ASSESSING THE IMPACT OF SUPPLY CHAIN OPERATIONS MANAGEMENT ON ORGANIZATIONAL PERFORMANCE AND COMPETITIVENESS IN INDIAN DAIRY INDUSTRY
Justification of the study
Amul and Gujarat Cooperative Marketing Federation is currently the largest food product entity in India. The industry mainly manufactures milk and milk products that are available for the general population. Usually, the main suppliers for the company are farmers who supply the industry with milk that is later processed to manufacture milk and its products. There is an increasing demand for the company product and for this reason, the company wishes to expand its ventures and open 10 processing plants in different regions in the country. This will assist to meet the increasing demand for their food products. The prospects to expand the venture require a reliable supply chain of farmers to provide milk for the industry throughout the year.
In consequence, the study will assess the impact of Supply Chain Operations Management on Organizational Performance and Competitiveness in the company. Supply chain is an important aspect in manufacturing and processing industries such as Amul and Gujarat. The rationale of the study is thus to determine if the supply chain management affects thecompetitiveness and performance of the company. Previously, there has been a hitch in the supply chain network as a whole which has caused delays in the supply of goods to the customers particularly because the cooperative has one depot to supply goods in bigger states hence slowing down business in the entity (Prasad &Satsangi, 2013).Proper management of a supply chain allows for proper coordination of the company operations which increases service delivery to the customers. As in the case of Hatsun Agro product limited, the supply chain management is a major strength to the firm. The company has established an effective supply chain management,superior logistics and a wide spread network characterized by exclusive franchise outlets. The efficient SCM has put Hatsun at a competitive advantage (Hatsun Agro Product Ltd, 2012).Accordingly, the study will also seek to identify the different SCM practices at the Amul Cooperative and how they affect performance. Further, it will investigate the challenges encountered while implementing the supply chain practices.
The study is important to the management of the company as it will assist in assessing the effectiveness of the supply chain as itenvisions expanding the entity. In the recent decades, there has been intensified competition fueled by globalization. This has made it challenging to provide a product orservice at the right time while using minimal costs. Therefore, with time,companies have started realizing the importance of supply chain management not only in terms of organization performance but also in competitiveness. Understanding the application of supply chain management practices is paramount for any business that seeks to become globally competitive while at the same time maintaining profitability. For this reason, exploring the relationship between supply chain management and organization performance is essential for any organization keen at maintain its competitive advantage and market share. In a bid to address some of these gaps, this research will provide relevant information with regards to the effectiveness of supply chain management practices. Lastly, the research is vitalas it will act as a foundation for advising individuals who wish to venture into the food industry in India.
Review of Literature
According to Li et.al (2006), effective supply management is valuable to any organization that seeks to secure a competitive advantage and improve the organization performance. This is because competition has changed from organizations to among supply chains. Supply chain management practices enable and empower leading companies to align their supply chains by providing solutions for the company needs in sourcing and procurement , supply and demand planning, supply chain execution and enterprise asset management. Supply chain management practices include a set of activities that an organization undertakes to promote proper management of its supply chain (Vencataya, 2015). A supply chain is defined as a set of three or more entities either as individualsor organizationsinvolved in the upstream and downstream of goods, services, informationor finances from customer to customer. According to Kushwaha (2012), India’s competitiveness continues to lag behind due to factors such as continued reliance on licensing rules, currency controls, price controls, high level of corruption and political instability. Additionally, the infrastructure that comprises of railways, roads, telecommunications, airports, seaports are poor compared to other developing and developed countries.
The focus on SCM comprises of the integration supplier relationship management (CRM), internal supply chain management (ISCM), and customer relationship management (CSM). Ideally, the primary goal of SCM is to effectively manage the flow of materials from the supplier to the final point of sale. It entails the management of raw materials, in-process materials and finished goods from the point they originate to the point of consumption. Supply chain members are faced with a continuous change in the market dynamics and a stressful competitive environment. This increases the need for proper SCM practices to maintain organization performance and competitiveness. Competitive advantage is the extent an entity differentiates itself from competitors. Conversely, organization performance refers to how effectively a business entity is able to achieve its market oriented and financial goals. This is in line with the objectives of SCM within an organization. Previous empirical studies have indicated that SCM practices are poorly defined and few organizations understand the importance of supply chain management. Further evidence suggests that SCM practices directly affect competitive advantage and organization performance.
On this account, the dissertation will address the following issues
- Supply chain management as a means to gain competitive advantage
- SCM as means to gain organization performance
- The common SCM practices
- The benefits of supply chain management
- To identify strategies to implement the various SCM practices
Research Methodology
The study will be a descriptive research. This is because the research seeks to carry out a case study on the impact supply chain management has on competitiveness and organization performance in Indian dairy industry. Both primary and secondary data will be employed in the study. Secondary data will be in form of an extensive review of the literature on existing studies for developing the insights for the research questionnaires (Creswell, 2013). Books, journalsand newspaper articles will act as sources of secondary data. Conversely, primary data will be collected using semi structured questionnaires and interviews with senior management officials of AMUL, its employees, suppliers, distributors and customers. A total of 100 respondents will be identified using simple random sampling. Stat Trek’s Random number generator available online will be used to assign the random numbers to reduce instances of biasness. The management of AMUL and employees will provide information on the structure of the SCM while the suppliers and customers will gauge the effectiveness of the SCM.
In a bid to reduce errors associated with the research, a pilot test with 10 respondents who are a representative of the respondents will be conducted prior to the commencement of the research. Further, to evaluate the reliability of each scale in the questionnaire, the Cronbach’s alpha of reliability will be computed. Alpha values of over 0.7 will indicate the reliability of the scale (Nunally, 1978). Qualitative data will be analyzed using content analysis whereas quantitative data will be analyzed using Statistical Package for Social Sciences (SPSS). The results will later be presented using pie charts, frequency tables, bar graphs, percentages, measures of central tendency. Chi square test and Pearson correlation will be used to test the hypothesis of the study. The research will be conducted adhering to all the ethical aspects of the research. Most importantly, the researcher will seek permission from the management of AMUL to ensure that the research runs smoothly.
Conclusion
Today, supply chain performance is essential for any organization. The competition is among supply chains as opposed to organizations. Therefore, the performance in the supply chain determines the overall winner. The supply chain must perform at its best to ensure that it remains at the top. Many companies in India are not aware of the importance of supply chain management in the domains of business and as such, India is still lagging behind despite its ability in provision of cheap skilled labor, entrepreneurial talents, and the presence of science and technological interventions. Otherwise stated, proper supply chain management enables companies to reduce costs and drives the profitability of the company. Other studies have argued that supply chain management positively influences competitiveness and organization performance. The study will seek to verify if there are similar trends in companies that are within the food industry in India.
References
Kushwaha, Gyaneshwar S. (2012). Operational performance through supply chain management practices. International Journal of Business and Social Science, 3(2), pp. 222-230.
Li, S., Ragu-Nathan, B., Ragu-Nathan, T. and Subba Rao, S. (2006). The impact of supply chain management practices on competitive advantage and organizational performance. Omega, 34(2), pp.107-124
Vencataya, Lomendra., Seebaluck, Ashley K., and Doorga, Deveshika. (2015). assessing the impact of supply chain management on competitive advantage and operational performance: A case of Four Star Hotel of Mauritius. International Review of Management and Marketing, 6(4), pp.61-69.
Prasad,Ruchira., Satsangi, Rupali.(2013).A case study of Amul co-operative in India in relation to organization design and operation efficiency. International Journal of Scientific &Engineering Research, 4(1), pp.61-69.
Hatsun Agro Product Ltd. (2012). Company Overview. ICRA Online.
Nunally, J. (1978), Psychometric Theory. New York: McGraw-Hill.
Creswell. (2013). Research design: Qualitative, quantitative, and mixed methods approaches. Sage Publications.