Critical Success Factor Sof SCM

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Critical Success Factors of Supply Chain Management: A Literature Survey and

Pareto Analysis
Article in EuroMed Journal of Business · May 2015

DOI: 10.1108/EMJB-09-2014-0028
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Critical Success Factors of Supply Chain Management:
A Literature Survey and Pareto Analysis
Mohamed Syazwan Ab Talib

Faculty of Management
81310 Johor, Malaysia
msyazwan79@live.utm.my
Abu Bakar Abdul Hamid

UTM International Business School
54000 Kuala Lumpur, Malaysia
Thoo Ai Chin
Faculty of Management
81310 Johor, Malaysia
Appeared in EuroMed Journal of Business:

http://dx.doi.org/10.1108/EMJB-09-2014-0028
1
Structured Abstract
Purpose: The aim of this study is three-pronged. Firstly, to review the existing critical success factors
(CSF) literature in the context of supply chain management (SCM). Secondly, to analyse the occurrence
frequency of every possible CSF in SCM literature. Thirdly, to identify the ‘vital few’ and the ‘useful
many’ CSF that are harmonized across the SCM field.
Design/methodology/approach: A time-specific and term-sensitive literature review technique is

undertaken to generate a list of possible CSF in SCM. The review yielded 55 papers, but only 26
empirical CSF papers were selected for analysis as the reliability and validity of the factors had been
rigorously tested. Consequently, a Pareto analysis approach was applied to trace the CSF frequency of
occurrence in SCM literature. By performing a Pareto analysis, this present study is able to id entify
and categorize the ‘vital few’ and ‘useful many’ CSF that are consistent throughout various fields of
SCM. The review and results are tabulated and a Pareto diagram has been constructed to provide a
summary of findings.
Findings: Out of the 26 selected empirical papers, 25 potent CSF in SCM literature have been
extracted. From the Pareto analysis, 9 CSF represent 80.68 percentage of occurrence which is
regarded as the ‘vital few’ CSF in SCM. The remaining 16 CSF represent 19.32 percentage of occurrence
and is regarded as the ‘useful many’ CSF in SCM. The 9 ‘vital CSF’ are immensely important, because
in order to achieve supply chain and operation success, one must recognize the few vital factors that
are responsible for the larger impact onto the industry compared to the other 16 ‘useful many’ CSF.
Practical implications: The study offers some sense of assistance to SCM managers in highlighting the
vital few CSF that matter most, regardless of their nature of SCM fields. Thus, saving their energy,
time, and resources in determining the critical pieces of information. For academicians, this study
provides a platform for future SCM CSF research and the results could aid researchers in developing
the research instrument.
Originality/value: This study is the first attempt to apply Pareto analysis for SCM CSF studies and
critically analyzing a wide range of SCM CSF literature. The result could allow supply chain managers
to focus on the internal factors, as it could implicate the external factors, and is vital for sustainable
supply chain operation, plus, it could stimulate potential researcher opportunities in linking SCM CSF
and firm performance.
Keywords: Supply Chain Management, Critical Success Factors, Pareto Analysis, 80/20 Rule, Literature
Review
Article Classification: Literature Review
The research is part on an ongoing PhD research under the UTM Research University Grant
(PY/2014/02527). We thank Dr. Demetris Vrontis, Dr. Evangelos Tsoukatos, and the two anonymous
reviewers for their valuable feedback. We also thank Anthony Maria Isabella Benjamin for helpful
comments on an earlier version of this article.
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1. Introduction
The concept of critical success factors (CSF) in management literature was first discussed by Daniel
(1961) and later popularized by John F. Rockart in the year 1979. Rockart (1979, p. 85) defined CSF as
“the limited number of areas in business, if they are satisfactory, will ensure successful competitive
performance for the organization”. Rockart further highlighted that “these limited number of areas in
business are recognized as ‘key areas’ that ‘must go right’ for business to flourish”. Simply
summarized, CSF are few factors that are critical for the success of a company and they must receive
careful and constant attention from the managers. Another definition of CSFs, as defined by Leidecker
and Bruno (1984, p. 24), are “those characteristics, conditions, or variables that when properly
sustained, maintained, or managed can have a significant impact on the success of a firm completion
in a particular industry”.
More recently, definition of CSF does not only concern a firm’s success but also a firm’s ability to
overcome the challenges faced. Islam (2010, p. 200) described CSF as “factors that must be
implemented in order to successfully address the challenge”. Meibodi and Monavvarian (2010)
viewed CSF as readily evident or sometimes as an invisible set of activities that an organization must
undertake in order to achieve its objectives. Plus, it should be noted that CSF and KSF (Key Success
Factors) are interchangeably used in the literature and still hold the same meaning (Khandelwal and
Ferguson, 1999; Meibodi and Monavvarian, 2010).
Since its presence in the management literature, CSF has been widely used among managers in various
management fields such as strategic planning and development, environmental analysis, and strategy
evaluation (Munro and Wheeler, 1980; Leidecker and Bruno, 1984; van Veen-Dirks and Wijn, 2002).
CSF is a bias-free tool (Munro, 1983) that is suitable for highlighting planning-implementation issues,
enhancing organizational performance, and monitoring organization’s activities and progress.
Meanwhile, Khandelwal and Ferguson (1999) underscored the relevancy of CSF as a tool to measure
organization and industrial maturity, whereas Kieser and Nicolai (2005) claimed that CSF research is
prevalent among industry practitioners and extensively studied among academicians (Kieser and
Nicolai, 2005).
Initially, the concept of CSF introduced by Rockart (1979) was used to determine manager’s
information needs in the field of information system (IS). However, these past thirty years have seen
wide application of CSF beyond its traditional field, including supply chain management (SCM). The
extensive application of CSF in SCM is common because every firm within various industries have
generic factors that are critical to their success. Thus, every firm must recognize these factors as it will
help firms to know their strengths, weaknesses, opportunities, threats, resources, and
capabilities that are vital to their success ( Rockart, 1979; Bullen and Rockart, 1981; Leidecker and
Bruno, 1984).
According to Talib and Hamid (2014), among the earliest CSF studies on logistics and supply chain
literature was by Chiu (1995), Tate (1996), and Korpela and Tuominen (1996). The work by Chiu (1995)
tries to improve firm’s distribution systems by formulating an integrated logistics management system
framework. In order to achieve success, Chiu highlighted good logistics planning, well -designed
distribution organization, carefully-selected and close partnership, good logistics investment analysis,
and top management commitment are essential.
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Tate (1996) discovered that logistics compatibility, mutual understanding, open communication,
shared commitment, fairness, flexibility, and trust are the requirements for harnessing successful
partnership in logistics. In a separate study on logistics CSF, Korpela and Tuominen (1996) proposed a
different list of CSF, where logistics’ reliability, flexibility, lead time, cost effectiveness, and value-
added activities are the CSFs for improving logistics performance. Although it differs with early studies
by Chiu (1995) and Tate (1996), Korpela and Tuominen (1996) indicated that the factors are only
critical if the enablers, i.e. effective logistics management system, process inte gration, effective
information system, effective and flexible organization, use of information technology, and long -term
relationship, are all properly addressed. These enablers are similar with the CSFs highlighted by Chiu
(1995) and Tate (1996).
Comparing the three earliest CSFs studies in logistics and SCM, several success factors are notably
similar. For instance, close partnership, trust and shared commitment, and long-term relationship, are
similar factors (read: partnership) identified by Chiu (1995), Tate (1996) and Korpela and Tuominen
(1996) respectively. This indicates that although the chosen CSFs are labelled differently, they are
identifying the same understanding, and that in different field of research may generate similar CSFs
(Rockart, 1979; Munro, 1983; de Sousa, 2004; Amberg et al., 2005).
In order to showcase that different field of logistics and SCM research may generate similar or identical
CSF, Table 1 provide the summary of CSF in logistics and SCM from the year 2000 until 2014. It mu st
be stressed that the list of literature in Table 1 showcases the CSF literature concerning both logistics
and SCM studies. In other words, literature gathered are both from logistics and supply chain themed
literature, as these terms are often used interchangeably (Mangan et al., 2008; Lorentz et al., 2013).
4
Table 1: Summary of CSF Studies in SCM
Author (Year) SCM Field Critical Success Factors
Chiu (1995) Integrated Logistics Good logistics system planning; well-designed distribution system; prudent selection of allied companies;
Management System close relationship with trading partners; good logistics investment analysis; logistics management barriers
elimination; top management support; continuous improvement in logistics
Korpela and Benchmarking Logistics Reliability; flexibility; lead time; cost effectiveness value added
Touminen Performance
(1996)
Tate (1996) Logistics Partnership Operational/culture/value compatibility; understanding business needs; effective communication; mutual
commitment; flexibility; fairness; trust
Razzaque and Outsourcing Logistics External and internal communication; relationship; customer focus; setting standard and monitoring;
Sheng (1998) Functions knowing payback period; human factors
Chuang and Supply Chain Top management commitment; consultant skills; schedule reliability; budget reliability; implementation
Shaw (2000) Management Critical team skills; compatibility with legacy system
Success Factors
Fearne and Fresh Produce Supply Good quality employee; continuous investment; cost control; innovation; improvement of measurement
Hughes (2000) Chain
Whipple and Supply Chain Strategic Good partnership, clear and compatible goals, compatible information technology, committed human
Frankel (2000) Alliance resource, effective leadership, partnership compatibility, top management support, trust
Power et al. Agile Supply Chain Participative management style; computer-based technology; resource management; continuous
(2001) improvement enablers; supplier relation; Just-in-Time (JIT) methodology; technology utilization
Gunasekaran Small Logistics Strategic planning; inventory management; transportation planning; capacity planning; information
and Ngai (2003) Companies management
Al-Mudimigh Value Chain Value chain optimization; value chain performance; value chain strategy; value chain information sharing;
(2004) Management vision; process management; partnership; infrastructure integration; agility and speed
Ngai et al. Web-based Supply Chain Communication; top management commitment; training and education; data security; reliability of
(2004) Management hardware and software
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Chen and Supply Chain Theory Environment uncertainty; customer focus; top management support; supply strategy; information
Paulraj (2004) Advancement technology; supply network structure; managing buyer-supplier relationship; logistics integration
Chow (2004) E-Supply Chain System quality; information quality; service quality; work performance quality
Gunasekaran Virtual Supply Chain Strategic alliance; web-based information system; automation for business process and re-engineering;
and Ngai (2004) supply chain visibility; performance management system
Puschmann and e-procurement in supply Preparation of catalogue; embracement of supplier at an early stage; automation of authorization
Alt (2005) chain workflow; creation of a central instance for supplier management; strategy for physical hosting of
catalogue; integration of e-procurement system with other relevant system; redesign of the procurement
process
Favilla and Supply Chain Software Commitment of senior management; business focus; project business goal alignment; software capabilities;
Fearne (2005) Implementation partner selection; apply proven; implementation methodology; incremental val ue gain approach; prepare
for business changes; keep end users informed; measure success with KPI
Tummala et al. Operational Issues in Customer-supplier relationship; information and communication technology (ICT); re-engineering material
(2006) Supply Chain flow; creating corporate culture; performance measurement
Management
Implementation
Drótos and Supply Chain Network Good ideas; impressive and efficient value proposition; involvement of credible partners stable logistics and
Móricz (2006) Electronic Trade supply chain background
Ogden (2006) Supply Base Reduction Top management support; cross-functional teams; standardize part numbers and descriptions; supplier
performance evaluation system; good communication during projects; win-win relationship; good
information system; hiring right people
Brun et al. Luxury Fashion Retail Product quality; style and design; country of origin; emotional appeal; brand reputation; creation of a
(2008) Supply Chain lifestyle
Hong et al. Reverse Supply Chain Costs; technology capacity; government policy; organizational commitment; channel relationship; service
(2008) (RSC) quality; ease of use; perceived usefulness; RSC performance
Kuei et al. Supply Chain Quality Customer focus; quality of IT system; supplier relationship; externally focused processed integration; supply
(2008) Management chain quality leadership
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Gunasekaran E-procurement Centralized control, top management support, constant communication, clear responsibility, skilled
and Ngai (2008) employees
Thakkar et al. SCM in SME Effective partnership, top management support and commitment, supply chain integration, close
(2008) relationship with customers, corporate planning, effective use of 3PL, employee empowerment, trust
among supply chain partner, effective leadership
Gunasekaran et Responsive Supply Chain Global supply chain, B2B and B2C relationship, enterprise resource planning, customer relationship
al. (2008) management, JIT, e-SCM, pull strategy, business resource planning, collaborative network
Hidalgo and Transport and Logistics Market competence; skilled employees; inter-firm collaboration (information sharing)
López (2009) Services ICT Adoption
Pettit and Humanitarian Supply Strategic planning; resource management; transport planning; capacity planning; information
Beresford Chain management; technology utilization; human resource management; continuous improvement; supplier
(2009) relationship; supply chain strategy
Wu and Hsu Collaboration in Authorization and security; CAD and EDA tools; co-design of equipment and tools; communication
(2009) Integrated Circuit (IC) technology; database management; data format, transformation and interface; design for manufacturing;
Supply Chain design optimization and technique; information sharing mechanism; IP reuse; knowledge-based system;
strategic alliance, community and coalition
Cullen and E-commerce in Supply System quality; information quality; management and use; world wide web – assurance and empathy; trust
Taylor (2009) Chain
Akyuz and E-Supply Chain Replacement of, or integration with legacy system; streamlining and standardizing internal processes;
Rehan (2009) Requirements implementation, adoption or updating ERP system; streamlining external processes; strategic business
alliance; basic technologies; security and trust
Singh and Al- Supply Chain On-time delivery; partnership with suppliers; effective use of ERP and MRP system; outsourcing non-core
Hakim (2009) Management in High- activities; teamwork; superior product quality; top management commitment; customer complaint
tech Companies management
Hu and Hsu Green Supply Chain (GSC) Supplier management; product recycling; organizational involvement; life cycle management
(2010)
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Lönngren et al. Supply Chain Partnership Decentralized task management; application of information technology (IT); mutual trust
(2010) in Construction
Fazrin and E-procurement in Supply Introduction project; organization support; content and catalogue management; supply chain process;
Nezhad (2010) Chain operation efficiency
Oloruntoba Humanitarian Supply Cyclone awareness and education; accurate and specific early warning; Effective prioritisation, plans and
(2010) Chain planning; government response and commitment; government agencies
Wu and Weng Supplier Selection in Price response capability; quality management capability; technological capability; delivery capability;
(2010) Supply Chain flexible capability; management capability; commercial image; financial capability
Management
Koh et al. (2011) ERP II Implementation in Operational efficiency; efficient legacy enterprise system; common partner goals; similar partner priority;
Supply Chain collaboration partner support; partner trust; partner culture similarity; relationship change management;
data standard consistency
Lao et al. (2011) 3PL Selection Quality improvement; cost reduction; service quality; reputation; primary customer loyalty; complaint
Lu et al. (2011) Semiconductor Supply Policies and regulations; joint agreement on performance and value evaluation; process to ensure
Chain interdepartmental cooperation; supply chain partner selection; direct cross organizational communication
for collaboration; data quality and information transparency in SCM process; data exchange standardization
Mothilal and 3PL Performance Breath of service; internationalization; customer focus; industry focus; relationship with 3PL; 3PL
Nachiappan experience; investment in quality; investment in information; skilled logistics; supply chain integration
(2011)
Rajesh et al. 3PL Customer Service relationship elements; role of organization; organization hierarchy; operational elements;
(2011) Relationship performance elements
Thoo et al. Supply Chain customer-supplier relationship; information and communication technology (ICT); material flow
(2011) Performance management; corporate culture (management support); performance management
Dinter (2012) Information Logistics Comprehensiveness; flexibility; top management support; communication; IT strategy orientation; business
Strategy IT partnership; project collaboration
Kim and Rhee Green Supply Chain (GSC) Collaboration with partners; mutual trust; green business understanding; planning and implementation;
(2012) standardizing and integration; activation of supporting for GSC; strategic use of IT
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Mothilal et al. 3PL Performance Breadth of services; industry focus; relationship with 3PLs; investment in information system; skilled
(2012) professionals; supply chain integration
Wittstruck and Sustainable Supply Chain Investment and use of IT, top management support, adoption of standard, strategy commitment, pressure
Teuteberg from competitors, mutual understanding and learning
(2012)
Lin et al. (2013) Supply Chain Quality Supplier relationship; information technology; process management; top management support; human
Management resource management; quality management; strategic planning; knowledge management
Hwang and Lu E-supply chain Top management commitment; clear goals, objectives and business requirements; key business process re-
(2013) management engineering; project implementation strategy; policies and regulation; process to ensure interdependent
implementation cooperation; integrate process into system; data quality and information transparency in SCM; change
management; formation of a project team; direct cross-organizational communication; joint agreement of
performance and value evaluation; underlining infrastructure and application readiness; process and data
exchange standardization; supply chain partnership selection
Routroy and Supplier Development in Long-term strategic goal; top management commitment; incentives; supplier’s supplier condition;
Pradhan (2013) Manufacturing Supply proximity to manufacturing base; supplier certification; innovation capability; information sharing;
Chain Management environmental readiness; external environment; project completion experience; supplier status; direct
involvement
Thakkar et al. SCM in SME Effective partnership; improve communication; logistics integration; supply chain business strategy; buyer-
(2013) supplier relationship; effective planning and control; trust among supply chain partners; availability of
performance management tools
Talib and Hamid Supply Chain Top management support; human resource; information technology; collaborative partnership
(2014) Management CSF
Grimm et al. Food Supply Chain Trust; buyer power; long-term relationship; knowledge; perceived value; geographical distance; culture;
(2014) sub-supplier capability
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Luthra et al. Green Supply Chain (GSC) IT implementation, technology advancement adoption, organization encouragement, quality human
(2014a) resource, government support, environmental management system implementation, green product
innovation, environmental design, green product management, total quality management, procurement
strategies, lean manufacturing, top management commitment, supplier commitment, supportive company
policies, proper strategic planning, employee healthcare, firm GSC awareness, knowledge in GSC
Luthra et al. Green Supply Chain (GSC) Internal management initiatives, customer support, regulation, supplier management, social commitment,
(2014b) supply chain competitiveness,
Kumar et al. Customer GSC Initiatives Top management commitment, governmental support, effective use of IT, green initiative regulations,
(2014) customer encouragement and awareness, internal GSC efforts, customer characteristics
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2. CSF in Supply Chain Management
Mentzer et al. (2001, p. 18) defined SCM as “the systematic, strategic coordination of the traditional
business functions and the tactics across these business functions within a particular company and
across businesses within the supply chain, for the purpose of improving the long-term performance
of the individual companies and the supply chain as a whole”. From this comprehensive definition, it
is consistent with an earlier definition by Cooper et al. (1997) that highlighted the integration of key
business activities along the supply chain is referred to SCM. SCM requires the integration of key
members in the supply chain as it is vital in creating superior competitiveness and profitability
(Lambert et al., 1998).
Although SCM has been around over the last forty-five years, the complexity of SCM and the
difficulties in turning concept into practice, makes SCM more challenging to understand and
implement, and academicians or practitioners are far from mastering SCM ( Ballou, 2007; Chen and
Paulraj, 2007; Christopher, 2011). With that in mind, this notion does intertwine with the concept of
CSF as there is no established framework to determine CSF. Nevertheless, SCM is the basis of a firm’s
competitive advantage and a successful SCM strategy implementation benefit firms in terms of
increased customer satisfaction, market share and profitability (Tan, 2001). Besides, SCM managers
could also benefit from knowing the CSF in SCM, and therefore, the study on SCM CSF is highly
welcomed and encouraged.
While there are a variety of definitions of CSF, this study adopts the definition that was first suggested
by Rockart (1979), and throughout this study, the term SCM CSF is use to refer to the few limited
number of key factors that must go right for successful SCM implementation.
From the Table 1 above, there are 47 SCM related CSF studies and there are several overlapping CSF.
For example, 22 studies have listed top management support as critical to the successful
implementation of e-commerce in the supply chain (Cullen and Taylor, 2009), logistics strategy (Dinter,
2012), web-based supply chain (Ngai et al., 2004) and green supply chain management (GSCM) (Hu
and Hsu, 2010), among others.
Apart from top management support, Talib and Hamid (2014) identified three other CSFs that are
apparent in logistics and supply chain literature, namely information technology, human resource, and
collaborative partnership. These three CSF are collectively evident in Ogden (2006), Singh and Al-
Hakim (2009), Dinter (2013) and Lin et al. (2013) that discuss logistics and SCM CSFs in the field of hi-
tech industry, supply base reduction, logistics strategy and supply chain quality respectively.
Among the CSF, shown in Table 1, there are 24 SCM studies that recognize information technology (IT)
as a CSF. This is not surprising as the presence of IT in supply chain is undeniable as it is a “driving force
for competitive supply chain strategy” (Christopher, 2011, p. 146). Studies of IT as CSFs in logistics and
SCM is documented in logistics small-medium enterprise (SME) (Gunasekaran and Ngai, 2003), GSCM
(Kim and Rhee, 2012), e-SCM (Ngai et al., 2004; Gunasekaran and Ngai, 2004), humanitarian SCM
(Pettit and Beresford, 2009), supply chain performance (Thoo et al., 2011), and supply chain quality
management (Kuei et al., 2008; Lin et al., 2013).
However, although IT is deemed as an enabler SCM (Fawcett et al., 2011), the incompatibility and
inconsistency of IT, complexity of data analysis and the issue of trust or fear of sharing information
11
online are hindering the use of IT in SCM (Fawcett et al., 2008; Alyuz and Rehan, 2009; Matopoulos et
al., 2009). Nevertheless, regardless of the IT barriers in SCM, the use of IT is inevitable and it brings
more pros than cons, and that it why it is a CSF in SCM.
Past logistics and SCM CSF literature have extensively discussed the importance of human resource or
human capital (Hidalgo and López, 2009; Mothilal et al., 2012; Hwang and Lu, 2013; Lin et al., 2013).
Human resource as CSF is apparent in the field of logistics information communication technology
(ICT), third-party logistics (3PL), e-SCM, and supply chain quality. According to Mothilal et al.,
investment in human resource is crucial as skilled logistics professionals will influence customer
satisfaction and ultimately improve 3PL’s profit growth. This can be supported by van Hoek et al.
(2002) where skilled logistics professionals are vital in achieving supply chain strategic and operational
objectives.
Conversely, the human factor at times can be a barrier in SCM. For example, employees who are
hindrance to changes and preferring the old ways of doing business is a barrier to online supply chain
adoption (Archer et al., 2008). Furthermore, a manager’s lack of clear vision will cause failure in
articulating supply chain vision to the employee, thus causing integration failure (Fawcett et al., 2008).
Therefore, human resource is acknowledged as a CSF in SCM since it can be a driving factor or a
hindering factor.
It is interesting to note from Table 1 above that collaboration, partnership and integration are
apparent in logistics CSF studies. Plus, it should be noted that these three terms are interchangeably
used to describe integration among supply chain partners in improving supply chain efficiency (Holweg
et al., 2005; Prajogo and Olhager, 2012). Thus, throughout this research, these terms are unanimously
referred to as supply chain integration (SCI). Integration in SCM CSF studies can be found discussing
about humanitarian SCM (Pettit and Beresford, 2009), supplier selection (Wu and Weng, 2010),
supplier development (Routroy and Pradhan, 2013), and supply chain among SMEs (Thakkar et al.,
2013).
Furthermore, in defining SCM, Mentzer et al. (2001) underline integration (establishing good
partnership with suppliers and customers) as a key aspect in SCM. Moreover, SCI is critical to supply
chain successes, and if it is done right, it will benefit every supply chain member through cost
reduction, service improvement, increased revenue, and thus producing greater operational flexibility
(Narasimhan and Kim, 2001; Chapman et al., 2003; Duffy and Fearne, 2004; Gimenez and Ventura,
2005; Richey et al., 2009).
However, SCI does not guarantee that supply chain members will enjoy the benefit instantaneously.
The elements of SCI must be fulfilled in order to achieve such success. The elements include trust,
transparency, mutual understanding, information sharing, constant communication, close
relationship, and shared objectives (Ogden, 2006; Cullen and Taylor, 2009; Hidalgo and López, 2009;
Koh et al., 2011; Kim and Rhee, 2012; Thakkar et al., 2013).SCI remains a pertinent and consistent
challenge in SCM because the lack of knowledge on when or with whom to collaborate, and trust
issues between partners, can be the barrier (Barrat, 2004; Ha et al., 2011; Näslund and Hulthen, 2012).
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3. Objective of Study
It is undoubted that CSF studies are apparent in SCM literature. However, the literature gathered in
Table 1 indicated no solid consensus of CSF that are vital in SCM, plus, prior literature only concerned
CSF that are specific to a particular set of SCM field. Due to the wide-ranging scope and boundless
possible CSF, it opens up research opportunities for this study to determine a set of CSF that are
harmonized across any SCM field. Furthermore, the absence of harmonized CSF indicated a lack of
established frameworks to identify CSF. In order to address the research gaps mentioned earlier, this
study aims to fulfil the following research objectives:
 RO1: To review the CSF literature in the SCM field.

 RO2: To analyze and prioritize, by using Pareto Analysis, the empirically tested CSF in SCM.
 RO3: To identify the ‘vital few’ and the ‘useful many’ CSF that are harmonized across the SCM
field.
Analysing and prioritizing the CSF in SCM is undertaken in order to rank the CSF from the most
significant to the least significant. In addition, by separating between the most frequent (vital few)
and least frequent (use many) CSF in SCM it will enable supply chain managers to have a clearer picture
on whether to focus on internal or external factors.
4. Pareto Principle
The Pareto principle, often termed as the 80/20 Rule, introduced by Vilfredo Pareto to demonstrate
that the eighty percent of Italy’s wealth was distributed among twenty percent of the total population
(Craft and Leake, 2002). Applying the 80/20 Rule in management perspective, Svensson and Wood
(2006, p. 458) stated that it is a theory where “a small percentage of a total is responsible for a large
proportion of total outcome”. For example, twenty percent of a firm’s salespeople generated eighty
percent of the total sales; or, eighty percent of total revenue comes from twenty percent of the
product range. In short, the Pareto 80/20 rule helps to separate between the ‘vital few’ from the
‘useful many’ (Fotopoulos et al., 2011).
The Pareto principle, Pareto analysis, Pareto rule, and the 80/20 rule resemble similar meaning. To
ease the readers’ understanding and maintain standardization, the term Pareto analysis is consistently
used throughout the study.
The concept of Pareto analysis has its limits (Craft and Leake, 2002). Although a small percentage of
input can generate a large percentage of output, firms should not downsize their operation by
concentrating on the twenty percent and omit the remaining eighty percent. Craft and Leake urged
that at times, depending on seasonality and availability, part of the ‘useful many’ may become the
‘vital few’ in the future. The application of Pareto analysis is “based upon empirical observation and
must not be intended to be a rule for actions”.
Furthermore, Fotopoulos et al. (2011) listed five weaknesses of Pareto analysis:
 No economic evaluation for analysis-based problem frequency;

 No consideration is given to the opportunities for problems to occur;
 Lack of statistical consideration;
13
 Pareto diagram is not generally useful for trend comparison (Knights, 2001); and
 No relationships are shown between listed variables (Bamford and Greatbanks, 2005).
Despite these critics, Pareto analysis is prevalently used among the industry practitioners and
academicians. For instance, Craft and Leake (2002) stated that the use of Pareto analysis has spread
immensely and is rooted in industries. Besides, Craft and Leake concluded that Pareto analysis is an
accepted and recommended management principles/model with little opposition. Moreover,
Bamford and Greatbanks (2005) and Fotopoulos et al. (2011) support the use of Pareto analysis as a
proven useful and easy to use tool in management decision making. Finally, according to Garg and
Garg (2013, p. 506), Pareto analysis is “often used by managers to direct efforts to the biggest
improvement opportunity by highlighting the vital few causes in contrast to the useful many”.
The use of Pareto analysis in determining CSF is commonly practiced in various fields such as in
enterprise resource planning (Garg and Garg, 2013), food safety assurance system (Fotopoulos et al.,
2011), and total quality management (Karuppusami and Gandhinathan, 2006). Unfortunately, far too
little attention has been paid to use Pareto analysis to determine CSF in SCM. Except for the study on
construction SCM by Karim et al. (2006), SCM literature that applies Pareto analysis remain scanty.
We argue that although the application of Pareto analysis is absent in SCM literature, Pareto analysis
is very prevalent in the field of purchasing, operation management, and SCM in the scope of
inventory/material management and quality management (Collier and Evans, 2012; Reid and Sanders,
2012; Greasley, 2013; Swink et al., 2013).
5. Methodology
5.1. Research Design
The present study is designed to determine the vital CSF that are harmonized across any SCM fields.
While this study is considered the first attempt in applying Pareto analysis in SCM CSF, a dual research
design (exploratory and descriptive) is deemed appropriate. On one hand, an exploratory research
design is used to gain new insights (vital CSF), establishing phenomenon (the use of Pareto analysis)
and understanding an issue (scanty Pareto analysis approach in SCM) at hand, while on the other
hand, a descriptive research design is applied to synthesize (separate between ‘vital CSF’ with ‘useful
CSF’) and analyse (through frequency occurrence) the phenomena under study (Saunders et al., 2007).
5.2. Research Approach
In order to achieve the research objectives, this study is conducted in two different approaches. Firstly,
a literature survey approach is undertaken (see Table 1) to ensure that no important variables are
ignored and to explicit the various forms of CSF in many SCM fields (Sekaran, 2003; Saunders et al.,
2007). Secondly, Pareto analysis will be used to analyse the CSF occurrence percentage from the
gathered literature. By extracting the CSF occurrence percentage, it allows us (the authors) to
determine the ‘vital few CSF’ from the ‘useful many CSF’ and ultimately extracting the vital CSF that
are harmonized across any SCM fields.
5.2.1. Literature Survey Approach
14
According to Fabbe-Costes and Jahre (2008, p. 132), the purpose of a literature survey is to have
“better formal conceptual definition” which will contribute to theory-building. Fabbe-Costes and
Jahre concluded that literature survey approach is useful for highlighting complex managerial issues.
Therefore, in the case of this study, literature survey approach is deemed fit for identifying
harmonized SCM CSF.
5.2.2. Scope of Literature Survey
The literatures are gathered from online library databases, namely Emerald, Web of Science, Scopus,
Taylor and Francis, and ScienceDirect. Google Scholar is also used to supplement the search because
the scholarly work coverage in Google Scholar is impressively broad and includes the most important
scholarly publishers’ archive (Jacsó, 2005). The aforementioned databases were chosen because they
houses refereed journals. This is essential to literature review technique because papers published in
refereed journals have undergone a thorough, professional review process before acceptance and
publication (Karuppusami and Gandhinathan, 2006).
In order to yield desired literature, and ensuring efficient and comprehensive survey, we applied time-
specific and term-sensitive search criteria, replicated from the work done by Karuppusami and
Gandhinathan (2006) and Fabbe-Costes and Jahre (2008). Gathered literature must abide the
following criteria:
 Published between 1995 to 2014; and

 The following terms must be included in the title, the keywords, and/or the abstract.
 critical success factors  success factors
 key success factors  critical factors
 key factors  supply chain management
 supply chain  logistics management
 logistics
The literatures are gathered from year 1995 because this was the year SCM CSF study was first
discovered. The terms ‘supply chain management’ and ‘logistics management’ are included because
these terms are interchangeably used (Cooper et al., 1997; Lorentz et al., 2013). In total, 55 related
literatures were gathered that match the keywords (see Table 1). The literature gathered ranges from
journal articles, papers from proceedings and conferences. The survey period lasted two months
(April-June 2014).
In order to yield better results, this study further scrutinizes the 55 literature and use only those that
are empirically tested. According to Karuppusami and Gandhinathan (2006) and Fotopoulos et al.
(2011), CSF that were empirically tested illustrate greater variable reliability and validity. In the end, a
total of 26 literature was used for analysis (see Table 2). Each of the variables discussed within the 26
papers are proven to be significant because they have undergone statistical analysis such as internal
consistency test (Cronbach α), exploratory/confirmatory factor analysis, or multiple regression
analysis. Additionally, to address the validity of the chosen papers, Table 3 showcase the source of the
selected 26 papers, and they are all from top indexed journals.
15
Table 2: Literature used for Pareto Analysis
Number
Author(s) (Year) Country Industry Methodology Sample Analysis Method
of CSF
Whipple and Multiple – North Food and personal Descriptive analysis using
5 CSFs Mail survey 97 questionnaires
Frankel (2000) American Countries healthcare industry percentage and mean value
Exploratory factor analysis
Power et al. Manufacturing 962
Australia 7 CSFs Survey and multiple regression
(2001) industry questionnaire
analysis
United States of America 109 Descriptive analysis and
Ngai et al. (2004) Chemical industry 5 CSFs Mail survey
(USA) questionnaire exploratory factor analysis
Information 103
Chow (2004) Unspecified 4 CSFs Mail survey Exploratory factor analysis
technology industry questionnaires
Multiple – United
Puschmann and 10 interviews
Kingdom (UK), Germany, Multiple industry 13 CSFs Triangulation Descriptive analysis
Alt (2005) 52 questionnaires
USA
Tummala et al. Manufacturing 129 Descriptive analysis using
USA 5 CSFs Email survey
(2006) industry questionnaires percentage
Mail and Confirmatory factor analysis,
Steel and gas 136
Hong et al. (2008) Multiple – China, Korea 8CSFs electronic path analysis, regression
industry questionnaires
survey analysis
Fabric polyester 1 firm as a case
Kuei et al. (2008) Taiwan 5 CSFs Case study Analytic Hierarchy Process
industry study
Gunasekaran and Descriptive analysis using
Hong Kong Multi-industry 6 CSFs Mail survey 74 questionnaires
Ngai (2008) percentage and mean value
Content and descriptive
Singh and Al- High-technology Interview and 5 interviews
Australia 8 CSFs analysis, gap analysis, and
Hakim (2009) industry mail survey 17 questionnaires
cross-case analysis
Multiple – USA, UK,
Hidalgo and Transportation 932
Germany, Poland, Italy, 4 CSFs Survey Multiple regression analysis
López (2009) industry questionnaires
Spain, Sweden, France
16
Correlation, Kruskal-Wallis
Cullen and Taylor Pharmaceutical 153
UK 6 CSFs Mail survey test, and exploratory factor
(2009) industry questionnaires
analysis
Hu and Hsu Electrical and Descriptive analysis and
Taiwan 4 CSFs Mail survey 84 questionnaires
(2010) electronics industry exploratory factor analysis
Lönngren et al. Building construction
Germany 3 CSFs Triangulation 6 interviews Content analysis
(2010) industry
Mail and Confirmatory factor analysis,
Wu and Weng High-technology 247
Taiwan 8CSFs electronic structural equation
survey modelling
184 Exploratory factor analysis
Lao et al. (2011) Hong Kong 3PL industry 6 CSFs Survey
questionnaires and regression analysis
Mothilal and
Nachiappan India 3PL industry 10 CSFs Mail survey 95 questionnaires Multiple regression analysis
(2011)
Rejseh et al. Mail and email 371 Kolmogorov–Smirnov (K–S)
India 3PL industry 5 CSFs
(2011) survey questionnaires test and t-test
Descriptive analysis, Pearson
Manufacturing
Thoo et al. (2011) Malaysia 4 CSFs Mail survey 84 questionnaires correlation, multiple
industry
regression analysis
Confirmatory factor analysis,
160 partial least square,
Dinter (2012) Germany Multi-industry 9 CSFs Survey
questionnaires structural equation
modelling
Confirmatory factor analysis,
Kim and Rhee 249
Korea Multi-industry 5 CSFs Email survey structural equation
(2012) questionnaires
modelling
Mothilal et al. Multiple regression analysis
India 3PL industry 6 CSFs Mail survey 95 questionnaires
(2012) and contingency analysis
Descriptive analysis using
Wittstruck and Electrical and 115
Germany 8 CSFs Mail survey percentage Jonckheere‐
Teuteberg (2012) electronics industry questionnaires
Terpstra (J-T) test
17
Semiconductor 30 focus group
Hwang and Lu Focus group and Content analysis, Fuzzy
Taiwan manufacturing 15 CSFs participants
(2013) survey analytic hierarchy process
industry 16 questionnaires
Luthra et al. 123 Descriptive analysis and
India Automobile industry 26 CSFs Mail survey
(2014b) questionnaires exploratory factor analysis
Kumar et al. Green product 448
India 25 CSFs Survey Exploratory factor analysis
18
5.2.3. Pareto Analysis Procedure
After the literature was gathered, Pareto analysis was performed to separate between the ‘vital few’
and the ‘useful many’ CSF in SCM, through prioritizing the occurrence frequency. To do this, we follow
the Pareto analysis four-step procedure suggested by Swink et al. (2013):
i. Identify the SCM CSF categories

ii. Grouping the SCM CSF and calculate the SCM CSF percentage of occurrence
iii. Sort the SCM CSF categories in descending order based on the percentage of occurrence
iv. Present the data graphically and identify the ‘vital CSF’ and ‘useful many CSF’
Table 3: Journal and database sources

Author(s) (Year) Journal Database
Puschmann and Alt
Supply Chain Management: An International Journal Emerald*
(2005)
Tummala et al.
(2006)
Lönngren et al.
(2010)
Cullen and Taylor International Journal of Operations &

Emerald*
(2009) Production Management
International Journal of Physical

Hwang and Lu (2013) Emerald*
Distribution & Logistics Management
Power et al. (2001) International Journal of Physical Distribution & Logistics Emerald
Hu and Hsu (2010) Management Research Review Emerald
Lao et al. (2011) Measuring Business Excellence Emerald
Chow (2004) Journal of Global Information Management Scopus
Mothilal and
American Journal of Applied Sciences Scopus
Nachiappan (2011)
International Journal of Logistics Systems and

Kumar et al. (2014) Scopus
Management
Hidalgo and López Taylor &

Asian Journal of Technology Innovation
(2009) Francis*
International Journal of Logistics Taylor &

Rejseh et al. (2011)
Research and Applications Francis*
19
Taylor &
Kim and Rhee (2012) International Journal of Production Research
Francis*
Taylor &
Mothilal et al. (2012) International Journal of Production Research
Francis*
Taylor &
Hong et al. (2008) International Journal of Sustainable Engineering
Francis
Production Planning & Control: The Management of Taylor &

Luthra et al. (2014b)
Operations Francis
Production Planning & Control: The Management of Taylor &

Ngai et al. (2004)
Operations Francis*
Taylor &
Kuei et al. (2008) Total Quality Management & Business Excellence
Francis*
Taylor &
Wu and Weng (2010) Total Quality Management & Business Excellence
Francis*
4th International Conference of on Cooperation and
Singh and Al-Hakim Web of
Promotion of Information Resources in Science and
(2009) Science
Technology
Gunasekaran and Web of
International Journal of Production Economics
Ngai (2008) Science
Web of
Thoo et al. (2011) African Journal of Business Management
Science
Web of
Dinter (2012) Decision Support Systems
Science
Whipple and Frankel Wiley Online

The Journal of Supply Chain Management
(2000) Library
Wittstruck and Corporate Social Responsibility and Environmental Wiley Online

Teuteberg (2012) Management Library*
Note: * paper is also available in Web of Science
6. Pareto Analysis of SCM CSF
6.1. Identifying and Grouping SCM CSF Categories
The statistically-tested CSF obtained from 26 papers is extracted and presented in Table 4. With the
aim to determine the CSF and their occurrence frequency, a ‘judgemental process’ of grouping similar
CSF (Karuppusami and Gandhinathan, 2006) is performed. CSF with similar description are grouped
together based on their content and description, and are collectively labelled. Referring to Table 4,
the CSF in italic represents the domain factors while the CSF in parentheses indicate the similarities
with the domain. For example, all factors related to participative management style, corporate
20
culture, organizational commitment, management support, etc., are grouped together under the
domain ‘Top Management Commitment’. However, factors that cannot be grouped, as they were not
related to any, are considered a separate factor on their own with only one occurrence. The total
number of CSF extracted from all the 26 papers are 25 CSF with occurrence frequency of 145.
Table 4: Identifying and Grouping of SCM CSF Categories

# Critical Success Factors Source Occurrence
1. Use of Information Technology Whipple and Frankel (2000); Power et 21
(computer-based technology; al. (2001); Ngai et al. (2004); Chow
technology utilization; reliability of (2004); Puschmann and Alt (2005);
hardware and software; effective use Tummala et al. (2006); Hong et al.
of ERP and MRP system; e- (2008); Kuei et al. (2008); Cullen and
procurement system compatibility Taylor (2009); Singh and Al-Hakim
with other system; technology (2009); Lönngren et al. (2010); Wu and
capacity; quality of IT system; Weng (2010); Mothilal and
information quality; application of Nachiappan (2011); Thoo et al. (2011);
information technology; technological Dinter (2012); Kim and Rhee (2012);
capability; ICT; IT strategy orientation; Mothilal et al. (2012); Wittstruck and
strategic use of IT; investment in Teuteberg (2012); Kumar et al. (2014)
information system; world wide web)
2. Top Management Commitment Whipple and Frankel (2000); Power et 20

(participative management style; al. (2001); Ngai et al. (2004); Tummala
corporate culture; organizational et al. (2006); Gunasekaran and Ngai
commitment; management support; (2008); Hong et al. (2008); Kuei et al.
organizational involvement; (2008); Cullen and Taylor (2009); Singh
decentralized task management; and Al-Hakim (2009); Hu and Hsu
management capability; role of (2010); Lönngren et al. (2010); Wu and
organization; top management Weng (2010); Rejseh et al. (2011);
support Thoo et al. (2011); Dinter (2012); Kim
managerial understanding; quality and Rhee (2012); Wittstruck and
leadership; managerial initiatives) Teuteberg (2012); Hwang and Lu
(2013); Luthra et al. (2014b); Kumar et
al. (2014)
3. Partnership/Integration Whipple and Frankel (2000); Power et 19

(supplier relation; partnership with al. (2001); Chow (2004); Puschmann
suppliers; embracement of supplier; and Alt (2005); Tummala et al. (2006);
customer-supplier relationship; Hong et al. (2008); Kuei et al. (2008);
channel relationship; inter-firm Hidalgo and López (2009); Hu and Hsu
collaboration; supplier management; (2010); Lönngren et al. (2010); Mothilal
service relationship elements; and Nachiappan (2011); Rejseh et al.
business IT partnership; collaboration (2011); Thoo et al. (2011); Dinter
with partners; standardizing and (2012; Kim and Rhee (2012); Mothilal
integration; et al. (2012); Hwang and Lu (2013);
relationship with 3PLs; interdependent Luthra et al. (2014b)
cooperation; supply chain partnership
selection; supply chain integration;
project collaboration)
21
4. Service Quality Puschmann and Alt (2005); Tummala 14
(on-time delivery; superior product et al. (2006); Hong et al. (2008); Cullen
quality; system quality; information and Taylor (2009); Singh and Al-Hakim
quality; service quality; work (2009); Wu and Weng (2010); Lao et al.
performance quality; service quality; (2011); Hwang and Lu (2013); Luthra et
ease of use; system quality; quality al. (2014b)
management capability; quality
improvement; service quality;
primary customer loyalty; data
quality; customer support)
5. Processes Power et al. (2001); Puschmann and Alt 12

(Just-in-Time (JIT) methodology; (2005); Tummala et al. (2006); Singh
outsourcing non-core activities; and Al-Hakim (2009); Hu and Hsu
customer complaint management; (2010); Thoo et al. (2011); Dinter
automation of authorization (2012); Hwang and Lu (2013); Kumar et
workflow; redesign of the al. (2014)
procurement process; re-engineering
material flow;
product recycling; life cycle
management; material flow
management; comprehensiveness
flexibility; key business process re-
engineering)
6. Resource Capability Power et al. (2001); Wu and Weng 10

(resource management; price (2010); Mothilal and Nachiappan
response capability; delivery (2011); Rejseh et al. (2011); Mothilal et
capability; flexible capability; financial al. (2012); Kumar et al. (2014)
capability; Breath of service;
operational elements; performance
elements; extensive services range)
7. Government Intervention Hong et al. (2008); Mothilal et al. 8

(government policy; perceived (2012); Hwang and Lu (2013); Kumar et
usefulness; support activation; al. (2014)
policies; regulation)
8. Skilled Employee Whipple and Frankel (2000); Ngai et al. 7

(skilled logisticians; skilled (2004); Gunasekaran and Ngai (2008);
professionals; training and education; Singh and Al-Hakim (2009); Hidalgo
teamwork; formation of a project and López (2009); Mothilal and
team, committed employee) Nachiappan (2011); Mothilal et al.
(2012); Hwang and Lu (2013)
9. Trust Whipple and Frankel (2000); Cullen 6

(trust, mutual trust, confidence, and Taylor (2009); Lönngren et al.
transparency (2010); Kim and Rhee (2012);
Wittstruck and Teuteberg (2012);
Hwang and Lu (2013)
22
10. Industry Focus Whipple and Frankel (2000); Kuei et al. 5
(Clear goals, customer focus, (2008); Mothilal and Nachiappan
compatible goals) (2011); Mothilal et al. (2012); Hwang
and Lu (2013)
11. Open Communication Ngai et al. (2004); Gunasekaran and 4

(communication, cross-organization Ngai (2008); Dinter (2012); Hwang and
communication, openness, constant Lu (2013)
communication)
12. Market Competence Hidalgo and López (2009); Wittstruck 3

(market competence; pressure from and Teuteberg (2012); Luthra et al.
competitors; competitive nature) (2014b)
13. Image/Reputation Wu and Weng (2010); Lao et al. (2011) 2
(commercial image; reputation)
14. Cost Minimization Hong et al. (2008); Lao et al. (2011) 2
(cost reduction; cost saving)
15. Planning and Implementation Kim and Rhee (2012); Hwang and Lu 2
(planning; project implementation (2013)
strategy)
16. Data Security Ngai et al. (2004) 1
17. Performance Measurement Tummala et al. (2006) 1
18. Assurance and Empathy Cullen and Taylor (2009) 1
19. Internalization Mothilal and Nachiappan (2011) 1
20. Organizational Hierarchy Rejseh et al. (2011) 1
21. Change Management Hwang and Lu (2013) 1
22. Infrastructure Readiness Hwang and Lu (2013) 1
23. Customer-Supplier Experience Mothilal and Nachiappan (2011) 1
24. Centralized Control Gunasekaran and Ngai (2008) 1
25. Adoption of Standard Wittstruck and Teuteberg (2012) 1
Total 145
Note: Similar descriptions are in parentheses
6.2. Analysing Percentage of Occurrence
The next step is to rank the factor in descending order from the highest to the lowest percentage of
occurrence. Table 5 illustrates the SCM CSF frequency of occurrence in descending order. In this
present study, we use the assumption of Pareto analysis where the ‘vital few’ CSF accounted for 80
23
percent of the occurrence percentage while the ‘useful many’ accounted the remaining 20 percent of
the occurrence percentage.
Applying the approach mentioned above, 9 SCM CSF were categorized under the ‘vital few’ group
while the remaining 16 SCM CSF under the ‘useful many’ group. The 9 ‘vital SCM CSF’ represent 80.68
percent of the occurrence percentage while the 16 ‘useful many SCM CSF’ occupy 19.32 percent of
the occurrence percentage. Although the ‘vital SCM CSF’ did not amounted to the exact 80 percent,
this outcome was expected as Christopher (2011) stressed that the 80/20 split is subjective in nature
because business or markets vary with one another.
To summarize the findings, we concurred from that the 9 ‘vital SCM CSF’ are immensely important,
because in order to achieve supply chain and operation success, one must recognize the few vital
factors that are responsible for a larger impact on the industry, as compared to the other 16 ‘useful
many CSF’. Logically, supply chain managers need to make decisions within limited amount of time.
Therefore, when supply chain managers are assigned to determine which of the resources or tasks at
hand that require their immediate attention, the proposed 9 ‘vital few’ CSFs can assist them in making
decisions. Ideally, focusing their efforts and resources on these 9 ‘vital few’ CSFs, supply chain
managers have the critical pieces of information that are vital to the firm’s success.
Table 5: The ‘vital few’ and ‘useful many’ CSF of SCM

Cumulative
Percentage of
Code Critical Success Factors Occurrence Percentage of
Occurrence (%)
Occurrence (%)
1. Use of Information Technology 21 14.48 14.48
2. Top Management Commitment 20 13.79 28.27
3. Partnership/Integration 19 13.10 41.37
4. Service Quality 14 9.65 51.02
5. Processes 12 8.27 59.29
6. Resource Capability 10 6.90 66.19
7. Government Intervention 8 5.52 71.71
8. Skilled Employee 7 4.83 76.54
9. Trust 6 4.14 80.68
10. Industry Focus 5 3.45 84.13
11. Open Communication 4 2.76 86.89
12. Market Competence 3 2.07 88.96
13. Image/Reputation 2 1.38 90.34
14. Cost Minimization 2 1.38 91.72
15. Planning and Implementation 2 1.38 93.10
16. Data Security 1 0.69 93.79
17. Performance Measurement 1 0.69 94.48
18. Assurance and Empathy 1 0.69 95.17
19. Internalization 1 0.69 95.86
20. Organizational Hierarchy 1 0.69 96.55
21. Change Management 1 0.69 97.24
22. Infrastructure Readiness 1 0.69 97.93
23. Customer-Supplier Experience 1 0.69 98.62
24. Centralized Control 1 0.69 99.31
25. Adoption of Standard 1 0.69 100
Total 145 100
24
6.3. Pareto Diagram
Lastly, Figure 1 illustrates the percentage of occurrence and the cumulative percentage of occurrence
for the ‘vital SCM CSF’ and the ‘useful many SCM CSF’. The Pareto diagram is showcased because it
helps managers to direct their attention to the ‘vital CSF’ for SCM operational success, and less
attention on the ‘useful many’ (Garg and Garg, 2013). Therefore saving their energy, time, and
resources in determining the critical pieces of information (Rockart, 1979). From Figure 1, it is clear
that the 9 CSFs (CSF1-CSF9) are the most significant factors and vital in SCM because it accumulates
to 80 percent while the remaining 20 percent (CSF10-CSF25) are considered less important. Although
there are 16 factors, these factors are less important because they only accumulated 19.32 percent.
25
Figure 1: Pareto Analysis of SCM CSF
100 100
90 90
80 80
70 70
OCCURRENCE %
CUMULATIVE %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
CSF1 CSF2 CSF3 CSF4 CSF5 CSF6 CSF7 CSF8 CSF9 CSF10-25
Occurrence 21 20 19 14 12 10 8 7 6 28
Occurrence % 14.48 13.79 13.1 9.65 8.27 6.9 5.52 4.83 4.14 19.32
Cum.% 14.48 28.27 41.37 51.02 59.29 66.19 71.71 76.54 80.68 100
CRITICAL SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT
26
7. Discussion
Past studies on CSF are apparent in SCM literature and many academicians have proposed scores of
factors that cover many SCM fields such as in green supply chain, reverse supply chain, and e-supply
chain. However, because of too much information at hand, there are difficulties among SCM managers
to determine which factors are truly critical to their operation success. Hence, this study offers some
sense of assistance to SCM managers in highlighting the vital few CSF that matter most, regardless of
the nature of SCM fields.
After an extensive literature survey of 26 statistically tested studies, we highlighted 25 sets of CSF that
are prevalent in SCM literature. By applying a Pareto analysis, this study analyzed the 25 CSF and
sorted them in a descending order based on their occurrence frequency. The results indicated 9 CSF
which are vital in SCM, namely; the use of information technology (CSF1), top management
commitment (CSF2), partnership/integration (CSF3), service quality (CSF4), processes (CSF5), resource
capability (CSF6), government intervention (CSF7), skilled employee (CSF8), and trust (CSF9).
CSF1 scores the highest number of occurrences with 21 papers which indicated that IT is essential in
SCM. The use of computer-based technology, the internet, and investment in IT underlines that to
achieve successful SCM operation, the use of IT must be parallel. The findings in this study are
consistent with previous researches. For instance, Ngai et al. (2004) emphasized the need to have
reliable computer hardware and software for a successful e-SCM implementation. However,
equipment alone does not guarantee success. That is why Cullen and Taylor (2009) accentuate the
criticality of having a quality information system at the managers’ disposal. However, drawing from
the study done by Hwang and Lu (2013), having IT capability is futile without the drive and support
from the top management. Therefore, it is not surprising for CSF2 to be among the vital CSF.
According to Ngai et al. (2004) and Hwang and Lu (2013), commitment from the top management is
critical for incorporating IT elements and SCM operation. Ngai et al. indicated that besides driving the
use of IT in SCM operation, top management support can come from psychological and behavioural
support. Studies from Rajesh et al. (2011), Thoo et al. (2011), Dinter (2012), and Kim and Rhee (2012),
generated similar findings. Most notably, Thoo et al. suggested that although managerial commitment
is critical, a weak corporate culture will deter the managers’ commitment.
The use of information technology (CSF1) and the commitment from top management (CSF2)
positioned as the most influential factors indicate that the internal factors are of more importance
than the external factors. The findings suggest that supply chain managers should prioritize their
efforts in improving the internal resources. Commitment from top managers are vital as they are the
brains behind the push towards organizational goals, and to mobilize the muscle (the employees),
they must be able to motivate and influence the subordinates to be aligned with the organization’s
business objectives. Support alone is not sufficient and therefore managers should provide the recent
technological advances and an updated use of information technology, to be parallel with the
organization’s objective. Besides, managers must encourage their subordinates to be technology-
savvy as this could lead to better performance and output. Consequently, once the internal resources
are efficiently used, it can then have an impact on the external factors, most importantly, better
integration with its partners and stakeholders.
27
Results from the Pareto analysis generated noticeable findings, for instance, the importance of supply
chain integration and partnership. The inclusion of CSF3 further emphasizes the critical nature of SCI
and its crucial role in SCM. Besides, this study confirms the findings of past academic research that SCI
is the critical in SCM (Tummala et al., 2006; Hong et al., 2008; Kuei et al., 2008; Hidalgo and López,
2009; Hu and Hsu, 2010; Talib and Hamid, 2014). Therefore, since CSF3 is highly ranked among the
vital SCM CSF, it should draw attention from SCM managers to ensure that their SCI, either vertical or
horizontal, is in an ideal state.
Furthermore, it is interesting to note some contradicting findings obtained from this study. For
example, although CSF8 is among the vital CSF, it is ranked second lowest, or in other word less
significant. Contrary from the work of Talib and Hamid (2014) that identified human resource as one
of the four major CSF. We argue that despite the availability of skilled employees are important in
SCM (Hidalgo and López, 2009; Mothilal et al., 2012), one cannot ignore the fact that the human factor
is a major barrier (Fawcett et al., 2008). According to Fawcett et al., human factor is a primary barrier
and rooted in nearly all forms of supply chain issues and therefore, resulted in the lower rank of vital
CSF. Although the result portrays CSF8 as less significant, the importance of having well-trained and
skilled employees is very significant in real industry situations. As was mentioned earlier, the internal
resources must be satisfactory in order to achieve supply chain success, and this gives an indication to
supply chain managers to invest in the human capital. Such investment is important because past
studies have shown that employees are an important element in SCM.
Another contradictory finding is the addition of trust factor (CSF9) in the ‘vital few CSF’ category. It is
conflicting because the element of trust is a part of SCI. Trust is the very foundation in SCI as it must
be developed and earned before supply chain members can integrate. To address this, we argue that
due to supply chain complexity, resistance to adopt, the issue of transparency, and the lack of
knowledge on SCI, contributed to the conflicting result (Fawcett et al., 2008; Archer et al., 2008).
Furthermore, the separation of ‘trust’ from SCI is on the basis that trust is an antecedence prior to SCI.
In order to SCM managers to achieve SCI, the element of trust must first be accomplished. Moreover,
this finding provides insights to supply managers, that in order to establish trust in the supply chain,
they must practice transparent and honest operations. We argue that by practicing transparency it
signals a firm’s intention of a win-win outcome that ultimately can forge a mutual understanding and
confidence among the supply chain member. Hence, it will have a domino effect on other CSF.
In addition, one might argue why cost minimization (CSF14) is not among the vital CSF because, aside
from profit maximization, cost minimization should be of high priority for firms to be sustainable. To
support our findings, we argue that although it is critical to reduce costs it can only materialize if firms
are able to practice efficient and effective use of resources (CSF6 and CSF8), refine or improve internal
processes (CSF5), and embrace cost-cutting by adopting the latest technology (CSF1). Once firms are
able to accommodate these vital CSFs, then they will begin to experience cost reductions.
Interestingly, this gives a different perspective for supply chain managers on how to accomplish cost
minimization and at the same time succeeding in improving the firm’s internal operation. Therefore it
gives insights to managers on the need for internal improvements which then can only cost reduction
materialized.
Despite several contradicting findings, this study offers new insights on SCM CSF. The inclusion of CSF7
as one of the vital CSF accentuates the role played by the public sector, specifically the government.
28
Influence from external elements such as government intervention will indefinitely ease supply chain
adoption among firms. Plus, we can argue that by highlighting governmental factor as one of the CSF,
it draws the supply chain managers into paying more attention on government-related elements such
as regulations, policies, or certification. To support this, Lee (2008) points out that the more the
government’s involvement in GSC initiatives, the more participation among SMEs. Similarly,
government support can intensify RSC implementation in developing countries (Lau and Wang, 2009),
and will most certainly influence firms to apply IT in their supply chain operation (Lin, 2007). Therefore,
it justifies the inclusion of CSF7 as one of the vital few CSF.
Finally, we can emphasize that the review and Pareto Analysis do not undermine the ‘useful many
CSFs’. Each of the factors have their own uniqueness but are of less importance in SCM. For instance,
it is important to adopt a form standard (i. e ISO 9000 or ISO 14000) (CSF25) as it gives opportunities
for firms to internationalize their business (CSF19), but it will not be achievable if the ‘vital CSFs’ are
not primarily addressed. Additionally, should a firm wants to develop its own performance
measurement (CSF17), investing or ensuring sensitive information sharing (CSF16), or streamlining its
project implementation strategy (CSF15), all these cannot materialize if there is weak support and
divided commitment from the top management (CSF2). Therefore this further signifies the
justification of the highly ranked ‘vital few CSF’ than the ‘useful many CSF’.
8. Conclusion
Despite previous studies have successfully applied quantitative and statistical testing, the process of
identifying the vital CSF in SCM remain unclear. Therefore the Pareto analysis approach is undertaken,
and results show that 9 out of the 25 CSF accounted for 80.68 percent of the occurrence percentage,
thus differentiating between the ‘vital CSF’ and the ‘useful many CSF’ in SCM. The present study
concludes by categorizing and differentiating the extensive li st of SCM CSF into two groups; the ‘vital
CSF’ and the ‘useful many CSF’.
Furthermore, although the process of Pareto analysis is tedious and time consuming (Karuppusami
and Gandhinathan, 2006), this study successfully achieved its objectives, thus further fortifying the
claim that Pareto analysis methodology is a proven tool in the management field and is reliable for
decision making process (Craft and Leake, 2006; Bamford and Greatbanks, 2005; Fotopoulos et al.,
2011). Therefore, this study contributes to the SCM CSF literature, and extend the application of
Pareto analysis in SCM field.
The presented review, Pareto Analysis, and the discussion are particularly important given that the
SCM CSF literature is inadequately discussed. In additionally, the conclusion drawn from this study
may be relevant for both academicians and practitioners.
From the practitioners’ point of view, supply chain managers can use the findings from this study to
direct their efforts, time, resources, or attention to the CSF that matter most, regardless of their
nature of business. This is because the proposed CSFs are harmonized across any SCM field. Internally,
supply chain managers should consider to improve their firms’ internal resources, by recruiting skilled
employees, motivating the employees, adopting the latest information technology, or improve the
firms’ internal process and operation. Consequently, this could lead to better performance. Externally,
the proposed CSFs can be used to build image and reinforce market reputation. Besides, supply chain
managers can use the proposed CSFs to harness better relationship with the firms’ stakeholders.
29
Meanwhile, from the academic point of view, future researchers could further test and extend the
consistency or reliability of the findings by undertaking quantitative approach. Hence, the review and
proposed CSFs could assist academicians in developing research instrument. Moreover, the proposed
CSF should be tested in real SCM environment in order to have better understanding on the true CSF.
Therefore, industrial survey is highly encouraged for future research undertaking. Additionally, this
review fortifies the relevancy of various CSFs discussed in previous CSF research.
Nevertheless, several limitations of this study needs to be highlighted for future researchers to be
addressed. Firstly, although the data are gathered from empirically tested literature, the exploratory
and qualitative nature of this study is its weakness. Future studies should try to quantify and
empirically analyse the applicability of the vital SCM CSF in actual industrial context. Secondly, the
study may generate bias results as it does not take into account the element of the country of origin,
types of companies, and the size of firms. Future researchers should study the relationship between
firms’ demographical aspects and the ability to operationalize the proposed CSFs.
Finally, to further contribute to the SCM and CSF body of knowledge, future researchers should try to
link and test the SCM CSF with firm performance. Studies on testing SCM CSF with firm performance
is long overdue and it should be a top agenda for future research. As Ram et al. (2013) expressed, prior
studies on CSF are mere listings of possible CSF, and therefore one should try to connect CSF with
firm’s performance.
30
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Critical Success Factors of Supply Chain Management: A Literature Survey and

Article in EuroMed Journal of Business · May 2015

Mohamed Syazwan Ab Talib Abu Bakar Abdul Hamid

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Mohamed Syazwan Ab Talib

Abu Bakar Abdul Hamid

Appeared in EuroMed Journal of Business:

Design/methodology/approach: A time-specific and term-sensitive literature review technique is

Article Classification: Literature Review

 RO1: To review the CSF literature in the SCM field.

Furthermore, Fotopoulos et al. (2011) listed five weaknesses of Pareto analysis:

 No economic evaluation for analysis-based problem frequency;

5.1. Research Design

5.2. Research Approach

5.2.1. Literature Survey Approach

5.2.2. Scope of Literature Survey

 Published between 1995 to 2014; and

i. Identify the SCM CSF categories

Table 3: Journal and database sources

Cullen and Taylor International Journal of Operations &

International Journal of Physical

Hu and Hsu (2010) Management Research Review Emerald

Lao et al. (2011) Measuring Business Excellence Emerald

Chow (2004) Journal of Global Information Management Scopus

International Journal of Logistics Systems and

Hidalgo and López Taylor &

International Journal of Logistics Taylor &

Production Planning & Control: The Management of Taylor &

Production Planning & Control: The Management of Taylor &

Whipple and Frankel Wiley Online

Wittstruck and Corporate Social Responsibility and Environmental Wiley Online

6. Pareto Analysis of SCM CSF

6.1. Identifying and Grouping SCM CSF Categories

Table 4: Identifying and Grouping of SCM CSF Categories

2. Top Management Commitment Whipple and Frankel (2000); Power et 20

3. Partnership/Integration Whipple and Frankel (2000); Power et 19

5. Processes Power et al. (2001); Puschmann and Alt 12

6. Resource Capability Power et al. (2001); Wu and Weng 10

7. Government Intervention Hong et al. (2008); Mothilal et al. 8

8. Skilled Employee Whipple and Frankel (2000); Ngai et al. 7

9. Trust Whipple and Frankel (2000); Cullen 6

11. Open Communication Ngai et al. (2004); Gunasekaran and 4

12. Market Competence Hidalgo and López (2009); Wittstruck 3

16. Data Security Ngai et al. (2004) 1

17. Performance Measurement Tummala et al. (2006) 1

18. Assurance and Empathy Cullen and Taylor (2009) 1

19. Internalization Mothilal and Nachiappan (2011) 1

20. Organizational Hierarchy Rejseh et al. (2011) 1

21. Change Management Hwang and Lu (2013) 1

22. Infrastructure Readiness Hwang and Lu (2013) 1

23. Customer-Supplier Experience Mothilal and Nachiappan (2011) 1

24. Centralized Control Gunasekaran and Ngai (2008) 1

25. Adoption of Standard Wittstruck and Teuteberg (2012) 1

Note: Similar descriptions are in parentheses

6.2. Analysing Percentage of Occurrence

Table 5: The ‘vital few’ and ‘useful many’ CSF of SCM

CRITICAL SUCCESS FACTORS OF SUPPLY CHAIN MANAGEMENT

Christopher, M. (2011), Logistics and Supply Chain Management, FT Press, Singapore.

Craft, R. C. and Leake, C. (2002), “The Pareto principle in organizational decision

Daniel, D. R. (1961), “Management information crisis”, Harvard Business Review, September-

Dinter, B. (2013), “Success factors for information logistics strategy—an empirical