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TQM, SCM and

TQM, SCM and operational operational
performance: an empirical study performance

of Indian pharmaceutical industry

Sanjay Sharma 331
National Institute of Industrial Engineering, Mumbai, India, and
Received 7 January 2018
Sachin Modgil Revised 20 August 2018
26 October 2018
International Management Institute, Kolkata, India 25 February 2019
Accepted 30 April 2019

Abstract
Purpose – The purpose of this paper is to investigate the impact of total quality management (TQM) and
supply chain management (SCM) practices on operational performance, and their interlinkage between
each other.
Design/methodology/approach – Constructs those are critical to pharmaceutical quality and supply chain
have been identified with the help of literature and experts from industry. The impact of TQM practices on
supply chain practices and on operational performance has been evaluated. Similarly, the impact of supply
chain practices on operational performance has been evaluated. Further, alternate models are tested and
evaluated through structural equation modeling.
Findings – It was observed during testing of alternate models that TQM practices have a direct impact on
operational performance. However, TQM practices also directly impact supply chain components, which, in
turn, influence overall operational performance. In comparison of alternate models, the model in which TQM
practices affect supply chain practices and supply chain practices further affect the operational performance
is found most appropriate.
Practical implications – This study provides some useful implications from industry point of view. TQM
practices are critical to pharmaceutical industry. TQM practices are the core of attaining a smooth supply
chain, which will have greater impact to achieve operational performance. Strategic supplier partnership,
procurement management, information sharing, and quality and inventory management practices are driven
by TQM practices. This tri-linkage helps to achieve the desired operational performance.
Originality/value – There are very limited studies that have considered both the areas together to achieve
better operational performance. In pharmaceutical industry, both TQM and SCM are the critical areas for any
organization to drive its growth.
Keywords Total quality management, Supply chain management, Operational performance
Paper type Research paper

1. Introduction
An industry-wide revolution is changing the pharmaceutical industry’s ultimate focus in
terms of operational effectiveness (Lee and Trimi, 2018; Yadav and Desai, 2016; Besseris,
2014). Demand for quality has never been as high as it is today (Emond and Taylor, 2018;
Castelli and Sianesi, 2015; Fodness and Murray, 2007). Pharmaceutical companies must
do away with challenges by providing quality products at the right time, right place and
right price (Gollu, 2017; D’Amato and Papadimitriou, 2013; Dadfar and Brege, 2012).
Quality requirement for pharmaceutical products has been emphasized by regulatory
bodies from time to time (Sangshetti et al., 2017; Haleem et al., 2015). The pharmaceutical
industry plays an important role in maintaining the health of individuals as well as of
economy, and hence the industry needs to be competitive (Mehralian et al., 2015;
Huang, 2012). Customer satisfaction is the ultimate aim of any firm/industry, with
Business Process Management
similar being the case for pharmaceutical industry. Customer satisfaction has Journal
two major components, namely customer focus (CF) and customer relationship. Vol. 26 No. 1, 2020
pp. 331-370
On the one hand, CF drives a firm to align the requirements and expectations of customer © Emerald Publishing Limited
1463-7154
while performing the manufacturing and related operations (Talib and Rahman, 2010; DOI 10.1108/BPMJ-01-2018-0005
BPMJ Fotopoulos and Psomas, 2009; Lakhal et al., 2006). On the other hand, customer
26,1 relationship is about maintaining the relationships in supply chain and ensuring the
availability of the products (medicines) of industry (Vanichchinchai and Igel, 2011;
Koh et al., 2007; Li et al., 2006; Ulusoy, 2003). Customers (patient, hospitals, and
pharmacies) require quality product (medicine), and simultaneously it should be
available on time. Hence, total quality management (TQM) addresses the quality-related
332 attributes and supply chain management (SCM) addresses the supply-related aspects.
TQM and SCM are two main areas of operations, especially in the pharmaceutical
industry (Haleem et al., 2015; Talib, Rahman and Quershi, 2011; Vanichchinchai and
Igel, 2011, 2009).
In developing country like India, the TQM implementation is critical. Some operations
management studies have focused on the SCM (Koh et al., 2007; Li et al., 2006; Chin et al.,
2004). Studies have found that the TQM and SCM have common synergies and principles
(Talib, Rahman and Azam, 2011; Vanichchinchai and Igel, 2009; Prajogo and Hong, 2008).
Talib et al. and Talib, Rahman and Quershi (2011) delineated the similarities and
differences between TQM and SCM. TQM and SCM are positively related to each other
and TQM have a direct effect on SCM practices (Vanichchinchai and Igel, 2011; Flynn and
Flynn, 2005). Hence, in our study, the impact of TQM on SCM practices has been
considered. The focus of TQM is “performance as per specifications or quality.” However,
in SCM, the focus is “performance as per due time or delivery” (Vanichchinchai and Igel,
2009; Prajogo and Sohal, 2003, 2004). SCM aims to respond to the next customer/
department as fast as possible with the lowest possible cost (Samaranayake, 2005; Chin
et al., 2004; Kuei et al., 2001). Operational performance further depends on reducing the
cost of manufacturing operations and enhancing the firm’s innovation capability (Green
et al., 2011; Khan, 2003; Kasul and Motwani, 1995). Further appropriate inventory levels
along with the capacity utilization at plant level also impact the operational performance
of the firm (Wong and Lee, 2014; Green et al., 2011; Zhu et al., 2008). Financial performance
is not appropriate in this study, as this article is based on plant-level supply chain
practices (Sila, 2007). Therefore, operational performance is the most appropriate measure
for plant-level supply chain and quality practices. Therefore, TQM and SCM can be
combined to achieve better plant-level operational performance over financial
performance (Duarte et al., 2011; Narasimhan et al., 2005). Very few studies have
examined the interlinkage of TQM and SCM practices and operational performance
(Wong and Lee, 2014; Baird et al., 2011; Kannan and Tan, 2005). Further, Wong and
Lee (2014) stated the scope for SCM and TQM interlinkages to improve the operational
performance of a firm. Out of the existing industries, pharmaceutical industry is one of the
highly regulated. Additionally, industry should closely monitor the safety, efficacy,
manufacturing quality and assure the availability of medicines at different healthcare
units across the world (Urias, 2017). India ranks in the top five emerging pharmaceutical
markets in the world, and has improved considerably in the export of drugs and
pharmaceutical products. In the financial year 2017, the industry’s net exports reached US
$16.8 billion. Indian medicines are exported to more than 200 countries along with the
USA as one of the key market (India Brand Equity Foundation, 2018). Moreover, India’s
production costs are much lower than those in the US and Europe (Sangwan et al., 2014;
Patil and Patil, 2014). This gives the Indian pharmaceutical industry a competitive edge
over others. Therefore, it is important to examine the interlinkage of TQM and SCM
practices in pharmaceutical industry to achieve the required competitive edge to serve the
worldwide market.
Studies on the interlinkage of TQM and SCM and the related impact on operational
performance with respect to the pharmaceutical setting are very few in the literature. Hence,
in this study, the authors aim to investigate the relationship between TQM and SCM
practices in the Indian pharmaceutical industry and their relationship to operational TQM, SCM and
performance. The present study has the following research questions: operational
RQ1. What are the practices related to TQM and SCM practices for pharmaceutical performance
industry?
RQ2. How TQM practices are related to the SCM practices of pharmaceutical industry?
RQ3. How TQM practices are related to the operational performance of pharmaceutical 333
industry?
RQ4. How SCM practices are related to the operational performance of pharmaceutical
industry?
The remainder of the paper is as follows. The second section presents a related literature
review of TQM, SCM and OP. The third section discusses the theoretical background of the
study. The fourth section represents the research design, followed by data analysis and
results for the measurement model’s evaluation in the fifth section. Discussion on the results
is presented in sixth section. The seventh section highlights the contribution of the study,
including scholarly and managerial implications. In the last section, the limitations, and
scope for the future research have been underlined.

2. Literature review
Research articles available until 2018 were collected from different search engines and
publishing platforms such as Emerald, Taylor and Francis, Google Scholar and
ScienceDirect with the help of following keywords: TQM, SCM, quality management,
supply management, in-house SCM, plant-level SCM, plant-level quality practices,
organizational performance and operational performance. The use of these multiple
keywords helped in the collection of relevant articles. Initial search resulted in a number of
articles related to quality and supply chain, leading to operational performance. Many of
these articles did not match to TQM practices, SCM practices and OP measures. Further,
to constrain the articles appropriate to the scope of study, following inclusion measures
were used:
(1) articles appeared in journals and conferences; and
(2) articles addressing research questions related to quality management practices,
TQM practices, internal supply management practices, SCM practices, operational
performance and plant performance.
Additionally, cross-referencing approach was chosen to shortlist the papers in this domain.
In total, 23 papers were found strictly relevant to the topic of study. Further, a descriptive
analysis was carried out to see the progressing trend over the years in this research domain.
Additionally, the classification of articles was done on the basis of research objectives.
Industry-specific approach was adopted and tools were utilized along with major findings
as presented in Table I. After following the above discussed procedure, total five constructs
related to TQM (Table II) and four related to SCM (Table III) have been identified.

2.1 Total quality management

TQM is defined as a guiding philosophy and principle that identifies a path for continuous
improvement (Irani et al., 2004; Besterfield et al., 2003; Hackman and Wageman, 1995).
These principles propose basic measures that can be implemented by the number of
techniques. After conducting an exhaustive review on TQM, we were able to identify five
practices that have been the most evaluated and tested. These practices are top
management support (TMS), CF, research and development management (RDM), product
 26,1

334
BPMJ

Table I.

the relationship
Review of recent

and performance
between TQM, SCM
literature discussing
Author(s) Level of Approach
S. No. and year Research objectives analysis Tool of analysis adopted Setting Major findings

1 Hong et al. Improve the performance of
(2018) a firm by mapping the
relationship between
supply chain quality
management and
knowledge transfer
2 Thai and Investigating the influences
Jie (2018) of total quality
management and supply
chain integration practice
on firm performance
3 Fernandes Develop an approach for
et al. (2017) integration of quality and
supply chain management
4 Soares Address the performance
et al. (2017) impact of supply chain
quality management
practices on quality
performance outcomes
5 Jayalath Investigate the relationship
et al. (2017) between quality
management, supply chain
management practices and
organizational performance
6 Yu et al. Investigate the relationship Firm
(2017) between supply chain
quality integration, green
supply chain management
and environmental
performance
Firm Structural Survey Manufacturing Internal quality management practices significantly affect the
equation model firms from China internal knowledge transfer. On the contrary, quality management
practices at supply chain level have a highly positive effect on
cross cultural knowledge transfer. Further, cross firm and internal
knowledge transfer helps to improve operational performance
Firm Step-wise Survey Container Total quality management has a positive influence on service
multiple shipping firms quality and performance indicators such as customer focus, supplier
regression from Singapore quality management and employee involvement. In supply chain
integration, practices such as supplier integration and internal
integration have a positive impact on the service quality
– Literature Conceptual – Synergies between supply chain and quality management help to
analysis paper benefit the organization significantly. Integration of quality and
supply chain will have a significant impact on firm performance
Firm Factor analysis, Survey Manufacturing Supply chain quality management practices (customer focus,
multivariate firms from the supplier focus, supply chain integration and quality leadership)
regressions UK have a significant impact on product quality. Supply chain quality
management network can be developed effectively only when
product quality is able to exceed customer expectations
Firm Multiple Survey Rubber Industry Top management commitment, human resource management,
regression from Sri Lanka communication, information analysis and customer focus were
analysis related to quality, whereas supplier partnership, lean systems,
customer relations and information management were under
supply chain management practices. Quality management
practices have direct impact on operational performance via
enhancement of supply chain management practices. The firms
that undertake quality management efforts are likely to practice
supply chain management
Structural Survey Manufacturing Customer quality integration drives green purchasing, customer
Equation firms from China green cooperation and helps to improve the environmental
Modeling performance. There is an indirect impact on supplier and customer
quality integration via green cooperation and purchasing

(continued )
 Author(s) Level of Approach
S. No. and year Research objectives analysis Tool of analysis adopted Setting Major findings

7 Truong Test the relationship Firm Structural Survey Manufacturing Supply chain practices have a deep influence on operational
et al. (2017) between supply chain Equation firms from performance of the firms. Supplier management and customer
practices and operational Modeling Vietnam focus have direct and indirect impact. Top management support
performance has an indirect effect on operational performance, whereas process
control and improvement directly influences the operational
performance of the firms in garment industry
8 Song et al. Identify inter and intra- Firm Step-wise Secondary Food selling and Supply chain quality management helps to capture sales in
(2017) supply chain quality regression data processing firms domestic market, whereas corporate reputation plays a mediating
management capability and from China role. The performance of these companies in foreign markets
their impact of food quality depends on inter- and intra-supply chain quality management,
and safety whereas food certification plays a mediating role
9 Attia Examine the effect of Firm Regression and Survey Textile Industry Strategic performance of a firm is directly affected by supplier
(2016) quality management structural from Egypt quality management activities. There is a significant effect of
practices on supply chain equation quality practices on the resource performance. Total quality
performance of the modeling management practices significantly affect the flexibility, outcome,
company. Further, to test strategic resource and operational performance of textile firms
the effect of quality
practices on firm
performance
10 Quang Investigation of supply – Literature Conceptual – Upstream supply chain includes supplier assessment and supplier
et al. (2016) chain quality management analysis paper quality management, whereas downstream of supply chain mainly
practices’ impact on firm focusses on customer. Further, internal processes in the firm
performance include product and service design, internal logistics and process
management, whereas support practice includes top management
support, information and supply chain integration and human
resource management. Moreover, firm performance can be
measured operationally, financially or through customer
satisfaction
11 Marinagi Assessment of the role of Firm Regression Survey Manufacturing Information quality has significant impact on information sharing.
et al. (2015) information sharing in the analysis firms from Information quality affect directly supply chain performance,
relationship between Greece whereas information sharing has strong direct effect on supply
quality of information and chain performance. The relationship between information quality
supply chain performance and supply chain performance is affected by information sharing
335
performance

Table I.
operational
TQM, SCM and
BPMJ quality (PQ) and total productive maintenance (TPM) (Zu et al., 2008; Prajogo and Sohal,
26,1 2006; Brah et al., 2000; McKone et al., 2001). Further, TQM has shown a positive influence
on PQ (Prajogo and Sohal, 2003; Kaynak, 2003; Das et al., 2000; Ahire et al., 1996). A firm
should have customer orientation and must be aware about expectations before offering
any product or service (Mehra and Ranganathan, 2008; Singh and Smith, 2004; Ugboro
and Obeng, 2000). These expectations should also be continuously monitored by the
336 company (Nguyen and Harrison, 2018; Sadikoglu and Olcay, 2014; Svendsen et al., 2011).
Many authors have emphasized the need for early involvement of customer in the internal
process of improvement for ensuring the total customer satisfaction (Baird et al., 2011;
Parast et al., 2006; Syamil et al., 2004; Carpinetti et al., 2003; Cua et al., 2001). Additionally
leadership, people management and CF are the strongest predictors of operational
performance (Oakland, 2011; Corredor and Goñi, 2011; Ismail Salaheldin, 2009; Shah and
Ward, 2003).
When working on a competitive strategy, firm-based variables include leadership (TMS
and product executive’s competence) and inter-functional co-ordination (Pattikawa et al.,
2005; Rafiq and Saxon, 2000). R&D is one of the most critical departments in the
pharmaceutical industry, and it is currently facing a major productivity challenge
(Mendigorri et al., 2016; Luo and Sheu, 2010). Productivity is the most crucial aspect in the
operational performance of any organization (Yadav et al., 2018; Gautam and Pan, 2016;
Lowman et al., 2012; Molina-Azorin et al., 2009). Drug extrusion toward the market has been
decreased by 20 percent, whereas expenditure on R&D has increased up to 60 percent
(Larkin, 2015; CMR International, 2006). Hence, it is important to focus on quality aspects in
pharmaceutical setting.

TQM sub-constructs Supporting references

Top management Prajogo and Sohal (2004), Prajogo and Hong (2008), Rahikkala et al. (2015),
support Mehralian et al. (2017), Psomas et al. (2018)
Customer focus Brah et al. (2000), Prajogo and Sohal (2004), Padma et al. (2010), Mokhtar (2013),
Kundu and Datta (2015), Mehralian et al. (2017), Souza et al. (2018)
Research and Prajogo and Sohal (2006), Alex et al. (2014), Qureshi and Evans (2015), Boeing et al.
Development (2016), Kumar and Sharma (2017), Corredor et al. (2018)
Table II. Product quality Prajogo and Sohal (2006), Prajogo and Hong (2008), Xiaofen (2013), Younesi and
Total quality Roghanian (2015), Peng et al. (2016), Li et al. (2018)
management practices Total productive McKone et al. (2001), Lazim and Ramayah (2010), Salonen and Deleryd (2011),
and supporting maintenance Maletič et al. (2014), Jain et al. (2015), Modgil and Sharma (2016), Agustiady and
literature Cudney (2018)

Supply chain
sub-constructs Supporting references

Strategic supplier Li et al. (2006), Parast et al. (2011), Chong et al. (2011), Makkonen and Mervi (2014),
partnership Kotula et al. (2015), Kumar and Routroy (2016), Saeed et al. (2018)
Level of information Sadikoglu and Zehir (2010), Ooi et al. (2011), Parast et al. (2011), Li et al. (2006), Prajogo
sharing and and Hong (2008), Chong et al. (2011), Costantino et al. (2014), Hosoda et al. (2015),
information quality Mehralian et al. (2017), Priyadarshini et al. (2017), Bao and Huang (2018)
Table III. Procurement/ Asamoah et al. (2011), Kim et al. (2012), Mcmurray et al. (2014), Kim et al. (2015),
Supply chain practices purchasing practices D’Amico et al. (2017), Blas and Turkulainen (2017), Srai and Lorentz (2018)
and supporting Inventory Rajeev (2008), Rabinovich and Evers (2002), Tan and Wisner (2003), Borade and Bansod
literature management practices (2010), Gu et al. (2015), Gorane and Kant (2016), Marodin et al. (2017), Lam (2018)
2.2 Supply chain management TQM, SCM and
Today, organizations are not competing with each other but with their competitor’s operational
supply chains (Carr and Karmarkar, 2005; Mentzer et al., 2001; Bengtsson and Kock, 2000). performance
To compete among supply chains, it is necessary to have the best practices that
support and create the value in entire chain (Srivastava, 2007; Ketchen and Hult, 2007;
Kleindorfer and Saad, 2005). Such supply chain practices include strategic supplier
relationships, information sharing and information quality, inventory management and 337
purchase management (Truong et al., 2017; Dubey, 2015; Chong et al., 2011; Li et al., 2006;
Langerak et al., 2004). However, supply chain strategies may differ from one
manufacturing environment to another (Trkman and McCormack, 2009; Brun and
Castelli, 2008).
Cost effectiveness can be achieved in SCM through efficiency at each node (Chin et al.,
2004; Kuei et al., 2001). Time is a factor of great concern in SCM activities, as firms aim for
quick delivery at the lowest possible cost (Gunasekaran et al., 2001; Beamon, 1999).
Flexibility to respond to the needs of market/customer and maintaining speed to market are
the essentials of SCM (Han et al., 2017; Hilletofth, 2012; Samaranayake, 2005). Faster
communication channels, flow of material from one process to another, and information
flows are the additional but strong pillars of SCM (Chase et al., 2007; Lummus et al., 2003).
Strategic supplier relationship is an important criterion in achieving a long-term
association for both the buyer and the supplier (Theodorakioglou et al., 2006; Monczka et al.,
1998). Information is important for maintaining supplier relationships in the long term
(Akrout et al., 2016; Teller et al., 2016; Kumar and Rahman, 2015). Information can be shared
using various tools and techniques (Li, Kang and Haney, 2017; Li, Wu, Holsapple and
Goldsby, 2017; Biggemann, 2012; Carr and Kaynak, 2007). Commonly used tools to
disseminate information at various levels across an organization are graphs, pie charts,
frequency tables, and bar diagrams, which represent information on the shop floor of many
companies and enable employees to know about the company’s overall activities (Singh and
Best, 2016; Lemire et al., 2013; Davis et al., 2012).
In the twenty-first century purchasing, environmental and social factors make the
process complex and difficult to pursue the objective of low cost (Carter, 2004; Handfield
et al., 2002). For this reason, buyers today look beyond cost while making purchases
and consider a set of new risks, such as wastage of raw material, employee security, and
sustainable purchasing practices (Famiyeh et al., 2018; Carter and Rogers, 2008).
Table I presents the recent literature in TQM and SCM, and their relation to the firm
performance. Table II describes the TQM practices identified from the literature.
Inventory management is an organization’s ability to maintain stock levels at the
lowest cost (Gunasekaran et al., 2004; Lancioni et al., 2000). Inventory costs include
shortage cost, holding costs, and ordering cost (Drurry, 2004). Techniques are like efficient
consumer responses that are available to maintain smooth functioning of supply chains,
which helps in product replenishment and store assortment (Arshinder et al., 2007;
Hoffman and Mehra, 2000). These initiatives are backed by electronic commerce
technologies (Kuria and Johnston, 2001). Firms (such as those in the textiles industry) have
used quick response techniques to meet consumer demand (Nair, 2001). Early supplier
involvement is important due to the market’s continuous demand for new products. The
literature shows that a new product’s performance is directly proportional to supplier
involvement (Cadden and Downes, 2013; Johnsen, 2009). Supplier involvement, in turn, is
directly proportional to strategic supplier partnerships. These practices are helpful in
ensuring the appropriate functioning of supply chain, in both the upstream and
downstream directions. However, plant-level supply chain practices in the pharmaceutical
industry may be restricted to the ones mentioned in Table III, which describes the supply
chain-related practices.
BPMJ 2.3 Operational performance
26,1 An organization’s operational performance takes time to reach its superior status. An
organization’s operational performance is indirectly associated to the financial performance of
an organization (Zhang and Xia, 2013; Radnor and Barnes, 2007). An organization’s
performance is distinguished across four dimensions, namely quality, cost, delivery and
flexibility (Nabass and Abdallah, 2018; Chavez et al., 2013). The main objective of operations is
338 to reduce the cost and enhance the efficiency in day-to-day operations. An organization’s
operational performance also indicates how efficiently large amounts of raw materials can be
converted into innovative and quality finished goods on time with minimum wastage (Prajogo
et al., 2012; Green et al., 2011; Zhu et al., 2008). Some previous studies have mentioned that
quality management programs and just-in-time processes act as moderators to influence
supply chain and, in turn, impact the operational performance (Baird et al., 2011; Kannan and
Tan, 2005). Other studies have emphasized the importance of operational performance in
different aspects. For instance, Prajogo et al. (2014) emphasized the role of green products in
achieving operational performance. The reduction of defects, energy/waste (Petkova and Dam,
2014; Blome et al., 2014) and increase in productivity affect operational performance positively
(Huq et al., 2014). Measures of operational performance are described in Table IV, along with
the supporting literature.
Besides the pharmaceutical industry, the researchers have highlighted the importance of
supply chain and quality practices in other industries as well. Li et al. (2006) highlighted the
interrelationship between quality, SCM and organizational performance with reference to
furniture, rubber, fabricated metal industry. In another study, TQM and organizational
performance relationship have been tested by Prajogo (2005) for a mix of industries.
Additionally, Koh et al. (2007) tested the impact of SCM practices in small and medium
enterprises set-up. It is found in literature that hardly any study has considered the
interlinkage of TQM, SCM and operations performance in a critical industry like
pharmaceuticals. The next section presents the development of research propositions.

3. Theoretical background and development

TQM is a customer-based approach that continuously seeks to meet customer
requirements through continuous improvement (Koval et al., 2018; Kristianto et al.,
2012), whereas SCM is focused on the efficient flow of raw material to finished goods from
suppliers to consumers (Oghazi et al., 2018; Cosimato and Troisi, 2015; Lummus et al.,
2003). As management philosophies, both SCM and TQM emphasize customer satisfaction
(Vanichchinchai and Igel, 2009).
TQM is an integral part of creating sustainable quality in products and services
throughout the supply chain (Svensson, 2006; Love et al., 2003). TQM adoption helps to

Measures Supporting references

Quality Asamoah et al. (2011), Xiaofen (2013), Younesi and Roghanian (2015), Halkjær and Lueg
(2017), Miller et al. (2018), Yadav et al. (2018)
Delivery Wong et al. (2011), Williams et al. (2013), He et al. (2014), Miller et al. (2018)
Cost Parast et al. (2011), Zhang et al. (2012), Laosirihongthong et al. (2013), Halkjær and Lueg
(2017), Miller et al. (2018), Yadav et al. (2018)
Defects Zu et al. (2010), Cho et al. (2011), Chongwatpol (2015), Miller et al. (2018), Yadav et al. (2018)
Capacity Ceccagnoli et al. (2010), Haslam et al. (2011), Majumdar (2014), Miller et al. (2018),
Table IV. utilization Bittencourt et al. (2018)
Operational Innovation Prajogo and Sohal (2006), Khemka and Gautam (2010), Ciliberti et al. (2016),
performance measures Halkjær and Lueg (2017)
and literature support Inventory Baird et al. (2011), Mishra et al. (2013), Jose et al. (2013), Gu et al. (2015), Marodin et al. (2017)
increase inventory turnover, reduce logistics costs, helps firms ensure on-time delivery, TQM, SCM and
promotes a close collaboration with suppliers and exchange of information through operational
information technology (Vanichchinchai and Igel, 2011; Casadesu´s and Castro, 2006). These performance
dimensions belong to SCM. TQM practices have positive impacts on supply chain practices
of a firm (Thai and Jie, 2018; Vanichchinchai and Igel, 2011; Baird et al., 2011). Many
decisions are based on factual data generated through the processes. Hence, data
management also become an important and crucial part of TQM and has an impact on 339
supply chain decisions (Waller and Fawcett, 2013). Quality data reporting has a positive
impact on supplier quality management (Noshad and Awasthi, 2015; Baird et al., 2011).
TQM, R&D and technology are the strong determinants of supply chain performance
(Dubey and Ali, 2015).
Therefore we propose the following hypothesis:
H1. TQM practices have a positive impact on SCM practices.
SCM practices are a set of events and activities that happen in an organization to ensure the
effective management of value chain (Truong et al., 2017; Toyin, 2012; Vanichchinchai and
Igel, 2011). Supply chain networks and activities start from plant-level events and lead to
cross-organizational collaboration and cooperation (Hong et al., 2018; Chaudhuri et al., 2018;
Patrucco et al., 2018). This study focusses on plant-level supply and quality practices.
Supply chain activities bring out collaboration by establishing alliances between different
stakeholders to achieve operational output (Brekalo and Albers, 2016; Davis and Love, 2011;
Daugherty, 2011). SCM also acts as a means for minimizing total cost while satisfactorily
meeting service-level requirements (Marino et al., 2018; Zachariassen, 2008). SCM, thus,
helps firms to allocate resources and produce products appropriately and proportionately
(Oghazi et al., 2018; Agus and Hajinoor, 2012). This will also help firms produce products at
right time and in the right location by having an integrated network of manufacturers,
suppliers/dealers, and warehouse (Dubey and Ali, 2015; Vanichchinchai and Igel, 2011;
Simatupang et al., 2002). Hence, SCM has become a cooperative practice with the
characteristics of responsiveness and flexibility (Rezaei et al., 2018; Gunasekaran et al.,
2008). This cooperative approach helps firms to meet changing customer needs by
maximizing the entire supply chain’s efficiency, which helps to achieve uttermost
operational performance (Thai and Jie, 2018; Tolossa et al., 2013; Janvier-James, 2012). Good
supply chain practices enable firms with a competitive advantage, which, in turn, helps to
improve their performance (Li et al., 2006). Therefore, the following hypothesis is proposed:
H2. SCM practices have a positive impact on operational performance of an organization.
Figure 1 describes the conceptual framework.
TQM is a management philosophy that encourages firms to engage towards continuous
improvement (Prashar and Antony, 2018; Tari, 2005). Further, TQM is about the
management of quality assurance and quality control measures to meet customer
expectations (Koval et al., 2018; Elassy, 2015; Biazzo and Bernardi, 2003). The effective
implementation of TQM practices is directly linked to internal customer satisfaction, that is
improved job satisfaction and/or enhancement in work-related attitudes (Nasim, 2018;
Abu-Doleh, 2012; Ooi et al., 2005, 2007), which leads to improved operational performance
(Hassan et al., 2014; Prajogo and Sohal, 2004). TQM helps organizations to attain a
competitive edge over competitors to attain sustainable operations (Yadav et al., 2018;
Nadarajah and Kadir, 2014). TQM efforts are recognized by various quality awards offered
worldwide (Deming prize in Japan, European quality award, Malcolm Baldrige National
Quality Award (MBNQA) in USA) (Calvo-Mora et al., 2018; Sabet et al., 2016).
Deming (1986) emphasized the need for top management commitment and support for
continuous improvement. Top management’s responsibilities include standardizing the
BPMJ Operational Performance
26,1 Quality
Cost
Total Quality Management Practices
Delivery
Top Management Support
Innovation
Customer Focus H3
Defects
340 Research and Development
Inventory
Product Quality
Capacity Utilization
Total Productive Maintenance

H2

Supply chain practices

H1 Strategic supplier relationship
Information quality and
information sharing
Figure 1. Purchasing management
Research framework Inventory management

vision and maintenance of appropriate communication in the working environment in a way

that is free from fault finding, fear or blame (Solovida and Latan, 2017; Hofer, 2015). This
approach helps a firm to boast its competitiveness, which leads to improve the productivity
with reduction in cost (Psomas et al., 2018; Mehralian et al., 2017). TQM practices have a
positive impact on quality performance, which, in turn, has a major impact on operational
performance (Chen, 2015; Prajogo, 2005). Furthermore, TQM has a direct impact on cost,
number of defects in the process, quality, delivery, capacity utilization and innovation rate
(Ochieng et al., 2015; Prajogo, 2007; Laugen et al., 2006). These are all important
characteristics of operational performance. Therefore, the following hypothesis is proposed:
H3. TQM practices positively impact operational performance.

4. Research design
4.1 Sample and data collection
A survey instrument was developed to investigate tri-linkages between TQM practices,
SCM practices, and operational performance of pharmaceutical plants in India. The
questionnaire was designed on the basis of established scale from the literature. Revision
had been done including the change of format, sequence of questions, and wording based
on a review of the questionnaire by three experts in quality and SCM from pharmaceutical
industry. The questionnaire constructs and items had been adopted from the literature
(see Table AI). The questionnaire was designed by following a method suggested by
Dillman’s (2007).
A self-administered questionnaire was distributed to 400 pharmaceutical plants in India.
In India, there are approximately 10,000 pharmaceutical manufacturing units. The
questionnaire was distributed either through emails or via personal visits to the factories.
Around 130 responses were collected through personal visits and 132 responses were
collected via e-mail. These responses were collected over a period of 5 months. The criterion
for selection of plants was a minimum turnover of Rs. 300m. This threshold was set up for
the selection of the firms according to the definition of large companies by ministry of micro,
small and medium enterprises (Govt. of India). The plants of large companies were
considered for the collection of data, because they have access and implementation to
quality and SCM principles. These plants were engaged in the manufacture of medicines TQM, SCM and
addressing treatment of infections, cardiovascular (CVS), gastro-intestinal complaints, operational
diabetes, and respiratory issues, as well as vitamins, minerals, pain/analgesics or others. performance
Respondents were executives/practicing managers in the areas of quality and supply
chains or operations. Plant general managers were approached if there were few executives
or line managers in the operations department. The sample was selected randomly from the
database of the National Pharmaceutical Pricing Authority, Govt. of India, New Delhi. Out of 341
400 target respondents, 275 questionnaires were received and collected, yielding a response
rate of approximately 68.75 percent. Only 262 questionnaires were correctly filled in all
respects, which were about 65 percent of the total; only these 262 questionnaires were
considered for analysis. This response rate is suitable to carry out the structural equation
modeling (Sideridis et al., 2014; Wolf et al., 2013). The measurement of variables is described
in next two phases.

4.2 Measurement of variables

Phase-I. Based on the existing literature, a set of five practices in TQM and four practices
in SCM along with their items have been exposed to exploratory factor analysis.
Respondents were asked to simply answer statements made in the form of items related to
the constructs of TQM and SCM on a seven-point scale, ranging from 1 ¼ strongly disagree,
4 ¼ moderately agree and 7 ¼ strongly agree.
Phase-II. The items from the first phase have been used for convergent, discriminant
validity and reliability of the scale. This is done mainly to verify the most suitable drivers
for TQM and SCM practices. Finally, structural model testing is done to analyze the
relationship between measured and latent constructs.

4.3 Profile of respondents

A total of 262 managers from various pharmaceutical manufacturing organizations
participated in the survey. The respondents belonged to different departments in their
respective organizations. Table V presents the profile of respondents. The profile includes
firm size as determined by number of employees, respondents’ education and respondents’
experience, and firm turnover. The next section discusses measurement of the proposed and
alternate models.

5. Measurement model
5.1 Exploratory factor analysis
For TQM practices, a factor analysis was conducted using a proposed 26-item scale. The
items have been conceptualized and evaluated as a five-factor construct. TPM emerged as
an additional factor to existing TQM practices. A total of six items have been dropped due to
cross-loadings in TQM constructs, which results into a 20-item scale for TQM. The
cumulative variance explained by all five factors was 74.28 percent. A factor analysis was
conducted for TQM practices, and items above 0.50 are shown in Table VI.
For supply chain practices, a factor analysis was conducted using four constructs.
Out of the 26 items, four items have been dropped due to cross loadings, and hence
22 items related to SCM practices have been retained. A factor analysis was conducted for
SCM practices, and items above 0.50 are shown in Table VI (Panel b). All items have been
loaded to their respective factors and have a value above 0.66. The cumulative variance
explained by all four factors was 65.14 percent. In the next section, a statistical analysis is
used to determine the reliability and validity of each construct (Tables VII and VIII).
The identification of TQM and SCM practices for pharmaceutical industry
(manufacturing) answers the first research question.
BPMJ Classification Total sample (n ¼ 262) % of total
26,1
Type of product manufactured
Cardiac 70 26.72
Anti-diabetic 53 20.23
Gynaecology 43 16.41
Pain/Analgesics 26 9.92
342 Anti-infectives 26 9.92
Derma 24 9.16
Gastro Intestinal 20 7.63
Department of respondent
Manufacturing 69 26.34
Quality 72 27.48
Stores and supply chain planner 52 19.85
Purchase 69 26.34
Employee size
Less than 50 17 6.49
50–100 64 24.43
100–500 126 48.09
500–1,000 55 20.99
Education level
Graduate 74 28.24
Postgraduate 188 71.76
Experience in the industry
0–3 years 12 4.58
3–5 years 57 21.76
5–10 years 112 42.75
10–15 years 48 18.32
Above 15 years 33 12.60
Turnover (Cr)
0–50 Cr 26 9.92
50–100 Cr 52 19.85
100–500 Cr 126 48.09
Table V. 500–1,000 Cr 43 16.41
Profile of respondents Above 1,000 Cr 15 5.73

To carry out the validity analysis, the convergent validity needs to be measured by
monitoring the maximum likelihood loading of each item against each of the others. The
shared variance and average variance extracted (AVE) are compared to determine the
discriminant validity (Fornell and Larcker, 1981); AVE should be greater than maximum
shared variance (MSV ) and average shared variance (ASV ) (Hair et al., 2010). TQM and
SCM practices as well as operational performance measures presented in Tables VII and
VIII provide the inter-construct correlation.
From Table V, the following is evident: composite reliability W0.70 (i.e. CRWAVE,
AVEWMSV and ASV oMSV ). Table VII shows that constructs do have convergent and
discriminant validity.
Convergent validity measures the items’ convergence toward a construct. Discriminant
validity ensures the items of one construct do not relate to other constructs. The item
correlations for all pairs are significantly high, ranging from −1.00 to +1.00. The above
correlations provide evidence that items converge on the same construct and also support
discrimination and therefore construct validity.
 TPM TMS PQ CF RDM
TQM, SCM and
operational
(a) TQM practices
TPM1 0.983
performance
TPM5 0.983
TPM4 0.936
TPM2 0.915
TMS6 0.917 343
TMS3 0.908
TMS4 0.861
TMS1 0.789
PQ2 0.873
PQ5 0.854
PQ1 0.805
PQ4 0.771
CF3 0.834
CF4 0.83
CF5 0.731
CF6 0.708
RDM3 0.781
RDM4 0.78
RDM1 0.745
RDM2 0.567
Eigenvalue 5.42 3.53 2.93 1.66 1.42
% of variance 27.09 17.67 14.65 8.31 7.11
Cumulative % of variance 27.09 44.76 59.41 67.72 74.83
IQIS PP SSP INM
(b) Supply chain practices
IQIS8 0.896
IQIS4 0.870
IQIS3 0.862
IQIS1 0.800
IQIS7 0.777
IQIS6 0.695
IQIS9 0.688
IQIS5 0.651
IQIS11 0.637
IQIS2 0.600
PP3 0.930
PP1 0.930
PP6 0.793
PP5 0.642
SSP2 0.855
SSP4 0.844
SSP5 0.729
SSP1 0.652
INM2 0.823
INM4 0.76
INM3 0.741
INM1 0.702
Eigenvalue 7.17 3.45 1.93 1.79
% of variance 32.58 15.69 8.75 8.12
Cumulative % of variance 32.58 48.27 57.02 65.14
Notes: Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Table VI.
Normalization. (a) A Rotation converged in five iterations. (b) A Rotation converged in six iterations Factor analysis result
BPMJ Constructs CR AVE MSV ASV
26,1
TMS 0.838 0.57 0.375 0.209
CF 0.829 0.5 0.011 0.002
RDM 0.838 0.569 0.304 0.117
PQ 0.821 0.537 0.375 0.189
TPM 0.873 0.635 0.063 0.023
344 SSP 0.851 0.591 0.303 0.149
IQIS 0.929 0.573 0.202 0.093
PP 0.864 0.62 0.323 0.16
INM 0.8 0.507 0.194 0.104
OP 0.923 0.641 0.24 0.117
Notes: RDM, research and development management; CF, customer focus; TMS, top management support;
TPM, total productive maintenance; PQ, product quality; SSP, strategic supplier partnership; IQIS, infor-
Table VII. mation quality and information sharing; PP, purchasing management; INM, inventory management; CR,
Convergent and composite reliability; AVE, average variance extracted; MSV, maximum shared variance; ASV, average
discriminant validity shared variance

PQ IQIS OP RDM CF TPM PP SSP INM TMS

TMS 0.612 0.449 0.490 0.492 0.107 0.250 0.568 0.536 0.367 0.755
CF −0.004 0.004 0.049 −0.006 0.707
RDM 0.551 0.107 0.185 0.754
Table VIII. PQ 0.733
Convergent and TPM 0.177 0.074 0.210 0.133 −0.006 0.797
discriminant validity SSP 0.508 0.313 0.230 0.550 −0.017 0.136 0.431 0.769
for TQM, SCM, and IQIS 0.212 0.757
operational PP 0.518 0.415 0.419 0.348 −0.079 0.145 0.787
performance (inter- INM 0.441 0.388 0.351 0.131 0.037 0.104 0.405 0.368 0.712
construct correlation) OP 0.472 0.394 0.800

5.2 Validation of second-order constructs

TQM practices were conceptualized as a five-dimensional second-order model. AMOS
20.0 was used to understand whether a second-order model is applicable for TQM
practices. The model fit statistics for second-order model was χ2 ¼ 430.509; p ¼ 0.000;
χ2/df ¼ 2.708; NFI ¼ 0.86; CFI ¼ 0.93; GFI ¼ 0.81; TLI ¼ 0.89; IFI ¼ 0.91; RMSEA ¼ 0.08.
The modification indices appear to be pointedly low, and thus there is no scope for
further improvement. The squared multiple correlations range from 0.32 to 0.99. The
weights of standardized regression vary from 0.57 to 0.99. Therefore, the validity
analysis upholds the overall feasibility of the model (Maruyama, 1997; Hair et al., 2010).
The target coefficient (ratio of χ2 value of first-order model to second-order model)
explains the variation of the first order as explained by the second order. The value of this
coefficient is 0.90.
SCM practices were conceptualized as a four-dimensional second-order model. AMOS
20.0 was used to determine whether a high factor model is relevant for SCM practices. The
final confirmatory model resulted in 22 items, and the results of this 22-item model
represents a good model fit with indices ( χ2 ¼ 385.140 p ¼ 0.00; χ2/df ¼ 1. 897; NFI ¼ 0.89;
GFI ¼ 0.887; IFI ¼ 0.95; CFI ¼ 0.94; TLI ¼ 0.94; RMSEA ¼ 0.05). The modification indices
show no scope of improvement and squared multiple correlations range from 0.31 to 0.90.
The regression weights (standardized) range from 0.58 to 0.95. Therefore, the overall
feasibility of the measurement model is good (Hair et al., 2010; Maruyama, 1997). The target TQM, SCM and
coefficient, which explains the variation of the first-order model explained by the operational
second-order model, was 0.87. Table IX provides the mean, standard deviation, reliability, performance
and correlations between constructs of TQM, SCM, and operational performance. Out of
these three, operational performance has the lowest standard deviation (0.05) and maximum
reliability (0.92).
Figures 2‒4 explain and compare the proposed and alternate models with the help of 345
structural equation modeling.

Variables Mean SD 1 2 3 4 5 Reliability

(a) TQM practices

1. Product quality (PQ) 6.16 0.90 1 0.84
2. Research and development mgt. (RDM) 5.99 1.01 0.614** 1 0.83
3. Top management support (TMS) 5.72 0.78 0.693** 0.559** 1 0.82
4. Total Productive Maintenance (TPM) 5.83 0.96 0.202** 0.148* 0.279** 1 0.84
5. Customer Focus (CF) 6.11 1.14 0.393** 0.691** 0.443** 0.106 1 0.85
(b) SCM practices
1. Inventory management (INM) 5.74 0.83 1 0.79
2. Strategic supplier partnership (SSP) 5.93 0.84 0.397** 1 0.84
3. Purchasing management (PP) 5.45 1.06 0.450** 0.447** 1 0.85
4. Information quality and information 6.56 1.10 0.430** 0.328** 0.442** 1 0.93 Table IX.
sharing (IQIS) Means, standard
deviations,
(c) Operational performance 6.01 0.05 1 0.92 correlations and
Notes: *,**Correlation is significant at the 0.05 and 0.01 levels, respectively (two-tailed) reliability

0.27 0.78 0.32 0.71 0.58 0.78 0.98

OP1 OP2 OP3 OP4 OP5 OP6 OP7

0.57 0.84 0.76 0.88

0.52 0.88 0.99
0.62 Product
Quality
Operational
performance
0.37 Research and 0.79
Development

0.61 0.24
0.77 Top Mgt. t =1.54
Total Quality
Support 0.88 Mgt. Practices
0.32 Inventory
t =1.88
Management 0.31
Total Prod. 0.29 0.56
0.08 Maintenance 0.83 t =7.24 Strategic
0.65 0.44
Supplier
0.51 Supply Chain partnership
Customer Practices 0.76
0.26 Focus
Purchasing 0.57
0.52 management
Figure 2.
Information 0.27 Proposed model of
sharing and TQM, SCM and
Quality operational
performance
Notes: SRMR = 0.08, CFI = 0.90, RMSEA = 0.10
BPMJ 0.27 0.78 0.32 0.71 0.58 0.78 0.98

26,1 OP1 OP2 OP3 OP4 OP5 OP6 OP7

0.88 0.57 0.84 0.76 0.88

0.52 0.99
0.62 Product
Quality
Operational
performance
346 0.38 Research and 0.79
Development

0.62 0.56 t = 5.47

0.77 Top Mgt.
Total Quality
Support 0.88 Mgt. Practices 0.32
Inventory
Management
0.08 Total Prod. 0.29
0.87 t = 7.65
Maintenance 0.51 0.56
Strategic
0.39
Supplier
Supply Chain 0.63 partnership
0.26 Customer Practices 0.74
Focus
Purchasing 0.55
management
Figure 3. 0.54
Alternate Model 1 of Information 0.29
TQM, SCM and sharing and
operational Quality
performance
Notes: SRMR = 0.07, CFI = 0.93, RMSEA = 0.08

0.27 0.77 0.32 0.71 0.58 0.78 0.99

OP1 OP2 OP3 OP4 OP5 OP6 OP7

0.88 0.57 0.84 0.76 0.88 0.99

0.52

0.64 Product
Quality
Operational
0.80 performance
0.61 Research and
Development 0.29 t = 4.07
0.78

0.62 Top Mgt. 0.79 Total Quality

Support
Mgt. Practices 0.38 t = 4.34 Inventory 0.44
0.26
Management
0.07 Total Prod. 0.66
Maintenance
Strategic
0.31
0.68 Supplier
Supply Chain 0.56 partnership
0.40 Customer Practices
Focus 0.71
Purchasing 0.51
0.64 management
Figure 4.
Alternate Model 2 of Information 0.41
TQM, SCM and sharing and
operational Quality
performance
Notes: SRMR = 0.17, CFI = 0.89, RMSEA = 0.11
5.3 Common method bias TQM, SCM and
It is argued in past research that it is very difficult to address the common method bias in operational
survey research unless multiple respondents from the same firm are surveyed (Ketokivi and performance
Schroeder, 2004; Podsakoff et al., 2003). Therefore, to address the problem of self-reported
data, we have taken a remedy to minimize common method bias. We requested respondents
not to answer the questionnaire directly on the basis of their experience in quality and
supply chain, but to refer the information from minutes of meetings and other relevant 347
documentation (Guide and Ketokivi, 2015). Further, to examine the severity of common
method bias, Harman’s single-factor test was performed. We observed that explained
covariance by single factor was 26.86 percent (see Table AII), which indicates that common
method bias is not a potential concern in our data.

5.4 Non-response bias test

In a survey research, the biases need to be checked. Non-response bias test helps to check
the difference in respondents and non-respondents (Chen and Paulraj, 2004). To check the
non-response bias, we compared physically collected responses and returned surveys via
e-mail (Dubey et al., 2015; Armstrong and Overton, 1977). The composite sample (262) of our
study was organized as first physical responses followed by e-mail responses. The
responses were split into equal size. Physical responses (first 130 responses) were compared
with e-mail responses (second 132 responses). The t-statistics indicated no significant
differences ( p ¼ 0.10). This indicator shows that non-response bias is not a potential
concern in the data collected.
Table X presents the comparison of proposed and alternate models with degrees of
freedom and χ2 differences, whereas Table XI presents direct, indirect and total effects in the
above-mentioned models. Based on the standardized coefficients displayed in Table XI,
TQM is shown to have a great influence on SCM practices. In turn, SCM practices influence
the operational performance.

6. Results and discussion

The conceptual framework of the research has been demonstrated in Figure 1, and it has
been explained through three hypotheses for relationship between TQM practices, SCM
practices and operational performance. From Figure 2, it is evident that measurements have
reasonable loadings in the second-order construct. The overall model was a moderate fit,

Model χ2 df χ2 difference df difference SCDT (α ¼ 0.05)

Figure 2: Proposed Model 466.251 101 Table X.

Figure 3: Remove link TQM‒OP 469.285 102 3.034 1 Significant Comparison of
Figure 4: Remove link TQM‒SCM 594.046 102 127.795 1 Significant proposed and
Notes: df, degree of freedom; SCDT, Chi square differences test alternate models

Hypothesis Relationship Total effects Direct effects Indirect effects Hypothesis

H1 TQM‒SCM 0.87** (7.65) 0.87** (7.65) Supported

H2 SCM‒OP 0.56* (5.47) 0.56* (5.47) Supported Table XI.
H3 TQM‒OP 0.73** (5.48) 0.25* (1.54) 0.48** (3.94) Supported Results for structural
Notes: t-values are in parentheses. *,**Significant at o0.05 and o 0.01, respectively (one-tailed test) equation model
BPMJ with SRMR ¼ 0.08, CFI ¼ 0.90 and RMSEA ¼ 0.10, which are just above the cut-off values
26,1 (Hair et al., 2010). It can be observed from Model 2(a) that the t-value for the relationship
between TQM and SCM is 7.24. The t-value for the relationship between TQM and
operational performance is 1.54, whereas the value for the relationship SCM and operational
performance is 1.88. It may be noted that the operational performance is greatly affected by
SCM practices, in comparison with TQM practices; in turn, SCM practices are greatly
348 affected by TQM practices. Among TQM practices, TMS plays a very important role, which
is highlighted by its standardized regression weight (0.88). This indicates that top
management should have clear and long-term focus on quality, which is further enforced by
tight government regulations in the industries like pharmaceuticals. Further, during the
personal visits, it was observed that the top management gives more importance to quality
over cost, as it expects return on investment in the longer run. This is followed by PQ, R&D
and TPM.
To check whether the proposed Model 2(a) is the best fit or if there is there any other way
to achieve operational performance, the Model 2(b) was evaluated. This evaluation was
carried out by removing the link between TQM and operational performance. In this model,
TQM practices impact SCM practices; in turn, SCM practices impact operational
performance. The path coefficient for TQM practices’ impact on SCM practices was 0.87 and
that for SCM practices’ impact on operational performance was 0.56. These findings indicate
that supply chain practices may not have that much impact on a firm’s operational
performance. TQM practices enable SCM practices to have a greater impact on operational
performance. CF and feedback is used as one of the tools to measure quality in respondent
firms. Further, the line managers of the respondent firms are aware about the satisfaction
index, which will help firms to align their supply chain practices accordingly. Firms discuss
the customer view and expectation in detail to design and offer the product. Therefore,
research and development is one of the core parts of the respondent firms to test and design
the product (medicine).
In Figure 4, the direct links between TQM practices and SCM practices were dropped.
This means that the individual impacts of TQM and SCM on operational performance can
be determined. TQM has a direct influence on operational performance, with a path
coefficient 0.29, whereas SCM has a direct influence on operational performance, with a path
coefficient 0.38. After comparing the model fit statistics of models 2(a), 2(b) and 2(c), the
alternate Model 2(b) is the best fit, which has the following values: SRMR 0.07, CFI ¼ 0.93
and RMSEA ¼ 0.08 (Hair et al., 2010).
More tests, such as Chi-square differences test (SCDTs in Table X), were conducted and
compared with alternate models. From Figure 2, it is evident that TQM practices have a
positive impact on SCM practices. TQM has a positive but minor impact on operational
performance. TQM has an indirect effect on operational performance by means of SCM
practices. Table X indicates that the alternate Model 2(b) is accepted as compared to the
proposed other models at a significance of 0.05.
Based on the structural equation modeling, the proposed and alternate models are
presented, which support all three hypotheses. H1, which posits that TQM practices have a
positive impact on SCM practices, has a path coefficient of 0.87, which is significant at
p o0.05 (t ¼ 7.65). TQM practices include TMS, PQ, R&D and CF, which are major
contributors (Prajogo and Sohal, 2006; McKone et al., 2001; Brah et al., 2000). The
relationship between TQM and SCM practices answers the second research question.
H2 states that SCM practices have a positive impact on operational performance, with
coefficient 0.56 at a significance level of 0.05 (t ¼ 5.47). Supply chain practices have a
moderate effect on operational performance (Li et al., 2006; Tan et al., 1999). Only inventory
management and supplier relationship may not contribute unless these are supported by
upper management, and they are aligned to fulfill customer requirements. Here, the third
research question is answered by exposing the relationship between SCM practices and TQM, SCM and
operational performance. operational
H3 states that TQM practices have a positive impact on operational performance, with performance
path coefficient 0.29 (t ¼ 4.07). This shows that TQM has a weak impact on operational
performance as compared to SCM practices (Sadikoglu and Temur, 2012). This may be true
if a firm is passionate about CF, but does not align its information systems, inventory
management and supplier relationships towards a desired operational performance. This 349
shows that the TQM practices alone do not have greater impact on OP, thus answering the
fourth research question.

7. Conclusion
The study provided the investigational proof on the interlinkage of TQM and SCM practices
with OP. The structural model supports the direct and indirect effects of TQM on SCM, SCM
on OP and the TQM on OP. This study adds to the body of knowledge of operations
management literature in number of ways. First, the research provides a framework that
synergizes the TQM practices with SCM practices to have maximum impact on operational
performance. Therefore, it is recommended that TQM practices should be combined with
SCM practices. Second, the study contributes to TQM literature by providing experimental
proof of their roles in achieving operational performance. In TQM practices, the strong
contributors are top management support, product quality, research and development.
Third, SCM practices have a positive impact on operational performance. The strategic
supplier partnership and purchasing management practices are the main contributors.
Supply chain practices alone have a moderate effect on operational performance. Fourth,
TQM practices alone have positive, but weak impact on operational performance.
Fifth, TQM practices have a strong positive effect on SCM practices and SCM practices, in
turn, impact the operational performance.

7.1 Implications for theory

The research contributes significantly to the operations management literature. The study
tested the different combinations of constructs in TQM, SCM and operational performance
with reference to pharmaceutical firms in India.
TQM practices support information sharing, information quality, purchasing
management, strategic supplier partnerships, and inventory management. TQM practices
include the base-level qualities of an organization, which lead to the application of SCM
practices in order to achieve optimal operational performance. Aspects such as quality and
supply become very critical in an industry like pharmaceuticals. Quality of products also
affect the lifestyle of the citizens of an economy (Mont, 2002), and it also defines the
sustainable environment from closed-loop supply chain view (Savaskan et al., 2004). In
purchasing function, one cannot compromise on quality of active pharmaceutical ingredient
over cost; however, the cost can be saved if the raw material is locally available. The
suppliers are asked continuously to improve their quality of specifications along with lead
time, which will impact the overall quality of the product (medicine). Additionally, the
quality products those drive through an efficient TQM system can help to develop a circular
economy, which is very much required for today’s scenario concerning ambiguous future
due to faster depletion of natural resources (Niero and Olsen, 2016).
Medicines are a crucial part of any individual’s life and crucial for society at large.
Results of this study can help firms maximize their utilization of critical practices to enable
production of quality products. With quality of production, quantity is also important to
achieve economy of scale for any firm. To achieve economy of scale, maintaining the
equipment and machines play an important role (Muchiri and Pintelon, 2008; Komonen,
2002; Dekker et al., 1997). Machines require regular and predictive maintenance. It was
BPMJ found in the survey that most of the pharmaceutical firms have dedicated period for
26,1 maintenance. Operators are encouraged to keep the set-up time low between two
changeovers and also at the start of machine. The industry still has to adopt the
condition-based maintenance using techniques like deep learning or neural networks.
Few studies have investigated the relationship between TQM and firm performance as
well as between SCM and firm performance (Thai and Jie, 2018; Kannan and Tan, 2005). The
350 present study makes a unique contribution by exploring the role of TQM and SCM practices
in operational performance, together with their interrelationships. The model developed and
tested in the present study may serve as a guide for organizations seeking to implement a
different approach to achieve optimum operational performance. Dubey and Ali (2015)
investigated the relationship between TQM, technology and operational performance.
Employing TQM and SCM practices help an organization to achieve the optimal operational
performance (Wong and Lee, 2014). However, empirical studies on such implementation
have not been carried out till date. Lean manufacturing practices across an entire supply
chain lead to better operational performance ( Jabbour et al., 2013). Supply chain
optimization has a positive impact on operational performance (Li et al., 2006; Tan et al.,
1999). The strategic supplier partnership and purchasing management practices are the
major contributors in SCM practices. Purchasing department acts as a bridge between focal
firm and supplier, whereas strategic supplier relationships help firms to know the unit from
in and out, which drives the entire supply chain. Supply chain practices alone have a
moderate effect on operational performance.
TQM practices alone have a positive but weak impact on operational performance.
However, TQM practices have a strong positive effect on SCM practices (Prajogo and Sohal,
2006; McKone et al., 2001; Brah et al., 2000). Pharmaceutical products need to be highly
reliable and safe. To ensure reliability, quality and safety, the products are checked at each
manufacturing stage and supply chain. Sustainability in supply chains can be ensured only
when it is developed on the principles of TQM (Kuei and Lu, 2013). Sustainable supply chain
can contribute towards economic development not only for firm but also for the country and
the world as a whole ( Jimenez-Gonzalez et al., 2011). In this aspect, the raw material quality
and right information sharing throughout the chain are necessary to achieve the overall
operational performance. Therefore, TQM practices impact SCM practices and SCM
practices, in turn, impact operational performance. This ensures the supply chain quality.

7.2 Implications for practice

The findings of the present study highlight the link between SCM, TQM and operational
performance in the pharmaceutical industry. Understanding this link is not only useful for
practicing managers to ensure drug production efficacy and efficiency, but it also ensures
that the consumers are protected from harm by ensuring supply chain quality that delivers
quality products and services.
The implications are not limited to the domestic Indian pharmaceutical market, but they
can be applied to foreign markets. The supply of drugs/medicines is essential for any
society. The correct procurement channel and correct manufacturing techniques will help
organizations to produce an adequate range of medicines. The right distribution channel
helps drugs and medicines to reach the consumer at the right time. In a pharmaceutical
industry, research and development plays a crucial role. The pace of new product
development can define the future of any pharmaceutical company. Further, to comply with
various regulations and policies, a firm should have the sound foundation of TPM, stringent
PQ rules, and deeper CF.
The present study demonstrates the interdimensional linkage between TQM and SCM
practices and operational performance measures. In terms of improving quality, organizations
have applied quality management systems (QMS) since 1990s. From the view of QMS, the first
step is to stabilize the processes with acceptable variations in operations without TQM, SCM and
compromising the level of quality. Once the processes become well established, further operational
improvements across the entire supply chain should be emphasized. This commitment toward performance
excellence should, thus, focus on maintaining quality in the entire supply chain, starting from
third-tier suppliers to end consumers. With the passage of time, ever-changing market
demands have driven the industry to implement best practices across the entire supply chain.
Today, supply chains are responsive to day-to-day operational fluctuations. 351
Any manufacturing supply chain starts with its manufacturing plant. Supply chains
operations begin after the demand from the market is observed, and they end with delivery
of product to meet that demand. The cycle will continue if no disruptions occur at any node
along with supply chain. A supply chain’s nodes can include the raw material stage,
processing stage, finished goods stage, which can further include the distribution channel
through product delivery. A careful monitoring of the actions at each supply chain node will
help to deliver defect-free products and maintain a strong CF. A close relationship exists
between the customer’s needs and R&D in the pharmaceutical industry. The R&D
department of a pharmaceutical firm plays a crucial role in its overall performance, which
reflects operational, market and innovation performance. TQM practices serve to enable
SCM practices to improve operational performance. These can include the level of
information quality along the entire supply chain without interruptions, inventory and
purchasing management practices, and the development of strategic supply partnerships.
Today, competition encompasses complete interorganizational supply chains. Every
firm is looking to achieve an efficient as well as responsive supply chain with best
practices. These best practices flow from the top management, leading to speed, accuracy,
and responsiveness along the entire supply chain. These practices can help the firms to
achieve the competitive priorities, namely, quality, cost, delivery and flexibility
(Gunasekaran and Ngai, 2004). In the supply chain, practices like purchasing have a
great impact on raw material costs, which are a larger piece of the total product cost
(Srivastava, 2007). Inventory management is another area to target for improvement, and
it includes carrying costs, work-in-progress inventories, raw materials and finished
goods, all of which can impact operational performance. No firm can afford to have an
out-of-stock situation; this will cost the firm, with losing customers in the market, and
losing labor and machine hours at factory (Waller et al., 2000). Thus, the prioritization of
quality in the supply chain is highlighted in the study as a factor that leads to higher
operational performance. Once the supply chain is engaged with good quality practices,
firms can reap operational benefits (Li et al., 2006; Tan et al., 1999), which can include
delivery of quality products, faster delivery at lower costs, and ability to develop
innovative products. These benefits, in turn, will help a firm to generate more revenue,
reduce the cost of operations through improved cycle times and economies of scale, and to
minimize the number of defects and achieve low levels of inventories.

8. Limitations and future scope

The present study was limited to 262 pharmaceutical manufacturing plants. The concepts
and linkages of TQM and SCM may not be sufficient to gauge the entire operational
performance of an organization. Concepts like information technology, information systems,
role of culture and other constructs can be considered, which affect the overall operational
performance. Additionally, the study was conducted on plant-level TQM and SCM practices
only. However, the entire supply chain consists of various stakeholders at various levels,
which creates the scope for future research. Future research can include dimensions like
logistics, inter-entity co-ordination (e.g. manufacturer–wholesaler co-ordination and
wholesaler–retailer co-ordination). Future research may also consider inter-entity
contracts, that is revenue sharing contracts and cost sharing contracts, which can offer a
BPMJ new avenue for research. Quality practices in both the upstream and downstream supply
26,1 chains are also potential areas for future research. The interdependencies of supply chain
practices and quality management practices have not been checked and can be another area
for future research. Cross-organizational supply chain practices can also be examined from
a broad perspective, which will help to determine the optimal operational performance
approach. As the present study includes a single respondent per plant, future research can
352 include multiple respondents from each organization to address the common method bias.
This will generate a balanced response and provide greater insights into how factors
interact within a firm. Partnerships with suppliers were considered only up to first-tier
suppliers, and future studies can extend to consider the next-level suppliers. Also, factors
like size, firm position in supply chain, culture at supplier end and hierarchical structure
were not considered in this study, thus offering areas for future research. Operational
performance also consists of multiple constructs like competitive performance and business
performance, which may include growth and market share of an organization as aspects to
be considered in future studies.

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(The Appendix follows overleaf.)

BPMJ Appendix 1
26,1

S. No. Statement Adopted from

Top management support (TMS)

368 TMS1 In our firm, long-term plans are focused on quality and developed Brah et al. (2000)
TMS2* In our firm, top managers have identified quality goals
TMS3 In our company meetings, top-level managers often discuss the importance of
quality
TMS4 In our firm, top-level managers view quality as being more important than cost
TMS5* The top-level management depends heavily on quality performance to evaluate
employees in the organization
TMS6 Management supports and motivates the employees to excel and innovate at
their own in the organization
Customer focus (CF)
CF1* A summary of customer complaints is given to floor managers in the Brah et al. (2000)
organization
CF2* Customer’s feedback is used to determine their requirements in the
organization
CF3 Customers’ requirements are used as the basis for measuring quality in the
organization
CF4 Floor managers are aware of the level of customer satisfaction index
CF5 We are frequently in close contact with our customers.
CF6 We understand and discuss customer requirements before starting the project
Research and development management (RDM)
RDM1 We have excellent communication processes between R&D and other departments Prajogo and
RDM2 Our R&D pursues truly innovative and leading-edge research Sohal (2006)
RDM2 Our R&D strategy is mainly characterized by high-risk projects with a chance
of high return
RDM4 R&D plays a major part in our business strategy
Product quality (PQ)
PQ1 The performance of our products is good Prajogo and
PQ2 We believe in conformance to specifications of products Sohal (2006)
PQ3* Reliability of our products is very high
PQ4 Our products are durable
PQ5 We ensure product quality at each stage of manufacturing
Total productive maintenance (TPM)
TPM1 We dedicate a portion of everyday solely to maintenance McKone
TPM2 We emphasize maintenance as a strategy for achieving quality and schedule et al. (2001)
compliance
TPM3* Our maintenance department focusses on assisting machine operators to
perform their own preventive maintenance
TPM4 We have low set-up time of equipments and machines in our plant
TPM5 We have a separate shift or part of shift each day for maintenance activities
Strategic supplier partnership (SSP)
SSP1 We consider quality as our number one criterion in selecting suppliers Li et al. (2006)
SSP2 We regularly solve problems jointly with our suppliers
SSP3* We have helped our suppliers to improve their product quality
SSP4 We have continuous improvement programs that include our key suppliers
Table AI. SSP5 We include our key suppliers in our planning and goal-setting activities
Constructs and items
adopted from
literature (continued )
S. No. Statement Adopted from
TQM, SCM and
operational
Information quality and information sharing (IQIS) performance
IQIS1 We inform our partners (production department, store, purchase Li et al. (2006)
department, etc.) in advance of changing needs
IQIS2 Our partners share product (raw material, WIP and finished product)
information with us
IQIS3 Our interorganizational partners keep us fully informed about issues that affect 369
our business
IQIS4 Our interorganizational partners share business knowledge of core business
processes with us
IQIS5 We and our internal partners (production, accounts, HR, marketing, etc.)
exchange information that helps establishment of business planning
IQIS6 We and our partners (production, accounts, HR, Marketing, etc.) keep each
other informed about events or changes that may affect the other partners
IQIS7 Information exchange between our internal partners and us is timely
IQIS8 Information exchange between our internal partners and us is accurate
IQIS9 Information exchange between our internal partners and us is complete
IQIS10* Information exchange between our internal partners and us is adequate
IQIS11 Information exchange between our internal partners and us is reliable
Inventory management (INM)
INM1 We have raw material classification in our raw material store (ABC, FSN, etc.) Borade and
INM2 We have vendor-managed inventory system, which helps to have effective Bansod (2010),
inventory control and management Rajeev (2008),
INM3 We monitor the inventories at raw material level, work in progress (WIP) and Rabinovich and
finished good level Evers (2002)
INM4 We maintain safe stock levels by applying just in time ( JIT) and economic order
quantity (EOQ)
Purchasing/procurement practices (PP)
PP1 We ensure the safe incoming movement of raw material to our facility. Mcmurray et al.
PP2* We ensure that the supplier’s location is operated in a safe manner, with (2014)
adequate certification
PP3 We generally prefer to purchase from local suppliers to save the cost.
PP4* We visit the supplier’s plants to ensure compliance of regulatory affairs
PP5 We ensure that the supplier focusses on improving specifications and
functionality of purchased raw material to improve supplier lead time
PP6 We promote environment protection (green supply chain practices) while
placing the order to vendor
Operational performance (OP)
OP1 There is an increase in the amount of goods delivered on time in the last three Green Jr et al.
years after TQM and SCM implementation (2011), Zhu et al.
OP2 There is a decrease in inventory levels in the last three years after TQM and (2008)
SCM implementation
OP3 There is a significant decrease in scrap rate in the last 3 years after TQM and
SCM implementation
OP4 There is an enhancement in product quality/performance after TQM and SCM
implementation
OP5 We have improved the capacity utilization over a period after TQM and SCM
implementation
OP6 Our operations and processes are cost effective after TQM and SCM
implementation
OP7 Our firm has introduced innovative products after TQM and SCM implementation
Note: Items marked with * are dropped in the final analysis Table AI.
BPMJ Appendix 2
26,1
Initial eigenvalues Extraction sums of squared loadings
Component Total % of variance Cumulative % Total % of variance Cumulative %

1 13.162 26.862 26.862 13.162 26.862 26.862

370 2 5.208 10.628 37.489
3 3.483 7.108 44.597
4 2.762 5.637 50.234
5 2.378 4.853 55.087
6 1.703 3.475 58.562
7 1.582 3.229 61.791
8 1.478 3.016 64.807
9 1.284 2.620 67.426
10 1.166 2.379 69.805
11 0.974 1.987 71.793
12 0.821 1.676 73.468
13 0.795 1.622 75.090
14 0.760 1.551 76.641
15 0.735 1.499 78.141
16 0.662 1.351 79.492
17 0.647 1.319 80.811
18 0.636 1.298 82.109
19 0.578 1.180 83.290
20 0.550 1.122 84.411
21 0.532 1.086 85.498
22 0.512 1.045 86.543
23 0.470 0.959 87.502
24 0.466 0.951 88.453
25 0.429 0.876 89.328
26 0.405 0.826 90.155
27 0.393 0.803 90.958
28 0.364 0.742 91.700
29 0.344 0.701 92.401
30 0.333 0.680 93.081
31 0.321 0.654 93.735
32 0.308 0.629 94.364
33 0.254 0.518 94.882
34 0.242 0.494 95.376
35 0.240 0.490 95.867
36 0.221 0.451 96.318
37 0.210 0.428 96.746
38 0.207 0.422 97.169
39 0.187 0.383 97.551
40 0.184 0.375 97.927
41 0.166 0.340 98.266
42 0.160 0.326 98.592
43 0.148 0.302 98.894
44 0.127 0.260 99.154
45 0.116 0.236 99.390
46 0.101 0.206 99.596
Table AII. 47 0.079 0.161 99.757
Single-factor 48 0.068 0.139 99.896
Harmon’s test 49 0.051 0.104 100.000

Corresponding author
Sanjay Sharma can be contacted at: s_nsit@rediffmail.com

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