The Effect of Supply Chain Management on Competitive Advantage: Mediating Role of Supply Chain Responsiveness in Ethiopian Food Processing Industry

Abstract

This study aims to examine the indirect impact of supply chain management (SCM) in its five dimensions (supplier relationship, customer relationship, information sharing, information quality and postponement) on the competitive advantage in its five dimensions (Cost, Quality, Delivery Time, flexibility, and innovation) through supply chain responsiveness as a mediator. Furthermore, 234 questionnaires were distributed in food processing industries. The total of 215 questionnaires was analyzed. For a robust result, we conducted exploratory factor analysis (EFA) using Varimax rotation and confirmatory factor analysis (CFA) to check the scale. Furthermore, we test validation of the second-order construct. Structural equations modelling (SEM) using AMOS 24 was used to test the hypotheses. The results of analysis show that the supply chain management practice (SCMP) has a positive and statistically significant influence on supply chain responsiveness (β = 0.909, p-value = 0.000) and the competitive advantage of firms with the standardized coefficient of (β= 0.639, p-value = 0.000). Similarly, the supply chain responsiveness has a positive and significant effect on competitive advantage by (β = 0.352, p-value = 0.000), on the other hand, supply chain management practice (SCMP) has a significant indirect effect on competitive advantage by (β = 0.320, p-value = 0.000) through supply chain responsiveness. Accordingly, we suggest that managers of food processing should properly manage their supply chain management practice, develop a responsive supply chain to gain a competitive advantage. But this study was limited only to food processing with plc and Share Company.