The primary purpose of this empirical paper is to
examine the importance of incorporating supply chain
management (SCM) in the Malaysian manufacturing industry
and investigate its impact on production performance and
product quality. Further, the study also attempts to investigate
the mediating influence of production performance in the
relationship between SCM and product quality. A
measurement Smart PLS model is developed and refined with
reliability and validity tests. The study employs a quantitative
survey method and data are collected from 250 manufacturing
companies. The survey instrument tries to measure senior
production or SCM managers’ perceptions of SCM
implementations and the level of performances in their
manufacturing companies. SCM has a positive and significant
effect on production performance. In addition, SCM also has a
positive and significant effect on product quality. The result also
provides evidence that the production performance construct
partially mediates the linkage between SCM and product
quality. Among the SCM practices, ‘new technology and
innovation’ emerges as the most important factor that enhances
production performance and product quality, and it is followed
by ‘strategic supplier partnership’, 'quality information
exchange’ and ‘lean production’.
Supply chain management, production
performance, product quality, smart PLS.
Arawati Agus is with the Graduate School of Business, Universiti
Kebangsaan Malaysia, 43600 Bangi, Malaysia (tel: +60389213721; fax:
+60389213161; e-mail: email@example.com).
Arawati Agus, "
Supply Chain Management: The Influence of SCM on
Production Performance and Product Quality," Journal of Economics, Business and Management vol. 3, no. 11, pp.