Manufacturing Industry Supply Chain Modeling and Improvement in Developing Countries

Abstract

Manufacturing industries are in dynamic changes in both developed and developing countries. It has increasingly been argued in the literature that for a company which strives for market competitiveness, it does not suffice just to excel at managing company s assets. Indeed, it has been suggested that supply chains compete, not companies (Lambert and Cooper, 2000). To this effect supply chain modeling and improvement is gaining more and more attention from academics and practitioners. With the recent emphasis by businesses around the world on the division of tasks, more and more activities are being outsourced to manufacturing firms in developing economies. Being the source of primary raw material, the performance of firms in developing countries is expected to contribute to the improvement of the entire supply chain. It is, therefore, important to seek a business process oriented model that facilitates their modeling and improvement efforts. The need for such model is augmented after considering a recent trend of global supply chain integration of firms. The motivation for this thesis is an interest to improve the supply chain processes that involves developing countries associated with the developed countries firms in production activities. Currently, different supply chain models have been developed that enable firms to model, evaluate, and improve supply chain activities. Among all the models, the most promising for supply chain modeling and improvement is the supply chain operations reference (SCOR) model. However, this approach is tailored to the needs of western, developed industries. Particularly, the early processes and products situated in the developing countries have totally different conditions and constraints. In consequence, these early processes in the supply chain have not been considered in the model. Many cross-cultural studies provide evidence that because of the existing business practices and operating environment differences, models in one country need to be adapted for effective use in another. This research work seeks to investigate the current characteristics of supply chains that support adaptation works. The research utilized a two-phase, mixed methods research design supported by literature review. After thoroughly understanding the characteristics of the supply chain, the research adapted the SCOR model that suits the situations of firms in developing countries. The main contribution of this research is an adapted business process with appropriate building blocks for an adapted SCOR model for firms in developing countries. Then, the proposed model has been implemented as a case study in a leather and leather products industry. Future practical implementation and application of the adapted SCOR model in situations of different manufacturing industries in developing country would allow for analyzing and possibly quantifying the benefits of the model.