RELATING ORGANISED RETAIL SUPPLY CHAIN MANAGEMENT PRACTICES, COMPETITIVE ADVANTAGE AND ORGANISATIONAL PERFORMANCE

Rajwinder Singh, H.S. Sandhu, B.A. Metri and Rajinder Kaur

Effective supply chain management has become a potential way nowadays to improve organisational performance through matching supply chain practices and competitive advantages in the competitive world. Organisations focus on better supply chain management practices to gain competitive advantage for better organisational performance. This research conceptualises and develops five secondary constructs for supply chain practices (use of technology, SC speed, Customer satisfaction, SC integration, and Inventory management). The research also identifies four primary competitive advantage constructs (Inventory Management, Customer Satisfaction, Profitability, and Customer Base Identification) and six primary organisational performance constructs (Market Performance, SC Competencies, Stakeholder Satisfaction, and Innovation and Learning). The data for analysis was collected from top 10 non-livestock organised retail players operating in Punjab, Haryana, Chandigarh, New Delhi and, Gurgaon in India. The relationships among supply chain practices, competitive advantage, and organisational performance, are tested in the proposed framework using structural equation modelling. The results indicate that Indian retailers know that competitive advantage has high impact on SCP but they fail in matching supply chain practices, competitive advantage and, organisational performance. Key Words: Supply Chain Practices, Organisational Performance, Competitive Advantage, Structural Equation Modelling INTRODUCTION upply chain management practices are the set of activities used by organisations to compete in this competitive world. The development has shown the use of innovative efforts to reduce cost, manage shorter product life cycles, resource globalisation, cope with increased demand for customisation, and intensive quality initiatives (Taylor, 2004). Since 1980s the term supply chain management and logistics was used synonymously. Later on it was realised that supply chain management is more than logistics. The term logistics is concerned with customer service, inventory management, transportation, warehousing, information systems and lot size considerations (Lambert, 2001). On the other hand supply chain management is, "a set of three or more entities (organisational or individuals) directly involved in the upstream and downstream flow of products, services, finances, and/or information from source to customer" (Mentzer et al., 2001). The Council of Supply Chain Management (2007) defines logistics management as "that part of SCM that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and point of consumption in order to meet customers' requirements." Logistics is an important component of supply chain management and integration of logistics processes helps to better serve the customers. The logistics service providers should focus on logistics because it involves the largest cost in the international trade (Rodrigues et al., 2005) and supply chains serve as the links between suppliers, manufacturers, sellers, customers (Lai and Chang, 2003) and logistics. Also the logistics involvement in product development projects improves both the project performance and as well as logistics and organisational performance (Zacharia and Mentzer, 2007).

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Supply chain management constitutes all activities associated with design, planning, synthesis, organisation, and control of supply chains (Chan et al., 2003). The essential elements of supply chain management are structure of supply chains, supply chain business processes, and supply chain components (Lambert, 2004). It is a complex flow of demand, supply, and cash (Taylor, 2004). The food processing is one of the emerging sectors of Indian economy and has been identified as a thrust area for socio-economic development. The industry needs to strengthen the linkages with the farmers/ producers and intermediaries for the procurement of farm products. Therefore proper methods for procurement of raw material should be adopted for shortening the food supply chains. The supply chain can be shortened by introducing the contractual model to strengthen the farm-industry interfaces. The choice of contractual interface between the parties shall minimize the transaction cost. The transaction costs include not only the direct costs of information, negotiation, communication, but also the indirect costs of monitoring and enforcing the terms and conditions of the contract. The contractual options are purchase from the spot market, through commission agents, through farmers' cooperatives, direct purchase from farmers under contract farming, and own raw material under captive farming (Jasbir Ali and Sanjeev Kapoor, 2005, IIM, Lucknow). Nowadays the supply chain management is not only a means to produce where they need but also a means to enhance key outcomes (Hult et al., 2004). SUPPLY CHAIN PRACTICES SCM practices have been defined as the set of activities undertaken in an organisation to promote effective management of its supply chain (Li et al., 2006). The best supply chain practices are the initiatives that influence the whole supply chain, its parts or key processes (Cuthbertson and Piotrowicz, 2008). These practices are influenced by contextual factors such as type of industry, firm size, its position in the supply chain, type and length of supply chain (Li et al., 2006). The supply chain practices (SCP) are classified as locational pricing and mark-up, assortment, performance metrics, forward buying, delivery destination, replenishment frequency, and order batch

sizes (Zairi, 1998). Beamon (1999) identified supply chain practices as; inventory turn, gross margin and profit, average in-stock inventory, and ability to measure inventory. Bowersox et al., (2000) quoted that collaborative practices help to achieve common goal. Robinson, (2002) identified SCP as electronic data interchange/point of sale (EDI/POS), flow coordination, and risk coordination. Tan et al., (2002) identified six aspects of SCM practices; supply chain integration, information sharing, supply chain characteristics, customer service management, geographical proximity and, JIT capability. Elmuti, (2002) identified outsourcing practice as a tool to be applied to transportation, warehousing, human resource management and, information technology for cost reduction. Udomleartprasert and Jungthirapanich (2003) classified supply chain management practices as inventory management, customer management, and supplier management. Golicic et al., (2003) identified SCP as arms-length, cooperative / partnership, collaboration and integration. Kkkinen et al., (2003) classified SCP as direct delivery, cross-docking and merge-in-transit. Chen and Paulraj (2004) in their supply chain framework incorporated environmental uncertainty, strategic purchasing, information technology, supply network structure, and logistics performance as supply chain practices. Wong et al., (2004) identified supply chain practices as physically efficient (MTO), physically responsive (MTS) and market responsive (ATO) for functional, intermediate and innovative product respectively. El-Beheiry et al., (2004) identified SCP as demand variability and induced seasonality. Christopher et al., (2005) identified supply chain practices as time-to-market, time-to-serve and time-to-react. Li et al., (2007) identified five dimensions of supply chain management practices as; strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement. Chow et al., (2008) in their empirical study on the US and Taiwan industries identifies supply chain practices as; customer and supplier management, supply chain features, communication and speed, information sharing, and integration. Mohd (2007) discusses some of the innovative supply chain management practices which can be adapted by the Indian companies to reduce the cost related to managing inventories and obsolescence, ultimately resulting in improved customer services.

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These are vendor managed inventory (VMI), radio frequency identification (RFID), collaborative planning and forecasting (CPFR). The organisations collaborate on planning and execution to achieve a synchronised supply chains. This collaboration has taken as a good practice in FMCG supply chains in the form of continuous replenish programme (CRP), vendor managed inventory (VMI), and collaborative planning forecasting and replenishment (CPFR). The addition of radio frequency identification (RFID) has revolutionised supply chain operations (Parter, et al., 2005). Electronic data interchange (EDI) has also been an efficient practice for supply chain coordination and efficient replenishment (Hill and Scudder, 2002). Chen et al., (2007) also identified CPFR as collection of practices. They further added that it aims to radically reduce stocks and expenses and also helps to improve customer service and collaboration between retailer and supplier. In order to cope with increasing information needs the internet based communication i.e. e-commerce played an important role (Sparks and Wagner, 2003). The electronic product code (EPC) which is a global-standard-based implementation of the RFID technology, is the standard adopted in all these initiatives identified as good practice (GCI, 2005). Srivastava (2006) quoted that the Indian markets managers are well aware of the supply chain practices and are under the pressure to compete globally. There are many studies showing that SCM improves the performance of entire supply chains (Haulihan, 1995; Burgess, 1988; Holti, 1997). It is also an essential element for success of process and product innovation, and organisational efficiency and effectiveness (Edum et al., 2001). The literature review has identified the supply chain practices used in manufacturing and service industry. In this research an attempt shall be made to classify the SCP useful for organised non-livestock retailing through empirical examination.
SUPPLY CHAIN PRACTICES AND COMPETITIVE ADVANTAGE

2007). As purchase accounts for 75% of the operating budget (Quinn, 1997) the organisations are in search of ways to lower input costs to gain competitive advantage. The organisations need to master the challenges of speed, convenience and reliability. It may help to reduce costs, increases productivity, and reduces risk to gain competitive advantage (Walker, et al., 2000). Bagchi (1996) classified metrics for competitiveness of organisations as time, quality, cost, efficiency, and diagnostic measures. Ittner and Larcker (1997) identified the supply chain practices as customer and supplier involvement, non-price factors in partner selection and long term partnership with suppliers' to improve profitability for competitive advantage. Ramdas and Speakman (2000) in their study on drivers of supply chain management identified that firm's ability to capture information, delayed product differentiation, mass customisation and, accurate response, help organisations to achieve competitive advantage. Hyland and Beckett (2002) quoted that for organisations to remain competitive should have high level of internal learning that refines both current practices and adopts new ones. Udomleartprasert and Jungthirapanich, (2003) in their study on aligning the infrastructure to supply chain practices quoted that manufacturing organisations gain competitive advantage by implementing value-added activities. The firms should focus on profit maximisation, and cost reduction (manufacturing, operating, and quality) to improve financial performance. Chen and Qi (2003) quoted that tendency of economic globalisation, and management technologies largely prompt business competition. The organisations strive to achieve competitive advantage through satisfying customers, quick response, cooperation and coordination in sharing information, increasing sales, cost reduction, and use of management philosophies (JIT, lean production etc.). Over the last decade, knowledge-based view (KBV) emerged and it helped to gain competitive advantage (Acedo et al., 2006). The firm's ability to share and integrate knowledge is identified as a key to success. Kim (2006) in his LISREL analysis on small and large manufacturing firms found that in small firms, efficient supply chain integration helps in sustainable performance improvement. On the other hand in large firms, the close relationship is

Supply chain management (SCM) enhances organisational competitiveness by integrating the internal functions within a company and linking them with the external operations of suppliers, customers and other channel members (Jiqin, et al.,

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predicted between SCM practices and competitive capability. This ultimately have significant effect on performance improvement. He added once the integration has been implemented, it is advisable to focus on SCM practices and competition capability. Selldin and Olhager (2007) identified performance measures for competitive priorities as; quality, delivery speed, delivery dependability, cost (for price competition), volume flexibility, and product mix flexibility, and profitability. Kenneth, (2008) identified that logistic performance is positively impacted by supply chain management strategy. He further added that both logistics performance and supply chain management strategy positively impact marketing performance, which in turn positively impact financial performance. Neither supply chain management strategy nor logistics performance was found to directly impact financial performance. Ferry et al., (2007) in their study on Australian beef industry identified price, quality, time to market, and sales growth as competitive advantage components of their framework. Chow et al., (2008) identified quality and service, operations and distribution, and design effectiveness as key components of supply chain competence. Othman et al., (2009) in their study of halal meat foods quoted that efficient and effective information sharing is the core of SC competitiveness. Shankar et al., (2009) in their study on supply chain management and retailer performance stated that in modern retail the retailers have to deal with intense competition both domestically and globally due to changes in customer expectations. As a result the retailers look beyond their organisational boundaries to evaluate, integrate resources and capabilities of their suppliers and customers. This helps them to create a superior value and long term competitive advantage. They further added that retail managers focus on three major supply chain trends; global sourcing practices, multi-channel route to market, and relationship based innovation for competitive advantage. Indian organisations are striving hard to adopt new standards such as TQM, JIT, BPR and SCM to enhance their performance and competitive advantage (Saad and Patel, 2006). However India lacks significant study on supply chain practices (Austin, 1990) and, logistics and supply chain practices in India show limited visibility (Srivastava, 2006). The

literature gaps suggested that Indian retailers need to focus on factors and strategies that may help to gain competitive advantage.
SUPPLY CHAIN PRACTICES AND ORGANISATIONAL PERFORMANCE

Supply chain management is a strategic level concept but managers' focus on improving the performance of organisational entities for which they are responsible (Shafer, 2002). SCM requires focus on organisational strategies to improve SC performance. The attempts to optimise organisational performance without considering SC performance may negatively impact SC performance and hence damaging the competitive advantage. The main focus of supply chain management is on operational cost, time and response, customer services, or profitability or margins (Nuthall, 2003) and improvement in service levels and reduction in costs to improve o rganisational performance. Supply chain management incorporates logistics as a key supply chain focused function and effective supply chain management and purchasing practices are associated with competitive capabilities of the firm and it has more significant effect on firm performance (Carter and Narasimhan, 1996). The performance measurement in any organisation should focus on two factors; those relate results and those focus on the determinants of the results (Fitzgerald et al., 1991). Parker (2000) identified the purpose of organisational performance measurement to identify success, identify whether customer needs are met, identify organisational process and to reveal what they don't know, where problems and bottlenecks exist and to remove them, ensure that decisions are based on facts, and to prove the improvements. The organisational managers need to focus attention on it for competitiveness of supply chains. Bowersox (1989) asserted that the process of SCI should progress from the integration of internal logistics processes to external integration with suppliers and customers. The internal integration can be accomplished by automation and standardisation of internal logistics functions, the introduction of new technology, and continuous performance control under a formalised and centralised organisational

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structure. The external integration can be achieved by sharing information and strategic linking it with suppliers and customers, and the standardisation of logistics processes between firms. Anderson et al., (1994) found that marketing performance, as measured by customer satisfaction, positively impacts financial performance, as measured by return on investment. Stewart (1995) found that for organisations to outperform needs to focus on four key areas; (1) delivery performance; (2) flexibility and responsiveness; (3) logistics costs; and (4) asset management. Kaplan and Norton (1996) identified five perspectives for performance measurement: financial, customers, internal processes, innovation and improvement, and employees. Carter and Narsimhan (1996) identified organisational performance measures as growth, profitability, and market share. The organisational performance can be looked from two angles i.e. presence in marketplace and profit generation over time (Yamin et al., 1999). Beamon (1999) presented a framework for manufacturing supply chains and classified the PMSs into three types as: resources, output, and flexibility for better organisational performance. Neely et al., (2002) in the approach of "Performance Prism" considered stakeholder as the focal point of the performance measurement process. This approach stressed on stakeholder satisfaction and emphasised their contribution to organisational performance measurement process. Green and Inman (2005) identified measures of organisational performance as; marketing performance and financial performance. Chen et al., (2006) classified organisational performance factors as; market share, sales growth, and profit margin on sales. Saad and Patel (2006) in their empirical study on automotive sector quoted that at the organisational level performance measurement is essentially focused on tangible and financial factors. Kenneth et al., (2008) stated that logistics performance construct reflects the organisation's performance as it relates to its ability to deliver goods and services in quantity ant time as per customer requirement. Crook et al., (2008) asserted that supply chain effectiveness reduces unnecessary activities, cycle time reduction, lower inventories, productive improvements, and enhanced responsiveness and product development capabilities. Vivek and

Ravinandran, (2009) in their empirical study of small scale industry (SSC) of India identified six dimensions to measure organisational performance as; return on investments, market share, growth of ROI , sales, profit margin on sales, and overall competitive position. They further added that supplier performance significantly influences organisational performance. Katou and Budhwar (2010) in their empirical study on Greek manufacturing sector found out that organisational performance consists of six variables as; effectiveness, efficiency, development, satisfaction, innovation, and quality. When summarising all these studies, we can notice that the literature portrays SCM practices from a variety of different perspectives with a common goal of ultimately improving organisational performance (Li et al., 2006). The performance of each supply chain practice should be evaluated depending on how the practice has a significant effect on the efficient integration of the supply chain (Kim, 2006). RESEARCH HYPOTHESIS The research frameworks shown in Fig.1, 2 and 3 consists of three components; second order supply chain practices, competitive advantage and organisational performance. The second order supply chain practices consist of 24 items classified into five groups (Technology use, SC speed, Customer satisfaction, SC integration, and inventory management). The competitive advantage component consists of four dimensions; inventory management, customer satisfaction, profitability, and identification of customer base. The organisational performance represents four dimensions; market performance, SC competencies, stakeholder satisfaction, and innovation and learning. These dimensions are based on extensive literature survey on relevant literature. The hypotheses are developed to relate supply chain practices, competitive advantage, and organisational performance. A detailed description of hypothesis for Indian organised non-livestock retailers are as hereunder: H1: Indian retailers try to match supply chain practices with competitive advantage The Indian organised retail industry gained momentum after liberalisation (1990). The retailers identified the limitations of the existing Karyana (mom

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and pop store) and started practicing new exercises to manage retail stores. This match resulted in identification of customers' needs and means to meet them. The old fashioned karyana stores were reshaped in air-conditioned well stocked and arranged inventory. This shows that retailers have identified the advantage in managing such space. Also big industrial houses entered in the organised retail business. Hence it shows that organised retailers try to harvest the opportunity and it leads to: H2: They try to match competitive advantage with organisational performance The retailers identified the competitive advantage to run organised retail business feeling that profits gained from this cash carry business help to improve business. Otherwise they offer good margins to retailers and a component of profit is wasted. Also bulk purchase shall reduce the product cost and benefit shall be used to attract customers. However the maintenance and running cost of such stores is quite high due to which many of the retailers are no more in business like Subhiksa and also many retailers have closed their stores in the new places. This leads to: H3: They have less understanding to match supply chain practices with organisational performance The retail stories have many examples of business failure due to mismatch of supply chain practice to the organisational performance. Many retail stores have been closed or shifted. The leading retail player Subhiksha is no more in business. These stories explain the extent of gap between Karyana and organised retail practices. DATABASE AND METHODOLOGY A survey questionnaire has been used as a primary instrument to collect information, and a total of 500 questionnaires were distributed by randomly selecting respondents from company websites, India Retail Reports 2007-2009, and retail telephone directory 2010. The questionnaires send were telephonically followed for response and finally 402 questionnaires were received (CEO=2; President/VP/GM/AGM=30; Manager/deputy Manager=100; Store Supervisor=270) for supply chain practices, competitive advantage and organisational performance yielding a response rate of 80.4%. The questionnaires collected were digitised

using SPSS software and factor analysis was done using principal component analysis for supply chain practices. The scale reliability was also done for supply chain practices. A 25-item scale was used for measuring supply chain practice and one item i.e. lean practice was reduced leading to effective size of 24 items. The 4 items were selected for competitive advantage and six items were selected for organisational performance based on strong literature support and discussion with academicians and practitioners. The statements/items so developed were rated on five point Likert scale ranging from strongly disagree (1) to, strongly agree (5). The items for supply chain practices were refined and purified to obtain the reliable scale for supply chain practices. For this purpose corrected item-to-total correlation and Cronbach's alpha statistics were used. The second order supply chain practices along with competitive advantage and, organisational performance were subject to structural equation modelling analysis using AMOS 4.0 version to test and validate confirmatory factor model. The four competitive advantage items and six organisational performance items were selected and information was collected for them. During the analysis for structural equation model the effective sample size reduced to 398 as 4 entries were reduced against outliers. Supply Chain Management Practices ScaleDevelopment and Refinement Scale Development A five point Likert scale was developed to identify the supply chain management practices used in non-livestock retail industry based on strong literature survey. The interactions and discussions with academicians and retail practitioners in the field of retail supply chain management identified 25 items for supply chain practices, four items for competitive advantage and six items for organisational performance. The selected items were surveyed through pilot survey and necessary corrections were made based on the comments. Later on full survey was conducted from the principal cities of Punjab, Chandigarh, New Delhi, a n d G u rg a o n c o n s i s t i n g 4 0 2 r e s p o n s e s . T h e analysis reduced the supply chain practice items to 24 as hereunder in Table 1:

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Table 1: 24-Items Final Supply Chain Practices; Mean, Standard Deviation, and Scale Statistics
Sr (p1) (p2) (p3) (p4) (p5) (p6) (p7) (p8) (p9) (p11) Items EPC EDI Software Use RFID E-Communication Communication Speed Teaming Supply Chain Process Management Arms Length Information Sharing Mean 3.3184 3.3607 3.3433 3.3706 3.3856 3.9577 3.9328 3.9328 3.9303 3.9851 3.1294 3.1368 3.1493 3.1269 3.1642 4.1070 4.1119 4.1194 4.1244 4.1318 3.8905 3.8980 3.8756 3.9279 Standard Deviation 1.1158 1.1062 1.1151 1.0984 1.1068 .8682 .8463 .8781 .8850 .8355 .9751 .9625 .9567 .9767 .9698 .8626 .8415 .8270 .8202 .8236 .9197 .9000 .9419 .8890 P1 P2 P3 P4 P5 P6 P7 P8 P9

Table 2: Scale Reliability Analysis: Item-Total Statistics

Scale Mean if Item Deleted 85.0920 85.0498 85.0672 85.0398 85.0249 84.4527 84.4776 84.4776 84.4801 Scale Variance Item Deleted 124.2633 124.2020 124.3471 125.0807 124.9021 130.7172 130.8287 130.5444 131.0432 132.1154 126.4968 126.6581 126.8319 127.4007 127.3033 132.7805 133.1476 133.3091 133.7010 134.1815 129.8712 129.8614 128.6584 129.9062 Corrected ItemTotal Correlation .5767 .5852 .5735 .5522 .5548 .4222 .4292 .4255 .3962 .3666 .5656 .5663 .5618 .5215 .5305 .3184 .3088 .3069 .2889 .2617 .4359 .4476 .4824 .4519 .8840 Alpha if Item Deleted .8761 .8758 .8762 .8769 .8768 .8805 .8804 .8805 .8812 .8818 .8767 .8767 .8768 .8779 .8777 .8830 .8832 .8832 .8836 .8842 .8802 .8799 .8790 .8798

(p10) Strategic Purchasing (p12) Supply Chain Integration (p13) Supply Chain Collaboration (p14) Supplier Involvement (p15) Coordination (p16) Customer Order Commitment (p17) Product Customisation (p18) Supply Chain Flexibility (p19) Quality Management (p20) Customer Relationship and Management (p21) Outsourcing Supply Chain Operations (p22) Demand Management (p23) Inventory Management (p24) Logistics Postponement N of cases 402 Statistics for Mean Variance SCALE 88.4104 139.8536

P10 84.4254 P11 85.2811

P12 85.2736 P13 85.2612 P14 85.2836 P15 85.2463 P16 84.3035 P17 84.2985 P18 84.2910 P19 84.2861 P20 84.2786 P21 84.5199 P22 84.5124 P23 84.5348 P24 84.4826

Scale reliability coefficient Alpha =

Std Dev Variables 11.8260 24

Factor Analytic Results for Supply Chain Practices According to the scale used the maximum score to be received is 120 if all the 24 items were rated at 5. However the mean score 88.4014 indicates that 73.68% of the constructs are explained by items. It indicates that supply chain practices indicated in the item explain the practices for this industry. The correlation matrix has been computed as shown in Table 3.The mean correlation is 0.2368 and it varies from -0.1739 to 0.9825 with arrange of 1.564 which indicates that there is enough correlation to go ahead for factor analysis.

Scale Refinement Item and reliability analysis was performed on supply chain practices to retain and delete scale items for the purpose of developing reliable scale. Corrected item-tototal correlations and Cronbach's alpha statistics were employed to conduct this type of analysis to know the extent to which any one item is correlated with the remaining items in a set of items under consideration. This analysis reduced the 25 items to 24 (Table 2) and Cronbach's alpha was greater than 0.6 (Cronbach, 1990).

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Table 3: Correlations for Supply Chain Practices

Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy (MSA) value of 0.886 reveals that the sample is adequate for conducting factor analysis. Here it is pertinent to mention that KMO value greater than 0.6 is good for conducting research in social sciences (Bartlett's, 1950).

Bartlett's Test of Sphericity has been applied to judge the appropriateness of the data set for factor analysis. The results have Chi-square=20235.952, Degree of freedom=276, and level of significance=0.000. All the results are acceptable and factor analysis (Table 4) results are as hereunder:

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Table 4: Factor Analysis Results, Scale Reliability for Supply Chain Practices
Component Supply Chain Management Practices EDI Soft Use E-Communication EPC RFID SC Process Management Communication Speed Arms Length Teaming Strategic Purchasing Customer Order Commitment SC Flexibility Product Customisation Quality Management Customer Relationship and Management SC Integration Coordination Information Sharing Supplier involvement SC Collaboration Demand Management Logistics Postponement Inventory Management Outsourcing SC operations Eigen Value % of Variance Cumulative % of Variance 7.605 31.689 31.689 6.238 25.992 57.6681 3.276 13.652 71.333 2.638 10.990 82.323 1 (Technology Use a=0.9893) .964 .960 .959 .951 .936 .964 .955 .952 .940 .938 .961 .959 .950 .948 .937 .957 .935 .929 .923 .920 .919 .907 .901 .865 2.511 10.462 92.785 2 (SC Speed a=0.9736) 3 (Customer Satisfaction a=0.9893) 4 (SC Integration a=0.9862) 5 (Inventory Management a=0.9381)

Kaiser-Meyer-Olkin Measure of Sampling (KMO)=0.886, Bartlett's Test of Sphericity (Chi-Square=20235.952; Degree of freedom=276; Significance=0.000) Scale reliability coefficient Alpha =0.8840

The factor analysis executed with principal component analysis using Varimax rotation extracted five factors. The initial value for defining these factors is set at 0.4 and five factors so extracted have Eigen values ranging between 7.605 to 2.511. These factors explain 92.785% of variance. The extracted factors are discussed as hereunder: F1: Technology Use This is the most important factor explaining 31.689% of the total variance and retaining Eigen value of 7.605. The scale reliability for this actor is 0.9893 and loadings range from 0.964 to 0.936. The factors covered here are; electronic process control (EPC), electronic data interchange (EDI), Software use, radio-frequencyidentification (RFID) and, electronic communication. These are the technologies used for retail facility management to speed up the operations.

F2: Supply Chain Speed This factor is the second most important explaining 25.992% of the total variance and Eigen value of 6.238. The scale reliability for this actor is 0.9736 and loadings range from 0.964 to 0.938. The items covered here are; communication speed, teaming, supply chain process management, arms length, and strategic purchasing. These practices are useful to minimise the distance of movement and ultimately speed up the supply chain operations. F3: Customer Satisfaction This factor is the third most important explaining 13.625% of the total variance and Eigen value of 3.276. The scale reliability for this actor is 0.9893 and loadings range from 0.961 to 0.937. It includes customer order

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commitment, product customisation, supply chain flexibility, quality management, and customer relationship and management. These factors focus on customers' requirements and means to meet them. F4: Supply Chain Integration This factor explains 10.990% of the total variance and Eigen value of 2.638. The scale reliability for this actor is 0.9862 and loadings range from 0.957 to 0.920. It includes information sharing, supply chain integration, supply chain collaboration, supplier involvement and coordination. These components are helpful to integrate supply chain in the constructive direction. F5: Inventory Management This factor is the last important component explaining 10.462% of the total variance and Eigen value of 2.5111. The scale reliability for this actor is 0.9381 and loadings range from 0.919 to 0.962. It covers outsourcing supply

chain operations, demand management, inventory management, and logistics postponement. These practices are helpful to arrange and manage inventory and its operations. Model for Supply Chain Practices Competitive Advantage and Organisational Performance The five groups of second order supply chain practice, four items of competitive advantage and six items of organisational performance were analysed to develop structural models using AMOS 4.0 software. The correlation among supply chain practices, competitive advantage and, organisational performance has mean of 65.9734 which indicates that out of 75 (15*5) explains 87.96% of the constructs. The maximum correlation is 0.7259 and minimum is -0.3278 with range of 1.0537. This is a good indicator for structural equation modelling. The detailed correlation matrix (Table 5) is as hereunder:

Table 5: Correlations, Mean, Standard Deviation for Grouped Supply Chain Practices, Competitive Advantage and Organisational Performance

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Results for Structural Equation Models The theoretical proposed models are shown in Figure 1,2 and 3 has three hypothesised relationships among the variables supply chain practices, organisational performance and competitive advantage. The analytic results for three models using AMOS 4.0 version are shown in Table 6.The results of Figure 1 showed that the model has GFI=0.915, AGFI=0.89, TLI=0.821, NFI=0.799, and RMR=0.035. The loadings for supply chain practices (SCP) has Technology use=1.0, supply chain speed = 0.42, customer satisfaction -0.13, and inventory management = 0.25, supply chain integration=0.02. The competitive advantage (CA) has loadings; inventory management=0.96, customer satisfaction=1.0, profitability=0.85, customer base identification=0.92.The factor loading for organisational performance (OP) are; market performance=0.50, supply chain competencies=0.82, stakeholder satisfaction=1.0, innovation and learning=0.46, customer satisfaction=0.28, financial performance=0.21. The RMR value is less than 0.05 and the model fit measures are within the range to explain significance of the model. The loading for supply chain integration is 0.02 which is

very low and it may not represent the true construct for supply chain performance. All other loadings are different and sufficiently explain the extent of use in organised non-livestock retail industry in India. The results of Figure 2 shows that model has GFI=0.913, AGFI=0.881, TLI=0.813, NFI=0.793, and RMR=0.036. The loadings for supply chain practices (SCP) has Technology use=1.0, supply chain speed = 0.43, customer satisfaction -0.14, and inventory management = 0.26, supply chain integration=0.02. The competitive advantage (CA) has loadings; inventory management=0.96, customer satisfaction=1.0, profitability=0.86, customer base identification=0.93. The factor loading for organisational performance (OP) are; market performance=0.52, supply chain competencies=0.84, stakeholder satisfaction=1.0, innovation and learning=0.45, customer satisfaction=0.27, financial performance=0.17. The supply chain integration has loading of 0.02 which is very less to explain its use in this industry. Here also the fit measures are sufficient and RMR value (0.036) is less than 0.05 explains a significant model.

Table 6: Results for Proposed Alternate Structural Equation Models

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184 Singh, Sandhu, Metri and Kaur

The results of Figure 3 shows that model has GFI=0.912, AGFI=0.880, TLI=0.807, NFI=0.788, and RMR=0.045. The loadings for supply chain practices (SCP) has Technology use=1.0, supply chain speed = 1.11, customer satisfaction -0.23, and inventory management = 0.62, supply chain integration=-0.05. The competitive advantage (CA) has loadings; inventory management=0.95, customer satisfaction=1.0,

profitability=0.85, customer base identification=0.91.The factor loading for organisational performance (OP) are; market performance=0.50, supply chain competencies=0.82, stakeholder satisfaction=1.0, innovation and learning=0.46, customer satisfaction=0.28, financial performance=0.21. In this model RMR =0.045 and all fit measures are sufficient to make the model significant.

Figure 1: Structural Relationship among SCP, Organisational Performance and Competitive Advantage
.12 e6 1 Invntory Management .96 .27 e1 1 Technology Use 1.00 1 SC Speed .42 .64 e3 1 Customer Satisfaction .94 -.19 scp .11 .02 .66 e4 1 SC Integration .25 .08 res2 .61 e5 1 Inventory Management .46 .21 .28 Innovation and Learning 1 .16 e13 1 op 1.00 Stakeholder Satisfaction 1 .15 e12 Market Performance 1 .19 e10 .27 res1 1 ca .11 .92 Identification of Customer Base 1 e9 .73 e2 .85 1.00 .16 Profitability 1 e8 Customer Satisfaction 1 .13 e7

-.13

.50 SC Competencies .82 1

.17 e11

.17 e15 1

Financial Performance

Customer Satisfaction

.16 e14

Chi-square=284.237, df=88, p=0.00, RMR=0.035, GFI=0.915, AGFI=0.884, NFI=0.799, RFI=0.760, IFI=0.852, TLI=0.821, CFI=0.850

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Organised Retail Supply Chain Management Practices and Organisational Performance 185
Figure 2: Alternate Structural Relationship among SCP, Organisational Performance and Competitive Advantage

Chi-square=292.596, df=88, p=0.00, RMR=0.036, GFI=0.913, AGFI=0.881, NFI=0.793, RFI=0.753, IFI=0.845, TLI=0.813, CFI=0.843

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186 Singh, Sandhu, Metri and Kaur

Figure 3: Alternate Structural Relationship among SCP, Organisational Performance and Competitive Advantage

Chi-square=298.851, df=88, p=0.00, RMR=0.045, GFI=0.912, AGFI=0.880, NFI=0.788, RFI=0.747, IFI=0.841, TLI=0.807, CFI=0.839.

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Organised Retail Supply Chain Management Practices and Organisational Performance 187

The results support the entire hypothesis. The Hypothesis H1, which states that Indian organised nonlivestock retailers try to match supply chain practices with competitive advantage has the standardised coefficient of -0.19 (Figure 1) and -0.20 (Figure 2) which are statistically significant at p=0.000. This shows that H1 is supported. The discussion with retail player has shown that retailers always get feedback from the customers and accordingly design their strategies. It helps to identify customers needs and accordingly design strategies to gain competitive advantage. It is verified during mall and store visits that at the places where high class people visit high end products are displayed. On the other hand in the areas where low and medium class people visit the low and medium end products are offered to them. The hypothesis H2 that the Indian organised nonlivestock retailers try to match competitive advantage with organisational performance has the standardised coefficient of 0.11 (Figure 1) and 0.12 (Figure 3) which is statistically significant at p=0.000. This shows that H1 is supported. When this hypothesis was discussed it is found that retailers use strategies as every days low price (EDLP) to attract customer. It happens in case of agricultural and horticultural products that if product is not sold at the right time then profit component are lost as products are perishable in nature. As a common practice they purchase products of high quality at lower cost and sell at competitive price for better organisational performance. The Hypothesis H3 that Indian organised retailers have less understanding to match supply chain practices with organisational performance has standardised coefficient of -0.01 (Figure 2) and 0.01 (Figure 3) and is statistically significant at p=0.000. This shows that H3 is supported. The discussion with non-livestock retail players highlighted many points for failure as store timing, locational disadvantage, personal relationships, borrows, product variety, high operational cost, multiple taxes, high employee turnover, multiple skills and exact predications of demand etc. All these factors lead to gaps between practices to be used for organisational performance. RESEARCH IMPLICATIONS AND LIMITATIONS This study identifies supply chain management practices used in organised non-livestock retail industry. The factor analysis classified 24 supply chain practices into five second order constructs as technology use, supply chain speed, customer satisfaction, supply chain integration, and inventory management. These practices show higher variability among retail players at different stages of the

organisational growth cycle. The study has also identified four major primary constructs of competitive advantage as inventory management, customer satisfaction, profitability and, customer base identification based on strong literature survey. The organisational performance primary constructs consist as market performance, supply chain competencies, stakeholder satisfaction, and innovation and learning, customer satisfaction and, financial performance are also based on strong literature survey. The discussion with retail practitioners indicated that they understand the importance of supply chain practices but have diverse views regarding matching of practices, competitive advantage and organisational performance. It is also learned during the discussion that due to dynamic and competitive environment more need to be done for this industry. During survey it is found that top level officials do not pay much attention to the questionnaire response as they are busy in the routine business. Also there are strict instructions not to disclose the business. It is found that staffs working in many of the organised stores are not well qualified to understand supply chain practices, competitive advantage, and organisational performance. This leads to the gap at the point where customers inputs are needed to be translated into strategies. The retailers should keep in mind all the business dynamics for better organisational performance. CONCLUSION The study verifies the empirical justification of the framework of supply chain practices, competitive advantage and, organisational performance. However the strategies and practices are directly linked with environmental dynamics and life cycle and stage of organisational growth. So they should be flexible enough for incorporating changes. The results gained in this study are in consonant with statements quoted by Austin (1990) and Srivastava (2006). It is concluded that Indian retailers can understand the link between supply chain practices and competitive advantage. Also they understand the link between competitive advantage and organisational performances but fail to match supply chain practices in relation to organisational performance. The instrument developed for supply chain practices, competitive advantage and, organisational performance was based on rigorous literature survey and consultation with academicians and supply chain practitioners in India. The validity and reliability tests were employed using appropriate statistical tests.

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Er. Rajwinder Singh (rajwindergheer@gmail.com) is Assistant Professor (Quantitative Methods) at School of Management Studies in Punjabi University, Patiala. He has been contributing papers in National and International conferences / seminars regularly. He is associated with 2 AICTE/ILO sponsored projects. He is pursuing PhD on "Modelling Supply Chain Performance: A Study of NonLivestock Retail industry" in India. H.S. Sandhu (sandhu_hs12@yahoo.com) is a Professor in Guru Nanak Dev University in the area of Quantitative Methods. He has interest in the fields of Customer Relationship Management, Corporate Social Responsibility, and Supply Chain Management. He has contributed more than 50 papers in the leading national and international journals. Bhimaraya A. Metri (metri@mdi.ac.in) is Professor of Operations Management and Dean at Management Development Institute (MDI), Gurgaon. Prior to joining MDI he was serving the Department of Management Studies Birla Institute of Technology and Science (BITS) Pilani. Professor Metri has 20 years of experience in teaching research and consultancy. He has published over 70 papers in International and National Journals and Proceedings. His teaching research and consulting interests include Quality Management Supply Chain Management ERP Lean-World Class Manufacturing Project Management and Management of Service Operations. MS Rajinder Kaur (riya07rajinder@gmail.com) is working at Malout Institute of Management and Information Technology Malout in the Department of Management Studies. She has teaching experience of 6 years and has contributed 15 papers in various National/ International conferences/seminars. She has the interest area of Financial Management. She is pursuing her PhD on Financing Higher Education from Punjabi University Patiala.

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