The Influence Of Supply Chain Management (SCM) Practices On Company Performance And Competitive Advantage In Processed UKM Bika Barkah Bika In Medan City

Feb 27, 2025 by ADMIN 154 views

The Influence of Supply Chain Management (SCM) Practices on Company Performance and Competitive Advantage in Processed UKM Bika Barkah Bika in Medan City

Introduction

In today's fast-paced and highly competitive business environment, companies are constantly seeking ways to improve their performance and gain a competitive advantage. One key area that has gained significant attention in recent years is Supply Chain Management (SCM). SCM refers to the management of the flow of goods, services, and information from raw materials to end customers. Effective SCM practices can have a significant impact on company performance, especially in the Small and Medium Enterprises (SMEs) sector. This article aims to explore the influence of SCM practices on company performance and competitive advantage in the processed UKM Bika Barkah Bika in Medan City.

Background

Bika Barkah Bika is a processed UKM that operates in the city of Medan. The company has a strong presence in the local market and is known for its high-quality products. However, like many SMEs, Bika Barkah Bika faces significant challenges in terms of managing its supply chain. The company's supply chain is complex, with multiple stakeholders involved, including suppliers, manufacturers, distributors, and customers. Effective SCM practices are crucial for Bika Barkah Bika to improve its performance and gain a competitive advantage in the market.

Methodology

This study employed a descriptive quantitative approach with a causal research design. The research subjects included all 65 supply network partners of Bika Barkah Bika, which was obtained using the Purposive Sampling method. Data collection was carried out through the study of documentation and distribution of questionnaires to respondents. The data analysis was conducted using the Statistics Method Partial Least Square (PLS) through the SmartPLS version 3.0 program.

SCM Practice Variables

The SCM practice variables were developed into three main dimensions:

Material Flow: This dimension refers to the management of raw materials, including procurement, inventory management, and logistics.
Information Flow: This dimension refers to the management of information, including communication, data analysis, and decision-making.
Financial Flow: This dimension refers to the management of finances, including cash flow management, budgeting, and financial reporting.

Company Performance Variables

The company performance variables were measured through two dimensions:

Market Performance: This dimension refers to the company's performance in terms of market share, sales, and customer satisfaction.
Financial Performance: This dimension refers to the company's financial performance, including revenue, profit, and return on investment (ROI).

Competitive Advantage

Competitive advantage was measured using dimensions such as:

Prices (Price): This dimension refers to the company's ability to offer products at competitive prices.
Quality (Quality): This dimension refers to the company's ability to offer high-quality products.
Delivery Reliability: This dimension refers to the company's ability to deliver products on time.
Product Innovation: This dimension refers to the company's ability to innovate and introduce new products.
Time to Market: This dimension refers to the company's ability to bring products to market quickly.

Results

The results of this study showed that the SCM practice had a positive and significant effect on company performance. The success of managing the flow of raw materials, information, and finance not only increases operational efficiency but also helps the company adjust to market demand. Effective SCM practices encourage better market performance, which is critical for Bika Barkah Bika to gain a competitive advantage in the market.

Discussion

The results of this study are consistent with previous research that highlights the importance of SCM practices in improving company performance. Effective SCM practices can help companies to improve their operational efficiency, reduce costs, and increase customer satisfaction. In the context of Bika Barkah Bika, the study shows that the company's SCM practices have a significant impact on its market performance and financial performance.

Conclusion

In conclusion, this study highlights the importance of SCM practices in improving company performance and gaining a competitive advantage. The results of this study show that effective SCM practices can help companies to improve their operational efficiency, reduce costs, and increase customer satisfaction. For Bika Barkah Bika, the study provides valuable insights into the importance of SCM practices in improving its market performance and financial performance. The study's findings have significant implications for SMEs, highlighting the need for effective SCM practices to gain a competitive advantage in the market.

Recommendations

Based on the findings of this study, the following recommendations are made:

Implement effective SCM practices: Bika Barkah Bika should implement effective SCM practices to improve its operational efficiency, reduce costs, and increase customer satisfaction.
Develop a robust supply chain: Bika Barkah Bika should develop a robust supply chain that can adapt to changing market demands and customer needs.
Invest in technology: Bika Barkah Bika should invest in technology to improve its supply chain management, including the use of data analytics and artificial intelligence.
Develop a culture of innovation: Bika Barkah Bika should develop a culture of innovation that encourages employees to think creatively and develop new ideas.

Limitations

This study has several limitations, including:

Sample size: The sample size of this study was limited to 65 supply network partners of Bika Barkah Bika.
Data collection method: The data collection method used in this study was based on questionnaires, which may not be representative of the entire population.
Data analysis method: The data analysis method used in this study was based on PLS, which may not be suitable for all types of data.

Future Research Directions

Future research should focus on the following areas:

Developing a more robust supply chain: Future research should focus on developing a more robust supply chain that can adapt to changing market demands and customer needs.
Investing in technology: Future research should focus on investing in technology to improve supply chain management, including the use of data analytics and artificial intelligence.
Developing a culture of innovation: Future research should focus on developing a culture of innovation that encourages employees to think creatively and develop new ideas.

Conclusion

Q: What is Supply Chain Management (SCM)?

A: Supply Chain Management (SCM) refers to the management of the flow of goods, services, and information from raw materials to end customers. It involves coordinating and managing the activities of multiple stakeholders, including suppliers, manufacturers, distributors, and customers, to ensure that products are delivered to customers on time and at the right price.

Q: Why is SCM important for companies?

A: SCM is important for companies because it can help them to improve their operational efficiency, reduce costs, and increase customer satisfaction. Effective SCM practices can also help companies to gain a competitive advantage in the market by providing high-quality products at competitive prices.

Q: What are the key components of SCM?

A: The key components of SCM include:

Material Flow: This refers to the management of raw materials, including procurement, inventory management, and logistics.
Information Flow: This refers to the management of information, including communication, data analysis, and decision-making.
Financial Flow: This refers to the management of finances, including cash flow management, budgeting, and financial reporting.

Q: What are the benefits of effective SCM practices?

A: The benefits of effective SCM practices include:

Improved operational efficiency: Effective SCM practices can help companies to reduce costs and improve their operational efficiency.
Increased customer satisfaction: Effective SCM practices can help companies to deliver high-quality products to customers on time and at the right price.
Competitive advantage: Effective SCM practices can help companies to gain a competitive advantage in the market by providing high-quality products at competitive prices.

Q: What are some common challenges faced by companies in implementing SCM practices?

A: Some common challenges faced by companies in implementing SCM practices include:

Lack of resources: Companies may lack the resources, including personnel and technology, to implement effective SCM practices.
Complexity of supply chains: Supply chains can be complex, making it difficult for companies to manage them effectively.
Communication breakdowns: Communication breakdowns between stakeholders can lead to delays and errors in the supply chain.

Q: How can companies overcome these challenges?

A: Companies can overcome these challenges by:

Investing in technology: Companies can invest in technology, such as data analytics and artificial intelligence, to improve their supply chain management.
Developing a robust supply chain: Companies can develop a robust supply chain that can adapt to changing market demands and customer needs.
Improving communication: Companies can improve communication between stakeholders to reduce the risk of delays and errors in the supply chain.

Q: What are some best practices for implementing SCM practices?

A: Some best practices for implementing SCM practices include:

Developing a clear strategy: Companies should develop a clear strategy for their supply chain management.
Investing in technology: Companies should invest in technology to improve their supply chain management.
Improving communication: Companies should improve communication between stakeholders to reduce the risk of delays and errors in the supply chain.

Q: How can companies measure the effectiveness of their SCM practices?

A: Companies can measure the effectiveness of their SCM practices by:

Tracking key performance indicators (KPIs): Companies can track KPIs, such as on-time delivery rates and inventory turnover, to measure the effectiveness of their SCM practices.
Conducting regular audits: Companies can conduct regular audits to identify areas for improvement in their SCM practices.
Gathering feedback from customers: Companies can gather feedback from customers to identify areas for improvement in their SCM practices.

Q: What are some common mistakes that companies make in implementing SCM practices?

A: Some common mistakes that companies make in implementing SCM practices include:

Lack of planning: Companies may lack a clear plan for their supply chain management.
Insufficient resources: Companies may lack the resources, including personnel and technology, to implement effective SCM practices.
Poor communication: Companies may have poor communication between stakeholders, leading to delays and errors in the supply chain.

Q: How can companies avoid these mistakes?

A: Companies can avoid these mistakes by:

Developing a clear strategy: Companies should develop a clear strategy for their supply chain management.
Investing in technology: Companies should invest in technology to improve their supply chain management.
Improving communication: Companies should improve communication between stakeholders to reduce the risk of delays and errors in the supply chain.