The value created by supply chain management (SCM) practices means managers today are even more interested in these initiatives, this is especially true in emerging markets where they can have a profound impact. This research examines several critical SCM initiatives (strategic supplier partnerships, information quality, and proactive logistics practices), and their impact on supply chain flexibility, and ultimately organizational performance for small scale (fewer than 100 employees) manufacturing firms in India. These constructs are especially important for India because it has been suggested that they have high logistics costs as a result of insufficient infrastructure (e.g., power grid) and various labor-related issues.
Under the Extended Resource Based View of the firm (Mathews, 2003) managers realize that capitalizing on supplier capabilities can improve the firm’s own responsiveness and overall performance. Therefore we examined strategic supplier partnerships (the long-term cooperative exchanges with critical suppliers) and proactive logistics practices (the interactions specifically with logistics providers regarding planning and joint problem solving), along with information quality (including accuracy, adequacy, timeliness, and credibility of information being exchanged) (Monczka et al., 1998). Other constructs include supply chain flexibility (the ability of the firm to respond to any change concerning its trading partners) and organizational performance (capturing productivity, efficiency, market share, and profit level) (Yamin et al., 1999; Tan et al., 1998).
Validated scales developed by Li (2002) and Tan et al. (1998) were used and firm owners were targeted from a list of Coimbatore’s (a city in India) small scale manufacturers covering a wide-range of industries. The result was 75 completed surveys (a 94% response rate) which we evaluated using partial least squares (PLS) path modeling as appropriate for our sample size.
The findings indicate that improving strategic supplier partnerships and information quality enables the firm to achieve a more flexible supply chain and ultimately better organizational performance. This research improves our understanding of critical considerations