The important of decision making in SCM on international business performance.

• Author: Poonpol, Parnsiri
• Position: Supply chain management - Report

1. INTRODUCTION

   Supply chain management (SCM) can contribute the competitive advantage in global firms. (Lia et., al. 2006). Manufacturers will manage the value chain from supplier to customer by concern the decision making theoretical (Narasimhan and Mahapatra, 2004). Song (2000) shows the relationships between supplier and manufacture can make production volumes and quality of Goods adequately.

   Agency theory was defined manager as agent of firm need to protect and develop manufacturing into high performance and low cost. Therefore information is the most important to must communicate within the organization. Moreover the information technology is arrayed both operational effectiveness and new capability of firm to meet in business munificence. (Choy et., al. 2003).

   Aslanertik (2005) said that firms have been operated manufacturing, sourcing, warehousing, sales and distribution activities by themselves. In perspective of the multi-market competition theory suggests that the many firms have complexity and competition within business cycles. Many firms need to add new outsource to their supply chain such as suppliers, distributors, etc (Jayachandran, 1999). These became very difficult to control and integrate many activities. Integrating properly supply chain became the most essential of many firms for making competitive flexibility (Reddy, 2003). Supply chain integration focuses on improving decision makings that reduce both information asymmetry and excess inventory (Mclaren et., al. 2002). The important point is the entire supply chain should be optimized. Thus organizations make their decision makings by thinking both internal and external partners in order to create value for all involved.

   Control theory assumes that management has been planning to compare with actual performance perfectly (Jaworski, 1988). Therefore, optimizations and creating value requires decision making at three levels: strategic, tactical, and operational in order to analyze supply chain problems in all these three levels (Shapiro, 2002). The connection between the supplier and manufacturer, contributes to the competitive advantage of the manufacturer in improving business processes and production efficiency by decreasing cycle times and increasing work volume in sometime. Moreover, this relationship will be cost reductions, quick response to changing customer demands and increasing customer service levels. These will be competitive advantage factor to creating customer satisfaction (Aslanertik, 2005).

   Developing models for complex of decision making in SCM on performance is a challenge and the literature on decision making in SCM is vast, varied, and evolving. Yet, there was not any systematic testing about decision making in SCM on performance both foreign and within Thailand. These have motivated researches to continue to develop improved models with research question. How does each factor in decision making in SCM affect to on international business performance with implementation of export marketing strategy is mediator, and environmental characteristics is mainly moderator?

   The purpose of this study is therefore to empirically test a framework identifying the relationships among decision making in SCM, effective implementation of export marketing strategy and international business performance. In addition to, if it is the direct relationship between decision making in SCM and international business performance, we also test the relationship under environment munificence. Therefore, our research has extended from previous research include First, Decision making in SCM simultaneously from both upstream and downstream sides of a supply chain, will help researchers better understand the scope and the activities associated with SCM and allow researchers to test the antecedences and consequences of SCM practice. Second, we added effective under environment munificence to the direct relationship from decision making in SCM to international business performance. Third, this research emphasizes international business performance because it can extent into international businesses to involved with decision making in SCM directly. Forth, offering a validated instrument to measure Decision making in SCM, and by providing empirical evidence of the important of decision making in SCM on an organizations effective implementation of export marketing strategy and its performance, it is expected that this research will offer useful guidance for measuring and implementing Decision making in SCM in an organization and facilitate further research in this area.

2. RELEVANT LITERATURE REVIEWS

   Figure 1 presents decision making in SCM framework developed in this research. The framework proposes that decision making in SCM will have an impact on organizational performance both directly and also indirectly through effective implementation of export marketing strategy. Decision making in SCM is conceptualized as a three-dimensional construct. The three dimensions are strategic decision making, tactical, and operational. A detailed description of the development of decision making in SCM construct is provided in this research. Effective implementation of export marketing strategy and international business performance are concepts that have been operationalzed in the existing literature (Koufteros, 1997; Zhang, 2001). Using literature support, the expected relationships among decision making in SCM practices, Effective implementation of export marketing strategy, and international business performance are discussed, and hypotheses relating these variables are developed.

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   2.1 Decision making in SCM

   The strategic, operational and tactical levels are function to connect respectively. Each function can be dominated with policies of firm and affect to suitable control used (Ballou, 1992). According to Rushton and Oxley (1989), such a hierarchy is based on the time condition for activities and the relevance of decision makings and influence of different levels of management. Gunasekaran (2001) shows concept and relevance of decision making in SCM (e.g. strategic, tactical, and operational level). The strategic level measures influence the top level management decision makings, very often reflecting investigation of broad based on policies, corporate financial plans, competitiveness and level of engage to organizational goals. The tactical level deals with resource allocation and measuring performance to compare with targets to be met in order to achieve results specified at the strategic level. Operational level measurements require accurate data and assess the results of decision makings of low level managers. Supervisors and workers are to set operational objectives that, if met, will lead to the achievement of tactical objectives.

   In detail of decision making at three levels: strategic, tactical, and operational. We can find from antecedent research of many authors to investigate for searching problem area to investigations in SCM with decision making of manager or authorizer. Strategic decision making include capacity planning, global supply chain, supply chain redesign, supply chain configuration, facility location, supply chain restructuring, locating point of differentiation, and service facility location (Paraskevopoulos et., al. 1991; Arntzen et., al. 1995; Berry and Naim, 1996; Fisher and Raman, 1996; Revelle and Laporte, 1996; Camm et., al. 1997; Garg and Tang, 1997; Jayaraman, 1999). Tactical aspects of SCM include incentive compatibility in a decentralized supply chain, managing decentralized supply chain, contracts, buyersupplier relationship, outsourcing, bidding, bid selection, supplier selection, supplier evaluation, and collaborative planning (chen, 1999; Henig et., al. 1997; Bassok and Anupindi, 1997; Nair and Narasimhan, 2003; Tagaras and Lee, 1996; Talluri, 2002; Narasimhan et., al. 2003; Talluri and Narasimhan, 2003; Raghunathan, 1999; Moinzadeh, 2002). Operational aspect of SCM include integrated operations, integrated distribution, responsive capacity planning and scheduling, procurement, procurement, replenishment policy, competitive inventory policy in supply chain, replenishment policy in vendor managed inventory systems, inventory management, production planning and scheduling, multistage production system, production planning, production scheduling, logistics postponement, delivery reliability, lateral shipment, supply chain coordination, and information sharing (Cohen and Lee, 1988; Robinson and Satterfield, 1998; Agrawal et., al. 2002; Clark and Scarf, 1960; Anupindi and Akella, 1993; Moinzadeh and Aggarwal, 1997; Cachon and Zipkin, 1999, Cetinkaya and Lee, 2000; Bagahana and Cohen, 1998; Tang, 1990; Graves et., al. 1998; Wang and gerchak, 1996; Lee and Wei, 2001; Ainn and Bowersox, 1988; Grout, 1998; Alfredsson and Verrijdt, 1999; Munson and Rosenblatt, 2001).

   2.2 Effective implementation of export marketing strategy

   Effective implementation of export marketing strategy is able to create their market position over than competitors (McGinnis and Vallopra, 1999; Porter, 1985). To be able to comprise capabilities that allows an organization to differentiate from competitors or also may be an outcome of critical management decisions (Tracey et., al. 1999). The dimensions of the effective implementation of export marketing strategy constructs used in this study are product differentiation and cost leadership.

   Jayachandran, (1999) has explained product differentiation that is a unique customer need by design the product or service, allowing organizations to charge a premium price to market share. The differentiation strategy is implemented effectively when the business provides unique or superior value to the customer through product quality, features, or after-sale support. The quality may be real or perceived, based on fashion, brand name, or image. Firms...