long lasting relationships over time. This emphasis by Miranbeigi et al. (2015) basically summarises the value of relationships within the supply chain networks.

2.3.2 The dimension of relationship quality

Communication

The aspect of communication in supply chain management cannot be overlooked. This is according to Stadtler (2015), who adds that communication usually entails the process of conveying the intended message from one party to another. This, according to Turker and Altuntas (2014), is usually through the use if mutually understood signs as well as semiotic rules. Taking this into consideration, when it comes tom communication supply chain management, it entails the act of transferring information from one member of the supply chain to another. For instance, Ellram and Cooper (2014) indicate that effective communication is usually vital between the supplier and the buyer. This, according to him is due to the fact that it makes it easier for both parties to ensure that the product is delivered on time. As put across by Seuring (2013), if a shipment is unfulfilled, delayed, or disrupted, it is the responsibility of the supplier to inform the buyer that there is a problem which may affect the delivery of the product.  While this may be disappointing to the buyer, it can significantly help him in planning. Such forms of communications in supply chain as explained by Fredendall and Hill (2016) can be made through emails, phone calls, and messages among other means, which are convenient. Therefore, as explained by Morali and Searcy (2013), communication usually has a significant impact on the supply chain management.

Trust

According to Zhang and Huo (2013), trust is usually one of the most critical components of an effective supply chain management. Taking this into consideration, Fredendall and Hill (2016) define trust as the willingness of a party to take risk. Precisely, as depicted by Seuring (2013), trust is typically considered to exist if one party is considered honest by the other party. This has been backed up by Ross (2013), who has added that trust usually take into account the expectation that attenuates that suspicion that a party in a particular transaction will behave in an opportunistic manner. In this view, just as explained by Morali and Searcy (2013), trust normally has a substantial impact on the supply chain performance.

Cooperation

According to Biswas and Samanta (2016), cooperation refers to the aspect of aligning the activities of among various parties. Therefore, when it comes to supply chain management, cooperation involves collaboration among the various parties involved in the supply chain. Nevertheless, as explained by Seuring (2013), cooperation between the buyer and the seller is usually the most critical when it comes to enhancing the performance of the supply chain. This has been echoed by Shonghari et al. (2013), who has added that if the buyer and the seller cooperate, they work together towards ensuring that the products involved are delivery on time, and in the expected quality and quantity. Therefore, as explained by Nyaga and Whipple (2011), the significance of cooperation in supply chain performance cannot be overlooked.

Interdependence

Interdependence as argued by Nyaga and Whipple (2011) refers to the mutual reliance between two or more parties. This definition has been echoed by Martínez-Jurado and Moyano-Fuentes (2014), who has elucidated that interdependence may take into account emotional, economical, as well a moral reliant on a party. In regards to supply chain management, independence involves mutual reliance between the supplier and the buyer. According to Razavi et al. (2016), this reliance has been found to have a considerable impact on the supply chain performance.

2.4 The influence of relationship quality on supply chain performance

2.4.1 The impact of communication on supply chain performance

According to Ross (2013), effective communication in supply chain play is a vital aspect of relationship quality, which significantly impact supply chain performance to a considerable extent. Taking this into consideration, Nyaga and Whipple (2011) have elucidated that for the purpose of making supply chain management successful, communication among various parties in the supply chain has to be effective. According to Huo et al. (2014), communication in supply chain plays a crucial role in increasing productivity. This assertion has been backed up by Biswas and Samanta (2016), who have articulated that if communication with the supply chain is effective, there is usually no need of repeated communication. As a result, time wastage is typically reduced to a considerable extent, which in turn leads to increased productivity. Besides, as found out by Martínez-Jurado and Moyano-Fuentes (2014), through effective communication, it becomes easier to set priorities as well as assigning tasks. According to Miranbeigi et al. (2015), communication in supply chain management also play a critical role in improving the morale of the members of the supply chain including the buyers. In light of this, just as elucidated by Turker and Altuntas (2014), when communication between supply chain manager and employees is clear, it helps greatly in improving the morale of the workers, which in turn helps in improving performance. This, according to Christopher (2016) also ensures that the buyers receive their order on time, thus increasing customer loyalty to a considerable extent. In addition, frequent and timely communication with the customers will assist the SCM to resolve any disputes, and align the expectations of consumers (Nyaga & Whipple, 2011). Nonetheless, Christopher (2016) has refuted this claim, asserting that the correlation between communication and customer loyalty is usually insignificant provided the customers get their products on time.

As found out by Miranbeigi et al. (2015), effective communication across all stages of supply chain management typically creates situations that depict the value of coordination for both sides. This coordination, as opined by Rushton et al. (2014) helps supply chain in operating in a manner, which is more effective. Nonetheless, as put across by Stadtler (2015), the full benefit of supply chain communication is only achieved if the entire supply chain system is coordinated effectively. Through such, it can be possible to ensure that information is passed on time, thus avoiding any form of inconvenience. Therefore, Zhou et al. (2016) have suggested that for the purpose of improving supply chain performance, there is a considerable need to use various communication systems including internet, which can help increasing communication across the supply chain.

2.4.2 The impact of trust on supply chain performance

According to Turker and Altuntas (2014), the success of supply chain performance is to a considerable extent dependent on high level of trust as well as strong commitment among the partners in the supply chain. In regard to this, Nyaga and Whipple (2011) have espoused that effective supply chain planning is usually based on shared information as well as trust among the involved partners. This according to Christopher (2016) is typically one of the fundamental requirements when it comes to successful supply chain management. As a matter of fact, a study carried out by Ellram and Cooper (2014), found out that about 30 percent of strategic alliances usually fail because of lack of trust among partners. According to Huo et al. (2014), information sharing in most cases requires release of confidential financial strategic as well as other operating information to partners. Taking this into consideration, Martínez-Jurado and Moyano-Fuentes (2014) have elucidated that the issue of trust is usually significant in supply chain management owing to the fact that it typically involve a significantly higher degree of interdependency between the partners. According to Stadtler (2015), when both the seller and the buyer in the supply chain trust each other, they usually produce outcomes that help in promoting efficiency, effectiveness, as well as productivity. This assertion has been echoed by Hoejmose et al. (2012), who have indicated that one of the biggest stumbling blocks to successful supply chain performance is lack of trust. Subsequently, as noted by Miranbeigi et al. (2015), trust has for a long time been regarded as a cornerstone of effective supply chain management.

With trust among the partners in the supply chain, there is usually creation of a condition where the transactions do not need to be scrutinised and verified. This is according to Ellram and Cooper (2014), who add that this helps in reducing the transaction costs. Besides, as Razavi et al. (2016) assert, it plays a vital role in enhancing productivity as well as effectiveness of the supply chain. Additionally, Hoejmose et al. (2012) have indicated that when trust is prevailing between the seller and the buyer within the supply chain, it usually becomes possible to create value added activities between the partners. Zhang and Huo (2013) have also noted that trust is one of the most important components of the supply chain management. On this, they has elucidated that if supply chain partners share information, they can reduce opportunistic behaviour within the supply chain such as fraud. This, according to Zhang and Huo (2013) helps greatly in improving the entire supply chain to a considerable extent. Nonetheless, a study conducted by Stadtler (2015) has found out that with the recent technological advancements, trust has cease to be a main factor of consideration. This because various systems in supply chains has ensured transparency throughout the supply chain, thus parties usually do not interact as much as it use to be some years back.

2.4.3 The impact of cooperation on supply chain performance

According to Ross (2013), cooperation between the buyer and supplier in a supply chain plays a critical role in the success of the supply chain performance. This, according to Ellram and Cooper (2014), is usually in response to the dynamic as well as unpredictable market changes. On this, Razavi et al. (2016) has emphasised that in supply chain management, cooperation between the partners is paramount importance given that it helps in reducing the effect of uncertainty during the transaction process. According to Morali and Searcy (2013), cooperation is fundamental when it comes to achieving effective coordination within the entire supply chain. According to Turker and Altuntas (2014), for the aim of coping with the high uncertainty in the dynamic market, most buyers are now demanding for greater supply flexibility as well as responsiveness from their suppliers. A recent survey by Zhou et al. (2016) has found out that when partners in the supply chain cooperate, they usually understand the expectations as well as needs of each other in a better way. This, according to Shonghari et al. (2013), helps in achieving mutual goals. Besides, as further noted by Huo et al. (2014), cooperation between partners in the supply chain plays a critical role in maintaining long term relationships, which consequently enhance performance. This statement has been backed up by Wisner et al. (2014), who has emphasised that this does not only help in improving supply chain performance, but also create customer loyalty, which leads to increased profits.

As depicted by Christopher (2016), cooperation between partners in supply chain helps the partners in making the right decision. Precisely, as noted by Stadtler (2015), if partners collaborate effectively, they are usually in a higher position of making the right decision. While this reduces risks to a considerable extent, it also reduces transaction costs to a considerable extent. This is according to Rushton et al. (2014), who add that it also helps in reducing the delivery time. Therefore, just as explained by Zhou et al. (2016), such the aspect of cooperation of partners in the supply chain is critical as far as supply chain performance is concerned.

2.4.4 The impact of interdependence on supply chain performance

According to Biswas and Samanta (2016), interdependence between buyers and sellers in the supply chain is usually not inevitable if at all the process is to become successful. Taking this into consideration, Wisner et al. (2014) have indicated that interdependence in supply chain management typically represents a notion of cohesion between the suppliers and the buyers. This according to Shonghari et al. (2013) makes it possible for the supplier to ensure that the products are delivered to the buyer in time, and on the right quantity and quality. These sentiments have been echoed by Ellram and Cooper (2014), who have espoused that interdependence in supply chain plays a critical role in providing the context in which trust as well as commitment grows, thus enhancing business outcomes. More importantly, as found out by Rushton et al. (2014), as the level of interdependence between the supplier and buyer increases, the impact of trust and commitment increases proportionally on the supply chain performance.

According to Miranbeigi et al. (2015), through effective interdependence between partners in supply chain management, there is usually confidence as well as expectation that one party will keep the promise. This has been supported by Zhang and Huo (2013), who state that interdependence in supply chain typically conveys a confidence that one party will not be exploited by vulnerability of the other irrespective of the ability of the other party to monitor such behaviours. Nevertheless, this claim has been disputed by Hoejmose et al. (2012), who has elucidated that interdependence does not span confidence especially when there is no trust among parties in the supply chain. As argued by Razavi et al. (2016), interdependence in supply chain enhances performance outcome to a considerable extent through a wider communication process, as well timely and meaningful information sharing. Stadtler (2015) has also noted that interdependence in supply chain helps in better controlling costs through effective monitoring of the involved costs by both the supplier and the buyer. Taking this into account, just as noted by Christopher (2016), independence in supply plain usually affect supply chain performance to a huge extent.

2.5 Summary

In conclusion, this chapter has found that supply chain management as the management of services, information, and goods as they move from the supplier to the point of consumption. It has also been found that relationship quality refers to the measure of the strength of the relationship between a buyer and a supplier. Through maintaining lasting relationships a supplier basically becomes part of a well-managed supply chain and this promotes long-term competitiveness of a particular supply chain. The main variable characteristics that define relationship quality include trust, communication, cooperation, and interdependence. For instance, building trust with consumers will ensure that the SCM delivers quality products to customers. In addition, frequent and timely communication with the customers will assist the SCM to resolve any disputes, and align the expectations of consumers.

 

 

 

References

Biswas, T, & Samanta, S. (2016). A strategic decision support system for logistics and supply chain network design. Sadhana, 41(6), 583-588.

Christopher, M. (2016). Logistics & supply chain management. Pearson Higher Ed.

Ellram, L. M., & Cooper, M. C. (2014). Supply chain management: It’s all about the journey, not the destination. Journal of Supply Chain Management50(1), 8-20.

Fredendall, L. D., & Hill, E. (2016). Basics of supply chain management. CRC Press.

Hoejmose, S., Brammer, S., & Millington, A. (2012). “Green” supply chain management: The role of trust and top management in B2B and B2C markets. Industrial Marketing Management41(4), 609-620.

Huo, B., Zhao, X., & Lai, F. (2014). Relationship between Supply Chain Quality Integration and Performance. Global Supply Chain Quality Management Supply Chain Integration Modeling, Optimization and Application, 2(1), 305-334.

Martínez-Jurado, P. J., & Moyano-Fuentes, J. (2014). Lean management, supply chain management and sustainability: a literature review. Journal of Cleaner Production85, 134-150.

Miranbeigi, M, Moshiri, B, Rahimi-Kian, A, Razmi, J. (2015). Demand Satisfaction in Supply Chain Management System. International Journal of Advanced Manufacturing Technology, 77(5-8), 1401-1417.

Nyaga, G, N., & Whipple, J, M. (2011). Relationship Quality and Performance Outcomes: Achieving a Sustainable Competitive Advantage. Journal of Business Logistics, 32(4), 345-360.

Morali, O., & Searcy, C. (2013). A review of sustainable supply chain management practices in Canada. Journal of Business Ethics117(3), 635-658.

Razavi, S, M., Abdi, M., Amirnequiee, S., & Ghasemi, R. (2016). The Impact of Supply Chain Relationship Quality and Cooperative Strategy on Strategic Purchasing. Journal of Logistics Management, 5(1), 6-15.

Ross, D. F. (2013). Competing through supply chain management: creating market-winning strategies through supply chain partnerships. Springer Science & Business Media.

Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.

Seuring, S. (2013). A review of modeling approaches for sustainable supply chain management. Decision support systems54(4), 1513-1520.

Shonghari, M, A., Iranzadeh, S., & khalilpour, K. (2013). The impact of supply chain relationship quality on quality performance (Case study: Sugar Factory of Naghadeh city). International Research Journal of Applied and Basic Sciences, 6(9), 1229-1233.

Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Turker, D., & Altuntas, C. (2014). Sustainable supply chain management in the fast fashion industry: An analysis of corporate reports. European Management Journal32(5), 837-849.

Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: a balanced approach. Cengage Learning.

Zhang, M., & Huo, B. (2013). The impact of dependence and trust on supply chain integration. International Journal of Physical Distribution & Logistics Management43(7), 544-563.

Zhou, K. Z., Su, C., Yeung, A., & Viswanathan, S. (2016). Supply chain management in emerging markets. Journal of Operations Management, (46), 1-4.

 

 

Interview protocol

  1. How is communication conducted in your supply chain?
  2. How do you ensure effective communication in your supply chain?
  3. What impact does communication has on your supply chain performance?
  4. How does the aspect of trust come out in your supply chain?
  5. How have you built trust with the buyers?
  6. What impact does trust has on your supply chain performance?
  7. How is the aspect of cooperation portrayed in your supply chain?
  8. How do you cooperate with the customers?
  9. What impact does cooperation has on your supply chain performance?
  10. How is the aspect of interdependence portrayed in your supply chain?
  11. What level of interdependence exists between you and the customers?
  12. What impact does interdependence has on your supply chain performance?

 

 

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