GAUGE UNIVERSITY COLLEGE

SCHOOL OF POST GRADUATE STUDIES

MBA Program
Group Assignment for the Course of Operations
Management
Article review on; The impact of supply chain management practices on
competitive advantage and organizational performance.

Authers; Suhong Li, Bhanu Ragu-Nathan, T.S. Ragu-Nathan and S. Subba Rao

Journal; Omega The International Journal of Management Science, V. 34,

(2006), issue 2, 107 – 124.

Group Name ID No.

1. Hirut Gadisa --

2.

Submission date: August/2021

Submitted to Dr. Birhanu Abebe (PhD)

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TABLE OF CONTENTS
ACKNOWLEDGEMENT ……………….…………………………………………..….……...3
1. INTRODUCTION ……………..…………………………………………..…..….…..4
2. SUMMARY………………………………………………………………….............…4
3. ANALYSIS.…………..……………………………………………..….……………….5
3.1. Strength ……………………………………………………….……………..…...5
3.2. Weakness…………………….……………………………………………………6
4. CONCLUSION…………………..……………………………………….……………..7
5. REFERENCES.............................................................................................................8

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 AKNOWLEDGEMENT

We would like to express our heartfelt gratitude and appreciation to our instructor for his
unreserved commitment in teaching us this course in all matters and encouragement to build up
our understanding on Operations Management. We would also like to gratefully acknowledge
him for giving us an opportunity to work on the Book/Article/Review/Critique/Analysis which is
a golden area of focus in Book reviewing. We have no words that can fully describe him on how
he has taught us the concept of article reviewing procedures.

1. INTRODUCTION
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This review evaluates and document “The impact of supply chain management practices on
competitive advantage and organizational performance” that is one of the studies dispatched
from Omega the International Journal of Management Science, volume 34 issue 2 published in
2006. The aim of the article is to conceptualizes and develops dimensions of SCM practice and
tests the relationships between SCM practices, competitive advantage, and organizational
performance. The authors, Suhong Li, (from Computer Information Systems Department, Bryant
University in USA) and Bhanu Ragu-Nathan, T.S. Ragu-Nathan, S. Subba Rao (where they stand
from College of Business Administration, The University of Toledo in USA. The authors have
tried to present different sources of evidences from many different other authors and they
substantiated their points satisfactorily with some logics on SCM. From this article, we realized
that a keen eye focused on SCM is very important for survival of the organizations that began to
realize that it is not enough to improve efficiencies within an organization, but their whole
supply chain has to be made competitive.

Here we try to review the article based on from our previous knowledge as well as reading
different sources on SCM for better understanding of the article concept and findings. This
review includes summary of the article, the detailed analysis, strength and contribution of the
research, weakness of the article and finally conclusion and list of references.

2. SUMMARY

Mainly, the article has discussed about the central ideas of supply chain management practices.
According to this article, the significant problem with organizational level research because of
the senior and executive level managers receive many requests to participate and have very
limited time to dig out an impact of supply chain management practices on competitive
advantage and organizational performance. The authors emphasized on the importance of issues
that some organizations have realized the importance of implementing SCM. According to the
authors, SCM is here to stay and the winners of the market will be the ones who cope up with it
and no longer an irregular outing.

The main objective of the research is to conceptualizes and develops five dimensions of SCM
practice (strategic supplier partnership, customer relationship, level of information sharing,
quality of information sharing, and postponement) and tests the relationships between SCM

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practices, competitive advantage, and organizational performance. For this study, they have used
the data collected from 196 organizations and relationships proposed in the framework were
tested using structural equation modeling.

The article has tried to assess are effects of change on organizations, the role of leaders in
guiding change, types and complexities of change, change tools and strategies, consequence and
continuous change of the future world those linked with SCM practices. Also, competitive
advantage can have a direct, positive impact on organizational performance, the research finding
indicates that higher levels of SCM practice can lead to enhanced competitive advantage and
improved organizational performance.

3. ANALYSIS

The authors have used three hypothesized qualities of different academic sources to support their
article on effective SCM. First, Firms with high levels of SCM practices will have high levels of
organizational performance. SCM practices impact not only overall organizational performance,
but also competitive advantage of an organization. Second, Firms with high levels of SCM
practices will have high levels of competitive advantage. Having a competitive advantage
generally suggests that an organization can have one or more of the following capabilities when
compared to its competitors: lower prices, higher quality, higher dependability, and shorter
delivery time. Third, the higher the level of competitive advantage, the higher the level of
organizational performance. According to this article, the above three hypotheses taken together
to support the SCM framework. But the authors didn’t assume their readers to have a certain
background or information on a number of prior studies have measured organizational
performance using both financial and market criteria. We don’t think so, that the authors did
communicate effectively to their audiences in simple manner. This article inferred to the clues
that “adaptation to an organization offering high quality products can charge premium prices and
thus increase its profit margin on sales and return on investment. An organization having a short
time-to-market and rapid product innovation can be the first in the market thus enjoying a higher
market share and sales volume. Therefore, a positive relationship between competitive advantage
and organizational performance can be a common agenda for every organization in business-

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based organizations”. Also, authors added their preconceived notions that a myriad of details and
effects must be acknowledged and addressed for successful SCM.

3.1. Strengths

The good side of this article and what did the authors do well in their article is how they have
made short and brief note from those bulky thoughts of different scholars. We know that SCM is
major in scope. According to the authors, the empirical literature has been quite consistent in
identifying price/cost, quality, delivery, and flexibility as important competitive capabilities. In
addition, recent studies have included time-based competition as an important competitive
priority. The authors identified time as the next source of competitive advantage one that
prepares the organization for continuous change in the world that provides no stability and
accepts no excuses for being strategy based on flexibility. This refers how much they are
visionary in their point of market view regarding the impacts of SCM. Moreover, the detailed
arguments are presented by the authors. Managers who have embraced deep change personally
are able to design effective SCM processes that reflect a heroic yet enlightened competitive
stance, one that imparts enthusiasm and vitality into customers and creates a new perspective of
the logic and wisdom of moving with the flow of good competitive advantage.

3.2. Weaknesses

One of the weaknesses of this article that we observed is the authors didn’t contribute anything
new to the concept of change and there is no general description about the article theme and its
purpose. Despite the increased attention paid to SCM, the literature has not been able to offer
much by way of guidance to help the practice of SCM. This has been attributed to the conceptual
confusion and the evolutionary nature of SCM concept. Thus, there is no generally accepted
definition of SCM was given in the literature of the article.

In addition to this, the authors focused on the much of the current theoretical/empirical research
in SCM. They focus on only the upstream or downstream side of the supply chain, or certain
aspects/perspectives of SCM. We don’t agree with this because no longer good at reacting to the
absence of an integrated framework, incorporating all the activities both upstream and
downstream sides of the supply chain and linking such activities to both competitive advantage
and organizational performance, detracts from usefulness of the implementation on SCM
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necessarily with the use of the same strategies. The authors didn’t define and use appropriate
academic terminology in their materials and have no an all-inclusive worldview writing style.
The article presupposes its readers have already known something about the SCM. After our
detail evaluation of this article, We examined as one thing was biased in the article which the
authors even believed that competitive advantage or strategic systems are become practical tool
for SCM to have a profound effect on how organizational performance practiced. However, the
competitive advantage is significantly biased by the necessary social interaction (social gaze),
but strategic systems can be a strategic tool for negotiation and decision making in the supply
chain management practices.

4. CONCLUSION

To sum up, we do agree with most of issues that the authors have tried to discuss in their single
article. The basic reasons is that because, the article stated that the key impact of supply chain
management practices on competitive advantage and organizational performance to successful
business organization is heroic and learned SCM by competent and visionary managers which is
comparable fit with their proactive article review titled above and also with their argument/stated
the three hypothesis.

The article warned that the present era is swiftly becoming one of discontinuous change because
business managers will need both skill and the motivation to become constant visionary
competitive advantage holders. The article identified Time Based SCM Strategic planning as a
key tool for effective business organization to maximize the fit for high levels of organizational
performance as the result of firms with high levels of SCM practices. Generally, despite our
appraisal for their initiation and vast work, we recommend that they should better to add new
concepts and will try to compare and contrast other work of scholars rather than only mentioning
their works in this article reviewed.

REFERENCES

1. Cigolini R, A new framework for supply chain management: conceptual model and empirical
test. International Journal of Operations and Production Management 2004;24(1):7–14.
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2. Chen IJ, Paul raj A. Towards a theory of supply chain management: the constructs and
measurements. Journal of Operations Management 2004;22(2):119–50.

3. Hand field RB, Bechtel C. The role of trust and relationship structure in improving supply
chain responsiveness. Industrial Marketing Management 2002;4(31):367–82.

4. Stalk G. Time—the next source of competitive advantage. Harvard Business Review

1988;66(4):41–51.

5. Tu Q, Ragu-Nathan TS. The impact of time-based manufacturing practices on mass

customization and value to customer. Journal of Operations Management 2001;19(2):201–17.

6. Vonderembse MA, Tracey M. The impact of supplier selection criteria and supplier
involvement on manufacturing performance. Journal of Supply Chain Management
1999;35(3):33–9.

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