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Research Article

An Empirical Study on the Fitness of Supply Chain Management Strategies of Korean Firms

Jung, Giho, Son, Seungho, Jung, Dongseop



Published: January 2005 · Vol. 34, No. 1 · pp. 219-243
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Abstract

As the external business environment becomes increasingly competitive, the importance of supply chain management has been widely emphasized, and a substantial body of related research has been conducted. In particular, prior studies have pointed out that because product characteristics and customer demand characteristics differ across products, supply chain performance is properly realized only when an appropriate supply chain structure is adopted to match these characteristics. Therefore, since the success of supply chain management depends on how well supply chain management strategies are aligned with the characteristics of the products themselves and customer characteristics, the strategic fit of supply chain management has emerged as a critically important issue in supply chain management. Korean firms have also recognized that true competition is not between individual firms but between supply chains, and have recently been building and operating supply chain management systems extensively. This study empirically analyzed whether supply chain performance differs according to the degree of strategic fit between the implied demand uncertainty—determined by product characteristics and customer demand characteristics—and supply chain management strategies among Korean firms. Through factor analysis and cluster analysis, the derived strategic groups demonstrated that groups with high strategic fit showed statistically significant differences in supply chain performance compared to groups with low strategic fit. Moreover, performance differences were found even within the high strategic fit group: the group that adopted supply chain strategies with both high implied demand uncertainty and high responsiveness showed higher performance than the group that adopted supply chain strategies with both low implied demand uncertainty and low responsiveness. These analytical results imply that if product characteristics or customer demand characteristics change due to changes in the business environment, firms must also change their supply chain management strategies accordingly. Furthermore, the results suggest that even when strategic fit has been achieved, supply chain performance tends to be lower when customer need characteristics are less sensitive or when product characteristics are closer to functional products compared to innovative product categories.
Keywords: Implied Demand UncertaintySCMSCM StrategyStrategic Fit공급사슬관리Supply Chain Performance