• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Fiona Chu
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HOME > Archive > 2015 > Volume 3 Number 11 (Nov. 2015) >
JOEBM 2015 Vol.3(11): 1046-1053 ISSN: 2301-3567
DOI: 10.7763/JOEBM.2015.V3.332

Supply Chain Management: The Influence of SCM on Production Performance and Product Quality

Arawati Agus

Abstract— 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’.

Index Terms— 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: araa@ukm.edu.my).

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Cite: 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. 1046-1053, 2015.

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