European Journal of Scientific Research

ISSN 1450-216X / 1450-202X Vol. 148 No 3 February, 2018, pp. 394-407

http://www. europeanjournalofscientificresearch.com

The Impact of Supply Chain Management and Manufacturing

Flow Management Practices on Competitive
Advantage of Jordanian Industry

Rawan Thaher Al-tarawneh

Department of Industrial Engineering, School of Engineering
The University of Jordan
E-mail: rtarawneh@ju.edu.jo

Abdullah Ahmad Al-Shourah

Department of Management; Faculty of Finance and Business
The World Islamic University for Sciences & Education WISE, Jordan
E-mail: al_shourah@yahoo.com
Tel: 962-772-426-996

Abstract

Supply Chain Management (SCM) affects manufacturing companies in a variety of

ways, including an availability of inputs needed for production processes, costs and
profitability of manufactured items, company infrastructure and ways in which companies
interact with their suppliers and customers. Understandings, that supply chain management
and manufacturers flow management from both a daily operational perspective and a
strategic viewpoint is important for all managers and entrepreneurs in the industry. Useful
supply chain management (SCM) has become a potentially important way of securing
competitive advantage since competition is no longer between organizations, but among
supply chains. This research conceptualizes and develops five dimensions of SCM practice
(supplier relationship management, manufacturing flow management, and product
development and commercialization) and tests the relationships between these SCM
processes and competitive advantage. Data for the study collected from prominent
organizations and the relationships proposed in the framework tested using rigorous
statistical techniques. The results show that higher levels of SCM processes can show the
way to enhanced competitive advantage.

Keywords: Supply chain management, manufacturing flow management and competitive

advantage.

1. Introduction
Supply chain management has been defined as the "design, planning, execution, control, and
monitoring of supply chain activities with the objective of creating net value, building a competitive
infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring
performance globally" Zhang and Dilts, (2004). A supply chain is a system of organizations, people,
activities, information, and resources involved in moving a product or service from supplier to
customer. Therefore, the concept of Supply Chain Management (SCM) has received increasing observe
The Impact of Supply Chain Management and Manufacturing Flow Management
Practices on Competitive Advantage of Jordanian Industry 395

from academicians, consultants, and business managers alike, Tan, Lyman, Wisner, (2002); Feldmann,
Müller, (2003).
Many organizations have begun to recognize that SCM is the key to building competitive
advantage for their products and services in an increasingly crowded marketplace, Jones, (1998). The
SCM has been careful from different points of vision in different bodies of literature Croom Romano,
Giannakis, (2000), such as purchasing and supply management, logistics and transportation, operations
management, marketing, and management information systems. Different theories have offered
insights on specific aspects or perspectives of SCM, such as industrial organization and associated
transaction cost analysis Ellram, (1990), Rungtusanatham, Salvador, Forza, Choi, (2003), resource-
based and resource-dependency theory Cigolini, Cozzi, Perona, (2004), and competitive strategy
Rudberg, Olhager, (2003).
The concept of competitive advantage can be introduced one of the most ancient concepts of
economics and the evolution the can follow to the presents concept absolute advantage by Adam Smith
and theory of comparative advantage provided by Ricardo until the present. Due to this long time,
various definitions is presented by scholars for clarify the concept of competitive advantage.
Competitive advantage for the organization's ability to provide the products its customers that is they
know the more valuable of the competitors provide Similar cases (Saloner, Garth, Andrea Shepard and
Joel Podolny, 2001),.
Therefore, Supply chain activities transform natural resources, raw materials, and components
into a finished product that is delivered to the end customer. In sophisticated supply chain systems,
used products may re-enter the supply chain at any point where residual value is recyclable, (David
Jacoby, 2009). The comprehensive supply chain management consists of top decision-making of
leading firms from a wide variety of industries, such as commodity merchandising, oil and
petrochemicals, automotive manufacturing, athletic equipment, household plumbing and accessories,
and consumer electronics. Some of companies represent all possible locations across a supply chain:
original suppliers, manufacturers of industrial products (business to business), manufacturers of
consumer products, distributors, and retailers.
Therefore, the views presented by the Global Supply Chain Management Forum represents
combined knowledge and experiences from leading firms in the corresponding industry (Goldsby, et al,
2003). Supply chain management is the assimilation of key business processes from end-user through
original suppliers that provides products, services, and information that add value for customers and
other stakeholders, (Andreas Wieland, Carl Marcus Wallenburg, 2011). Supply Chain Management is
the integration of key business processes from end user through original suppliers that provides
products, services, and information that add value for customers and other stakeholders, (Lambert,
Douglas, Martha, Cooper and Janus, Pagh, 1998). The understanding and practicing of supply chain
management (SCM) has become an essential prerequisite for staying competitive in the global race and
for enhancing profitably Tan, Lyman, Wisner (2002), Childhouse, Towill, (2003).
All of the SCM process has both strategic and operational sub-processes, the strategic sub-
processes provide the structure for how the process will be realize and the operational sub-processes
provide the detailed steps for accomplishment. The strategic process is a required step in integrating
the firm with other members of the supply chain, and it is at the operational level that the day-to-day
activities take placing (Lambert, 2008). This research aims to fulfilling the gap of the literature on the
impact of supply chain by empirically testing of manufacturing flow management variables on
competitive advantage. However, due to size limitations and time constraints, only five of the
processes and their impacts on competitive advantage fully examined in this research: supplier
relationship management, manufacturing flow management.
396 Rawan Thaher Al-tarawneh and Abdullah Ahmad Al-Shourah

2. Research Framework
The framework proposes that SCM will have an impact on competitive advantage both directly and
indirectly through, SCM conceptualized a five-dimensional construct. The five dimensions are
strategic supplier partnership, customer relationship, level of information sharing, quality of
information sharing, and postponement. A detailed description of the development of the SCM
processes construct is provided in the following paragraphs. Competitive advantage and organizational
performance are concepts that have been operationalized in the existing literature, Koufteros,
Vonderembse (1997) Zhang, (2001). Using literature support, the expected relationships among SCM,
competitive advantage, and manufacturing flow management, and hypotheses relating these variables
are developed.
• Customer relationship management – provides the firm’s face to the customer, including
management of the PSAs, and provides a single source of customer information.
• Supplier relationship management – provides the structure for how relationships with suppliers
are developed and maintained, including the establishment of PSAs between the firm and its
suppliers.
• Demand management- provides the structure for balancing the customers’ requirements with
the capabilities of the supply chain.
• Order fulfillment- includes all activities necessary to define customer requirements, design the
logistics network, and fill customer orders.
• Returns management- includes all activities related to returns, reverse logistics, gate keeping,
and avoidance.

Figure 2: Research Framework

Supply Chain
Management
Competitive
Advantage
Manufacturing Flow
Management

(Lambert, 2008). Koufteros, Vonderembse (1997) Zhang, (2001).

Tan, Lyman, Wisner (2002), Childhouse, Towill, (2003).

3. Previous Research
3.1 Supply Chain Management
Simchi-Levi and Kaminsky (2000) define supply chain management as “the integration of key business
processes among a network of interdependent suppliers, manufacturers, distribution centers, and
retailers in order to improve the flow of goods, services, and information from original suppliers to
final customers, with the objectives of reducing system-wide costs while maintaining required service
levels”. The Council of Supply Chain Management Professionals (CSCM) (2004) defines SCM as:
encompasses the planning and management of all activities involved in sourcing and procurement,
conversion, and all logistics management activities, including coordination and collaboration with
suppliers, intermediaries, third-party service providers, and customers”. Cooper, Lambert, and Pagh
(1997) define SCM as the management and integration of the entire set of business processes that
provides products, services and information that add value for customers. Other definitions of supply
chain management are. Though these definitions differ slightly in wording, all communicate the
The Impact of Supply Chain Management and Manufacturing Flow Management
Practices on Competitive Advantage of Jordanian Industry 397

importance of integration, communication and coordination between functions and organizations that
will create value for the customer (Gillyard, 2003).
In addition, supply chain management definitions SCM is a discipline in the early stages of
evolution (Gibson, Mentzer, and Cook, 2005). Consultants proposed the term and educators proposed
the structure and theory for executing SCM. The term "supply chain management" first appeared in
1982 (Oliver and Webber). Around 1990, academics first described SCM from a theoretical point of
view to clarify the difference from more traditional approaches and names (such as logistics), to
managing material flow and the associated information flow (Cooper et al., 1997).
SCM processes have been defined as a set of activities undertaken in an organization to
promote effective management of its supply chain. Donlon, (1996) describes the latest evolution of
SCM processes, which include supplier partnership, outsourcing, cycle time compression, continuous
process flow, and information technology sharing. Tan et al. (1998) use purchasing, quality, and
customer relations to represent SCM processes, in their empirical study. Alvarado and Kotzab (2001)
include in their list of SCM processes concentration on core competencies, use of inter-organizational
systems such as EDI, and elimination of excess inventory levels by postponing customization toward
the end of the supply chain.
The term of supply chain management has grown in popularity over the past two decades, with
a lot of research done on the topic (Ashish, 2007). The concept of SCM has received increasing
attention from academicians, consultants, and business managers like (Feldmann and Müller, 2003,
Tan, Lyman and Wisner, 2002, Van Hoek, 1998). Therefore, many organizations have begun to
recognize that SCM is the key to building sustainable competitive edge for their products and/or
services in an increasingly crowded marketplace (Jones, 1998). The concept of SCM has been
considered from different points of view in different bodies of literature (Croom et al., 2000) such as
purchasing and supply management, logistics and transportation, operations management, marketing,
organizational theory, and management information systems.
Tan, Kannan, Handfield and Ghosh (1999) attempted to link certain supply chain management
processes with firm performance. In particular, they examined the effects of quality management,
supply base management and customer relations processes on firm financial performance. They found
that some aspects of quality management – use of 8 performance data in quality management,
management commitment to quality, involvement of quality department, and social responsibility of
management - all positively related to firm performance (Gillyard, 2003). Managing the supply base
found that to have a significant impact on firm growth but not on overall performance. The
significance of supply chain management highlights the need for companies actively manage their
supply chain to maximize their performance. As Mentzer et al. (2001) said, a supply chain would exist
whether a firm actively manages it or not.
Boddy, Cahill, Charles, Fraser-Kraus, and Macbeth (1998) found that more than half of the
respondents to their survey considered that their organizations had not been successful in implementing
supply chain partnering; Spekman, Kamauff, and Myhr (1998), noted that 60% of supply chain
alliances tended to fail. Deloitte Consulting survey reported that only 2% of North American
manufacturers ranked their supply chains as world class although 91% of them ranked SCM as
important to their firm’s success (Thomas, 1999). It appears that while SCM is important to
organizations; effective management of the supply chain does not yet appear have been realized.

3.2 Manufacturing Flow Management Process

Manufacturing, the conversion of raw materials and components into finished goods, represents one of
the most value-adding activities in the supply chain. In fact, the economic health of entire nations can
tied to a nation’s ability to produce an assortment of finished goods desired by the home market as well
as markets abroad. In order to face these challenges, manufacturing companies must have strategy and
competitive priority in order for them to compete in a dynamic market (Thun, 2008). According to
398 Rawan Thaher Al-tarawneh and Abdullah Ahmad Al-Shourah

Skinner (2007), “a manufacturing strategy is a set of manufacturing policies designed to maximize

performance among trade-offs among success criteria to meet the manufacturing task determined by a
corporate strategy”.
Properly connecting production to actual demand represents a huge money-saving opportunity
for manufacturing companies and their supply chains. For example, According to Amoako-Gyampah
and Acquaah (2008), quality strategy plays an important role in capturing customer satisfaction that
can potentially lead to increased sales growth and market share. They also added that, a company that
develops a strategy to achieve volume and mix flexibility while keeping low costs and high quality will
be able to react faster to market demands and finally achieve higher performance. A recent study by
Karim et al. (2008) revealed that product quality and reliability has become the main competitive factor
in the global trend. Firms that integrate procurement, manufacturing and logistics activities might
achieve cost reductions of between five and seven percent of revenues (Hoover, Eero Eleranta &
Huttunen, 2001).
According to Özcan and Toklu (2009), the obvious characteristic of a high volume production
is that operations are linked together in an assembly line. After completion of one operation on a
product, it moves directly to the next operation in the assembly line. The process is continued until the
final station in the assembly line where the finished product is expected. Manufacturing flow
management is the supply chain management process that includes all activities necessary to obtain,
implement, and manage manufacturing flexibility in the supply chain and to move products through the
plants (Goldsby & Garcia-Dastugue, 2003). This process deals with making the products and
establishing the manufacturing flexibility needed to serve the target markets. Manufacturing flexibility
reflects the ability to make a variety of products in a timely manner at the lowest possible cost and
respond to changes in demand.
According to Drira et al. (2007), flow line production is characterised by high volume,
repetitive and short cycle work. The work piece is physically moved through this sequence in order to
complete the process and finally becomes the product. The sequence is also known as product layout
because it is arranged in a long line of workstations and usually connected by conveyors. In flow line
production, machines are oriented such that the product flows in sequence down the line and has all
necessary set-ups to perform operations on the products (Chen and Chen, 2009). For these reasons,
machines in flow line are often 17 designed specifically for the products and are not easily adapted to
other products (Quadt and Kuhn, 2007).
The manufacturing flow management process team coordinates all activities necessary to
obtain, implement, and manage manufacturing flexibility in the supply chain and to move products
through the plants (Lambert, 2008). This process incorporates more than just simply production. For
example, efficient product flow through a plant depends on the reliability of the inbound/receiving
activity as well as the suppliers’ ability to deliver complete orders on time. Therefore, receiving and
procurement functions should work closely with production to ensure efficient product flow during the
manufacturing process. Suppliers also need to be involved in these discussions to ensure that
potentially costly delays and miscommunications can be avoided.
The strategic portion of manufacturing flow management provides the structure for managing
the process within the firm and across key supply chain members. The operational portion of the
process represents the actualization of manufacturing flow management. Developing the strategic
process is a necessary first step toward integrating the firm with other members of the supply chain,
and it is at the operational level that the day-to-day activities are executed (Goldsby& Garcia-
Dastugue, 2003).
Manufacturing flexibility ensures the company’s ability to manage resources and uncertainty to
meet various customer requests (Lambert, 2008). Generally, more flexibility is preferred over less.
However, as with any other advantage in business there is a cost associated with developing
manufacturing flexibility. Therefore, the targeted type and degree of flexibility should fit the overall
business strategy (Gaimon & Singhal, 1992). Key customers may receive a higher degree of flexibility
The Impact of Supply Chain Management and Manufacturing Flow Management
Practices on Competitive Advantage of Jordanian Industry 399

in order to keep that customer satisfied. However, managers must be confident that the firm will be
rewarded by these customers for providing greatened amounts of manufacturing flexibility. If this
flexibility is determined to be of little or no value to the customer than the managers may reduce this
flexibility in or to contain costs.
Manufacturing constraints and requirements will lead to the development of in the inventory
policy for each facility in the supply chain network structure. The inventory policy will include how
much inventory is to be held in the form of raw materials, subcomponents, work-in-progress, and
finished goods, and how often inventory will be replenished. Finally, the inventory policy will
determine the appropriate actions in the event of a stockout, which will be coordinated with demand
management and, eventually, incorporated with contingency plans (Croxton, Lambert, Rogers &
Garcia-Dastague, 2002).
Manufacturing flow management should be implemented across the members of the supply
chain that participate in the flow of products, as well as across those that have an effect on, or are
affected by, the supply chain as a whole. Through the manufacturing flow management process,
management coordinates all activities necessary to move products through the plants, and to obtain,
implement, and manage manufacturing flexibility in the supply chain (Goldsby & Garcia-Dastugue,
2003).
However, it is the responsibility of each and every member of the supply chain to make the
product flow as efficient as possible while allowing for the desired amount of manufacturing flexibility
Extensive reviews of the literature on manufacturing flexibility are provided by Hyun and Ahn (1992),
Sethi (1990), and Suarez, Cusumano, and Fine (1991). They all seem to have come to one general
conclusion: the achievement of flexibility in manufacturing is a critical source of competitive
advantage for manufacturing firms. CEOs know this, managers know it, and shop floor operators know
it (Upton, 1994). Based on the results of the studies presented, the next two hypotheses are:
H3. Manufacturing flow management processes will be positively related to competitive
advantage within an organization.
H4: Manufacturing flow management processes will be positively related to organizational
performance.

3.3 Competitive Advantage

A competitive advantage is an advantage gained over competitors by offering customers greater value,
either through lower prices or by providing additional benefits and service that justify similar, or
possibly higher, prices. In a recent article Peer Neary (2003), attempting to advance the theory of
comparative advantage in the presence of market imperfections (oligopoly in a general equilibrium
framework) had to say the following for a general understanding of competitive advantage in the
economics profession. Competitive advantage defined as the “capability of an organization to create a
defensible position over its competitors” (Li, Ragu-Nathan, Ragu-Nathan, & Rao, 2006). Tracey,
Vonderembse, and Lim (1999) argue that competitive advantage comprises distinctive competencies
that set an organization apart from competitors, thus giving them an edge in the marketplace. Gaining
competitive advantage is critical for organizations.
Baltzan and Phillips (2010) define competitive advantage as ‘a product or service that an
organization’s customers value more highly than similar offerings from its competitors’ (in other
words, you have something useful (i.e. products, services, capabilities) that your competitors do not
have). Competitive advantages are typically temporary as competitors often seek ways to duplicate the
competitive advantage (Baltzan & Phillips 2010).
In addition, recent studies have included time-based competition as an important competitive
priority. Research by Hand field and Pannesi (1995), Kessler and Chakrabarti (1996), Zhang (2001)
identifies time as the next source of competitive advantage. On the basis of prior literature, Koufteros
et al. (1997) describe a research framework for competitive capabilities and define the following five
400 Rawan Thaher Al-tarawneh and Abdullah Ahmad Al-Shourah

dimensions: competitive pricing, premium pricing, value-to-customer quality, dependable delivery, and
production innovation. Competitiveness of a firm is its capacity to achieve its targets. These targets are
likely to be expressed in a variety of terms depending on the context (Barney 2002).
Therefore, a firm experiences a competitive parity when the firm’s action creates economic
value applied in several other firms engaging in a similar action. An important goal of a business
enterprise is to optimize shareholders returns. However, optimizing short-term profitability does not
necessarily ensure optimal shareholders returns since shareholder value represents the net present value
of expected future earnings. One of the techniques that reflect the shareholders return is the concept of
the Balanced Scored Card (BSC) as an indicator for the firm’s competitive advantage (Barney, 2002).
Competitive advantage emerges from the creation of superior competencies that are leveraged
to create customer value and achieve cost and/or differentiation advantages, 46 resulting in market
share and profitability performance (Barney, 1991; Day & Wensley, 1988). Sustaining competitive
advantage requires that firms set up barriers that make imitation difficult through continual investment
to improve the advantage, making this a long-run cyclical process (Day & Wensley, 1988). Porter's
approach to competitive advantage centers on a firm’s ability to be a low cost producer in its industry,
or to be unique in its industry in some aspects that are popularly valued by customers (Porter, 1991).
Most managers agree that cost and quality will continue to remain the competitive advantage
dimensions of a firm (D’ Souza, 2002). Wheelwright (1978) suggests cost, quality, dependability and
speed of delivery as some of the critical competitive priorities for manufacturing.
There is widespread acceptance of time to market as a source of competitive advantage
(Holweg, 2005). Price/cost, quality, delivery dependability, and time to market have been consistently
identified as important competitive capabilities (Fawcett & Smith, 1995; Vokurka, Zank & Lund 2002;
Tracey, Vonderembse & Lim 1999). ‘Time’ has been argued to be a dimension of competitive
advantage in other research contributions (Stalk, 1988; Vesey, 1991; Handfield & Pannesi; 1995).
In a research framework, Koufteros, Vonderembse and Doll (1997) describe the following five
dimensions of competitive capabilities: competitive pricing, premium pricing, valueto-customer
quality, dependable delivery, and product innovation. These dimensions were further described and
utilized in other contributions as well (Koufteros Vonderembse & Doll, 2002, Li et al. 2006; Safizadeh,
Ritzman, Sharma & Wood 1996; Vickery, Calantone & Droge, 1999). Based on these studies, the five
dimensions of competitive advantage most applicable to this study are:
1. Price/Cost - “The ability of an organization to compete against major competitors based
on low price” (Li et al., 2006).
2. Quality- “The ability of an organization to offer product quality and performance that
creates higher value for customers” (Koufteros, 1995).
3. Delivery Dependability- “The ability of an organization to provide on time, the type and
volume of product required by customer(s)” (Li et al., 2006).
4. Product Innovation. “The ability of an organization to introduce new products and
features in the market place” (Koufteros, 1995).
5. Time to Market. “The ability of an organization to introduce new products faster than
major competitors” (Li et al., 2006).

4. Methodology
This study was developed to determine the relationship between five dimensions impact of supply
chain management and competitive advantages. The five measures used in this study are (supplier
relationship management (SRM), manufacturing flow management (MFM), and competitive advantage
(CA)). Procedures Data for this study was collected using a 30-item based survey that was delivered to
100 top management executives in a wide range of industries. This survey was developed for use by
two additional research studies being produced concurrently with this study. The survey was developed
using supply chain assessment tools developed by Lambert (2008).
The Impact of Supply Chain Management and Manufacturing Flow Management
Practices on Competitive Advantage of Jordanian Industry 401

5. Results and Analysis

The aim of this research study was to determine if five dimensions of SC processes (supplier
relationship management (SRM), manufacturing flow management (MFM), and competitive
advantage. This summarizes the findings of a survey sent out to 90 executive members of the Global
Supply Chain Forum. The three hypothesis presented earlier in this research study are evaluated using
bivariate correlation analysis. Data 90 surveys were distributed and 10 surveys were returned and of
those 10 surveys 8 were deemed usable.

5.1 Reliability Tests

To test the reliability of study tool for sample study, Cronbach's Alpha was used and the results
revealed a Cronbach's alpha coefficient was (0.924) for all items, and values of (α) range 0.882 to 0.87,
which refers the questionnaire is reliable. The values of (α) of the study variables of the study were as
in Table (1):

Table 1: Reliability Tests and Data Summary for Sample Study

Variable No. of Items Reliability Coefficient (α )

Cost leadership strategy 14 0.889
Focus strategy 18 0.897
Differentiation strategy 14 0.882
All 46 0.924
Source: Develop by the researcher

5.2 Survey Data

In order to achieve the desired objectives of this study, the researcher adapted and developed a
questionnaire distributed to Jordanian industry, to measure the impact of supply chain management and
manufacturing flow management process on competitive advantage of Jordanian industry. Description
of the answers of question by means standard deviations and relative importance.
a. Supply chain management

Table 2: Means, Standard Deviation and Relative Importance for supply chain management

Item Standard Relative

Paragraph Means Rank
No. Deviation Important
SRM processes requirements are determined by a cross
1 3.720 0.830 High 6
functional team
2 Our industry has developed a CRM process team. 4.020 0.887 High 1
Our key suppliers understand how their decisions/actions
3 3.760 0.806 High 5
affect the SRM process.
Our industry provides supplier team with formal
4 3.550 0.783 Moderate 8
boundaries for the degree of customization desired in PSA
Our industry share benefits from process improvements
5 3.510 0.759 Moderate 10
with suppliers.
Our key suppliers understand how their decisions/actions
6 3.920 0.929 High 2
affect the SRM process
A person throughout our industry understands how their
7 3.540 0.717 Moderate 9
decisions/actions affect the SRM processes.
Conflicting functional objectives often hinder the
8 3.240 0.653 Moderate 14
performance of the supplier relationship process.
Our industry regularly measures the impact our business
9 3.320 0.634 Moderate 13
has on a supplier’s profitability.
Our industry regularly measures our supplier’s
10 3.340 0.639 Moderate 12
contributions to our profitability.
402 Rawan Thaher Al-tarawneh and Abdullah Ahmad Al-Shourah

Item Standard Relative

Paragraph Means Rank
No. Deviation Important
Our industry have formal performance goals for supplier
11 3.880 0.844 High 3
relationship management
Our industry has SRM metrics that are related to financial
12 3.680 0.863 High 7
performance.
Our industry provides supplier teams with formal
13 boundaries for the degree of customization desired in 3.500 0.785 Moderate 11
PSAs.
Our industry documents our relationship with suppliers
14 3.770 0.839 High 4
through formal PSA1.
Supply chain management 3.625 0.352 Moderate
Source: Develop by the researcher

The table (2) indicates that the general average of supply chain management was (3.625) with
standard deviation (0.352) and moderately relative importance. The Paragraph (Our industry has
developed a CRM process team) was first with mean (4.020), and relative importance, while paragraph
(Conflicting functional objectives often hinder the performance of the supplier relationship process.)
was last with mean (3.240) and relative importance.

b. Manufacturing flow management

Table 3: Means, Standard Deviation and Relative Importance for manufacturing flow management

Item Standard Relative

Paragraph Means Rank
No. Deviation Important
Manufacturing capability are formally communicated
1 3.690 0.825 High 14
internally
Manufacturing capabilities are formally communicated
2 3.740 0.824 High 9
with key customers
Manufacturing capability are formally communicated with
3 3.680 0.790 High 15
key suppliers.
Our industry has formal metrics focused on the MFM
4 3.880 0.844 High 4
processes
Our industry understands how MFM metrics affects
5 3.670 0.792 High 16
financial performance.
Our industry has formal performance goals relating to the
6 3.960 0.803 High 2
MFM process.
Our industry has communicated performance goals
7 3.860 0.876 High 5
relating to MFM through industry.
Conflicting functioning objectives hinder the performance
8 3.790 0.880 High 6
of the MFM process.
People in our industry have a limited understanding of
9 3.580 0.831 Moderate 18
how their decisions/actions affect the MFM process.
Postponement opportunities are evaluated jointly with key
10 3.750 0.903 High 8
suppliers.
Postponement opportunities are evaluated jointly with key
11 3.770 0.851 High 7
customers.
Make/buy decisions are based on multiple criteria, with a
12 3.710 0.902 High 12
long term focus.
13 Our firm plans for capacity growth for the future. 3.630 0.861 Moderate 17
Manufacturing flexibility requirements determined by a
14 3.900 0.870 High 3
cross functional team.
Our industry cannot offer different degrees of
15 3.970 0.915 High 1
manufacturing flexibility to different customers.
Our firm has a formal process for assessing future changes
16 3.720 0.889 High 11
in laws and regulations that might affect our
The Impact of Supply Chain Management and Manufacturing Flow Management
Practices on Competitive Advantage of Jordanian Industry 403

Item Standard Relative

Paragraph Means Rank
No. Deviation Important
manufacturing processes.
Our industry has a formal process for evaluating the
17 expertise that will be needed to use future technologies or 3.700 0.759 High 13
fulfill future market needs.
Our industry has examined how our corporate strategy
18 3.730 0.802 High 10
influences the MFM process.
Manufacturing flow management 3.763 0.409 High
Source: Develop by the researcher

The table (3) indicates that the general average of manufacturing flow management was (3.763)
with standard deviation (0.409) and highly relative importance. The Paragraph (Our industry cannot
offer different degrees of manufacturing flexibility to different customers) was first with mean (3.970),
and highly relative importance, while paragraph (People in our industry have a limited understanding
of how their decisions/actions affect the MFM process.) was last with mean (3.580) and moderately
relative importance.

c. Competitive advantage

Table 4: Means, Standard Deviation and Relative Importance for competitive advantage

Item Standard Relative

Paragraph Means Rank
No. Deviation Important
1 We have fast product development. 4.130 0.849 High 2
2 We have time-to-market lower than industry average. 3.940 0.802 High 6
We are first in the market in introducing new
3 4.150 0.845 High 1
products/services.
We do respond well to customer demand for 'new'
4 4.100 0.905 High 3
featureslserv1ees.
We alter our product services offerings to meet client
5 4.060 0.973 High 4
needs
6 We provide customized products/services. 3.920 0.882 High 8
7 We provide dependable delivery. 3.760 0.811 High 14
8 We rarely deliver customer orders on time. 3.890 0.909 High 11
9 We offer products that are very durable. 3.910 0.900 High 9
10 We offer products/services that are highly reliable. 4.030 1.029 High 5
11 We are able to compete based on quality. 3.790 0.808 High 13
12 We offer high quality products/services to our customer. 3.900 0.893 High 10
We are able to offer prices as low or lower than our
13 3.930 0.868 High 7
competitors.
14 We offer competitive prices. 3.870 1.051 High 12
Manufacturing flow management 3.956 0.608 High
Source: Develop by the researcher

The table (4) indicates that the general average of competitive advantage was (3.956) with
standard deviation (0.608) and highly relative importance. The Paragraph (We are first in the market in
introducing new products/services.) was first with mean (4.150), and relative importance, while
paragraph (We provide dependable delivery.) was last with mean (3.760) and relative importance.

5.3 Multicollinearity Test

To test the existence of multicollinearity phenomena between model variables, Pearson correlation
coefficients calculated between independent (predictor) variables, the results of testing multicollinearty
between independents variables are explained by correlation matrices and VIF test as following:
404 Rawan Thaher Al-tarawneh and Abdullah Ahmad Al-Shourah

Table 5: Correlation matrix for predictor variables

variables Supply chain management Manufacturing flow management

Supply chain management 1.000
Manufacturing flow management 0.466** 1.000
(**) Significant at 0.01

The above table shows that value of correlation coefficient between (supply chain management)
and (manufacturing flow management), equals (0.466), which means there was no perfect relationship
between variables. In the statistical literature, the value (0.80) and more considered as an indicator of
multi co linearity existence Gujarati, (2004).

6. Hypotheses
6.1 Simple Regression
This part of study explains hypotheses testing, where simple analysis applied, for main hypotheses, the
results were as following:
• H01: There is no significant relationship between supply chain management and competitive
advantage of Jordanian industry
• HA1: There is a significant relationship between supply chain management and competitive
advantage of Jordanian industry.

Table 6: Regression Analysis for supply chain management (SCM)

B SE B β T Sig.
(Constant) 1.377 0.580 2.375 0.020
SCM 0.711 0.159 0.411 4.465 0.000
Note. R = 0.411; R2 = 0.169; adjusted R2 =0.161; F(1,99) = 99.938, p<0.01.

The regression analysis for SCM is shown in table (6). There was a significant relation between
SCM and competitive advantage (CA), Pearson r = 0.411, p (one-tailed) < 0.01. the result indicated
that SCM (t (99) = 4.465, p< 0.01) is significant contributor of CA. R2 (0.169) shows that SCM
accounts for 16.9% of variation in CA. Moreover, the difference between R2and adjusted R 2(0.161) is
only (0.008); as shown in table (6). This means that if the model is derived from the population, it
would account for 0.8% less variance in CA.
• Ho2: There is no significant relationship between manufacturing flow management and
competitive advantage of Jordanian industry
• HA2: There is a significant relationship between manufacturing flow management and
competitive advantage of Jordanian industry.

Table 7: Regression Analysis for manufacturing flow management (MFM)

B SE B Β T Sig.
(Constant) 2.080 0.536 3.879 0.000
MFM 0.499 0.142 0.335 3.520 0.001
Note. R = 0.335; R2 = 0.112; adjusted R2 =0.103; F(1,99) = 12.391, p<0.01.

The regression analysis for MFM is shown in table (7). There was a significant relation
between MFM and competitive advantage (CA), Pearson r = 0.335, p (one-tailed) < 0.01. the result
indicated that MFM (t(99) = 3.520, p< 0.01) is significant contributor of CA. R2 (0.112) shows that
MFM accounts for 11.2% of variation in CA. Moreover, the difference between R2and adjusted R2
The Impact of Supply Chain Management and Manufacturing Flow Management
Practices on Competitive Advantage of Jordanian Industry 405

(0.103) is only (0.009); as shown in table (7). This means that if the model is derived from the
population, it would account for 0.9% less variance in CA.

6.2 Multiple Regressions

This part of study explains third hypothesis testing, where multiple regression analysis and stepwise
regression analysis were applied, the results were as following:
• H03: There is no significant relationship between supply chain management and manufacturing
flow management, together, and competitive advantage of Jordanian industry
• HA3: There is a significant relationship between supply chain management and manufacturing
flow management, together, and competitive advantage of Jordanian industry.
To test the validity of third hypothesis (H03), multiple regressions were used to verify the
potential impact of both supply chain management and manufacturing flow management competitive
advantage provided in Table (8).

Table 8*: Regression result of third hypothesis H03

Regression Coefficients
Dependent
R R2 Adj.R2 F Sig F Independent
variable B Std. error T Sig t
variable
Competitive (Constant) 0.886 0.637 1.392 0.167
advantage 0.442 0.195 0.179 11.778 0.000 SCM 0.564 0.178 3.166 0.002
(CA) MFM 0.273 0.153 1.782 0.078
*Significant at 0.05 level.

The model summary table reports that R Square, the coefficient of determination about (19.5%)
of the variation in CA is explained by the model. While ANOVA (F-test) tests the acceptability of the
model from a statistical perspective, and it is a useful test of the model's ability to explain any variation
in the dependent variable CA. The significance value of the F statistic (F=11.778) is (SigF=0.000) less
than 0.05, which means that the effect of independent variables aggregated is significant.
Moreover, the coefficients of the regression line states that (SCM) has a significant effect on
CA, where coefficient equals (0.564) is significant with (t= 3.166) and (Sig t =0.002) less than 0.05,
while (MFM) has NO significant effect, where coefficient equals (0.273) is not significant with (t=
1.782) and (Sig t =0.078). Furthermore, the difference between R2and adjusted R2(0.179) is (0.016); as
shown in table ( ). This means that if the model is derived from the population, it would account for
1.6% less variance in CA.
All manufacturing industry and other organizations should be advised to embrace the concept
so that they can be able to reap the benefits of adopting these processes. Although this research
analyzed the effect of only five of the eight supply chain management processes identified by the
Global Supply Chain Forum. Perhaps the most serious limitation of this research is the use of
simulated data. Future Research Results from this research appear to support the prevailing belief in
literature that SRM, and MFM are positively related to competitive advantage.

7. Conclusion and Limitations

This research provides empirical justification for a framework that identifies five key dimensions of
SCM processes and describes the relationship among SCM processes, manufacturers flow management
impact of competitive advantage, and Jordanian industry. The study concludes that most manufacturing
industry in Jordan have adopted the various supply chain management processes. The results of this
study seem to indicate that SCM, MFM, and impact on competitive advantage. Therefore, business
organizations should take an active role in managing all facets of their supply chain. In today’s
406 Rawan Thaher Al-tarawneh and Abdullah Ahmad Al-Shourah

increasingly competitive global markets, organizations that do not practice sound supply chain
management techniques may find themselves unable to compete with their business competitors.
Supply chain management helps small enterprises meet purchasing and production requirements
efficiently. The Council of Supply Chain Management Professionals defines the process as “the
planning and management of all activities involved in sourcing and procurement, conversion and
logistics.” Supply chain management is also a method of improving coordination and collaboration
with suppliers, distributors, service providers and customers. This study pro vides empirical evidence
to support conceptual and prescriptive statements in the literature regarding the impact of SCM
processes.

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