Beruflich Dokumente
Kultur Dokumente
International Management Institute IMI Kolkata 2/4C, Judges Court Rd, Alipore, Kolkata 700027, West Bengal, India
International Management Institute IMI Bhubaneswar Gothapatna, Bhubaneswar 751003, Odisha, India
art ic l e i nf o
a b s t r a c t
Article history:
Received 9 December 2014
Received in revised form
21 September 2015
Accepted 25 September 2015
The study surveyed executives of a major food retailer in India and explored their perspectives on supply
chain management practices, competitive advantage and rm performance; to assess the importance
accorded to application of business intelligence (BI) in their operations. Nine dimensions for SCM
practices and four dimensions for competitive advantage are identied which are found to strongly relate
to each other. The dimensions of SCM also strongly relate to rm performance. Though information
sharing with suppliers and their inclusion in strategic decision-making emerge as key dimensions of
SCM, their impact on competitive advantage is perceived to be insignicant by retailers.
& 2015 Elsevier Ltd. All rights reserved.
Keywords:
Supply chain management
Business intelligence
Emerging market
Food retailer
Competitive advantage
Firm performance
1. Introduction
The understanding and execution of supply chain management
(SCM) practices have a key role for an organization in staying
competitive and for enhancing protability in the increasingly
competitive global marketplace (Childhouse and Towill, 2003).
Existing literature consistently uses terms such as supplier integration, supply base management, synchronization, partnerships
and supply chain management to dene elements of this management viewpoint (Tan et al., 1998; La Londe and Masters, 1994).
The concept and practice of SCM has received increasing attention
amongst business managers, consultants and academicians
(Hamister, 2012). The implementation of SCM practices is not
conned to manufacturing rms only (Li et al., 2006), it has spread
its wings in the retail sector also (Randall et al., 2011). In the
modern and competitive retail environment, SCM is the key to
success and survival (Arnold, 2002; Ganesan et al., 2009). Previous
studies have identied several antecedents and consequences of
SCM practices in numerous contexts. Though the Supply-Chain
Council has developed a supply-chain operations reference model
as a cross-industry standard for supply chain management, it does
not describe specic activities and practices and its impact on rm
performance.
n
Corresponding author.
E-mail addresses: m.banerjee@imi-k.edu.in (M. Banerjee),
manit.mishra@imibh.edu.in (M. Mishra).
http://dx.doi.org/10.1016/j.jretconser.2015.09.009
0969-6989/& 2015 Elsevier Ltd. All rights reserved.
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
research on other critical areas like manufacturing and distribution, and consumer product marketing.
2013). India not only has the highest number of retail outlets per
person (7 per thousand), but also registers the highest density of
retail outlets in the world with more than 15 million outlets as
compared to 900,000 in America (Halepete and Iyer, 2008). Indian
retail sector contributes to 22% of India's GDP. The government of
India currently allows 51% (from 0%) and 100% (from 51%) foreign
direct investment (FDI) in multi-brand and single brand retail respectively. These changes in FDI regulations are attracting foreign
retailers and accelerating the growth in the Indian retail sector. To
maintain this growth and reap the benets of the reformed FDI
policy, Government of India has taken cognizance of the role of
retail infrastructure, including supply chain. Indian supply chain
suffers from poor infrastructure and consequently the Indian
government has mandated that half of the total FDI investment in
Indian retailing must be allotted for the back-end infrastructure
that includes the supply chain.
In India, presently low protability, high overheads and inadequate investment in technology are the constraints of modern
retail. Modern retail sector is not optimally using information that
is being collected by prevailing information technology (IT) systems. Current strategies are based on intuitive approaches as the
data generated in the different systems within an organization
lacks integration and therefore making predictions on customers'
future behavior, demand forecast, or gaining insights on the dynamics of market shifts becomes challenging. Quality analytics is
possible by using effective data warehousing, data mining and
business intelligence applications, and retailers are exploring
technology-based solutions to analyze structured data from different applications spanning operations like strategic sourcing,
procurement, logistics and warehousing, merchandising and promotion, shelf-space management, customer service, back-end
process, sales and marketing process, and nancial management.
They are also contemplating analysis of unstructured data from
social networks like Facebook, Twitter, Google, web logs, mobile
devices, etc.
Indian retail practitioners have established a retail SCM subdiscipline with earmarked careers and annual professional conferences (e.g. India Retail Forum, East India Retail Summit, India
Shopping Centre Forum) but SCM researchers have taken awhile to
address the retailer-centric business model and there is an insufcient number of studies that address SCM issues, capabilities
and outcomes (Defee et al., 2009) and business intelligence integration in SCM processes. The aforesaid literature has examined
SCM practices from different perspectives and this knowledge gap
is unanticipated in the context of the critical nature of SCM to
success in the context of Indian retail (Brown et al., 2005; Ganesan
et al., 2009).This gap is the basis of the motivation to develop the
following objectives of this study: to explore retail SCM practice in
India with a special focus on the extent and nature of information
sharing that enables BI; and relate these SCM practices to the retail
rm's performance.
5. Research constructs
5.1. SCM practices
Previous research has dened SCM practice as a set of activities
undertaken in an organization for promotion of effective management of its supply chain. Existing studies conducted predominantly in the USA have indicated possible dimensions of SCM
practices. Alvarado and Kotzab (2001) in their study of SCM
practices have included concentration on core competencies, use
of inter organizational systems such as EDI, and elimination of
excess inventory levels by postponing customization towards the
end of the supply chain. Li et al. (2006) have identied strategic
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
rm performance. Also, there is insufcient mention of the importance to the retailer, regarding the level and quality of information sharing among the retail channel partners that consequently enables their BI systems. This research investigates these
issues to evaluate their relevance for Indian retailers based on
empirical data collected from an Indian organized food retailer. For
the purpose of this study, by discussions with Indian managers
operating in corporate ofce and in stores, and with store executives, along with reviewing and combining the existing literature,
36 SCM practices have been identied (Appendix, Section I). These
included practices related to management issues of supply and
product management, relationship with their customers, information sharing, technology sharing, geographical location and
capability issues of partners in the supply chain.
6. Research methodology
6.1. Objectives
The study endeavored to explore the constructs of SCM, competitive advantage and rm performance in Indian conditions. The
objectives of the study are as follows:
(1) To identify the underlying dimensions of the constructs: SCM
practices and competitive advantage.
(2) To determine importance of sharing information with suppliers as an SCM practice among food retailers.
(3) To assess the relationship between the constructs of SCM
practices and competitive advantage; and, SCM practices and
rm performance.
Hypotheses 1 and Hypotheses 2 have been formulated to
attain the objective.
(4) To assess retail executives' perspective on whether BI can
enable the SCM practices of the company to contribute towards competitive advantage.
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
7. Statistical analysis
7.1. Hypotheses
In order to fulll the objectives of the study, following hypotheses were formulated and put to test:
H1. : There is a signicant relationship between the constructs of
SCM practices and competitive advantage.
H2. : There is a signicant relationship between the constructs of
SCM practices and rm performance.
Table 1
Exploratory factor analysis of supply chain management practices items.
# Factor (Variance explained)/Item
Factor
1
.855
.809
.809
.732
.697
.552
.749
.731
.662
.637
.566
.562
.508
.873
.856
.855
.777
.497
.811
.791
.715
.674
.565
.733
.704
.693
.565
.793
.679
.563
.771
.763
.798
.668
.558
.516
Extraction method: Principal Component Analysis. Rotation method: Varimax with Kaiser Normalization.
a. Rotation converged in 13 iterations.
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
practices and competitive advantage. For rm's overall performance, the response categories ranged from signicant decrease
(1) to signicant increase (7).
Table 2
Exploratory factor analysis of competitive advantage items.
# Factor (Variance explained)/Item
Factor
1
Accessibility (41.2%)
1 We offer competitive prices.
2 We are able to offer prices as low or lower than
our competitors.
3 We are able to compete based on locality.
Product (17.7%)
1 We offer products that are highly reliable.
2 We offer products that are very durable.
3 We offer high quality products to our customers.
4 We deliver the kind of products needed.
Service (8.8%)
1 We deliver customer order on time.
2 We provide dependable delivery.
Customer centricity (7.6%)
1 We provide customized products.
2 We alter our product offerings to meet client
needs.
3 We respond well to customer demand for new
features.
4 We deliver product to market quickly.
5 We are rst in the market in introducing new
products.
6 We have time-to-market lower than industry
average.
7 We have fast product development.
.803
.781
.737
.768
.846
.754
.408
.864
.729
.600
.728
.706
.767
.844
.877
.873
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
Table 3
Reliability assessment.
Supply chain management practices scale
#
Scale
Reliability
1
Supply chain characteristics
2
Level of information sharing
3
Customer relationship
4
Supply chain integration
5
Quality of information sharing
6
JIT capabilities
7
Inclusion in strategic decision making
8
Involvement in product quality & development
9
Mutual trustworthiness
SCM practices
0.917
0.930
0.891
0.874
0.866
0.829
0.753
0.735
0.495
0.958
0.853
0.808
0.864
0.907
0.901
0.909
Table 4
Bivariate correlations.
Customer
centricity
.244a
.020
.276a
.067
.021
.460a
.060
.204a
.072
.121a
.265a
.006
.376a
.149a
.098b
.670a
.618a
.417a
.343a
.538a
.016
.210a
.339a
.115b
.102b
.192a
.565a
.173a
.213a
.306a
.053
.415a
.046
.182a
.126a
.215a
advantage viz. accessibility, product, service and customer centricity (Table 4). Supply chain characteristics are positively correlated to all attributes of competitive advantage. This corroborates
that the retailer attributes great importance to the trust component prevalent with their suppliers and shares future strategic
needs with them, also works cohesively with their channel partners in order to ensure customization in a timely and efcient
manner. It also indicates that to build competitive advantage by
responding early to customer's need for new product features and
being rst in the market to introduce new products; doing so efciently with a faster time-to-market, the retailer focuses on
seamless operations by identifying additional supply chain and
ensuring suppliers deliver on-time directly to the retailer's points
of use.
Customer relationship has the highest positive correlation
coefcient to accessibility and service. This is not surprising since
regular and frequent evaluation of customer satisfaction, interacting frequently with customers to set retailer's reliability, responsiveness and other standards, providing an environment
conducive for customers to seek assistance from the retailer
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
Table 5
Bivariate correlations.
Market
share
Return on
investment
The growth of
market share
Prot margin
on sales
Overall competitive
position
.140a
.460a
.351a
.379a
.406a
.170a
.218a
.170a
.472a
.274a
.387a
.399a
.286a
.265a
.287a
.557a
.378a
.380a
.423a
.436a
.277a
.347a
.383a
.182a
.185a
.362a
.392a
.279a
.291a
.322a
.120a
.234a
.378a
.386a
.254a
.240a
.237a
.065
.009
.283a
.360a
.185a
.256a
.050
.008
.028
.137a
.299a
.162a
.494a
.527a
.453a
.463a
.462a
.557a
.337a
.278a
.406a
.541a
.362a
.482a
.398a
.213a
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
10
abundance of cheap labor that makes current SCM practices laborintensive rather than technology-driven. To implement BI in their
business processes, Indian retailers will face a shortage of skilled
man-power who have the technical knowledge to decide what
action to take based on the outcomes of BI analysis. It is imperative
to know that BI system will present retailers with structured and
analyzed data but without proper skill sets they may not be able to
make informed decisions on the basis of that analysis. Thirdly,
apart from the right talent and technology, it will be fundamental
for retail rms to re-design their business processes, structure
workows and put proper incentives in place so that analytics
become a vital part of enabling managers to accomplish their
goals. Ideally the CEO should be at the helm of the process initiation and gradually all levels of the management should have a
thorough understanding of its business processes and the objectives that are to be achieved. Also the functional units impacted by
the BI initiative must be closely involved with the BI implementation processes to iron out dissidence and seamlessly
merge analytics with a rm's ongoing management tasks.
8.3. Limitations
This study is conducted on an Indian food retailer operating in
specic zones of the country. Research needs to be conducted to
study whether the SCM practices and the outlook to information
sharing among channel partners are unvaryingly applicable to
retailers operating in non-food categories as well as to retailers
with operations across other geographical locations. Extending
this study to retailers operating in other categories would enhance
the external validity of the study and improve the accuracy of
parameter estimates. This research has a relatively small sample
size which is a usual phenomenon amongst initial-stage research
studies. Yet such studies pose certain limitations to its
generalization.
Future study can increase the comprehension of a retail rm's
effectiveness by gathering objective performance data. But since
most of the organized Indian retailers are usually not publicly
listed, published nancial reports are unavailable. Obtaining such
information may require support from Indian retail trade groups
like Retailers Association of India (RAI) for cases where the retailers may not be forthcoming to participate without such ofcial
support.
Further research is necessary to extend the ndings of this
study. Specically more study is needed to validate the scales in
Indian conditions. Post-validation, research needs to be carried out
to determine the possible existence of a second order SCM practices construct and whether such a higher order factor model is
appropriate for SCM practice. The model, as a whole, needs to be
tested through path analysis to ascertain its veracity.
Note: Early version of this paper was presented at the Oxford
Retail Futures Conference 2014, organised by the Oxford Institute of
Retail Management, University of Oxford.
Appendix
I. Supply chain management practices:
With regard to SCM practice, please circle the number that
accurately reects your rm's present conditions: (1strongly
disagree; 7strongly agree)
1. We consider quality as our number one criterion in selecting
suppliers.
2. We regularly solve problems jointly with our suppliers.
3. We have helped our suppliers to improve their product quality.
4. We have continuous improvement programs that include our
Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i
key suppliers.
5. We include our key suppliers in our planning and goal-setting
activities.
6. We actively involve our key suppliers in new product development processes.
7. We frequently interact with customers to set reliability, responsiveness and other standards for us.
8. We frequently measure and evaluate customer satisfaction.
9. We frequently determine future customer expectations.
10. We facilitate customers' ability to seek assistance from us.
11. We periodically evaluate the importance of our relationship
with our customers.
12. We inform trading partners in advance of changing needs.
13. Our trading partners share proprietary information with us.
14. Our trading partners keep us fully informed about issues that
affect our business.
15. Our trading partners share business knowledge of core business processes with us.
16. We and our trading partners exchange information that helps
establishment of business planning.
17. We and our trading partners keep each other informed about
events or changes that may affect the other partners.
18. Information exchange between our trading partners and us is
timely.
19. Information exchange between our trading partners and us is
accurate.
20. Information exchange between our trading partners and us is
complete.
21. Information exchange between our trading partners and us is
adequate.
22. Information exchange between our trading partners and us is
reliable.
23. We search for new ways to integrate SCM activities.
24. We reduce response time across the supply chain.
25. We work on improving integration activities across supply
chain.
26. We work on establishing more frequent contact with supply
chain members.
27. We work on creating a compatible communication/information
system.
28. We work on identifying additional supply chain.
29. We work on suppliers' on-time delivery directly to our points
of use.
30. We communicate our future strategic needs to our suppliers.
31. We work on creating a greater level of trust among supply
chain members.
32. We work on locating closer to our customers.
33. We require suppliers to locate closer to our rm.
34. We participate in the marketing efforts of our customers.
35. We aid our suppliers to increase their JIT capabilities.
36. We work on increasing our rm's JIT capabilities.
II. Competitive advantage:
With regard to competitive advantage of your rm, please circle the appropriate number to indicate the extent to which you
agree or disagree with each statement:
(1Strongly disagree; 7strongly agree)
1. We offer competitive prices.
2. We are able to offer prices as low or lower than our
competitors.
3. We are able to compete based on locality.
4. We offer products that are highly reliable.
5. We offer products that are very durable.
6. We offer high quality products to our customers.
7. We deliver the kind of products needed.
8.
9.
10.
11.
12.
13.
14.
15.
16.
We
We
We
We
We
We
We
We
We
11
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Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligence
perspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i