Impact Of HR Practices On Supply Chain Performance

MGT402 Graduation Project

Statement of the problem

This research study is emphasized on the HR practices of the said organization impacts supply chain network and distribution of products and services. In this research report, certain chapters are considered named introduction, literature review, and findings. The introduction section supports to comprehend many essential elements named statement of the problem, Purpose of the study, Significance of the study, Definition of terms. It could be effective for gaining knowledge towards the research matter. Further, the literature review section supports to gain a conceptual understanding in the context of the current issue. In last, findings demonstrate a result that could be associated with current research issue.

1.1 statement of the problem

The problem of the study undertaken is related to existing supply chain performance associated barriers and issues that hinder the supply chain performance.

The purpose of the study is to know how the HR practices of the said organization impact the supply chain network and distribution of products and services.

The significance of the study

The chosen topic HR practices and its impact of supply chain network provide greater insights regarding how to build the HR activities to promote an efficient supply chain network. Consideration towards efficient HR practices enhances the productivity and profitability of any organization. Efficient HR practices support business goals and enhance the competitiveness of the company. HR practices can increase the customers satisfaction, builds a favorable image of the company, determines the human resource needs, attracts potential employees, rewards employees properly, creates a positive work environment, brings in creativity and innovation etc. (Noe, Hollenbeck, Gerhart, & Wright, 2006) therefore, the chosen topic has become relevant to analyse.

Definition of terms

The HR practices refer to those practices pertaining to recruitment and selection of employees, their career advancement, compensation, training, and development. Supply chain refers to existing supply performance refers to extended activities of a supply chain to fulfill the customers’ requirements and it includes on-time delivery, product availability, necessary inventory and capacity in a supply chain to function in a responsive manner (“Supply chain performance measures,” 2018).

Chapter two: a review of the literature

To evaluate the impact of HR practices on Supply Chain Performance

The literature review section is imperative for research scholar to gain an understanding about the research issue. Moreover, it is evaluated that there are many sources that are practiced by the investigator to create a literature review named books, online sources, online sources, and academic journal. It could be imperative for accomplishment for the research task. This research is emphasized on identifying HR practices impact on the supply chain performance.

The historical background of the supply chain performance management has been started some 25 years ago when the integration of supply chain term has been coined by Stevens. At that time, the supply chain management was still in its infancy stage but now the supply chain management has been considered to be managed at strategic, tactical and operation levels. The supply chain has later been extended to the network of suppliers and customers. Thus, an integration of supply chain network has become an indispensable factor and therefore, HR role in enhancing the performance of the supply chain has become more crucial than before.

Purpose of the study

Historical background study of supply chain familiarises with its efforts towards the growth of supply chain network and low-cost sourcing of products and services (Fredriksson & Johnson, 2009). Now the advent of mature supply chain strategies focusing on sustainable practices and environmental concerns are considered by the HR professional and supply chain employees and stakeholders (Pagell & Wu, 2009). Thus, it has increased the SCM importance in the organization and it has become a driver of business performance of any company (Johnson & Templar, 2011).

Demand-driven strategy of supply chain leading to improved performance of the company (Ellinger et al., 2012) is now considered by the management of organizations. It is also identified that even though research confirmed regarding supply chain integration benefits, (Prajogo & Olhager, 2012), and its relevance to an organization success (Flynn et al., 2010), there is an ambiguity looms large regarding constitution of a supply chain integration (Autry et al., 2014). The analysis reveals that the supply chain has a strategic relevance to cost saving for a company as 75 percent of the cost of the product is external. According to Porter, (2008), cost advantages and differentiation are two major strategies to gain competitiveness and win business. Therefore, the cost advantage offered by supply chain has been a major benefit for any organization.

Considering all these development in supply chain management area, now the focus is shifted to critical success factors for supply chain performance to understand the role of human resources practices. It is found that top management commitment, skills of consultants, teams, and compatibility with the legacy system are critical success factors (Ab Talib, Abdul Hamid, & Zulfakar, 2015).

 For transport enhancement, skilled employees are needed (Nguyen, 2017). Decentralized task management is also required as a critical success factor (Fu, Chang, Lin, Du, & Hsu, 2015). For the green supply chain, collaboration, mutual trust, greater planning are required (Wong, Wong, & Boon-Itt, 2015). For logistics function outsourcing, communication, setting standards, human factors are found important. To benchmark the logistics performance, reliability factor is needed. For supply chain performance, the role of corporate culture and performance management are needed (Huam, Yusoff, Rasli, & Hamid, 2011).

These factors require HR practices to be congruent to the needs of supply chain performance and therefore, HR function such as communication, leadership promotion, training and development of employees, ethical values promotion, collaboration initiatives amongst different stakeholders, compensation, security of employees, career advancement to retain the best talent in supply chain department have become crucial to supply chain performance.

2.3 Theories related to human resources practices and supply chain performance  

The theories of leadership and motivation, the theory of stakeholder theories of sustainable development for green supply chain are found important for the supply chain performance management. The theories such as transactional and transformational leadership, the theory of Herzberg, equity theory are important for the topic because HR practice those impact the supply chain performance require communication, compensation, fair performance appraisal and therefore, these theories have become relevant to consider.

Two-factor theory of Herzberg considers motivators and hygienic factors. Supply chain performance can be positively affected when people working in supply chain network have good pay, security, safe environment, career advancement, rewards, and recognition; therefore, HR people are needed to practice Herzberg two factor theories in the organization. The HR practices should also introduce from the top great leaders who are able to manage the organizational resources efficiently and lead the team well.

Significance of the study

As HR people provide training and development opportunities to employees, people working in the supply chain and having traits of transformational, transactional leaders certainly enhance the supply chain performance. Stakeholder’s theory requires considering the needs of every stakeholder and as the supply chain management requires integration of suppliers and customers, HR practices should reflect promotion of stakeholder theory by promoting participative management and effective collaboration by the assistance of top management.

2.4 Literature review gap

The literature review provides insights about integrated supply chain management and green supply chain and therefore, the performance of the supply chain is oriented towards achieving integrated supply chain and green supply chain. In this regard, the role of HR function has been found critical to developing requisite skills sets amongst supply chain professionals to deal with issues of supply chain management. It suggests that the critical success factors for a supply chain are the leadership of top management, their commitment, communication, the role of corporate culture, human skills are important and as the HR practices shape communication, corporate culture, and human skills, the impact of HR practices on supply chain performance is evident

2.5 scope of the study

The study provides an insight of relevant role of the HR function to enhance the performance of contemporary supply chain and provides guidelines regarding how HR functions can be improved and oriented towards the needs of enhancing supply chain performance.

Findings and discussion 

In this paper literature review has been written. This paper will highlight the impact of human resource practices on the supply chain performance of the organization. In order to complete this paper, 30 research articles have been selected that are discussed as below:

Exploring the role of HR practices in the supply chain

The study by Prachi et al (2012) examined the role of HR practices in the supply chain. The research in the research paper mentioned that HR plays an important role in making the supply chain efficiencies. A sample selected for the study is 60 automobile components manufacturing company. The researcher used a random sampling method. The sampling element is manufacturing companies operating within the territory of India. Through questionnaire and personal interview, data were collected. No pilot survey was undertaken.

The main objectives of the study are to analyze the importance of human resource practices in achieving a high level of the supply chain (Pandey et al., 2012). Tools used to conduct this study is a questionnaire and personal observation. The collected data has been analyzed through excel. Regression analysis has been used by the researcher. The major findings of the research is that information sharing has a significant impact on the supply chain and this can be done through HR in an effective manner.

The Impact of HRM Practices on Supply Chain Management Success in SME

N.R Khan and his associate (2013). The researcher highlighted in his research work that HRM practices put a positive impact on the performance of the supply chain management in an organization. A structured questionnaire was used to survey a sample of 195 manufacturing and services sectors SME.  The sampling elements are service and manufacture company. The data were collected through the questionnaire. The main objectives of the study are to determine the relationship between HR and supply chain management.

Definition of terms

The Pearson’s correlation and multiple regression were employed to examine the relationship between HR practices and supply chain management (Khan et al., 2013). The major findings of the study are that SME performed the moderate level of HRM and SCM practices and there is a correlation between HRM practices that proactively contributes to supply chain success.

Human resource practices, supply chain performance, and wellbeing

Sanjay T Meon (2012) did a research to evaluate the HR practices in making the supply chain management efficient in School of Applied Psychology in the USA. Data was collected using a sample size of 228 supply chain professional. The researcher used the Delphi method in a way to reach on the particular research findings. The regression analysis has been conducted.

The main objectives of this research paper are The researcher used observational as well as regression analysis to find the actual findings. The major finding is that the successes of the supply chain management highly depends upon the HR effectiveness.  

Supply chain management and suppliers’ HRM practice

This paper is been written by Rozhan and Rohayul in the year 2008. The researchers in this research report mentioned about the effectiveness of the Supply chain management through proper and effective HR practices in an organization. The sample size is seven companies. The structured interview has been conducted. The researchers used excel and observation method to arrive at finding and conclusion. The major findings of this research are that successful supplier-customer relationship is dependent on the suppliers developing specific HRM practices that will enable them to fulfill customer’s requirements (Othman et al., 2008). 

 Impact of human resources on supply chain management and performance

This paper is written by Gómez et al., 2015. The researcher in the research study mentioned that there is a huge positive impact of sound HR practice over the supply chain management. The main objective of this research paper is to determine the impact of human resource management (HRM) has an impact on supply chain management (SCM), which in turn has a significant impact on customer satisfaction (Gómez et al., 2015). The researcher has formulated a Hypothesis and the hypothesis has been proved using the partial least squares. Beside this structured model of HRM has been analyzed to conclude the research. The major findings of this research report are HRM had significant direct and indirect impacts on SCMO, and SCMI, which in turn played a mediating role in the relationships between HRM and SCMO.

Human Performance in Supply Chain Management

This paper is been written by the Swart et al in(2012).  In this paper, the researcher highlighted that Human performance impacts the supply chain of an organization. The main objectives of this research paper are to determine the influence of human performance on the supply chain. The researcher did not use any sample size as the study is based on secondary data. The researcher used resources based view to concluding the research. The major findings of this research report are that if HR is effective then it will lead to having sound supply chain management.

Chapter Two: A Review of the Literature

 Human Resource Management and Supply Chain Management Intersection

The research paper is also not an empirical research paper. Therefore, there is no sample related information, including sample size, how it was determined, sampling elements, data collection method, data analysis tool, and pilot survey.  The objective of the study was to establish the role of organizational behavior and human resource in the supply chain (Bharthvajan, 2014). The study focuses on staffing functions, evaluation, training, and compensation (Bharthvajan, 2014). The findings of the research are that supply chain employees require specific competencies, which are strong communication skills, fast learning, and understanding of technological techniques, strong collaboration skills, team management, flexibility, problem-solving skills, and analytical skills (Bharthvajan, 2014).  These competencies can best be impacted through human resource practices.

Human Resource Management Policies and Supply Chain Management in Apparel Industry in Delhi /NCR

A sample size of 35  from export houses in Apparel Industry in Delhi/NCR was examined by (Mittar & Deep, 2015). It was determined by sending out questionnaires to houses that met certain criteria. The returned questionnaires automatically became the sample size. The sampling elements were export houses in Delhi or NCR with over 50 turnover rates. The sampling method used was a random sampling technique.

There were two data collection methods: primary and secondary. Primary data was collected through questionnaires while secondary data was extracted from research papers. There was no pilot survey conducted. Percentage method was the tool used for analysis. The research objective was to establish the consequence of human resource practices on garment manufacturing firms’ supply chain management.  The findings of the study are that organizational culture affects the integration of supply chain and HRM practices can have both positive and negative effects on supply chain integration.

Influence of human capital on healthcare agility and healthcare supply chain performance

Santanu Mandal (2018) did a research to develop agility in health care through human capital, which involves innovation in generating ideas and specialized expertise of the employees. The research used two analysis tools, which are structural equation modeling and confirmatory factor analysis. The sample size used in this research paper was 212. The determination criteria for this sample was senior managers in hospitals selected randomly. Therefore, a random sampling method was used to choose the hospitals. The main data collection method employed was the primary data collection because all the data was collected through face-to-face interviews with all the 212 senior managers (Mandal, 2018). There is no mention of a pilot survey in the research paper. Therefore, a pilot survey was not conducted. The objective of the research was. The major findings of the research indicate that human capital influences supply chain and agility in health care. Increased supply chain performance was also found to enhance agility.

Supply Chain Management: Success factors from the Malaysian manufacturer’s perspective

Ai Chin et al. (2011) did a research on the most important and critical factors that affect supply chain performance and found that there was a strong relationship existent between a relationship with customer and supplier, ICT, material flow management, performance measurement and supply chain management performance except corporate culture. Data were collected from 84 staff from (purchasing, planning, logistics, and operation) departments. Pearson correlation, regression, reliability analysis, and descriptive analysis’s were used to test the hypothesis. There is no mention of a pilot survey in the research paper.

Factors Influencing Supply Chain Performance

A research conducted by Fadumo Ahmed Mohamed & Ananthalakshmi Mahadevan (2014) to examine the impact of HR practices (Training, Compensation and employee participation) on employee performance. The sample size used in this research paper was 102 employees and were selected randomly.  Hypotheses were tested through Regression Analysis The objective of this research was to find out the effect of independent variables on employee performance. And the major finding was a significant relationship and impact of training and compensation plans on employee performance whereas employee participation had less impact on employee performance.

 Exploring the importance of human resource activities-strategies alignments: Interactive brainstorming groups approach

Nana Yaw Oppong (2017) did a research to analyze some of the HR activities and a set of HR strategies and to examine the possibility of aligning the various HR activities appropriately with the HR strategies to develop the work process of the HR department. The researcher did his research through interactive brainstorming groups approach and sampling elements were 21 MBA/MPhil students of the Department of Management Studies of the University of Cape Coast, Ghana he divided them into 3 groups to conduct an open discussion and identify some new ideas on HR activities and their strategic linkages and he guided and provided them with the needed materials. Observational and regression were used to test the hypotheses. Some critical HR activities and its link to enhance the work process of the HR department were identified by them.

The study has succeeded in identifying HR strategies and activities and how they linked to enhancing the work of the HR department. As the study is limited to the strategic implications of HR activities but not extended to the broader corporate strategy, the authors suggest a further study on how the HR strategies-HR activities linkages impact on the overall strategies of the organization. The researcher also recommended expanding the study to the overall strategy of the organization.

 Performance perceptions among food supply chain members: A triadic assessment of the influence of supply chain relationship quality on supply chain performance

Walter Odongo (2016) has conducted a research on the performance perceptions among food supply chain members. The purpose of this paper is to address how supply chain performance is attracted by RQ in the triadic business. Moreover, the survey is conducted on 150 agribusiness firms on 50 direct supply chains professionals. Multi-group structural equations modeling was practiced by the researcher to evaluate perception differences on supply chain process. Findings demonstrated that there is a positive relationship among positive perception and supply chain performance.     

 The impact of innovativeness on supply chain performance: is supply chain integration a missing link?

John Dinwoodie (2014) focuses on exploring the impact of innovativeness on supply chain performance. It can be integrated via conceptual structure and validating the structure empirically to develop the proposed associations. The survey thorough questionnaire method is practiced by the researcher to conduct this research and meet the aim and objectives.  Moreover, data from South Korean manufacturers manufacturing company by considering Structural equation modeling method. The researcher has used a web-based questionnaire survey to conduct the research. The findings demonstrated that innovativeness in the supply chain directly impacts positive impact on both SCI and SCP.  

Critical Success Factors

An empirical analysis of supply and manufacturing risk and business performance: a Chinese manufacturing supply chain perspective

Kumar et al. (2018) define that the aim of the investigation is to identify the significance and impact of manufacturing and supply risk management upon business performance within the context of Chinese manufacturing supply chains. Two-phased multi-method was implemented that involves a survey questionnaire to experts in Chinese manufacturing supply chain. This is followed by semi-structured interviews. The result demonstrates that in Chinese manufacturing context manufacturing and supply risk as well as manufacturing risk management is significant for improving the business.  

 Interdependent supply relationships as institutions: the role of HR practices

Koulikoff?Souviron and Harrison (2008) stated that the main aim of this research is to use institutional theory to assess the role of human resource practices as carriers in the origination of interdependent supply associations. It is a qualitative study of inter-firm supply association in which two partners were reliant as a consequence of closed loop supply association. This paper depicts the Scott’s “three pillars where it indicates that HR practices can perform as a shipper of normative, regulative as well as cultural cognitive factors in interdependent supply association via both informal and formal systems.  

Measuring supply chain knowledge management (SCKM) performance based on double/triple loop learning principle

Ramish and Aslam (2016) demonstrated that the aim of this research is to suggest performance measures related to supply chain knowledge management performance. It is a theoretical investigation. Furthermore, the dimension of performance has been determined as per the inclusive access of literature review in the area of SCKM.  This investigation relies on the philosophies of tripe and double loop learning hence performance measure has been addressed to measure the achievement of KM activities in SCs. Along with this, philosophies of double as well as triple loop learning has been practiced to recommend the KPI’s for SCKM performance. Furthermore, this research discusses the relevance an justification of these KPI’s.

A framework of supply chain orientation

Esper Clifford Defee and Mentzer (2010) evaluated that the purpose of this research is to combine previous investigations and further create the structural section of SCO such as involving the field of human resource, organizational measurement, organizational design, and information technology. A literature review is practiced for addressing the previous studies of SCO as well as demonstrates the structure to more absolutely assess these aspects. Furthermore, SCO cannot be comprehended without involving both an internal structural factor of firm an strategic purpose of the firm to compete through supply chain competencies.

 Supply chain integration and efficiency performance: a study on the interactions between customer and supplier integration

Danese and Romano (2011) have conducted a study on assessing the role of customer integration on efficiency, and the moderating role of supplier integration. This investigation assesses the information from a sample of 200 plants of manufacturing. Two hypotheses were tested via using hierarchical regression assessment. In addition, consumers are suppliers integration constructs involve item associated with the certain concept of integration.

The effect of supply chain management practices on supply chain and manufacturing firms’ performance

Conclusion

Moh’d Anwer Radwan Al-Shboul, (2017) the main purpose of this research is to develop theories and dimensions for improving the performance of the supply chain. The data were collected by considering survey through questionnaire method on 249 Jordanian manufacturing firms. The findings of this study demonstrated that SCMPs has a favorable impact on SCP. It is also found that there is a positive relationship between SCMPs and  MFP.      

The effect of high-involvement human resource management practices on supply chain integration

Huo et al. (2015) evaluated that the main purpose of this research is to integrate the aspects from supply chain management fields and human resource management fields by focusing on interdisciplinary strategy. It also identifies the impact of high involvement activities of HRM on SCI (supply chain integration).  The author stated the maximum-likelihood estimation method and structural equation modeling in order to measure the proposed links. The findings show that HRM has relevancy with the supply chain integration. But, several suggested links are not sustained by data gathered.

  Human resource management issues in supply chain management research: A systematic literature review from 1998 to 2014

Nils-Ole Hohenstein (2014) depicted that the main purpose of this research is to evaluate the human resources management and supply chain management problems. This research relies on secondary data collection method hence the theoretical data has collected in the favor of specified research matter. Moreover, secondary research supports to theoretically evaluate the specified matter. The findings of this article depicted that research scholar has primarily concentrated on the popular concern of the HRM and SCM.     

 Humanitarian supply chain performance management: a systematic literature review

Hella Abidi (2014) illustrated that the main purpose of this study is to examine the humanitarian supply chain performance management: a systematic literature review. This research is based on the secondary data collection method that depicted the research of another researcher. This research basically demonstrates certain factors named evaluation of humanitarian supply chains success, managing performance, and performance management challenge. The findings were demonstrated that supply chain management is directly influenced by the humanitarian nature of the human resources manager. Hence it can be said that this research supports the community of humanitarian to perform future research in the same area and to create the framework of performance measurement.  

 Research on the phenomenon of supply chain resilience: A systematic review and paths for further investigation

 Nils-Ole Hohenstein (2015) addressed that this research is emphasized on the phenomenon of supply chain resilience: A systematic review and paths for further investigation. These research consider the secondary data collection method that means the research data is collected by available resources. The literature review method is used by the researcher to comprehend the research matter. These findings demonstrated that this research has needed to comprehend the SCRES and modern technology to evaluate the performance of the organization. It is also addressed that most of the researcher has used the qualitative method hence they were failed to measure the SCRES performance. It becomes a major concern for the firm.     

 Impact of human resources on supply chain management and performance 

Milena Gómez-Cedeño (2015) explored the study as it is based on the Impact of human resources on supply chain management and performance. It also demonstrates the role of HR in certain sectors named organizational performance, and customer satisfaction. This study is exploratory in nature hence researcher has made research hypothesis. This research was conducted on the 231 total research candidates that could be different for others area. The findings demonstrated that Human resource practices needed to share with the research candidates and research participants.

 Measuring and managing the sustainability performance of supply chains: Review and sustainability supply chain management framework

Stefan Schaltegger (2014) stated that the main purpose of this research is to measure and manage the sustainability performance of supply chains and critically evaluate the sustainable supply chain management framework. This research also is effective for increasing knowledge towards the assessment of approaches for sustainability performance of supply chains. In this research, a literature review and conceptual framework are used by the researcher to do the same thing. From the findings, it is evaluated that analytical framework for the sustainability performance of supply chains (SPSCs) management. The framework is practiced to measure suitability performance that could be a major part of the study.   

 Knowledge management, supply chain technologies, and firm performance

Jamie D. Collins (2014) stated that the main purpose of this paper is to address the conceptual overview of the relationship between knowledge management, supply chain tool investment, and overall the organizational performance. Various literature has been used by the researcher as it could be related to the specified research issue. For conducting this research, the literature review method has used by the researcher to comprehend the research issues and research at the valid conclusion. Furthermore, the findings of this study depicted that many organizations have been driven towards the new advances tool by supply chain information capturing investments.

 Leveraging human resource development expertise to improve supply chain managers ‘ skills and competencies

 Alexander E. Ellinger (2014) depicted that the main purpose of this research is to determine the Leveraging human resource development expertise to improve supply chain managers ‘ skills and competencies. This report also supports to create suggestions for improving management practices. The researcher has found many kinds of literature in the favor of the specified research matter. This study leads to comprehend how the leveraging of HR managers could be imperative in getting the competitive benefits. From the findings, it is evaluated that this research is conceptual in nature hence it can be illustrated that decision towards the HR executive could influence the overall performance of the supply chain and supports to sustain the position of the organization in the marketplace.

 Identifying the drivers of enterprise resource planning and assessing its impacts on supply chain performances

David Hwang (2015) depicted that the main purpose of this study is to determine the enterprise resource planning drivers and evaluate their impact on the overall performance of the supply chain. This research is relied on the contingency theory and literature review method to critically evaluate the research matter. Moreover, the finding of this study depicted that ERP adoption and implementation decision could directly influence the overall situation of the firm.  

 Business excellence through total supply chain quality management

Kamran Rashid (2012) depicted that the main aim of this research is to identify how the quality human practices could be associated with the supply chain quality management. In this research, research scholar has practiced literature review method with respect to understand the quality management practices in the supply chain. The findings demonstrated most of the organization has practiced ISO 9000 standards to maintain the quality of their products and services and sustain their poison. 

References 

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Jensen, J. M., Patel, P. C., & Messersmith, J. G. (2013). High-performance work systems and job control: Consequences for anxiety, role overload, and turnover intentions. Journal of Management, 39(6), 1699-1724.

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