Supply Chain Management practices: Competitive Advantage and Organizational Performance in Sri Lankan Construction Industry

Abstract

In the construction industry supply chain management (SCM) is a vital tool in controlling business processes in a defined and a systematic way to improve quality, time management and increase profit. Effective supply chain management has become a potentially valuable method of securing and improving competitive advantage and organizational performance since competition no longer between organizations, but between global organizations and among supply chains. This paper aims to investigate the impact of supply chain management practices on competitive advantage and organizational performance in the construction industry, Sri Lanka, due to the lack of application of supply chain management practices to determine the organizational performance in the competitive environment. Further, this study focuses five SCM practices: strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement to investigate what supply chain management is, how it works in increase competitive advantage and what are its dynamics. Six hypotheses were developed based on the constructed conceptual framework derived from the supply chain management literature. The data were collected over the survey technique by randomly administering structured questionnaires from 198 respondents of construction management teams and different sub-contractors. First Multiple regression analysis was performed to explore the impact of five supply chain management practices on competitive advantage and organizational performance in the construction industry and the analysis was carried out the factor analysis to explore the significance of supply chain management dimensions. The results of the regression analysis indicated that all SCM variables have a positive impact on competitive advantages and organizational performance of the construction industry in Sri Lanka. Moreover, it suggested that the strategic supplier partnership was the most significant SCM variable which determines the competitive advantage and level of information sharing variable was the less significant variable towards competitive advantage. The results of this study provide new insights to the construction companies to better understand the significant role that SCM variables play in respect to the competitive advantages and organizational performance in Sri Lanka. The study has outlined to examine the five SCM variables in construction industry. Hence future study can be outlined to further examine the impact of SCM on competitive advantages in other industries. Moreover, the future study can be outlined to further examine the impact of SCM variables in different dimensions especially including customer perspective in respect to human variables. Besides, this study was based on the limited large scale construction companies operated in Sri Lanka and ignore the small and medium scale supermarkets.

Keywords: Supply chain management practices, Competitive advantage, Organizational performance