The impact of supply chain security practices on security operational performance

Excerpt from: "The impact of supply chain security practices on security operational performance among logistics service providers in an emerging economy: Security culture as moderator"

Author: Suhaiza Hanim Zailani, Karthigesu Seva Subaramaniam, Mohammad Iranmanesh, and Mohd Rizaimy Shaharudin

Publication: International Journal of Physical Distribution & Logistics Management, Vol. 45 No. 7, 2015, pp. 652-673

As supply chains become increasingly global, firms will be forced to adopt strategies for the secure flow of goods from raw material to end consumer. Furthermore, security-related issues are frequently uppermost in the minds of many end consumers, and will require all supply chain members to take a fresh look at the security measures. In response to the importance of security issues in supply chain and the far limited discussion regarding its operational performance in developing countries, the study developed a research model and evaluated its empirical validity and explanatory usefulness by using a survey study that involved Malaysia’s service providers in the logistic industry. The study’s overall data analysis results support the research model, which showed reasonable statistical significance and classification accuracy. Moreover, findings of the study suggest that cargo management, facility management, human resource management, and information management have a significant impact on supply chain security operational performance. The results also confirmed the moderating role of security culture on the relationship between facility management practices and supply chain security performance.

There are certain limitations that need to be taken into account for generalizing the results of this study. One limitation is that, the study tested and verified the hypotheses with a questionnaire survey and only provided a cross-section of the study in nature. Therefore, it limits the ability to imply causality in the relationships among the variables. Thus, the result of the survey will be affected by the fact that this study cannot observe the dynamic change of security operational performance in the process of the development of supply chain security practices. As such, a longitudinal study should be attempted, that examines the relationships for an extended period of time to be able to provide more precise results. Furthermore, this study used a survey sample limited to the Malaysia’s service providers in the logistics industry. However, the effect of the security practices on operational performance and security culture might be different between countries. In addition, small firms make up a large portion of the sample that may not have formal, or the wherewithal to have formal human resource management, information management, and facility management. Thus, future research could test the research model of this study in different countries and collect data from big firms. Another limitation of this study would be the respondent firm’s customer base, which will be different for each firm. Different customer bases, such as electronic and electrical, plastic and packaging, chemical, metal, and others will present their own security concerns for their products. Therefore, different respondents serving different customer bases will have different opinions about the questionnaires forwarded to them. This study does not cover the security initiatives implemented by the government; hence, presenting a limitation and the need for a more structured study among the service providers in the logistics industry. In addition, security culture may also be an antecedent to the supply chain security practices; therefore, future studies could test the security culture as an antecedent.