Operations Management Procedures, Article Critique Example

Article Source: Cao, M. and Zhang, Q. (2011). Supply Chain Collaboration: Impact on Collaborative Advantage and Firm Performance. Journal of Operations Management. United States of America.

Introduction

Operations management is an important aspect of organizational function. It could be observed that every organization at present specifically depend on the said process largely especially when it comes to developing the manner by which they develop products that they are to release in the market (Tu, et al, 2006, 710). Notably, it could be analyzed that through the years, the culture of operations management has largely changed and has been adjusted to competitively dealing with global requirements especially when it comes to the aspect of international trading.

Considerably though, the challenges that face modern organizations today include the need to create more specifically efficient operations management approaches. Among the current approaches to operations management embraced by modern organizations is that of the supply chain collaboration (Petersen, et al, 2005, 388). Generally, from the term “collaboration”, this approach to operations management involves the distinction of two organizations partnered together to create a specific connection, unified by the existence of one goal, and that is to perform efficiently in their own tasks. Partnership is one of the most basic forms of business collaboration that organizations use at present to establish a sense of supply chain collaboration operation (Narasimhan, et al, 2006, 457). The application of supply chain collaboration is basically a partnership between a manufacturing company and a supplier organization. This means that the manufacturers are to form long time partnerships with particular suppliers that are sure to provide them the most convenient sources of raw materials that are needed for the production of the items that they are to release in the market for general consumption.

Nevertheless, this particular partnership, like other business agreements, has its own advantages and disadvantages. How are these elements of agreements likely to be specifically balanced to benefit both parties involved in the partnership? This specific issue on supply chain collaboration application is what is given specific attention to in the study of Cao and Zhang (2011) as they define the capacity of organizations to perform efficiently under the agreements formed between manufacturers and suppliers. Focused on the process of defining the condition of development that organizations take under the application of supply chain collaboration management, this research is directed towards making an indicative distinction on the specific aspect by which cooperative business collaboration between organizations affect the performance of each business entity in the market and the industry that they are enjoined in.

Problem Statement and Background

In the aim of undergoing more efficient ways of handling operational functions among manufacturing companies, several business organizations try to explore the possibility of making agreeable partnerships with other organizations that could respond to what they require to be able to perform better especially in completing the tasks they are expected to handle for the sake of the market’s appreciation. Relatively, the worth of forming partnership with suppliers has provided a great deal of convenience for manufacturers. One specific advantage is the consideration over the well retained price-rate over time-changes in the market. With a specific contract that has been signed between the manufacturers and the suppliers, price control is assured and loyalty is considered locked between the two parties. This way, each of the organizations involved get beneficial support from each other hence creating a comparative level of advantage from the partnership.

However, the main question is, does this particular partnership really improve the outer performance of each firm involved. True, there is an internal benefit for both organizations especially when it comes to ensured regular sales revenue (on the part of the supplier) and a remarkable cost-control capacity (on the part of the manufacturer). On the other hand though, the capacity of both organizations to perform outside of the partnership towards other stakeholders of their organization cannot be fully determined by the supply chain collaboration application results. This is the reason why the research of Cao and Zhang tries to explore the different issues that might be able to determine whether or not the application of the supply chain collaboration practice between organizations do create a specific condition of development in the performance of each firm involved in the partnership based on their competency in providing response to the demands of other stakeholders.

To be able to come up with the more refined indication of pathway that the research would take; four particular hypotheses have been used by the researchers as the basis of their study. These hypotheses are as follows:

• Hypothesis 1: Supply Chain Collaboration has a significant positive effect on collaborative advantage
• Hypothesis 2: Collaborative advantage has a significant positive effect on firm performance
• Hypothesis 3: Supply chain collaboration has a significant positive effect on firm performance
• Hypothesis 4a. Firm size moderates the relationship between SCC and collaborative advantage.
• Hypothesis 4b. Firm size moderates the relationship between collaborative advantage and firm performance.
• Hypothesis 4c. Firm size moderates the relationship between SCC and firm performance.

Observably, these four focused hypotheses try to concentrate on three primary issues, one is the effective of supply chain collaboration on collaborative advantage, another is the effect of the collaboration of firm performance and third is the size of the organizations and its relation to the advantage the collaborative agreement creates for both parties involved. To be able to further examine the possibility of these specific points of consideration being fully relative to the definition on how supply chain collaboration affects modern supplier-manufacturer relationship, the researchers of the study tried to create a direct interview and assessment among target members of the business industry who are believed to have a good sense of how supply chain collaboration does affect their firm’s performance in the market.

To note, the researchers intended to file a purchase for at least 5000 target email respondents from the Council of Supply Chain Management Professionals or the CSCMP so as to be able to reach their target participants to the study. The respondents were randomly chosen from the list and most of the ones who have been picked comprised of CEO, company presidents and vice presidents, directors and managers of different manufacturing firms around the United States region. This makes the study rather localized [which means it does not include international partnership options included in the modern supply chain collaboration aspects of the business].

From these respondents, the researchers passed an itemized seven-level, 35-item questionnaire that is directed towards confirming whether or not these organizations are relatively benefiting from a supply chain collaboration agreement they are currently in. The approach applied by the researchers involves the utilization of the structured interview and Q-sort which means that the questions are sorted out according to the level of involvement the individuals have in relation to their understanding of what supply chain collaboration is all about. The leveling of the questions also involve the indication of the process by which the individuals asked were considered to have a relatively closer knowledge on how supply chain collaboration operations affect their organizations both in their internal and external functions in the market.

Using the LISREL analysis under the confirmatory analysis and method factor approach, the researchers were able to measure the respondents’ answers to the questions based on the first and second order constructs which indicates the separation of the knowledgeable background the participants have regarding the issue being investigated upon. To note, a remarkable percentage of the response specifically defines the possibility of the three primary hypotheses of the study to be proven strongly based on actual evidence garnered from the reaction of the participants on the matter. On the other end, the fourth hypothesis on the differentiation of the business scale was not fully supported as the questionnaires that have been passed on did not specifically involve direct questions regarding business scale specifications.

Overall Critique of the Research

Considering that the three primary hypotheses on the effectiveness of the supply chain collaboration approach to primary business operation between manufacturers and suppliers were proven true and reliable, it could be agreed that the research was a success. This is especially true when it comes to proving that supply chain collaboration increases performance competency among organizations involved in the partnership. The stability of cost-assistance and control basically makes it easier for manufacturers to foresee future forecasts regarding how they are likely to perform in the market even in the midst of price-fluctuation on the raw materials that they are using especially in connection with their most appreciated products. On the other hand, the suppliers are benefited by the partnership through having an assured income even when the culture of manufacturing changes over time [as long as the said span of time is still included within the contract signed by both parties].

Given the situation that business organizations face today especially in the face of unstable international economy, price definitions differ fully and at times, this fact hurts the performance of both suppliers and manufacturers in the market. With the binding partnership between the said organizations, they are able to protect each other’s assets and remain in the industry for a longer time while they withstand the turns and tides of the industry.

One thing is assured by the researchers though, that even though there are numerous benefits that the organizations would be able to enjoy through long time partnership, it is essential that each party involved be aware of the fact that the integral part of the agreement is the understanding that they have over the aspect of investment. Partnership in business means the involvement of one being specifically noted to have a strong understanding over the existence of give-and-take relationship between the parties involved. Hence, it is then suggested that in the aspect of deciding to join or engage in a supply chain collaboration system, it is essential that the organizations involved should be willing to give what they need to give [share resources] and share the risks as well so as to gain the benefits that the partnership has to offer.

Considering the literature review that has been completed for this research, it could be analyzed that the researchers were on full command of the definition of the primary terms that were essential for the conceptual presentation of the study. Focusing on the most important terms of the issue such as supply chain collaboration, collaboration advantage and firm performance, the literature choices used to create a foundation for the discussion made a great impact on how modern business embrace the aspect of supply chain collaboration management in terms of developing their operations culture. Effective as the literature review is, it serves as the bridging link between the methodology and the hypothesis that drives about a sense of consideration on how the reliability of the research is further established.

Conclusion

The implicative results that have been discussed by the researchers in this study have a great impact on what the current status of business relations shared by suppliers and manufacturers in the market specifically impose. The connection that these entities have between each other also determines the capacity they have to competently perform in their own industries. Relatively, the research provides a convincing description on how supply chain collaboration partnership does improve company performance in an internal and external scale. The literature that has been reviewed by the researchers were helpful enough to create a path that would connect their hypotheses with that of the methodologies they used to collect and interpret the data that they have gathered from the experimentation and enquiry handled during the completion of the research.

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