A STUDY ON THE SUPPLY CHAIN PERFORMANCE OF MANUFACTURING INDUSTRIES IN UNION TERRITORY OF PUDUCHERRY, INDIA. C. Ganesh Kumar Ph.

D Research Scholar Department of Management Studies, School of Management, Pondicherry University, Puducherry- 605014, INDIA Mobile: +91-97861-47867 E-Mail ID: gcganeshkumar@gmail.com Dr. T. Nambirajan Professor Department of Management Studies, School of Management, Pondicherry University, Puducherry- 605014, INDIA Mobile: +91-94433-84550 E-Mail ID: rtnambirajan@gmail.com ABSTRACT The purpose of this research work is to empirically test the relationships among supply chain performance and business demographical variables. Data for the study were collected from a sample of 255 SMEs and large scale manufacturing enterprises operating within the Union Territory of Puducherry, India. The research variables were tested using chi-square test along with correspondence analysis, analysis of variance (ANOVA) and canonical correlation. Based on the chi-square analysis, Supply chain performance has significant association with types of industry and nature of industry. Finally the result indicates that there is a 12% of the variance shared between supply chain performance and business demographical variables. Key words: Supply Chain Performance, Business Demographical and Manufacturing Industry

1. INTRODUCTION Globalization and intensive world-wide competition along with the technological advancements create an entirely new business environment for the manufacturing organizations. Initially, manufacturing companies have accomplished massive productivity gains through the implementation of lean production in response to this intensifying competition. The waste has eliminated from many different local operations for the sake of better productivity. Currently such type of massive productivity improvements for many manufacturing organizations is very limited. Instead, there is a huge improvement potential to reduce the inefficiencies caused by the poor performance of the suppliers, unpredictable customer demands, and uncertain business environment. An integrated supply chain has a clear advantage on the competitiveness of the individual companies. As a result, the chain-chain competition has started to take over the enterpriseenterprise competition, although many enterprise-enterprise competitions do exist particularly in the less developed economies (Koh et al., 2006). The forward-looking enterprises today are dynamic; they collaborate with suppliers, customers and even with competitors; share information and knowledge aiming to create a collaborative supply chain that is capable of competing if not leading the particular industry. Hence, gaining competitive edge under such a cut-throat environment becomes increasingly difficult. 2. LITERATURE REVIEW The relationship between nancial and non-nancial measures of organizational performance has long been discussed in organization and strategy literature. York and Miree (2004) argue that non-nancial performance such as improved quality, innovativeness and resource planning should actually reduce costs, and thus have a positive effect on measures of nancial performance. Increased quality helps SMEs and large scale enterprises to retain current customers and create greater customer loyalty, which in return may increase market share and organizational performance (Rust et al., 1994). A number of prior studies demonstrate positive relationship between operational performance dimensions such as product quality, (Larson and Sinha, 1995) innovation and R&D (Prajogo and Sohal, 2001 ;) employee performance (Fuentes-Fuentes et al., 2004). Increase in operational performance may lead to high levels of organizational performance related to SCM in terms of increased sales, organization-wide coordination and supply chain integration.

It is generally recognized that it is difficult to select a single measure of rm performance. The literature lists several quantitative objectives that can be set to guide performance over a period of time, as well as qualitative objectives (Hunger and Wheelen, 1993;). It has been argued that as there are obvious difculties in obtaining quantitative measures, there is a strong a priori case that qualitative measures should be included in assessments of performance (Chakravarthy, 1986). Therefore, the subjective approach has been used extensively in empirical studies, based on executives perceptions of performance, having been justied by several writers. 3. RESEARCH METHODOLOGY Based on the literature review, a set of eight supply chain performances items were identied, These performance variables included improvement in lead time, improvement in inventory turns, improvement in level of inventory write off, improvement in time to market (Product development cycle), improvement of defect rate, improvement in order item fill rate, improvement in stock out situation and improvement in set-up times. The questionnaire was developed and pre-tested to ensure reliability and validity of the response. Data for this study was collected using a questionnaire that was distributed to 255 SMEs and large scale manufacturing enterprises operating in Union Territory of Puducherry in India. The sample was selected using simple random sampling by lottery method from the database of Department of Industry and Commerce, Government of Puducherry. Respondents were asked to rate the supply chain performance of their organization over the past 3 year on ve-point scales ranging from 1 = very low to 5 = very high . Apparently, this research work is to investigate the impact of business demographical variables on the supply chain performance so the supply chain performance variables are factored into two factors using principle component analysis and then the two supply chain factors are segmented into three clusters of manufacturing enterprises using k-mean cluster method. 4. RESULTS AND DISCUSSION Supply chain performance have been classified into three categories namely Low supply Chain performance units, Moderate supply Chain performance units and high supply Chain performance units on the basis of their Supply chain performance variables. It can be noticed that the high supply Chain performance units will display an improved overall better performance. In this section, the characteristics of supply chain performance segments are identified through chisquare test along with correspondence analysis and analysis of variance (ANOVA).

To understand the characteristics of these three supply chain performance segments, their association with various business demographic related variables are analyzed. The chi-square test is applied to test the significance of associations. The chi-square values along with their level of significance are given in the following table. TABLE 1.1: CHI-SQUARE TEST VALUE FOR VARIOUS VARIABLES Variable Type of Industry Number of Employees Total Capital Invested Supply Chain Position Nature of Industry Side of Supply Chain Type of Goods Produced Type of Business Organization Type of Ownership Type of Listing What kind of Manufacturing Manufacturing Pattern Type of process Annual Sales Market Coverage Area of Market Business years Software Usage ChiSquare value 26.163 10.072 2.824 6.445 11.717 5.130 1.943 4.577 1.975 9.988 3.784 6.434 9.877 12.374 0.516 12.094 2.346 0.985 Sig. Value 0.045 0.434 0.831 0.375 0.020 0.077 0.379 0.599 0.922 0.125 0.436 0.376 0.130 0.261 0.972 0.147 0.885 0.077

From the chi-square test it is found that Type of Industry, Number of Employees, Total Capital Invested, Supply Chain Position, Side of Supply Chain, Type of Goods Produced, Type of Business Organization, Type of Ownership, Type of Listing, kind of Manufacturing Manufacturing Pattern, Type of process, Annual turnover, Market Coverage, Area of Market Business years and Software Usage have no significant association with supply chain performance segments, while there is a significant association between supply chain performance segments with Type of Industry and Nature of Industry. 4.1 Relationship between Supply Chain Performance and Business Demographic Variables The business demographic variables considered for the study are Type of Industry, Total Capital Invested, Supply Chain Position, Side of Supply Chain, Type of Goods Produced, Type of

Business Organization, Type of Ownership, kind of Manufacturing, Type of process, Annual turnover, Business years, Number of Employees, Nature of Industry, Type of Listing, Manufacturing Pattern, Market Coverage, Area of Market and Software Usage of the manufacturing units. 4.1.1 Association between Type of Industry and Supply Chain performance The chi-square value as 26.163 and significant value as 0.045 which clearly indicates that there is significant association between Type of Industry and Supply Chain performance of Manufacturing units. TABLE 1.2: ANOVA FOR TYPE OF INDUSTRY AND PERFORMANCE Supply Chain Performance F Sig. Lead Time and Inventory 1.659 0.084 Responsiveness 0.997 0.450 It is observed from table 1.2 that there is no significant difference among the groups of manufacturing units categorized on the basis of Type of Industry in respect of Lead Time and Inventory and Responsiveness. FIG. 1.1 TYPE OF INDUSTRY AND SUPPLY CHAIN PERFORMANCE CORRESPONDENCE DIAGRAM

The association between the type of industries categories and supply chain performance segments can be identified by using correspondence analysis. The formed associations can be seen from the diagram. Highly supply chain performance units belong to electronics, Electronics, Building materials, Plastic, textiles and other types of industries, while the Moderate supply chain performance units belong to Automobile, Agriculture, Furniture,

food and the Low supply chain performance units are associated with Chemical, metal and pharmaceuticals industries.
4.1.2 Association between Nature of Industry and Supply Chain performance The chi-square value as 11.717 and significant value as 0.020 which clearly indicates that there is significant association between Nature of Industry and Supply Chain performance of Manufacturing units. TABLE 1.3: ANOVA FOR NATURE OF INDUSTRY AND PERFORMANCE Supply Chain Performance F Sig. Lead Time and Inventory 1.573 0.209 Responsiveness 5.265 0.006 It is observed from table 1.3 that there is no significant difference among the groups of manufacturing units categorized on the basis of Nature of Industry group with respect to Lead Time and Inventory, while there is a significant difference among the groups in respect of Responsiveness. TABLE 1.4: DUNCAN TABLE FOR NATURE OF INDUSTRY AND RESPONSIVENESS PERFORMANCE Subset for alpha = 0.05 Nature of Industry N 1 2 Medium Scale 94 3.2660 Small Scale 115 3.6217 Large Scale 46 3.6304 Sig. 1.000 0.951 The post hoc analysis is carried out with Duncan method to understand inter group difference among Nature of Industry with respect to responsiveness performance. Duncan table (Table 1.4) indicates that two homogeneous sub groups can be formed among the three groups of manufacturing units categorized on the basis of Nature of Industry in respect of responsiveness performance. The difference in mean values among the two homogenous groups of Medium Scale industry group, and Small Scale and Large Scale industry group is significant at 99 percent level of confidence (table 1.3, Significant value is 0.006). This means that there is a significant difference among groups of manufacturing units categorized on the basis of Nature of Industry with respect to responsiveness performance.

FIG. 1.2 NATURE OF INDUSTRY AND SUPPLY CHAIN PERFORMANCE CORRESPONDENCE DIAGRAM

The association between the groups of units categorized based on Nature of Industry and supply chain performance segments can be identified by using correspondence analysis. The formed associations can be seen from the diagram. Highly supply chain performance units belong to large scale industry group, Moderate supply chain performance units belong to medium scale industry group, and Low supply chain performance units are associated with small scale industry segment.

TABLE 1.5: CANONICAL CORRELATION BETWEEN SUPPLY CHAIN PERFORMANCE AND BUSINESS DEMOGRAPHICAL VARIABLES

.cnn(ediersos)(n idntr) ao latm epne id n_aue Lna cmiain frcnnclcreain ier obntos o aoia orltos Ce. of u1 latm edie rsos epne id n idntr n_aue latm edie rsos epne id n idntr n_aue Sd Er t. r. t Nme o os= ubr f b P|| >t [5 Cn.Itra] 9% of nevl 2.23 0.00 -1.64 5.82 -0.35 0.38 0.36 0.03 0.026 0.997 0.103 0.000 0.729 0.708 0.719 0.975 .0724764 -.4842279 -.1875819 .8985106 -9.931395 -6.114727 -1.303231 -7.043665 1.157471 .486135 .0172986 1.818113 6.959296 8.991435 1.886256 7.272289 255

.6149735 .0009535 -.0851417 1.358312 -1.486049 1.438354 .2915122 .1143118

.2754705 .2463666 .0520174 .233479 4.288398 3.835322 .8097826 3.634695

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A canonical correlation analysis was conducted using the two supply chain performance factors as predictors of the two business demographical variables that was significant in the chi-square test to evaluate the multivariate shared relationship between the two variable sets (i.e., supply chain performance factors and business demographical). The analysis yielded two functions with canonical correlations (r) of 0 .3452, and 0.0236 for each successive function. Collectively, the full model across all functions was statistically significant using the Wilkss = 0.8804 criterion, F (4, 502) = 8.2557, p < 0.01. Because Wilkss represents the variance unexplained by the model, 1 yields the full model effect size in an r2 metric. Thus, for the set of three canonical functions, the r2 type effect size was 0.12, which indicates that the full model explained a substantial portion, about 12% of the variance shared between the variable sets that are two supply chain performance factors and two business demographical variables. 5. CONCLUSION AND IMPLICATIONS This paper has provided empirical justication for a relationship between of supply chain performance and business demographic variables within the context of manufacturing in Union

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Territory of Puducherry. Supply chain performances segments have significant association with types of industry and nature of industry and also indicates that nature of industry have significant difference with responsiveness performance. Finally the result indicates that there is a 12% of the variance shared between two supply chain performance factors and two business demographical variables. The analysis of the relationship between supply chain performance and business demographical variables might directly influence the overall firm performance. Perhaps, the most serious limitation of this study was its narrow focus on Puducherry manufacturing Enterprises, thus precluding the generalization of ndings to other emerging countries as well as other sectors such as service and government sectors that may benet from a sound SCM strategy. This research paper adds to the body of knowledge by providing new data and empirical insights. REFERENCES
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