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THE IMPACT OF SUPPLY CHAIN STRATEGY ON THE FINANCIAL PERFORMANCE: A CASE STUDY OF A MANUFACTURING COMPANY at KHARTOUM STATE

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Last updated: 22 Jan 2023

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Abstract

Purpose of this paper: The aim of this paper is to propose a systems view to link supply chain (SC) strategy to a company's financial performance by developing a scenario approach. The paper applies five scenarios under differing financial performance contexts to analyse the relationship between supply chain performance and the overall financial performance.
Design/methodology/approach: An integrated supply chain performance measurement system was created and implemented to demonstrate and utilise the relationship between SC performance metrics and the financial performance metrics. A scenario analysis approach was undertaken using five main alternative scenarios in order to explore how this procedure could be applied with regard to various possible financial results. A case study of a manufacturing company was conducted and analysed to illustrate the applicability of the research procedure.
Findings: The results reflected the improvement in the efficiency and the effectiveness of SC strategy in connection with the company's short-term strategic financial objectives. The analysis showed that any improvement in the SC operations' performance will lead to better supply chain management (SCM), and consequently enhance the company's overall financial performance. An improvement in SC performance as well as financial performance has been shown for the three conditions (optimistic, normal and pessimistic) following the proposed procedure.
Value: A systems view is introduced to integrate SC strategy and the company's overall financial strategy under different possible scenarios based on the systems view problem-solving model. Five main alternative scenarios are defined given the related targeted financial outcomes and their corresponding present paths (managing SC costs, increasing SC agility, improving SC reliability, increasing SC responsiveness and managing SC assets).
The system can be operated in two directions given two possible loops. A company can formulate SC strategy to achieve targeted strategic financial objectives or it can start with an unsatisfactory financial performance and then formulate the corresponding SC strategy to enhance it.
Research limitations/implications: The research study makes an original contribution in the direction of linking SC strategy to a company's financial strategy through focusing on studying the relationships between SCM practices and financial performance improvements. Further research should investigate and compare the results from several companies in different sectors of manufacturers in different locations. 
Practical implications: The paper follows a systems view which can help in determining the most appropriate SC strategy with regard to targeted financial objectives. This paper benefits from data extracted from a manufacturing company by evaluating the applicability of the model developed under a different set of scenarios.

DOI

10.21608/ajsr.2021.177516

Authors

First Name

Lina Mohamed

Last Name

baabaker

MiddleName

Ahmed

Affiliation

Department of business administration, Business Studies Section –Elbyan Science & Technology College, Khartoum, Sudan

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Orcid

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First Name

Nuseiba

Last Name

Ibrahim

MiddleName

Azzam

Affiliation

Department of business administration, College of Business Studies -Sudan University of Science & Technology, Khartoum, Sudan

Email

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City

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Orcid

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First Name

Hawaa Abdallah

Last Name

Saadallah

MiddleName

-

Affiliation

Assistant Professor, Faculty of Community, Department of Humanitarians and Management Science, Jouf University,

Email

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City

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Orcid

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First Name

Mushtaha Alfadil

Last Name

Juma

MiddleName

Yahia

Affiliation

Department of business administration, Business Studies Section –University of Bahari

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Orcid

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Volume

5

Article Issue

5

Related Issue

25008

Issue Date

2021-04-01

Receive Date

2021-03-14

Publish Date

2021-04-01

Page Start

39

Page End

58

Print ISSN

2537-0367

Online ISSN

2537-0375

Link

https://ajsr.journals.ekb.eg/article_177516.html

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https://ajsr.journals.ekb.eg/service?article_code=177516

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2

Type

Original Article

Type Code

930

Publication Type

Journal

Publication Title

The Arab Journal of Scientific Research

Publication Link

https://ajsr.journals.ekb.eg/

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Article

Created At

22 Jan 2023