The Relationship between Supply Chain Management Practices and Overall Firm Performance: The Mediating Role of Time Based Performance

  • Frank A.E. Mkumbo* Faculty of Economics and Management Sciences, Institute of Finance Management (IFM), Tanzania:


This study examines the relationship between supply chain management practices (SCMP) and overall firm performance (OFP) in supply chains (SCs) in Tanzania as a developing economy. The study investigates the mediating effect of time-based performance in the relationship between SCMP and overall firm performance (OFP), with the objective of advancing the understanding of performance in a broader context. In pursuit of this objective, the distinction between time-based performance (TBP) and OFP is demonstrated. The empirical data was drawn from a 2005/06 survey of 264 industrial firms in Tanzania. The structural equation modelling (SEM) technique employing the AMOS program was used in examining several competing models that represented full and partial mediation relationships. The findings indicated that SCMP was positively and significantly related to TBP; and TBP fully mediated the relationship between SCMP and OFP. The implication was that appropriate practices in firms engaging in SCMP were bound to improve their TBP, which in turn would influence the OFP positively.

Keywords: supply chain management, supply chain management practices, performance measurement


Alvarado, U. Y. & H. Kotzab, (2001), “Supply Chain Management: The Integration of Logistics in Marketing. Industrial Marketing Management, 30(2): 183–198.

Anderson, J. C. & D. W. Gerbing, (1988), “Structural Equation Modelling in Practice: A Review and Recommended Two-Step Approach,” Psychological Bulletin, 103(2): 411– 423.

Angerhofer, B. J. & M. C. Angelides, (2005), “A Model and A Performance Measurement System for Collaborative Supply Chains. Decision Support Systems, Article in Press,”Available At Www.Elsevier.Com, Accessed On 26 May 2005.

Arbuckle, J. L. & W. Wothke, (1999), “Amos 4.0 User’s Guide, Chicago: Smallwaters Corporation, IL.

Baron, R. M. & D. A. Kenny, (1986), “The Moderator–Mediator Variable Distinction Insocial Psychological Research: Conceptual, Strategic, and Statistical Considerations,” Journal of Personality and Social Psychology, 51(6): 1173–1182.

Barratt, M., (2004), “Understanding the Meaning of Collaboration in the Supply Chain," Supply Chain Management: An International Journal, 9(1): 30–42.

Beamon, B. M., (1999), “Measuring Supply Chain Performance," International Journal of Operations and Production Management, 19(3): 275-292.

Bititci, U. S., Mendibil, K., Martinez, V. & Albores, P., (2005), “Measuring and Managing Performance in Extended Enterprises," International Journal of Operations and Production Management, 25(4): 333–353.

Bolstorff, P., (2003), “Measuring the Impact of Supply Chain Performance," Logistics Today,(At ABI/INFORM Global) 6–11.

Byrne, B. M., (2001), Structural Equation Modeling With AMOS: Basic Concepts, Applications, and Programming. Mahwah, New Jersey: Lawrence Erlbaum Associates, Inc.

Carr, A. S. & J. N. Pearson, (1999), “Strategically Managed Buyer–Seller Relationships and Performance Outcomes," Journal of Operations Management, 17(5): 497–519.

Chan, F. T. S. & H. J. Qi, (2003a), “Feasibility of Performance Measurement System for Supply Chain: A Process-Based Approach and Measures," Integrated Manufacturing Systems, 14(3): 179-190

Chan, F. T. S., H. J. Qi, H. K. Chan, H. C. W. Lau & R. W. L. Ip, (2003), “A Conceptual Model of Performance Measurement for Supply Chains," Management Decision, 41(7): 635–642.

Chen, I. J. & A. Paulraj, (2004), “Towards A Theory of Supply Chain Management: The Constructs and Measurement," Journal of Operations Management, 22: 119–150.

Coakes, S. J. & L. G. Steed, (2003), SPSS: Analysis Without Anguish: Version 11.0 for Windows, Sydney, New South Wales: John Wiley & Sons Australia, Ltd.

Cooke, J. A., (2003), “Want Real Collaboration? Change Your Measures," Logistics Management Highland Ranch, 42(1): 37–41.

De Toni, A. & G. Nassimbeni, (2000), “Just-In- Time Purchasing: An Empirical Study of Operational Practices, Supplier Development and Performance," OMEGA, 28(6): 631–651.

Dillman, D.A., (1978), Mail and Telephone Surveys: The Total Design Method, New York: John Wiley.

—, (2000), “Mail and Internet Surveys, 2nd ed., New York: John Wiley.

Dixon, J. R., (1992), “Measuring Manufacturing Flexibility: An Empirical Investigation," European Journal of Operations Research, 60 131–143.
Droge, C., J. Jayaram & S. K. Vickery, (2004),

“The Effects of Internal Versus External Integration Practices On Time-Based Performance and Overall Firm Performance,"
Elsevier B. V. Doi:10.1016/J.Jom.2004.08.001.

Dyer, N. G., P. J. Hanges & R. J. Hall, (2005), “Applying Multilevel Confirmatory Factor Analysis Techniques to the Study of Leadership,"

The Leadership Quarterly, 16: 149–167. Field, A., (2000), Discovering Statistics Using SPSS for Windows: Advance Techniques for the Beginner, Great Britain: Sage Publication.

Garver, M. S. & J. T. Mentzer, (1999), “Logistic Research Methods: Employing Structural Equation Modeling to Test for Construct Validity," Journal of Business Logistics, 20(1): 33– 57.

George, D. & P. Mallery, (1999), SPSS for Windows Step By Step: A Simple Guide and Reference, USA: Allynand Bacon.

Good, D. A. & B. Carin (2004), “Individual and Organizational Performance Arrangements,” A paper prepared by the Canadian team as a part of the CEPRA project on ‘Sector and Regional Specifics of Reformation of Budgetary Institutions’ for the Kaliningrad Workshop, July 24–25, 2004.

Gunasekaran, A., C. Patel & E. Tirtiroglu, (2001), “Performance Measures and Metrics in A Supply Chain Environment," International Journal of Operations and Production Management, 21(1/2): 71–87.

Hair, J. F., W. C. Black, B. J. Babin R. E. Anderson & R. L. Tatham, (2006), Multivariate Data Analysis, 6th ed., Upper Saddle River, NJ: Pearson Education

Holmberg, S., (2000) “A Systems Perspective On Supply Chain Measurements,” International Journal of Physical Distribution & Logistics Management, 30(10): 847- 868.

Jarrell, J. L., (1998), “Supply Chain Economics," World Trade, 11(11): 58–61. Kelloway, E. K., (1995), “Structural Equation
Modeling in Perspective," Journal of Organizational Behavior, 16 215–224.

Kline, R. B., (1998), “Principles and Practice of Structural Equation Modeling," in D. Kenny (ed.), “Methodology in the Social Sciences, New York: The Guilford Press.

Lambert, D.M. & T.C. Harrington, (1990), “Measuring Non-Response Bias in Customer Service Mail Surveys," Journal of Business Logistics, 11(2): 5–25.

Lamming, R. C., (1996), “Squaring Lean Supply With Supply Chain Management," International Journal of Operations and Production Management, 16(2): 183–196.

Li, S., B. Ragu-Nathan, T. S. Ragu-Nathan & S. S. Rao, (2006), “The Impact of Supply Chain Management Practices On Competitive Advantage and Organizational Performance," Omega, 34: 107–124

Li, S., S. S. Rao, T. S. Ragu-Nathan & B. Ragu- Nathan, (2005), “Development and Validation of A Measurement Instrument for Studying Supply Chain Management Practices," Journal of Operations Management, 23 618–641.

Lin C., H. Chiu & P. Chu, (2006), “Agility Index in the Supply Chain," International Journal of Production Economics, 100: 285–299.

Lin F., S. Huang & S. Lin (2002), “Effects of Information Sharing on Supply Chain Performance in Electronic Commerce," IEEE
Transactions On Engineering Management, 49(3): 258–268.

Malhotra, N. K., (2004), Marketing Research: An Applied Orientation. 4th Ed. Pearson Education, Upper Saddle River, New Jersey. Min S. & J. Mentzer, (2004), “Developing and Measuring Supply Chain Management Concepts," Journal of Business Logistics, 25(1): 63– 99.

Nunnally, J. C. & I. H. Bernstein (1994), Psychometric Theory, New York: McGrawhill. O’Leary-Kelly, S. W. & R. J. Vokurka, (1998), “The Empirical Assessment of Construct Validity," Journal of Operations Management, 16 387–405.

Pallant, J., (2005), SPSS Survival Manual: A Step By Step Guide to Data Analysis Using SPSS for Windows (Version 12). 2nd ed., Berkshire, UK: Open University Press.

Poirier, C. C., & F. J. Quinn, (2003), “A Survey of Supply Chain Progress,” Supply Chain Management Review, 7(5): 40–47.

Power, D. J., S. Sohal & S. U. Rahman, (2001). “Critical Success Factors in Agile Supply Chain Management: An Empirical Study," International Journal of Physical Distribution and Logistics Management, 32(9): 755–770.

Prajogo, D. I. & A. S. Sohal, (2006), “The Relationship Between Organization Strategy, Total Quality Management (TQM), and
Organization Performance–The Mediating Role of TQM," European Journal of Operational Research, 168: 35–50.

Ragatz, G. L., R. B. Handfield & T. V. Scannel, (1997), “Success Factors for Integrating Suppliers Into New Product Development," Journal of Product Innovation Management, 14(3): 190–202.

Rooney, J.J., (2002), “Two Sides of the Same Coin: Using Teams in Customer-Supplier Relationships," Journal for Quality and Participation, 25(3): 4–8.

Rosenzweig, E. D., A. V. Roth & J. W. Jr. Dean, (2003), “The Influence of An Integration Strategy On Competitive Capabilities and Business Performance: An Exploratory Study of Consumer Products Manufacturers," Elsevier Science B. V. Doi: 10.1016/J.Jom.2004.08.001.

Segar, A. H. & V. Grover, (1993), “Re-Examining Perceived Ease of Use and Usefulness: A Confirmatory Factor Analysis," MIS Quarterly, 17: 517–529.

Shin H., D. A. Collier & D. D. Wilson, (2000), “Supply Management Orientation and Supplier/Buyer Performance," Journal of
Operations Management, 18(3): 317–333.

Simatupang, T. M. & R. Sridharan, (2002), “The Collaborative Supply Chain," International Journal of Logistics Management, 13(1): 15–30.

Stanley, L.L. & J.D. Wisner, (2001), “Service Quality Along the Supply Chain: Implications for Purchasing," Journal of Operations Management, 19: 287–306.

Stuart, F. I., (1993), “Supplier Partnerships: Influencing Factors and Strategic Benefits," International Journal of Purchasing and Materials Management, 29(4): 22–28.

Tan, K. C., V. R. Kannan & R. B. Handfield, (1998), “Supply Chain Management: Supplier Performance and Firm Performance," International Journal of Purchasing and Materials Management, 34(3): 2–9.

Tan, K. C., V. R. Kannan, R. B. Handfield & S. Ghosh, (1999), “Supply Chain Management: An Empirical Study of Its Impact On Performance," International Journal of Operations and Production Management, 19(10): 1034–1052.

Theodore Farris II, M. & P. D. Hutchison, (2002), “Cash-To-Cash: The New Supply Chain Management Metric," International Journal of Physical Distribution and Logistics, 32(4): 288–298.

Van Hoek, R. I., R. I. Voss & H. R. Commandeur, (1999), “Restructuring European Supply Chain By Implementing Postponement Strategies," Long Range Planning, 32(5): 505–518.

Vickery, S. K., J. Jayaram, C. Droge & R. Calantone, (2003), “The Effects of An Integrative Supply Chain Strategy On Customer Service and Financial Performance: An Analysis of Direct Versus Indirect Relationships," Journal of Operations Management, 21: 523–539.

Vickery, S.K., C. Droge, R.E. Markland, (1997), “Dimensions of Manufacturing Strength in the Furniture Industry," Journal of Operations Management, 15: 317–330.

Wisner, J. D., (2003), “A Structural Equation Model of Supply Chain Management Strategies and Firm Performance," Journal of Business Logistics, 24(1): 1-26.

Zikmund, W. G., (2003), Business Research Methods, South-Western: Thompson Learning
How to Cite
MKUMBO*, Frank A.E.. The Relationship between Supply Chain Management Practices and Overall Firm Performance: The Mediating Role of Time Based Performance. The African Journal of Finance and Management, [S.l.], v. 24, n. 1 & 2, mar. 2017. ISSN 0856-6372. Available at: <>. Date accessed: 25 june 2018.
African Journal of Finance and Management