Analyzing the Impact of SCM on Competitive Advantage in Pakistan

This report explores the critical relationship between Supply Chain Management (SCM) practices and competitive advantage, focusing on the textile sector in Pakistan. The study investigates the impact of Customer Relationship Management (CRM), the level of information sharing, and Strategic Supplier Partnerships on achieving a competitive edge. The research addresses the challenges of globalization and the increasing need for organizations to optimize their supply chains for cost efficiency and customer satisfaction. The report outlines the objectives, research questions, and significance of the study, emphasizing the lack of research in this area within the Pakistani textile industry. The methodology includes an examination of existing literature, the construction of a conceptual framework, and the use of quantitative analysis to determine the correlations between the variables. The report is structured into six chapters, covering an introduction, literature review, methodology, results, discussion, and conclusions. The findings of this research aim to provide guidance to organizations seeking to enhance their competitive advantage through effective SCM implementation.

CHAPTER ONE: INTRODUCTION
1.1 Background
Over the past few decades, Supply chains have immensely developed in both developedand
developing countries. The key emphasis is given on interdependence of buyerand supplier firms
which are collaborating to achieve the key mission to deliver productsand services without
increasing the costs incurred (Bradley et al, 2009). For organizations’ it is not enough that they
develop their competencies with the firm but also considered their supply chain partners i.e.
retailers, final customers and wholesaler (Feldmann & Müller, 2003).
Nowadays, an effective execution of SCM is anticipated to improve the connection among
downstreamand upstream customers. It is one of the foremost practices of SCM that has become
very significant aspect for the firms, it is the key tools that are used by organization’s to survive
in the competitive market to enhance the profitability as well as the firms performance (Choon et
al., 2002). The objective of SM practices is to incorporate both material flowand information
which seamlessly indicates as an operative competitive weapon.
According to Sussanand Johnson (2003), Supply chain management (SCM) practices is the key
component for firms in order to achieve the firms desired position among competitorsand
improvements that may be required to gain the edge. The modern evaluation of SCM practices
that embraces of alliances, with the supplier, outsourcing process, compression cycle time,
sharing of technology and information by expending the acquiring the superiority and the
relation with buyer SCM practices distinct, as a set of accomplishments taken by the firms to
encourage actual management of its supply chain (Ghoshal and Bartlett, 1995).
The research conducted by (Beesley, 1997) suggested that companies nowadays have occupied
to gain a competitive advantage through managingand monitoring of suppliers. The SC activities
in a way that organizations are properly designed as resulting are cost reduction as well it would
be helpful in effectively delivering the goods. The organizations’ can also manage their supply
chain by adopting extensive activities linked with upgrading their systems such as ERP and
MRP to integrate the several types of information in different departments such as, purchasing,
production, marketing,and finance (Bradley, Thomas, & Cooke, 1999).
In today’s era, SCM is known as an existing concept that leads to attaining benefits of mutually
operational and strategic nature, in order to exploit the competitive edge it is important that all
the employees worker together to achieve the common goal of firm. They can adopt key

activities such as network sourcing, delivering pipeline management,and value chain
management. The term “pipeline" was first coined by Forrester in (1960), it is basically the
mechanism which helped out the raw material and required information of SC, it should be
smooth and properly define as it also provides the undisputed movement of SC (Mason‐Jones
and Towill, 1997).
Effective SCM practices have become theoretically valuable technique of safeguarding
competitive advantage by improving the performance of organization. Most of the companies
have been increasingly implementing SM practices to gain competitive advantage within their
perspective markets (Heizer & Render, 2011). The SCM can also provide many benefits such as
exploit their suppliers’ processes, expertiseand competence to enhance competitive
advantage,and coordination of the manufacturing,and material management functions within an
organization (Won Lee, Kwon, & Severance, 2007). Furthermore developing trust, creating the
SSPand positive CRM are the next most important actions that the management of any
organization can take for the attainment of organizational successand the desired competitive
advantage (De Ruyter, Moorman,and Lemmink, 2001).
Essentially, SCM manages occupational activitiesand helps in developing connection with all
types of stakeholders such as firstand second-tier suppliers, customers along the SC,and others in
the entire supply chain. The purpose of supply chain analysis is to maximize company’s
profitability in the process of engendering for the customers, namely maximizing the variance
between the final product worthand the total cost expanded by the supply chain to provide the
product to the customers (Kim, Kumar, & Kumar, 2010).
The concept of SCM has been involved from two separate paths: purchasing,and transportation
through logistics management. Furthermore developing trust, creating the SSPand positive CRM
are the next most important actions that the management of any organization can take for the
attainment of organizational successand the desired competitive advantage (De Ruyter,
Moorman,and Lemmink, 2001). The practices of SCM are proposed to a multi-dimensional
concept, including the upstreamand downstream sides of the SC. The SCM has integrated with
investor management, supplier management, production management, technology
management,and quality management. In simple words, practices of SCM have a direct influence
on the organization success that helps in conquering the anticipated competitive advantage.

There are different procedures adopted by companies to integrate their SCM practices with their
key stakeholders such as suppliers, manufacturers, distributors,and customers. When these
stakeholders are effectively handled then it becomes one of the major sources of gaining the
competitive advantage within specific markets (Lenny Koh, Demirbag, Bayraktar, Tatoglu, &
Zaim,, 2007). The research conducted by (Degraeve, Labro, & Roodhooft, 2000) identified that
SCM is the combination of all internal processesand effectively collaboration with customersand
suppliers.

Subsequently, it is purposed that implementation of SCM practices would improve the customer
value and their satisfaction level, which in flip leads towards better competitive gain for the
supply chain value (Chen and Paulraj, 2004). When firms bring innovation in their approaches
in competitive advantage, then the SM practices in result brings massive interestand more
consideration for the organization. In simpler words, better SCM practices bring a lot of benefits
to all firms whether there are SMEs or medium sized firms. These practices adoption can allow
firms to accomplished CA (Lenny Koh et al., 2007).

In Pakistan, the research on impact of SCM practices on Competitive Advantage is quite
fragmented. This work will surely increase the current knowledge about competitive advantage
in the textile sector of Karachiand how can it be attained via implementation of effective Supply
chain management practices. In this research we are going to find out „The impact of Supply
Chain Practices on Competitive Advantage‟ by dividing it into three determinants; Customer
Relationship management, Level of Information sharingand Strategic Supplier Partnership.
1.2 Problem Statement
An author (Choon et al, 2002), states that the supply and manufacture of products to the final
end customers at the minimum cost are more challenging in the market of globalization and it
increasing day by day. SCM practices play an important role for every organization to achieve
the competitive advantage. The efficiency off work is not only important for the firm’s
performance; they also focused on the effective practices of supply chain management according
to the desire of customer’s. Further, in organizations it is a more complex agreement within the
community of scientific through to increase the performance of firms, customer satisfaction
according to the competitive advantage lower the cost and increasing the profits
(Lambert&Cooper, 2002). This research is to identify the impact of SCM practices on
competitive advantage along with the Strategic Supplier Partnership, Level of information
sharing and Customer Relationship management variables in the context of Pakistan .As we that
there is a lack of these practices in the textile industries. So, in this study we chosen this
particular sector because many organizations faced these problems in a broader way, but
according to my study it is limited only on textile sector. However, to beat the unpredictable
competitive advantage firms focused on SCM practices now days in the market globally
(Feldman&Miller, 2009).According to (Croom,Romano&Giannakis, 2000),here are various
practices in the particular sector such as management knowledge ,total quality management ,
organization’s learning ,customer response efficiently , quick response program , business
process re-engineering are help to enhance the competitive advantage overall the organization
(Van Hoek, 2004).In this study , we focused on SCM practices to attain the better competitive
advantage in the textile industries of Pakistan.

1.3 Objectives
 To study the impact of CRM on competitive advantage.
 To examine the competitive advantage effect on level of information sharing
 To investigate the effect of Strategic Supplier of partnership on competitive advantage.
1.4 Research Questions
 How does the impact of Customer Relationship Management on competitive advantage?
 Does the level of information sharing effect on competitive advantage?
 What is the relationship between Strategic Supplier Partnership and competitive
advantage?
1.5 Significance
Organizations need guidance about the competitive advantage achievement through the
execution of SCM practices. Our contribution of this study is to find out the impact of supply
chain practices on competitive advantage according to the recent knowledge in companies In
Pakistan; the developments are growing limited in the textile sector. However, this study will
contribute the discipline findings in the textile environment in the context of Pakistan. As we see
in the industry sector, there’s no effective implementation of these practices yet. Supply chain
management plays an important role in every organization because it helps to make planning’s,
decisionsand better strategies to perform in a good way.
1.6 Scope
The research scope is based on how the practices of SCM impact on competitive advantage. It is
limited only top, middleand operational level of managers in the context of textile industry. The
comprehensive variables are selected in this research. The SCM components used in this study
are Strategic Supplier Partnership, Level of information sharingand management of customer
relationship are indirectly or directly effect on the attainment of competitive advantage in an
organizations. This study is limited only on quantitative approach while other will be using both
approaches (qualitativeand quantitative). Further, authors will be chosen different variablesand
different sector to analyze these practices.

1.7 Structures
This research is consisting of 6 sections.
CHAPTER ONE: It includes the introduction in a broader way in which the debate about SCM
practices when it comes in the globeand who will be using in different ways. The past study or
crisis discussed in the heading of background. Research objectives and questions are constructed
through the variables which relates to the conceptual framework. Significance and scope define
the importance of the supply chain management practices on competitive advantage.
CHAPTER TWO: Theoretical review is highlighted in this section .Different theories will be
discussed related to topic and variables. Explain all the variables which we consider of the
conceptual framework .Develop the relationship between independentand dependent variables.
Construct the hypothesis according to the framework.
CHAPTER THREE: It consist on methodology, research design, statistical techniques i.e.
descriptive analysis, correlation, regression analysis .Pilot testing will also be discussed through
the SPSS data. Sample size will be calculated as the researchers.
CHAPTER FOUR: Questionnaire will be constructed according to the variables and run the
data on SPSS to find out the results. After that all the results are written with the interpretations
either the relationship among variables would be positive or negative.
CHAPTER FIVE: The discussions on data, findings are defined in this section
CHAPTER SIX: Summary, conclusion, future implication and recommendations will be given
in this chapter.
CHAPTER TWO: LITERATURE REVIEW

2.1Competitive Advantage
According to (McGinnis & Vallopra, 2000), define competitive advantage as an organization’s
capability that leads to a strong position over the competitors of firms. In other words, the
organizations are different from their competitors and it happen when companies can beat their
opponents through competitive advantage. Further, the quality, delivery in time, lower cost,
management knowledge, program of quick response makes the firms competitive with each other
(Tracey, Vonderembse, & Lim, 1999).
2.2 Supply Chain Management Practices
An author (Akkermans, 2016), in order to enhance customer’s satisfaction and to compete in an
organization’s, they considering the performance and efficiencies of it. Apparently, in the global
business supply chain play as a key part that are needed to be considered in particular. In SCM,
the products delivery, procurement procedure and production delivery are necessary to develop
industries and network for activities. Supply chain involves these practices because they manage
the effective information flow and transformation in an organization. All the firm’s departments
are integrated with each other not only internally as well as externally in an organization.
Suppliers, whole sellers, distributors and n end consumers are all aware with each type of
information and there is no distortion in it (Carter, 2009).Further, the flow of information and
material is to integrate across the SC are the major goals of supply chain practices. In today’s
market, for long run awareness and application of these practices s a critical tool for the survival
(Tan, Kannan, & Handfield, 1998).
According to (Zhang, Vonderembse, & Lim, 2000), in the manufacturing area SCM practices
allow to organizations to get possible capabilities with less capital investment. Further, t also
helps to improve production and performance of organizations through efficiency of cost,
agility, cost and flexibility, the wastage elimination and improvement in quality through SCM
practices tends to maintain profit margins through this (Chen & Paulraj, 2004).Further , the
understanding among all departments and organizations with each other is significant for the
practices of SCM and for the time being the participants of SC and firms in the long run to get
the most out of supply chain and achievement of desired goals. These practices help to attain the
competitive advantage (Narasimhan & Das, 1999).
Renowed author (Lenny Koh, Saad, & Arunachalam, 2006), the idea of SC is extracted from the
network of value chain and it has changed the environments of business through advancement in

technology and competition increasing day by day. Further, for the production improvement of
an organization for parties of SC , the SCM have various methods for producing an effective
linkages between them and it is not based on single entities who aimed to provide the
information and resources for the requirementand fulfillment of an organization’s objectives
(Lau & Lee, 2004).According to the prior studies , the practices of supply chain is consist on
various leading and effective management for the attainment of firm’s competitive advantage
involved with information sharing quality , CRM , lean practicing and strategic supplier
partnership and also all these are very significant for the success of every organization as per of
cost of goods sold and purchasing goods are directly related with each other (Degraeve et al,
2000).
Further, for the effective combination of product demand and supply, SCM practices approaches
and promotes that real management of SC (Yew Wong, Stentoft Arlbjørn, & Johansen, 2005). It
also works as a mediator among capabilities and performance for improvement of organizations.
In other words, if the parties and departments of SC are not performing effectively to achieve
their competitive advantage so it will not impact on the performance. According to (Hsu, Tan,
Kannan, & Keong Leong, 2000), as per the prior literature on SCM practices include; quality
information, internal operations, sharing of information, better relation with customers and
strategic supplier partnership.
2.3 Importance of Supply Chain Management
(Choon Tan, Lyman, & Wisner, 2002),it requires effective, linkages and usages of information
among all SC participants is compulsory for the performance of an organization’s and it is also
an integrative approach. All the linkages between then are interrelated with each other from the
initiations to operations in which the delivery time and production of raw material finish to the
end consumers. Further, the effective SCM linkages created by it and connect with all the final
customers and supplier through the intermediaries (Choon et al , 2002).
It is all related to managing for running the chain that the requirement of material from the goods
manufactures who turn into finished goods and then to deliver to the final consumers (Lee &
Billington, 1995).Further, the process of manufacturing , procurement and finished goods
distribution .Effective SCM managing by numerous advantages to the organization’s i.e. in a
mean time of delivery to the customers and better performance (Finch , 2006).Additional , SCM
helps to improve flexibility and reduction in cost and firm’s efficiency.The SCM major aim is

to advance the performance that can add more and more value and cost minimizes as much as
possible. As per the research, the SCM objective is to make the parties bond involved into
production of the product strong through augmented cooperation within the firm so that the cost
can be minimizedand productivity improved (Vereecke & Muylle, n.d, 2002 ).
Many studies have been done on SCM in different ways and in a different manner. Further, it is
start from the purchasing of the raw material convert into the finished goods and the delivery of
these products to the final consumers of an organization (Frohlich & Westbrook, 2001).The
strong coordination between managers of SCM and departments by working together can easily
helpful to attain the organization’s competitive advantage .Although, the overall process is
integrated by the SCM managers. The main goal of this procedure is to fulfill the needs of the
end consumers providing flexibility and responsiveness through the inefficiencies elimination
(Narasimhan & Das, 1999).
2.4 Supply Chain Management Practices and Competitive Advantage
An author (Hong, Zhang, & Ding, 2018), organization’s more focused on effective practices of
supply chain management because there is increasing more and more competition in the market
now days, it is also the effective mean of increasing CA and lowering cost is include in SCM.In
recent times , numerous firms are really focused and run supply chain management practices
effectively and they are the successful ones to achieve their competitive advantage in the global
business world , they also managed the final consumers through the delivery time and quality of
raw material effectively (Kushwaha, 2011).As per the researchersand scholars , that the efficient
execution of these practices are very important for every organization in the department of
SCM ,but the problem is created when these practices are not implement effectively in an firm.
According to (Porter, 2018), with the passage of time competition is increasing day by day
among organization’s and through the effective implementation of these practices are the only
solution to solve this issue or to gain competitive advantage.
An author (Handoko, Aryanto, & So, 2018),CA is very important for every firm because of the
increasing competition in the market ,so every organization has to focus and find their
competitive advantage for the survival in this competitive world. However, for gaining the
competitive advantage the better way is to provide good quality products and set the lower
product cost. As per the past researchers, the CRM, sharing information level and partnership of

strategic suppliers are the successful practices apply in the SCM (Heizer & Render, 2011).All
these practices are very helpful to attain the desired profit margin , it is very supportive tool to
attain CA. (Li, Ragu-Nathan, Ragu-Nathan, & Subba Rao, 2006),if the process of SCM perform
in a critical way so these practices or activities are help to apply all these in a positive way in an
organization’s. However, satisfaction and identification of customers, profitability and
management of inventory are the tools for the attainment of competitive advantage and also the
total assets utilization, product quality and cost in total are the essentials of the firm’s in the
economical world.
An author (Bradley et al, 2009), improvement in practices of SCM , firms need to require a lot
on technology information, but to minimize the cost , variability reduction , time delivery
through controlling the SCM practices effectively , so for this the various firm’s are making
efforts to achieve competitive advantage. Moreover, organizations have to improved their
internal operations through by reducing the cost and the product quality improvement (Vokurka,
Zank, & Lund, 2009).Additionally, to attain the successful practices of SCM firm’s making their
competitive edges in areas like , quality , cost and flexibility (Yew Wong et al, 2005).According
to the past literature and many scholars state that the effective and efficient SCM practices are
positively impact on performance and competitive advantage. Further, the competition is turned
within the SCM departments of firm’s which means it is evolved internally within an
organization. These practices are considered to attain the CA by providing good quality products,
the reduction in cost and delivery of time to the end consumers. In this research, we choose
Strategic Supplier Partnership, CRM and level of information sharing are the variables.
2.5 Customer Relationship Management
According to (Reichheld, 1996), it is a strategy that helps the customers towards the product and
getting information what the consumers actually want from the product. It increases the
satisfaction of customers when it works or use effectively and efficiently. Further, it is not
related to the marketing department of the product in an organization, but if it is properly
implemented in firms it gives a positive impact on CRM and for the success of an organization.
It is the most effective tool and way to find out that customers actually expect from the product
and from the companies in the market. However , the main barrier for the success is that
companies are not able to the consistent level of services through supply of the

product .Companies should adopt the appropriate process of CRM to achieve the competitive
advantage and provide better level of services to the end consumers (R. J. Cox & Cunial, 1999).
CRM is now turning into the long term for the survival of the organization’s and it is a key for
the attainment of CA.Further , good relation with customer’s allow to attain their competitive
edges through the products and services opponents transformation. To maintain this relationship
with customers companies are also able to sustain loyalty of customers and they get able to
increase in profits and productivity (Claycomb, Dröge, & Germain, 1996).
2.6 Customer Relationship Management and Competitive Advantage
According to (Croxton, Garcia-Dastugue, Lambert, & Rogers,, 1999), it is the procedure of
enhancing and maintaining the relation with the existing organization’s customers. It also helps
in getting to know about the needs and close to the customers. This way providing a consistent
level of services and quality of product .CRM is a tool to getting what the customers need from
the product because the tough thing is to retaining the existing customers with the particular
product while retain the new customers is quite difficult for an organizations. It also helps in
achieving their competitive advantage through fulfilling the needs of customers and from the
process of production performance. Advanced technology helps firms up to date about the new
information related to the global market and it also help in making a good relation with
customers through the expectations of individuals according to CRM.
CRM are using to meet the needs and expectations of organization’s customers and to increase
the consumer’s satisfaction level towards the product now days. (Payne & Frow, 1999), it is
always taken as a source of attracting new customer’s and attained old customer’s according to
the product desires to enhance the loyalty and satisfaction of customer’s. However, a firm’s
need to respond the customers demand and maintain better relation with existing and new
customers. For the development of customer relationships companies are required to consider
SCM as an necessary constituent for improving loyalty and customer satisfaction and these
committed customer relationships leads to sustainability and also removes barriers to achieve
competitive advantage . Further,there is an availability services of personalization and mass
customization here management with customers is more crucial in order for the survival of
corporate now days.
The successful manufacturers have effectively linked internal processes with the external
suppliersand also with end consumers. The goal is to connect manufacturing process across the