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Ports' Supply Chain Management (Scm) Strategies and Their Impacts on Performance

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Ports' Supply Chain Management (Scm) Strategies and Their Impacts on Performance PORTS' SUPPLY CHAIN MANAGEMENT (SCM) STRATEGIES AND THEIR IMPACTS ON PERFORMANCE - A PARTIAL LEAST SQUARES APPROACH ON THE USERS OF BUSAN PORT by Lae Hyung Hong A Thesis Submitted in Fulfillment of the Requirements for the Degree of Doctor of Philosophy of Cardiff University Transport and Shipping Research Group, Logistics and Operations Management Department of Cardiff Business School, Cardiff University November 2009 UMI Number: U584374 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U584374 Published by ProQuest LLC 2013. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 Cardiff Ca r d if f B u s in e s s UNIVERSITY s c h o o l DECLARATION This work has not previously been accepted in substance for any degree and is not concurrently submitted in candidature for any degree. Signed ...ytb ......................................................(candidate) Date ... y o I II.. I W.° 1 STATEMENT 1 This thesis is being submitted in partial fulfillment of the requirements for the degree of Ph.D. Signed . A ...... (candidate) D ate ^ U U STATEMENT 2 This thesis is the result of my own independent work/investigation, except where otherwise stated. Other sources are acknowledged by footnotes giving explicit references. Signed ...................... (candidate) D a te........ STATEMENT 3 I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter- library loan, and for the title and summary to be made available to outside organisations. Signed ..Sfr .........................................................(candidate) d ,,, i ABSTRACT Based on the combined view of Resource Based Theory (RBT) and Supply Chain Management Theory (SCMT), this study aims to investigate the impact of Port Authorities' (PAs') SCM strategies on Port focused Supply Chains' (PSCs) SCM strategies, PSCs' resources, and PSCs' Supply Chain Performance (SCP). Considering the different roles of PAs and private players in ports, the concept 'Port focused Supply Chain' (PSC), including container terminals, inland transport companies and depots, is adopted for the current study. After a literature review and exploratory factor analysis, twelve specific variables, i.e. PAs' 'concessions', 'using IT', 'marketing', 'support for hinterland and FTZ', PSCs' 'vertical integration', 'relationship orientation', 'skills', 'physical 'resources', and PSCs' 'reliability', 'flexibility', 'costs', and 'service effectiveness' were chosen for the PLS (Partial Least Squares) analysis. The questionnaire survey was distributed to 1,208 surveyees, i.e. experts in headquarters, branches, agents of the shipping liner companies and freight forwarders using Korean and Chinese ports. From 12th March to 3rd May 2007,124 responses were collected. It is shown that PAs' 'using IT' strategy can positively affect PSCs' SCP through 'PSCs' relationship orientation', and 'skills'. Among the variables of PSCs' SCM, 'relationship orientation' makes a stronger impact on PSCs' resources than 'vertical integration'. 'Skills' is more powerful in determining PSCs' SCP than 'physical resources'. While 'physical resources' has a significant relationship with two variables (cost and service effectiveness), 'Skills' has positive influences on all the four variables of PSCs' SCP. Singapore's SCP exceeded the SCP scores of other rivals, i.e. Hong Kong, Busan, Shanghai, and Gwangyang port. Except Shanghai port, the container cargo volumes of the other four ports were consistent with their SCP. In conclusion, the implication for PAs can be that PSCs' performance can be improved by utilizing coherent SCM strategies. Further research investigating the impacts of PAs' SCM strategies is recommended. ACKNOWLEDGEMENTS I have always had a dream of the moment that I finished the acknowledgement during my whole Ph.D. period. And I am now approaching that moment. I should express my thanks to everyone who helped and supported me. They all made my Ph.D. time as a very precious experience that I cannot forget for the rest of my life. First of all, I would like to thank my supervisors, Dr. Anthony Beresford, Dr. Stephen Pettit and Professor Peter Marlow. Especially, I appreciate Dr. Beresford's invaluable advice which was always warm, and stimulating me. Also, I would like to thank South Korean government. Without their support, I could not imagine a chance to study for a Ph.D. I hope that they will be proud of their decision. I would like to thank Bo-Sun Kim, my wife, who has been assisted my decision to pursue a Ph.D. and gave me a great deal of encouragement whenever I was in trouble. My son, 'Woojae' and daughter, 'Hyunjae' have always been an inspiration to me. My thanks should go to Ms. Daisy Wang for her neat and clear translation for the Chinese version of the questionnaire, and Mr. Sang- jin Shin for his great effort in building the website for the questionnaire. Finally, I must say that I owe a lot to my parents, Duk-wha Hong and Young-ja Cho. Without their love and trust, I can not imagine that I could accomplish any of my achievement such as completing this Ph.D. thesis. Table of Contents Chapter 1 Introduction 1 1.1 Research Background and Motivation 1 1.2 Research Objectives and Questions 5 1.3 Research Scope and Sample 7 1.4 Thesis Structure and Framework Chapter 2 Literature Review 14 2.1 Transaction Cost Theory (TCT) I7 2.1.1 General TCT 17 2.1.2 TCT on logistics 18 2.1.3 Limitations & implications 21 2.2 Porter's Competitive Strategy Framework 24 2.2.1 General Porter's framework 24 2.2.2 Porter's framework on the Port and Shipping Industries 25 2.2.3 Limitations & Implications 26 2.3 Port Selection Criteria 28 2.3.1 General Port Selection Criteria 28 2.3.2 Limitations & implications 29 2.4 Port Performance 29 2.4.1 Studies on traditional port performance indicators 29 2.4.2 Limitations & implications 30 2.5 Resource Based Theory 32 2.5.1 General Resource Based Theory 32 2.5.2 RBT in the port and shipping industry 36 2.5.3 Implications for the current research 37 2.6 Supply Chain Management Theory (SCMT) 38 2.6.1 General SCMT 38 2.6.2 SCMT in port and shipping industry 40 2.7 RBT & SCMT approach: Identifying key concepts 44 2.7.1 PAs' Supply Chain Management strategies 46 2.7.1.1 Definition of 'Port Authority' (PA) 46 2.7.1.2 Privatisation 48 2.7.1.3 Support for Hinterland and FTZ 53 2.7.1.4 Using Information Technology 55 2.7.1.5 Marketing 57 2.7.2 Port focused Supply Chains' SCM strategies 58 2.7.2.1 Port focused Supply Chains (PSCs) 58 2.7.22 Vertical Integration 62 2.72.3 Relationship Orientation 65 2.7.3 Resources 68 2.7.3.1 Definition and Typology of Resources 68 2.7.32 Financial Resources 70 2.7.3.3 Skills 71 2.7.3.4 Relational Resources 72 2.7.3.5 Physical Resources 74 2.7.4 Supply Chain Performance 75 v 2.8 Concluding Remarks 81 Chapter 3 Characteristics of Busan and Shanghai port 83 3.1 Container Routes involving Busan and Shanghai port 83 3.2 Physical Resources of Busan & Shanghai port 86 3.3 SCM strategies of Busan & Shanghai port 90 3.4 Concluding remarks 97 _Chapter 4 Research Model 98 4.1 Definitions of key concepts 99 4.2 Conceptual Model 100 4.3 Hypotheses 103 4.3.1 Relationships between PAs' SCM and PSCs' SCM 104 4.3.2 Relationships between PSCs' SCM and Resources 106 4.3.3 Relationships between PSCs' Resources and SCP 109 4.3.4 Relationships between PAs' SCM and PSCs' SCP 110 4.3.5 Relationships between PSCs' SCM and SCP 112 4.4 Final Model and Concluding Remarks 114 Chapter 5 Research Design & Methodology 116 5.1 Research Design 117 5.2 Research Process Approach 118 5.2.1 Research Philosophy 119 5.2.2 Research Approaches 124 5.2.3 Research Strategies 126 5.2.4 Time Horizons 129 5.2.5 Research Purpose 129 5.2.6 Data Collection Methods 130 5.3 Questionnaire Design 132 5.4 Sampling Design 145 5.4.1 Defining the population 145 5.4.2 The sampling frame 146 5.4.3 The sample procedure 147 5.4.4 Determine the sample size 149 5.5 Issues on emergent constructs 150 5.5.1 Definition of formative indicators 150 5.5.2 Problems of using formative indicators in SEM 150 5.6 Model evaluation 152 5.6.1 Assessing the overall model 152 5.6.2 Reliability and Validity 153 5.7 Data Analysis MethocyTechnique 158 5.7.1 Basic concepts of the PLS 159 5.7.2 Criteria for choosing between PLS and SEM 160 5.7.3 Implications for the present study 163 5.8 Concluding Remarks 164 Chapter 6 Descriptive Statistics 166 vi 6.1 Response Rate and Non-Response Bias 166 6.2 Overall Sample Demographic Profile 169 6.3 Descriptive Statistics for Responses 180 6.4 Descriptive Statistics for SCP of five selected Ports 184 6.5 Concluding Remarks 188 Chapter 7 Statistical Analysis 190 7.1 Framework 190 7.2 Data Preparation and Screening 191 7.2.1 Missing Data 191 7.2.2 Outliers 195 7.2.3 Normality 196 7.3 Exploratory Factor Analysis: Validity check 197 7.3.1 PAs'and PSCs'SCM Strategies 198 7.3.2 PSCs' Resources and Supply Chain Performance 201 7.4 Outer Model 204 7.4.1 Evaluation of reliability and validity 204 7.4.2 Weights as the relative importance of indicators 204 7.5 Structural Model 210 7.5.1 Overall relationships between variables 210 7.5.2 PAs' SCM strategies 213 7.5.3 PSCs' SCM strategies 216 7.5.4 PSCs' resources 218 7.6 Concluding Remarks 221 Chapter 8 Discussions and Conclusions 223 8.1 Research Findings and Implications 224 8.1.1 PAs' SCM strategies 224 8.1.2 PSCs' SCM strategies 227 8.1.3 PSCs' resources 228 8.1.4 SCP of five major container ports in Asia 229 8.2.
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