Journal of Industrial Technology • Volume 20, Number 2 • February 2004 to April 2004 • www.nait.org Volume 20, Number 2 - February 2004 to April 2004 Supply Chain Management: Strategic Factors From The Buyers’ Perspective By Dr. Ronald L. Meier, Dr. Michael R. Williams, and Mr. Rodger B. Singley Peer-Refereed Article KEYWORD SEARCH Industrial Distribution Management Quality Research Supply Chain Management The Official Electronic Publication of the National Association of Industrial Technology • www.nait.org © 2004 1 Journal of Industrial Technology • Volume 20, Number 2 • February 2004 to April 2004 • www.nait.org Supply Chain Management: Strategic Factors From The Buyers’ Perspective By Dr. Ronald L. Meier, Dr. Michael R. Williams, and Mr. Rodger B. Singley Dr. Ronald L. Meier has been in the Technology Department at Illinois State University since 1994. Introduction And Overview economy changes, as competition His scholarly work focuses on organizational com- Business is characterized as evolving becomes more global, it is no longer petitiveness issues, primarily oriented toward en- terprise risk and project management. His teach- away from its traditional focus on company vs. company but supply chain ing responsibilities include graduate level project single exchange transactions and vs. supply chain” (Henkoff 1994). management courses and the oversight and deliv- ery of a six-course series of project management toward an emphasis on creating and Properly implemented, SCM can courses designed for business and industry pro- maintaining longer-term buyer-seller positively impact many functions and fessionals. Dr. Meier has published or co-published over 50 papers in various technical and manage- relationships. These strategic relation- outcomes of the organization including ment journals. ships generate managed supply chains. product quality, customer responsive- For the purpose of this article a man- ness and resultant satisfaction, manufac- aged supply chains encompasses all the turing cost control, product and market activities associated with the flow and flexibility, and macro performance transformation of goods from raw outcomes including market share and materials to the end user, as well as the profitability. associated information flows. Materials and information must simultaneously Purpose of This Study flow both up and down the supply The purpose of this study was to chain to leverage strategic positioning expand the knowledge base regarding and to improve operating efficiency. planning, implementation, and ongoing operation of Supply Chain Manage- However, to date, our knowledge and ment (SCM) initiatives. Other purposes Dr. Mike Williams is a professor in the Depart- understanding regarding effective of this study included development of ment of Marketing at Illinois State University and Director of the Professional Sales Institute. He supply chain management practice is information and recommendations to received his Ph.D. in marketing from Oklahoma limited to case studies and anecdotal aid organizations in improving their State University. In addition to authoring numer- ous books, his work has also been published in documentation, which provides little in existing SCM practices. More specifi- Quality Management Journal, International Journal the way of reliable, theory-based tools cally, this study addressed the follow- of Purchasing and Materials Management, Journal of Personal Selling and Sales Management, Jour- and guidance for managers. Indeed, the ing four objectives. nal of Business and Industrial Marketing, Journal 1. An in-depth examination of the of Industrial Technology, Competitiveness Review, importance of the study reported herein Journal of Engineering Education, and the Journal was emphasized at the CAPS 2001 role of partnerships in SCM of Marketing Theory and Practice. North American Executive Roundtable 2. An understanding of the process where Chief Purchasing Officers from and environment of partnership Fortune 500 companies voted the formation development of supply chain measures 3. An identification of organiza- and models to be the most important tional characteristics influencing topic for future research (Hendrick & partnership formation and Ogden 2001). The development and operation subsequent application of valid, theory- 4. The identification of potential based measures and models are critical conflict areas in partnership if companies are to establish and formation and operation effectively manage supply chains. Overview of This Study Supply Chain Management (SCM) is a Due to page and publication limitations Rodger B. Singley is an associate professor of Mar- priority topic for contemporary social, the remainder of this paper examines keting at Illinois State University since 1989. His teaching areas include International Marketing, economic, and industrial technology only the first phase of a two-phase Sales Management, and Retail Management with multi-year study. This first phase students at both the undergraduate and graduate researchers at the global level (Dodgson levels. His scholarly interests include international 2001). As stated by a Vice- President of investigated the evolving concept of business issues, insurance fraud, supply chain management, and project management. the Boston Consulting Group, “As the supply chain management (SCM) and 2 Journal of Industrial Technology • Volume 20, Number 2 • February 2004 to April 2004 • www.nait.org its current practice in contemporary Another frequently researched compo- puter Discount Warehouse, Delco business strategy. Exploratory in nent of SCM is the exploration and Remy, Delphi Automotive, Detroit nature, this phase worked with support- understanding of the motivations for/ Diesel, Detroit Edison, Electromotive ing industry partners and their supplier benefits of engaging in SCM. The Division – General Motors, Ford Motor and purchasing managers and univer- literature was developed from the areas Company, Growmark, Mitsubishi sity academicians to identify and study of quality control and expedient Motors of North America, Northern the key factors in strategically managed delivery (Rich and Hines 1997; Davis Automotive Systems, Rhon, Sherwin- supplier-buyer relationships. The 1993); lean/agile manufacturing Williams, State Farm Insurance, and results from this first phase were (Womack and Jones 1996); shortened Verizon. Academic institution partici- twofold. First, the results were used to product life cycles (Fine 1999); and pants included representatives from develop a comprehensive set of increased domestic and global competi- Appalachian State University, Arizona descriptive item statements for each of tion (Blackwell 1999; Tyndall 2000). State University, Ball State University, the constructs coming out of the Q-sort Reported benefits of research in SCM Bradley University, Illinois State analysis. Second, the results yielded included decreased order cycle time University, Northern Kentucky Univer- information about perceived relation- (Sheridan 1999); reduced costs/ sity, University of Southern Missis- ships between the constructs and increased efficiency (Christopher and sippi, and East Texas State University. variables for the purpose of generating Ryals 1999; Quinn 2000); improved These participants were selected based hypotheses describing the posited product delivery and responsiveness upon their expertise and interest in relationships among the variables (LaLonde and Masters 1994); and developing better evaluative and comprising the conceptualized model revenue and profitability growth predictive tools for monitoring and of supply chain management: the (Timme & Timme 2000; Quinn 2000). controlling efficient and effective antecedents, moderators, and out- Finally, both bridges and barriers to business partner relationships. comes. Phase two began in August implementing supply chains have 2003. During phase two the perceived received a great deal of research As illustrated in Figure 1 on page 4 and relationships between the constructs attention (i.e., Monczka and Morgan discussed in detail below, this study and variables are being tested to 1997; Blackwell 1999; Stank, began with a qualitative investigation to validate the researcher’s perceptions of Daugherty & Ellinger 1999). explore and delineate actual supply chain the hierarchical relationships that practices. The first phase of research, constrain the choice of supply chain Existing research begins to provide a consistent with the tenets of exploratory partners. These results will be reported description of the nature and environ- research and scale development in a future manuscript. ment of SCM along with the motiva- (Churchill 1979; Nunnally 1978), tions for and benefits of engaging in utilized qualitative investigation tech- Review of Related Research SCM. What is lacking is a holistic and niques including literature review, As both research and practice in SCM systematic investigation of supply chain observation of existing practices, focus have increased, the knowledge base has practice. Both manufacturing firms and groups, and in-depth interviews. This also grown. A historical perspective their consultants recognize the need for qualitative investigation was designed to illustrates one significant and necessary additional knowledge in this area. For identify potential variables functioning as stream of literature is concerned with example, a focus group participant antecedents, moderators, and outcomes establishing the nature and scope of (April 24,