Impact of Supply Chain Operations on Financial Performance (An evidence from 5 big Cement companies in Pakistan)

Today’s supply chains have placed greater demand on companies to manage both risk and costs. As supply chain focuses on sourcing of supply, managing supplier relationships and the costs incurred from manufacturing to customer delivery, finance plays a value added role in providing a comprehensive view and support for risks and costs. CFOs are now turning their attention to supply chains, working closer than ever with their supply chain teams to fashion holistic end-to-end processes that aligns goals and benefit the whole business. Intensive competition in the market place has forced companies to respond more quickly to customer needs through faster product development and shorter delivery time. Increasing customer awareness and preferences have led to an extraordinary increase in product variety. The wrong supply chain operation strategy or agenda could make return on investment thresholds more difficult to achieve by not investing in the right projects at the right time. Traditionally, both of the functions have an arm’s length relationship, this relationship is more difficult as operationally the two functions should be better aligned but have different outlooks that are not fully understood by the other. Key words: Supply chain, Profit & loss, Balance sheet, CFO and CSC

Productivity spillovers from multinational activity to indigenous firms in Ireland. ESRI WP587, March 2018

As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on this has however tended to be mixed. This paper uses Irish firm-level data on both manufacturing and services firms to re-examine and update tests of intraindustry and intra-region spillovers and then extends the previous research by examining if spillovers are more likely to occur through supply chain linkages. We further test for the sensitivity of these vertical spillover effects to alternative supply chain measures. Overall, we find fairly limited evidence of a link between the presence of foreign-owned firms and the performance of domestic firms with considerable sensitivity of results to changes in specification. Important variation across sectors is identified, however, with more robust evidence of intra-industry spillovers on the productivity performance of firms in services. Examining forward and backward linkages through supply chains indicates some negative impacts from obtaining supplies from and supplying foreign-owned firms although these are mitigated for domestic firms which invest in R&D, which appears to increase the absorptive capacity of the firms to benefit from productivity spillovers

PRODUCTIVITY SPILLOVERS FROM MULTINATIONAL ACTIVITY TO LOCAL FIRMS IN IRELAND. OECD PRODUCTIVITY WORKING PAPERS No. 16, November 2018

As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on these indirect effects has however tended to be mixed. This paper uses Irish firm-level data on both manufacturing and services firms to re-examine and update evidence on intra-industry and intra-region spillovers and then extends the previous research by examining if spillovers are more likely to occur through supply chain linkages. In addition, we consider the heterogeneity of investors and allow the spillover effects to differ for foreign affiliates owned by EU and non-EU based parent companies. Finally, we examine the role of domestic firms’ absorptive capacity in conditioning the effects of spillovers from multinationals on their productivity. Overall, we find limited evidence or a negative link between the presence of foreign-owned firms and the productivity of domestic firms in the same industry or the same region. Examining forward and backward linkages through supply chains indicates that on average, selling to foreign-owned firms had a positive effect while buying from foreign owned firms had a negative effect on the average productivity of domestic firms. Finally, considering the absorptive capacity of domestic firms and allowing the spillover effects to differ depending on the origin of the parent companies, we find that the positive productivity spillovers come from supply chain linkages between domestic firms investing in R&D and foreign affiliates of multinationals with headquarters based outside the EU

SUPPLY CHAIN FINANCIAL PERFORMANCE IN LIQUEFIED NATURAL GAS SYSTEMS

Part of the study phase two has been presented and published at Logistics Research Network Conference (LRN 2018), University of Plymouth 5-7 September 2018.Liquefied natural gas (LNG) is a rapidly growing energy source, with highly competitive supply chain networks, sensitive to global macro-economic developments. To date, supply chain finance studies have failed to explore supply chain financial performance (SCFP) in the LNG sector and few have demonstrated the potential impact of supply chain practices on financial performance. This study aims to evaluate the relationship between supply chain strategies and the financial performance of Nigeria liquefied natural gas (NLNG) systems, to guide practitioners to review and adopt supply chain initiatives that drive business survival and growth, while creating value for investors. To identify key supply chain strategies that have financial influences for NLNG networks, SCFP related publications between 1999 and 2018 alongside interviews with experts and key decision-makers at NLNG were analysed using template analysis. To prioritise the relative influence of the major supply chain initiatives that drive financial performance in NLNG systems, supplementary data collected from NLNG was analysed using analytical hierarchy process (AHP). In study phase one, qualitative template analysis of literature identified sourcing strategy, information technology and automation, integration and collaboration, and sustainability as key drivers of SCFP in NLNG systems. These drivers are measured using cost, revenue, working capital and assets utilisation. In study phase two, AHP presented integration and collaboration as the most important drivers of financial performance in NLNG networks, followed by sourcing, IT and automation, and sustainability. Study phase three identified investment and capacity development in addition to the four supply chain capabilities established earlier. Effective implementation of these initiatives is essential to realise the full financial advantages of effective supply chain strategies. Theoretical and empirical taxonomies and frameworks facilitate understanding of how supply chain initiatives contribute positively to NLNG financial performance, and support practitioners in making strategic supply chain decisions. The AHP model provides a novel ranking for supply chain strategies and measures to guide decision-makers.Petroleum Technology Development Fund (PTDF), Nigeri

Innovation and business performance - a provisional multi-regional analysis

Although much attention has focussed on the determinants of firms' innovation performance, the relationship between innovation and business performance is less well defined. In this paper we use data from identical plant level surveys conducted in six regions of the UK, Germany and Ireland to examine this relationship and identify some of the implications for regional innovation initiatives. The survey data used was collected by postal survey during 1999 and 2000. In all over 2000 plants responded to the surveys which provide regionally representative information about innovation activity, IT adoption and a number of indicators of business performance. Four main indicators of business performance are examined here: sales and employment growth, export performance, profitability and productivity (value added per employee). The analysis is based on a simultaneous econometric model explaining plants' innovation activity and business performance. Discussion focuses on a number of key themes. First, core-periphery differences are explored by contrasting analytical results for peripheral (Northern Ireland, Scotland) and 'core' regions (Bavaria, Baden-Wurttemberg) within the sample. Second, attention is focussed on the performance effects of firms, different innovation profiles relating to product and process development but also radical and more incremental innovation activity. Thirdly, contrasts between small and larger businesses are considered and the sensitivity of firms, innovation and performance to their operating environment is explored. The paper concludes with an assessment of the implications of the analysis for regional innovation initiatives and their potential impact on business development.

The global apparel value chain, trade and the crisis : challenges and opportunities for developing countries

This paper examines the impact of two crises on the global apparel value chain: the World Trade Organization phase-out of the quota system for textiles and apparel in 2005, which provided access for many poor and small export-oriented economies to the markets of industrialized countries, and the current economic recession that has lowered demand for apparel exports and led to massive unemployment across the industry’s supply chain. An overarching trend has been the process of global consolidation, whereby leading apparel suppliers (countries and firms alike) have strengthened their positions in the industry. On the country side, China has been the big winner, although Bangladesh, India, and Vietnam have also continued to expand their roles in the industry. On the firm side, the quota phase-out and economic recession have accelerated the ongoing shift to more streamlined global supply chains, in which lead firms desire to work with fewer, larger, and more capable suppliers that are strategically located around the world. The paper concludes with recommendations for how developing countries as well as textile and apparel suppliers can adjust to the crisis.Markets and Market Access,Economic Theory&Research,Free Trade,Labor Policies,Access to Markets

Learning Paths to Offshore Outsourcing - From Cost Reduction to Knowledge Seeking

A corporation’s offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learning-by-doing process in which the offshore outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation. Initially, a corporation’s outsourcing is driven by a desire for cost minimization. Over a period of time the outsourcing experience lessens the cognitive limitations of decision-makers as to the advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor may not only offer cost advantages, but also quality improvement and innovation. The quality improvements that offshore outsourcing may bring about evoke a realization in the corporation that even innovative processes can be outsourced.Offshore outsourcing, cost reduction, innovation, experiential learning, low-cost countries

DETERMINANTS OF STRATEGIC RISK MANAGEMENT IN EMERGING MARKETS SUPPLY CHAINS: THE CASE OF MEXICO

Risk mitigation in global supply chains has grown in importance in recent years, in tandem with globalization and both the commercial and security threats faced by firms both large and small. This study hypothesizes that a firm’s ability to manage risk strategy—and therefore support its competitiveness—is determined by a symbiotic triad of factors: the resources it utilizes; network systems; and performance criteria it employs. The study, comprising 24 in-depth interviews with electronics and IT firms, examines resource utilization through the Resource-Based View (RBV), assesses firms’ proclivity to engage in networks for risk mitigation and competitiveness; and highlights the importance of performance evaluation as a critically important component in supply chain management. Findings reveal that both buyers and suppliers believe that the symbiotic triad can provide them with a competitive advantage in addition to improving operational efficiency, effectiveness and quality. Future research should also extend this pilot investigation to other countries and industries, and utilize a larger sample of firms for quantitative as well as qualitative assessment.Risk management; emerging markets; Supply Chain Management; IT

Technology in purchasing: Impacts on performance and future confidence

This study investigates how top Finance & Accounting managers perceive the performance implications of adopting technologies to improve Purchasing processes. Based on a large-sample (454) survey, we employ multivariate data analysis techniques to specifically provide insights into how e-Purchasing impacts organizational performance. We model a theoretical construct of e-Purchasing and empirically confirm our literature-based hypotheses that e-Purchasing strongly and positively correlates with the integration between the Finance and Purchasing departments, improves the operational performance within these departments, and positively affects the confidence of managers in future organizational performance in the face of internal and external risk. We discuss implications for purchasing and supply researchers and practitioners as well as areas for further research.e-Purchasing; Internal Integration; Empirical Research Methods;