Journal of Distribution Science (유통과학연구)

Korea Distribution Science Association (한국유통과학회)
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Distribution of supply chain capabilities and firm's sustainable development

  • Received : 2021.03.10
  • Accepted : 2021.05.05
  • Published : 2021.05.30
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Abstract

Purpose: Research on supply chain sustainability is important for exporters When the factor of sustainable development is considered by the businesses as well as governments of all countries. Research on supply chain sustainability is important for exporters. Sustainable supply chain management and supply chain dynamics will help enterprises adapt to changes in the business environment. This study analyzes the impact of sustainable supply chain management, and supply chain dynamic capabilities on the sustainable development of exporting enterprises in Vietnam. Research design, data, and methodology: The research model and survey are designed based on previous studies after surveying export enterprises. With 185 samples collected from export enterprises. The Structural Equation Modeling (SEM) analysis technique is used. Data analysis is performed on SPSS and AMOS software (Reliability test, Confirmatory Factor Analysis, SEM). Results: Sustainable supply chain management and supply chain dynamic capabilities all have positive effects on the sustainable development of businesses (sustainable development is measured by distribution: measuring economic efficiency, social efficiency, and environmental performance). Conclusions: From the results of this study, the authors also made several recommendations to help export enterprises develop sustainability based on sustainable supply chain management and supply chain dynamic capabilities.

Keywords

1.Introduction

Vietnam's participation in the WTO and the opportunity to join CPTPP and AEC are opportunities and tremendous challenges for enterprises. Especially with exporting enterprises, it is considered that they are most affected by joining the economic union. Therefore, the development of export enterprises in Vietnam plays an important role in Vietnam's economy. However, Vietnamese businesses still face difficulties developing and managing supply chains (Duong & Thanh, 2018). Supply chain management has become one of the primary means for enterprises to control costs and improve economic efficiency in the face of increasingly competitive markets (Duong & Thanh, 2018; Hong, Zhang, & Ding, 2018).

Hanifan et al. (2012) found that establishing an enterprise supply chain cuts costs and improves risk management and generates new sources of income, and increases brand value (Hanifan, Sharma, & Mehta, 2012). Ineffective supply chain implementation, supply chain capacity, and supply chain dynamics play an important role in increasing competitiveness and business performance (Liao, Hu, & Ding, 2017). With traditional supply chain capabilities, tangible resources (technology, products) are becoming familiar to all enterprises. Supply chain resources are easy to discover andevaluate, so they are easy to catch first, resulting in reduced value due to popularity and visibility.

Besides, existing in the intangible enterprise resources (knowledge, leadership art) is challenging to detect and imitate. That is the source of enterprise dynamics. With the development of science and technology, products launched with shorter life cycles have led to businesses needing continuous product innovation. At the same time, tangible changes or supply chain capabilities are easily duplicated. Therefore, dynamic factors become more necessary to create competitive advantage and bring enterprises efficiency (Eisenhardt & Martin, 2000). Therefore, enterprises must always make efforts to identify, nurture, develop and use dynamic competencies effectively and adapt to changes in a business environment.

Many studies have been conducted to evaluate the supply chain and enterprise performance. In particular, Liao et al. (2017) conducted an assessment of the impact of supply chain capacity on competitive advantages for manufacturing enterprises; Hong et al. (2017) study the impact of supply chain dynamics, supply chain management practices on the development of businesses; Zott (2003), Griffith et al. (2006) and Eriksson (2014) both studies that the impact of supply chain dynamics has a positive impact on enterprises performance (Eriksson, 2014; Griffith, Noble, & Chen, 2006). Although studies in the world are carried out on the above issues, in the environment of Vietnamese enterprises, according to the author's research, there has not been any study to assess the supply chain dynamics, sustainable supply chain management practices, and the sustainable development of the enterprises. Therefore, the author considers the role of supply chain dynamics, sustainable supply chain management practices in the sustainable development of export enterprises.

2. Literature Review

2.1. Sustainable supply chain management practices

Sustainable supply chain management (SSCM) is a supply chain management (SCM) focused on environmental, economic, and social protection issues for long-term sustainable enterprises development (Beske, Land, & Seuring, 2014; Dubey et al., 2017; Malindretos, Tsiboukas, & Argyropoulou-Konstantaki, 2016; Singhal, Agarwal, & Mittal, 2011). SSCM manages input materials, capital issues, cooperation between companies in supply chain operations to achieve sustainable development goals (economic, social and environmental) (Seuring & Müller, 2008). SSCM can be divided into two main categories: SSCM as a management philosophy & SSCM as a set of management processes (Dubey et al., 2017). SCM's activities, in addition to bringing about economic benefits for businesses, creating jobs for workers, need to make sure that the whole society is concerned about the environment (Bai & Sarkis, 2010; Dubey et al., 2017).

SSCM practices in enterprises are implementing SCM measures inside and outside the enterprise to achieve three sustainable development goals (Paulraj, 2011). SSCM practices are divided into five components: strategic orientation, collaboration, supply chain continuity, risk management, and pro-activity for sustainability (Beske et al., 2014). Some studies have divided SSCM practices into other aspects: incorporating sustainable product design, process design, and sustainability collaboration with suppliers and customers (Paulraj, 2011). There are also researches on SSCM practices into four elements: sustainable production, sustainable design, Sustainable distribution, and return on investment (Esfahbodi, Zhang, & Watson, 2016). It can be seen that there are different results of SSCM practices in each field or research environment— the main components of SSCM practices in the environment of export enterprises in Vietnam.

SSCM practices can enhance the enterprises results when activities in the purchase of environmentally friendly materials, or how sustainable products have a positive impact on economic and social enterprises (Zailani, Jeyaraman, Vengadasan, & Premkumar, 2012). Also, according to Wang and Sarkis (2013), SSCM practices have a positive effect on financial performance through ROE (return on equity) and ROA (return on assets), and this effect can last up to 2 years (Wang & Sarkis, 2013). In addition, several studies have shown that the green supply chain has a positive effect environmental performance, economic performance, social and operational performance (Montoya-Torres, Gutierrez-Franco, & Blanco, 2015)

Therefore, the research hypothesis is given as follows:

H1a: SSCM practice has a positive impact on economic performance.

H1b: SSCM practice has a positive impact on environmental performance

H1c: SSCM practice has a positive impact on social performance

2.2.Supply chain capacity

Supply chain capacity is constructing a closed cycle of supply chain strategy to help supply chain development and enterprise development (Morash, 2001). Supply chain capacity can be divided into several aspects: the ability to handle supply-oriented processing and create value-added value according to demand. Supply-driven processing capabilities use standardized and standardized supply chain business processes for the extensive, in-depth analysis, distribution to create a more efficient delivery of products and services and reduce total costs (Duong & Thanh, 2018). The ability to develop value-added on-demand to meet customer needs for particular products or customized services, designed to create value-added customers and maximize customer satisfaction customers and continuous improvement.

2.3. Supply chain dynamic capacity

Supply chain dynamic capacity is built on general dynamics and applications in supply chain operations (Ryu, 2019). Supply chain dynamic capacity is a new concept in Vietnam and is considered a complex process (Beske, 2012). Supply chain dynamics is the supply chain capability that can cope with changes in the enterprise's environment (Duong & Thanh, 2018). Dynamic supply chain dynamics help organizations be more creative and flexible with business situations (Masteika & Čepinskis, 2015).

Zott (2003), Griffith et al. (2006) and Eriksson (2013) confirm that dynamic capacity allows a company to gain competitive advantage and thus improve the efficiency of enterprises. Menguc and Barker (2005) find similar results for the dynamics of economic performance. In addition, enterprises with good motivations show the ability to acquire knowledge as well as knowledge of good society. This will make enterprises more aware of social or environmental issues. Business ethics is also highly appreciated by the community for businesses operating not only for economic purposes but also for social and environmental goals. This will make the business more sustainable. Therefore, the theory is published as follows:

H2a: SC dynamic capabilities has a positive impact on economic performance.

H2b: SC dynamic capabilities has a positive impact on environmental performance

H2c: SC dynamic capabilities has a positive impact on social performance

3. Methods

3.1. Research Model

The framework for selection theory research is Hong et al. (2017), Esfahbodi et al. (2016), and Suhaiza et al. (2012) with the impact of supply chain dynamic capacity, Sustainable supply chain management on sustainable development of export enterprises. The author's research model is as follows:

OTGHB7_2021_v19n5_5_f0001.png 이미지

Figure 1. Proposal model

3.2. Design and sample

The author used the scale of Hong et al (2017) and Liao et al (2017) to build the survey with the set of scales using Likert 5 points with point 1 – disagree strongly and 5 agree strongly, the survey is summarized in the following table:

Table 1. Survey

OTGHB7_2021_v19n5_5_t0001.png 이미지

Research samples were collected with exporters in Vietnam. Forms of direct and online are based on Google Docs. The survey period is from 10/2019 to 02/2020. With the number of sample collected is 185 samples to ensure reliability for data analysis when the conditions of minimum sample size are satisfied(Kang & Hwang, 2012; Hair et al. 2006; Nguyen et al. 2016; Nguyen et al. 2020): According to Hair et al (2006) the number of good samples is over 100 (Hair, Black, Babin, Anderson, & Tatham, 2006); or according to Tabachnick and Fidell (2007) with the number of samples calculated as 50 + 8 * p = 90 (with p = 5-independent variable) (Tabachnick & Fidell, 2006). After the data was collected, the author continued to encode and put into SPSS, AMOS 20 software for analysis. The analytical techniques are detailed in the next section.

3.3. Data analysis

The study sample (n = 185) will be put into the analysis and evaluation of reliability through Cronbach’s Alpha coefficients, the correlation coefficient of variables with the criteria: Cronbach Alpha coefficient is greater than 0.6 and the correlation of the total variable greater than 0.3 (Hair et al., 2006; Nunnally & Bernstein, 1994); Next to exploratory factor analysis technique (KMO coefficient greater than 0.5, Bartlet test has p-value <0.05, and explanatory variance is greater than 50%)

Next, the research uses confirmatory factor analysis and structural equation model analysis (SEM). Conformity assessment of research scale: validation factor analysis (CFA) is used to converge validity and discriminant validity. Next, the study uses a structural equation model (SEM) at 5%. CFA models, and SEM is reliable when the conditions Chi-2 / df is less than 3; The value of CFI, TLI, IFI is greater than 0.9; RMSEA is less than 0.05

4. Results

4.1. Descriptive

For exporting enterprises, the percentage of ownership is mainly private (43.24%). The companies primarily operate from 5 to 10 years (32.43%), and the export market is evenly distributed (about 20% for each market).

Table 2.Summary

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Table 3. Reliability test

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4.2.Reliability test

To indicate the reliability scales, Cronbach'sAlpha and correlation coefficients were used in this verification step. The reliability test results show that factors of supply chain dynamic capabilities, Sustainable supply chain management practices, enterprises performance all achieve reliability (Cronbach's Alpha coefficient is greater than 0.6 and the correlation coefficient of the total variable of The items are bigger than 0.3). The results of CFA show that: Chi-square / df = 1, 842 is less than 3, CFI = 0.914; TLI = 0.902; IFI = 0.915 are greater than 0.9, RMSEA = 0.051 is less than 0.08. This shows that the theoretical model is compatible with market data. The factor load factor is greater than 0.5, the composite reliability of the factors above 0.7 and the Average Variance Extracted (AVE) are greater than 50% compared to see the model of convergence validity.

Factor loading greater than 0.5 in each factor are considered to have convergence validity and the square root of the AVE greater than the correlation between research concepts are concepts with discriminant validity (see table 4)

Table 4. Discriminant validity

OTGHB7_2021_v19n5_5_t0004.png 이미지

4.3. Result of SEM

After the CFA model gains aggregate reliability as well as discriminant validity. The structure model will be implemented to find out the effect of supply chain dynamic capabilities, Sustainable supply chain management practices on enterprises performance. The results of the analysis of the structural model are reliable with Chi-square / df = 2.133 is less than 3, CFI = 0.933; TLI = 0.915, IFI = 0.934 is greater than 0.9, RMSEA) = 0.078 less than 0.08.

OTGHB7_2021_v19n5_5_f0002.png 이미지

Figure 3. Result of SEM

The analysis of the structural model all indicates that the supply chain dynamic capabilities, Sustainable supply chain management practices all have the same effect on the sustainable development of exporting enterprises (p-value is less than 0.05 and the beta is positive). Through standardized beta, SEM model also shows that SCDC has a stronger impact on economic performance than SSCM (SCDC standardized beta is 0.73, while SSCM's standard beta is only 0.18)). For Environmental performance most strongly affected by SCDC (standardized beta is 0.40), SSCM has a weaker impact on Environmental performance than SCDC (standardized beta is 0.30).

Finally, the Social performance factor was also influenced more strongly by SCDC (standardized beta is 0.78) while SSCM's standardized beta is only 0.21. Detailed statistics are in table 5.

Table 5. Result of SEM

OTGHB7_2021_v19n5_5_t0005.png 이미지

Source: Results from AMOS software

Supply chain dynamics positively affects economic performance, which indicates that enterprises prepared supply chain dynamics well will promote economic performance. The ability of enterprises to acquire good knowledge about the supply chain helps the process activities as well as standards be maintained in a sustainable manner. New standards or processes are adopted and updated by businesses that help improve enterprises performance and bring economic value to businesses (Hong et al., 2017). In addition to receiving knowledge about the supply chain, the higher the ability of businesses to be creative about the supply chain, the more effective it can improve the supply chain process. This will also bring high economic benefits. At the same time, reestablishing the supply chain with new processes or facilities helps to control supply chain operations better, resources or operating time will be minimized.

Supply chain dynamics also positively affect the environmental performance. This result is similar to previous studies that also showed the positive effect of supply chain dynamics on environmental performance (Sharfman & Fernando, 2008). It can be seen that enterprises have good supply chain dynamics, leading to increased environmental awareness. The issue of environmental responsibility in production and enterprises activities is paid more attention by the enterprises. Simultaneously with the integration of new technologies or new modern processes, it will improve the efficiency of production and business and reduce the costs that lead to environmental pollution. Energy-efficient production and transport processes help reduce emissions. Streamlining supply chain processes or digitization will help reduce unnecessary steps and waste resources to minimize negative impacts on the surrounding environment.

Social performance is also enhanced when the supply chain dynamics of the enterprises, with the acquisition of knowledge about the supply chain helping to interact with people more. Developing a wider and more effective supply chain makes social issues such as employment and unions better. The always use or creation of supply chain processes makes partners or competitors recognize the success of the business. This makes the social effect increase; businesses or society will consider these as learning things to apply in their production activities.

Sustainable supply chain management practices has a positive impact on economic, social and environmental efficiency in export enterprises. These results point to the importance of Sustainable supply chain management practices in enterprises. A good supply chain operation or management helps promote the overall internal strength of the business and supply chain dynamics in the industry. Good coordination of the supply chain brings smooth operational processes; costs are minimized when there are no problems in the supply chain disruptions. Therefore, economic efficiency is improved. In addition, forecasting or implementing good supply chain risk management will help businesses have a contingency plan when risks in the supply chain occur will help businesses take initiative in production and business activities.

SSCM also has a positive impact on environmental performance, indicating that businesses with good SSCM will be more likely to use energy-efficient as well as environmentally friendly products. At the same time, the operation and management of the supply chain in strict compliance with environmental protection regulations will help improve the efficiency of enterprises. Besides, supply chain inspection procedures also help to control the quality of products used in the supply chain. All problems that arise affecting the environment will be handled well by the business, so the effective monitoring and supervision of the supply chain.

Finally, SSCM also has a positive relationship with social performance. Better management of the supply chain, control issues during the supply chain implementation helps businesses satisfied with their operations. Businesses think that businesses are operating smoothly through well- functioning supply chains. At the same time, employees are also satisfied with the job when they are managed and cared for scientifically under effective management and supply chain link within the enterprise.

5. Conclusion

From the analysis of over 185 samples on supply chain operations and sustainable development of export enterprises. Research has shown that the positive effects of supply chain dynamics, sustainable supply chain management practices all have a positive effect on the sustainable development of enterprises (the enterprise's sustainable development is measured through three factors: economic performance, environmental performance and social performance.

Implication:

From the result, the authors also made some recommendations to help sustainably develop chain-based exporters: (1) Focus on using environmentally friendly products in the supply chain. The use of eco-friendly products helps to reduce the company's emissions to the environment (Ho et al, 2021). At the same time, the sustainability of the business will be in line with the primary goal of sustainable social development;(2) Work / cooperate with participating partners and supply chains with high social responsibility to ensure products in accordance with the regulations on both economic, social and environment. Partners also tend to use green products or processes that make it easier for both sides to cooperate with the strategic directions of sustainable development. With a sustainable development policy in general and concern for the environment, it will make it easier for companies to alliances; (3) Regularly updating new supply chain knowledge and processes. The research and development department needs more network investment. New and improved technologies or processes not only increase productivity but also help protect the environment; (4) Enhancing inspection and monitoring activities of the supply chain, and setting up the system risk management in the supply chain.This activity helps to control well the inputs and the output of the business to be balanced. Besides, errors in the working process are also reduced because monitoring and error detection are performed regularly.

Limitation:

Although the article has accomplished the research objective, however, there are still certain limitations. The number of businesses collected is still limited (185 samples). Due to the topic related to exporting enterprises, data collection still faces many difficulties. This results in limited comparisons of the type of export or specific characteristics of the firm. Therefore, in the next studies, it is possible to study with broader enterprise cases to use more samples.

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