Impact of Supply Chain Management on Business Performance

This literature review explores the impact of improving supply chain management on business performance. It discusses the concept of supply chain management, different strategies for effective supply chain management, and the positive impact on business performance. The study focuses on Radiometer Medical and its efforts to improve supply chain management for better business performance.

Literature Review

Table of Contents
Chapter 2 - LITERATURE REVIEW.............................................................................................3
2.1 Introduction......................................................................................................................3
2.2 Research’s independent and dependent variable..............................................................3
2.3 Business performance (DV).............................................................................................3
2.4 Concept of supply chain management in organisation (IDV 1).......................................3
2.5 Different strategies for supply chain management in organisation (IDV 2)....................5
2.6 Impact of improving supply chain management on business performance (IDV 3).......7
2.7 Conceptual framework...................................................................................................10
2.8 Conclusion......................................................................................................................10
REFRENCES.................................................................................................................................12
Books and Journal................................................................................................................12

Chapter 2 - LITERATURE REVIEW
2.1 Introduction
Literature review is the part of dissertation that is very important which gives a secondary
data research report. It is the summary and critical evaluation of the topic that is chosen for
conducting research report. This literature review is written on the basis of published journals,
books, magazines, newspapers, etc. In a research report, a researcher used both types of research
that are primary and secondary. For the purpose of secondary research, they are using already
published information in their literature review so that they can successfully elaborate secondary
research data. This literature review is based on supply chain management in the organisation.
2.2 Research’s independent and dependent variable
This research has a three independent variable that are supply chain management, internal
supply chain management practices and supply chain performance. One dependent variable is
business performance.
2.3 Business performance (DV)
Business performance is the dependent variable that needs to analyse with the help of
independent variable. This report is focusing on the impact of business performance through
supply chain management.
2.4 Concept of supply chain management in organisation (IDV 1)
According to Li, Holsapple and Goldsby, 2019, supply chain management is the
important process in which an organisation makes sure about all functions and operations related
to supply chain of goods and services. Supply chain is the activity that performs by each and
every organisation in order to transfer their goods and services to their end user. The main
motive or aim of any organisation is that they have to provide goods and services in order to
satisfy consumers' needs and wants. With that purpose, they try to make their supply chain
efficient so that the delivery cannot be delayed. It is very necessary for an organisation that their
goods and services deliver on time with god quality. It can be only possible with the help of
effective and efficient supply chain process. In simple words, supply chain is the process of
delivering raw material from manufacturer to their end user by converting into finished goods.
This process should be effective so that they can achieve organisational goals and objectives

(Roy, Schoenherr and Charan, 2020). That's why supply chain management is necessary for an
organisation in order to remove all complexities in the process of supply chain.
According to Michalski, Montes-Botella and Narasimhan, 2018, supply chain
management is the process of managing the flow of goods or services which includes the
transformation of raw material into finished goods. It is not just related to the transformation of
goods and services but also it is more concerned with supply activities of organisation. It really
very useful for organisation as they can add customer values and assists in taking competitive
advantage. It plays a crucial role in Radiometer Medical as they are the manufacturers of blood
gas analysis and perform other functions also. Supply chain is the efforts that done by suppliers
in order to transfer goods and services to their end users effectively and efficiently. Supply chain
concept is based on two concepts that are first one is to reach their product to end users and
second one is the supply chain that which is existed for long term period where organisation
cannot focus on the effectiveness of supply chain. Supply chain has important five parts that are
source, manufacturing, plan, return system, and delivery and logistics. All these five parts are
important to mange in the organisation so that they can effectively improve the performance of
supply chain management. It can be more understand with the help of explanation.
According to Balasubramanian and Shukla, 2017, plan is the strategy that is used in the
organisation for guiding and directing the organisation in order to mange supply chain. Supply
chain is not a simple process as it contains all the activities that are related to the transfer of
products. The manufacturer produces goods by converting raw material into finished one. It is
very necessary for manufacturers that they get inventory within time period so that they can
transfer to their end users. They purchase raw material from suppliers but they have to make sure
that the quality of their products should be good so that they can manufacture or produces best or
quality products. It assists in accomplishment of their aims and objectives by satisfying their
consumers. It is identifying that after manufacturing of products now organisations need to
supply to the distributors who sell to the retailers. Retailers are transferring those products to the
end users or consumers. Consumers are the person who consume those goods and services and
pay some consideration to run the business of organisation. This prop cess should be very
effective because if any faults are found in this process then they cannot achieve their objectives
or may be failing in the organisation.

According to Scavarda and et. al., 2019, there are many benefits of supply chain
management that enjoys by organisation such as decreasing of total cost which includes purchase
cost, production cost, etc. That means it overall reduce the operating cost which is very helpful
for organisation as well as for consumers. Organisation can increase their profit margin and
consumers can get products at reasonable prices. It also helpful in boosting of customer services.
Customers are always expect that they can purchase a right and quality product so that their
purpose can achieve by consuming that products. So if companies appropriately produces goods
and services and transfer to the customers then they can achieve their objectives. That means
they can effectively satisfied consumers' needs and wants. It can be done with the help of
available their products at right location, at right people and at right time. It improves financial
position of the organisation with the help of increasing profit margins and decreases fixed assets.
They produces goods which are continuously transfer to the end users that means there is no over
stock are collecting. For that reason they are reducing their fixed assets which improve liquidity
in the organisation. It beneficial for the company as it improves cash flow in the organisation.
According to Famiyeh and et. al., 2018, supply chain management is just not helpful for
only organisation as it also very useful for sustainability in business environment. It always make
sure that unnecessary things are not running in the organisation which impact on environment.
Supply chain management is necessary in sustaining of individual life by providing good quality
of products within time period. It reduces extra wastage by managing all related activities. It
really helpful for Radiometer Medical as they can effectively deliver medicines to the right
person that means it assist in sustainability in human life. It improves human healthcare as well
as protects from climate extremes. In the society, supply chain management plays a crucial role
as it helps in improving the quality of life of an individual. It promotes economic growth rate of
a country by improving infrastructure of supply chain. Supply chain needs a good infrastructure
sop that they can effectively deliver goods and services to their end users. It assists in improving
standard of life by enhancing employment opportunities as it includes many people in this
process such as manufacturer, distributor, retailer, etc.
2.5 Different strategies for supply chain management in organisation (IDV 2)
According to Yoo and Won, 2018, supply chain management is the important activity for
organisation. It is analysed that it can be become more effective and beneficial for the
organisation if they are using strategies of supply chain management. Strategies are tool or

techniques that used to improve the practice of supply chain management. With the help of
effective strategy an organisation can achieve their goals and objectives. Strategy is very
essential in the organisation so that they can include all activities in order to attain their
objectives. Strategies are the road map which gives the directions to the organisation in order to
perform their activities. Strategies of supply chain management improve the management of
activities in the organisation related to the supply of goods and services. It can be very clear for
the organisation that they have to make or formulate strategies in order to make the business
successful. It helps in achievement of organisation's objectives and goals. There are majorly
three types of strategies that can be clearer with the help of below explanation.
According to Rahman and et. al., 2020, the first and important strategy is total visibility
in supply chain management process. Day to day digitalisation is increasing which is very good
for providing real time visibility. It is identified that with good visibility in supply chain
management improves the operations transparency. With the help of more transparency every
member of organisation cat more responsibly in the organisation. In Radiometer Medical, they
need good transparency because they have a risk of forging with their labs reports that creates
problems for patients. So that's why transparency or visibility is necessary in supply chain
management. Every employee has a fear that their performance are continuously reviewing by
top level management due to visibility, they gives their best in order to reduce the negative
consequences from the visibility. It is beneficial as it improves sustainability in global supply. It
also helps in ensuring ethical product sourcing. It helps in maintaining stock in the organisation
as they can look towards requirement of stock and overstock. Supply chain management
reducing stress of overstock by continuing the supplying goods and services.
According to Sarkar and et. al., 2018, in the present scenario the market is more attracted
towards smart automation because everything is now link with information technologies.
Radiometer Medical is one of the organisation that use information technologies in order to give
reports of patients. All reports are automated through information technology. That means no
human being can play their roles as it analysed that every lab report is come from the
technologies. They used current digital programming so that they can provide authenticated lab
reports to the individual. They have very innovative and current types of software so that their
result will not be wrong and patents get right information through their lab reports. In supply
chain management, all lab reports are transferred from their software and programmes to the

patients. It really helpful in making the process effective because with the help of information
technology they can easily transfer their report and information to the patients within time
period.
According to Melnyk, Flynn and Awaysheh, 2018, third strategy is the effective training
program which becomes very helpful for making the supply chain management process
effective. It is identified that day to day the importance of supply chain management becomes
necessary for organisation. Effective training programs helps Radiometer Medical employees
more effectively perform the duties and responsibilities in order to achieve organisational
objective. It is very necessary that every person should take a training and development program
so that their performance cannot restrict any process of supply chain management. Training is
the important things that should be understand by every organisation if they want to improve
supply chain management. It is identified that supply chain management covers many members
of the organisation and that's why it is very necessary that they take a training session. With the
help of effective training program, every employees is now able to perform their best in order to
make the process effective and efficient. Employees play a crucial role as they are transporting or
deliver the goods and services to their end users so that’s why companies need to focus on
increasing the productivity of employees. Effective training programme clear out the duties and
responsibilities of employees so that they can deliver goods and services to the right person, right
location and at right time. All three things are very necessary in the organisation if they want to
make their supply chain management successful.
2.6 Impact of improving supply chain management on business performance (IDV 3)
According to Fomina and et. al., 2019, supply chain management is necessary for
achievement of goals and objectives. It is identified that if organisation can improve the supply
chain management then it will give a great impact on business performance. Improving in supply
chain management means that they improve all over the business function which helps in getting
organisational objectives and success. It is identified that they can improve every system of
organisation which helps in adding value to the organisation. It satisfies their customers' needs
and wants which helpful in sustainability in the organisation functions. In nowadays,
organisation focuses on improving of supply chain management so that they can attain their
objectives effectively and efficiently. Every business has a main purpose that they can

successfully deliver their products and services to the end users in order to satisfy their
customers.
According to Foo and et. al., 2018, improving of supply chain management gives a
positive impact on organisation's performance as they are acting more responsible. Due to this,
customers feel happy because they get a right product at right time. In the case of Radiometer
Medical it is identified that their customers feel happy as they get right lab report because it is
very important for their life. Any wrong information may be ruining their all life so that’s in
health care department supply chain management always being improving. Business
performance gets higher if their customers get happy. It boosts their trust and creates customer
loyalty in the organisation. Loyalty is very necessary for Radiometer Medical as they provide
testing and other services which needs a trust of customers. Improvement of supply chain
management reduces the cost of operating expenses as it remove all wastages functions from the
process of delivering goods and services to the organisation. The business performance get rises
day by day which is very beneficial for the growth of organisation. They renovate their business
which makes the functions and operations smooth that cannot stop their growth and support each
level of organisation.
According to Raut, Narkhede and Gardas, 2017, supply chain is improving by
organisation so that they can improve their financial position in the market. It helps in
improvement of financial ratios as they are increasing their profits margin with the help of
reducing extra cost. Supply chain has both direct and indirect cost so that's why it is necessary
that all cost should be critically evaluated in order to reduce them. It improves financial ratios
such as return on equity, returns on assets, working capital ratio etc. Supply chain is directly
impacted on business sales that they are maximizing sales with the help of improvement. So
that's why it gives a impact on ratios which can become more effective. Improvement in supply
chain means that they increase sales which help them to increase the customer satisfaction.
Increasing in sales shows that they are doing a great job in organisation and successfully satisfy
organisation objectives. Financial position gets improved day by day which helps them to take
further step for expansion of business.
According to Song, Ming and Liu, 2017, improvement in supply chain gives a great
impact on employees' performance as they are motivated towards working in the conditions of
collaborative in the organisation. Collaboration is the success key of organisation so that's why

every company needs to improve their supply chain so that they can develop collaborative
working conditions. It is necessary for the organisation that they should take a necessary
corrective action so that every employees has a common goal i.e. success of organisation. It can
be done if companies can improve the communication flow between employees. Employees
work more collaboratively if they get right information at right time. Communication is very
necessary in the organisation as it assists in flowing the information related to sales so that they
can effectively deliver the products. It is identified that companies have to take a corrective
measure in order to improving their supply chain.
According to Kain and Verma, 2018, in the case of Radiometer medical it is analysed that
organisation can achieve success if they get a good quality of raw material. They get raw
material with the effective supply chain. If they have good suppliers then they can easily get time
to time raw materials. It assists in improvement of employees performance in the organisation.
Radiometer Medical can easily get a information from their customers through supply chain
management and provide the result with effective strategies. The main agenda of every
organisation is to provide best quality of goods and services so that their customers get a quality
products with reasonable prices. It is identified that it is not only beneficial for organisation as it
is beneficial for employees and customers. Customers get right products, at right place and at
right time. They are not feeling any disappointment through the organisation if they improve
their supply chain management.
From the above discussion it is very clear that organisation can achieve their objectives
effectively and efficiently if they improve the supply chain management. It helps them to grow
their business at global level. With effective supply chain they can deliver products and services
at anywhere that attracts customers to purchase from the organisation. They get products with
good quality that helps them to satisfy their wants and needs. It just not helping organisation to
grow well but also improve their financial performance. They can take a competitive advantage
with the help of effective supply chain management. If organisation improve their supply chain
then it is very obvious that they fast deliver products and services to the customers. They can
achieve organisational objectives with the help of effective strategies and policies of supply
chain management. It reduces the overall cost and increase the profit margin. It helps them to
take further decision in order to improve business model of organisation. They can get a different
position in the market if they are continuously focusing on improvement in supply chain

management. It is necessary for the organisation that they have to ensure about effectiveness of
supply chain management.
2.7 Conceptual framework
2.8 Conclusion
It can be concluded from the above explanation that literature review plays a crucial role
in the research report as it analyse the important published information in the journals, books,
etc. This literature review is based on the importance of supply chain management in the
organisation. It is effectively critically analysed with the help of literature review. Literature
review gives detailed information about the project. It can be attained with the help of analysing
some important sources.
INDEPENDENT
VARIABLE
DEPENDANT
VARIABLE
Supply
Chain
Management
Internal
Supply Chain
Management
Practices
Supply
Chain
Performance
H1
H2
H3
Business
Performance

REFRENCES
Books and Journal
Balasubramanian, S. and Shukla, V., 2017. Green supply chain management: an empirical
investigation on the construction sector. Supply Chain Management: An International
Journal.
Famiyeh, S., and et. al., 2018. Green supply chain management initiatives and operational
competitive performance. Benchmarking: An International Journal.
Fomina, S., and et. al., 2019. The effect of teaching and supply chain management on
employees’ skills in small and medium sized enterprises of Russia. International
Journal of Supply Chain Management, 8(4), pp.930-938.
Foo, P. Y., and et. al., 2018. A gateway to realising sustainability performance via green supply
chain management practices: A PLS–ANN approach. Expert Systems with
Applications, 107, pp.1-14.
Kain, R. and Verma, A., 2018. Logistics management in supply chain–an overview. Materials
today: proceedings, 5(2), pp.3811-3816.
Li, X., Holsapple, C. W. and Goldsby, T. J., 2019. The structural impact of supply chain
management teams. Management Research Review.
Melnyk, S. A., Flynn, B. B. and Awaysheh, A., 2018. The best of times and the worst of times:
empirical operations and supply chain management research. International Journal of
Production Research, 56(1-2), pp.164-192.
Michalski, M., Montes-Botella, J. L. and Narasimhan, R., 2018. The impact of asymmetry on
performance in different collaboration and integration environments in supply chain
management. Supply Chain Management: An International Journal.
Rahman, T., and et. al., 2020. Evaluating barriers to implementing green supply chain
management: an example from an emerging economy. Production Planning &
Control, 31(8), pp.673-698.
Raut, R. D., Narkhede, B. and Gardas, B. B., 2017. To identify the critical success factors of
sustainable supply chain management practices in the context of oil and gas industries:
ISM approach. Renewable and Sustainable Energy Reviews, 68, pp.33-47.
Roy, V., Schoenherr, T. and Charan, P., 2020. Toward an organizational understanding of the
transformation needed for sustainable supply chain management: The concepts of force-
field and differential efforts. Journal of Purchasing and Supply Management, 26(3),
p.100612.
Sarkar, B., and et. al., 2018. Effects of variable production rate on quality of products in a single-
vendor multi-buyer supply chain management. The International Journal of Advanced
Manufacturing Technology, 99(1), pp.567-581.
Scavarda, A., and et. al., 2019. A proposed healthcare supply chain management framework in
the emerging economies with the sustainable lenses: The theory, the practice, and the
policy. Resources, Conservation and Recycling, 141, pp.418-430.
Song, W., Ming, X. and Liu, H. C., 2017. Identifying critical risk factors of sustainable supply
chain management: A rough strength-relation analysis method. Journal of Cleaner
Production, 143, pp.100-115.
Yoo, M. and Won, Y., 2018. A study on the transparent price tracing system in supply chain
management based on blockchain. Sustainability, 10(11), p.4037.