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Developing supply chain management focus through ISO 9000: An empirical assessment

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  1. Abstract
  2. Introduction
  3. Literature review
    1. Aspects of ISO 9000 that are suggestive of supply chain orientation
    2. Internal organizational processes
    3. Relationships with suppliers
    4. Relationships with customers
  4. ISO 9000 management practices ? performance relationships
  5. Contingent/contextual factors affecting ISO 9000's SCM capability
  6. Business environmental conditions
  7. Temporal experience with the standard
  8. Organization size
  9. Research questions, model and hypotheses
  10. Method
    1. Study participants
    2. Measurement instrument
  11. Results and analysis
    1. Psychometric properties of constructs
    2. Content validity
    3. Multicollinearity
    4. Reliability
    5. Convergent and discriminant validity
    6. Common methods bias
  12. SEM results for hypothesized model
  13. SEM results for moderating effects on relationships in hypothesized model
  14. Discussion
  15. Conclusion
  16. References

The ISO 9000 quality management (QM) standard, a key approach to implementing QM in organizations, also has many supply chain management (SCM) concepts associated with it. In this paper, we assess the extent to which organizations can use the standard to develop a SCM focus. Specifically, we extracted the relevant SCM practices from the ISO 9000 standard (internal organizational processes, relationships with suppliers and relationships with customers), and related these to business performance of firms through a direct effects model. The empirical data to test this model was obtained from a sample of 416 manufacturing plants in Australia that are registered to the standard. The results of this study provide evidence to suggest that firms do derive significant benefits from SCM related practices contained within ISO 9000, and that these practices affect performance by acting through internal organizational processes. The relationships were subjected to tests for sensitivity to several moderating factors. From these analyses, it is apparent that unfavorable business environmental conditions make it difficult to realize such benefits. We also found that the length of temporal experience (with the standard) did not appear to make a difference in terms of benefits obtained. Finally, it appears that smaller plants find it easier to realize the benefits of these practices than their larger counterparts. These sensitivity test results suggest that the utility of the standard is not universal. We see these results as a reality check for managers in modifying their expectations from certification and application of the standard. In sum, the findings indicate an important potential role for the use of the ISO 9000 standard beyond that of just promoting quality assurance at the plant level.

[...] (2006) "Supplier management and its relationship to buyers' quality management", Supply chain Management: An International Journal, Vol 11, No pp. 148-159. Fynes, B., Burca, S., and Voss, C. (2005) "Supply chain relationship quality, the competitive environment and performance", International Journal of Production Research, Vol 43, No 16, pp. 3303-3320. Flynn, B. and Flynn, E.J. (2005) "Synergies between supply chain management and quality management: Emerging implications", International Journal of Production Research, Vol 43, No 16, pp. 3421-3436. Lin, C., Chow, W.S., Madu, C.N., Kuei, C.H., and Yu, P.P. [...]

[...] As such, they cannot expect to be insulated from such factors based on use of supply chain practices incorporated in an ISO 9000 standard. In this sense, we see this as a reality check for managers in modifying their expectations from the standard. Further, micro/small organizations appear to find the approach more applicable than their larger counterparts. This is probably because small organizations view the standard in strategic terms and place greater value in their investment in the standard. Larger organizations, on the other hand, are more likely to view the standard in functional terms for the purposes of facilitating transactional activities. [...]

[...] However, the difficulty for most is how to develop the required supply chain management (SCM) focus that not only results in effective relationships with suppliers and customers alike, but also is transparent, tangible, definable, demonstrable, and communicable to interested parties. To date, organizations have used an eclectic collection of methods, programs, tools and techniques for their SCM purposes. These include the use of: process mapping methodologies such as the SCOR model to represent the linkages both between and within firms technology based solutions for better integration with trading partners socio-political approaches that focus on improvements in relationships between firms and their trading partners and, strategically changed roles in supply chains in order for firms to better co-align their activities with trading partners The effectiveness of these myriad of approaches is mixed, especially if they are pursued singularly and in isolation. [...]

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