The Effect of Supply Chain Management CH 17c44954
The Effect of Supply Chain Management CH 17c44954
The Effect of Supply Chain Management CH 17c44954
Studies have shown that during the 1990s, numerous public and private organizations accepted and used
the techniques of SCM, such as efficient response to the customer, continuous procurement, and
inventory and vendor management systems, to gain sufficient competitive advantage in the market.
Evidence has shown that organizations manage effectively their entire supply chain, successfully reduce
logistics costs and related inventory, cycle time, and improve customer service. For example, the use of
the supply chain in Procter Company led to annual savings of about $ 65 million. According to its
management reports, a principle approach that is based on both production and works with suppliers
was used to eliminate the additional activity and resources in the entire supply chain. But several
project-based organizations have neglected the acceptance and use of supply chain techniques. This
type of organization, in the construction industry, is usually associated with low quality, low-profit
margins, high time, and cost (Yeo & Ning, 2002). In a study, it was estimated that about 40% of the
work in the construction industry is non-value-added activities, such as time spent waiting for the
approval or achievement of material at the project site (Mohamed, 1996). Although there are proven
advantages of applying supply chain in projects,research-development project supply chains are faced
with numerous challenges in its application and integration such as intercultural problems, lack of
necessary skills, operational problems, lack of resources, and external problems (Ritchie & Brindley,
2007).
Therefore, the purpose of this study was to identify, classify and prioritize SCM challenges in Iran's
R&D Organization. The novelty of this research article was to consider two concepts include supply
chain management and project management together for the project-based organizations. In addition,
this study considers SCM challenges in the whole project life cycle including planning, implementing,
control and monitoring. The study covers both single project management and megaproject
management.
There are several different challenges associated with research-development PSCM. Thus these
challenges have been divided into six categories: capabilities, process, contextual, infrastructural,
motivational, and cultural. They may be related from three perspectives: macro, inter-organizational
and micro perspective. Challenges from the macro perspective are related in such a way that they can
be exploited and resources in the development and operation phase from several sources can be obtained
from different locations and procurement processes among operators, contractors, and suppliers.
However, challenges from the inter-organizational perspective are related to collaboration in inter-
organizational arenas. While challenges from the micro perspective are related to each actor in being
attractive as a supply chain actor (Cousins & Spekman, 2003).
1
Project supply chain management= PSCM
2021 | Annals of Management and Organization Research / Vol 2 No 3, 175-190
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Capability challenges are the scientific and technological capabilities associated with industry and
external partners which are the minimum requirement necessary for cooperation partnership. In fact,
there are different types of actors with different roles, responsibilities, and capabilities in a project
supply chain that cause challenges in the project. These increase the complexity of project management
and the rate of change (Young, 2003). The major challenge in this field is to find a way to utilize the
capacities and capability of local-external organizations in order to maximize their benefits (Morris &
pinto, 2007). Also, some challenges and obstacles are associated with collaborative innovation and
property intellectual. However, several researchers have identified the different necessary factors for
effective collaboration in PSCM, which include cognitive differences, organizational, cultural, and
institutional differences between parties (Parrod, et al., 2007), (Vrijhoef & Koskela, 2000).
Collaboration may draw up a single contract with a prime contractor or alliance group of contractors.
Prime contractors announce that they seek to reduce the number of subcontractors and develop long-
term relationships with a smaller number of partners. When industries are becoming mature, they tend
to focus more on cost efficiency and value enhancements through a rich set of suppliers with technology
development capabilities. The relationship that existed between the Operators and the technology-based
companies permits close integration of their operations and R&D (Lainez & Kopanos, 2008).
Process challenges refer to specific steps, a certain sequence of activities, and specific mechanisms for
doing things. The demand definition and specification process in project development is directly related
to the value positioning of the project. This demanding process will establish and commit the supply
chain when the defined demand is supplied through the contract execution model (Kerzner, 2006).
PSCM needs to establish mechanisms to create integration. The major challenge in this field is the
selection process of the operator or contractor in the development or operation phase of the projects.
The selection process can cause an optimal network through a life cycle (Tam, et al., 2011). Also,
alternatives selection in conceptual design, technologies alternative and supply chains alternative, due
to new supply chains, can establish new opportunities or challenges that are uncovered through
uncertainty management of the project and are able to change cost and execution time (Yeo & Ning,
2006).
Contextual challenges refer to the industry’s background and context. and regulation of behaviors in
the institutional framework and interaction forms. The major challenge in this field is related to project
life cycle, project stages, and nature. The supply chain should be involved in a project life cycle in order
for it to be part of project definition and project object specification (Kim, et al., 1992), (Young, 2003).
Infrastructural challenges refer to the structure and equipment necessary to facilitate and expedite
matters such as communication, ICT infrastructure. Project-based organizations require integrated
information systems. Moreover, Motivational Challenges refer to situations in which the individual and
group are motivated to interact and exchange ideas and to obtain cooperation and participation. Cultural
challenges refer to situations of trust culture, honesty, teamwork, data and information sharing,
cooperation and interaction culture, and collective learning during the project life cycle (Lainez &
Kopanos, 2008).
Several researchers have identified four key actions that must be carried out for the successful
implementation of PSCM: building a network within the different enterprise, change in organizational
structure, establishing assessment processes, and cooperation and coordination design (Edum, et al.,
2001). Other researchers have introduced five necessary activities for the implementation of PSCM in
order to select appropriate mechanisms for integration and trade-off between different organizations
(Gattorna, 2005), (Vrijhoef & Koskela, 2000). Forozandeh et al. reported the right suppliers, right
project executors, and network design of layers as the key success factors involved in project-based
organization's implementation of PSCM (Forozandeh, 2015). Moreover, Miguel believes that many
potential problems and challenges may be due to inadequate knowledge, cultural differences,
2. Research methodology
In this study, the method of data collection was descriptive because it included a set of methods that
describe the conditions necessary to make better decisions. Also, it was a survey because it examined
an existing situation, the relationship between variables, and the challenges faced by the R&D projects.
At first, 20 research-development projects were selected for examination in the R&D Organization.
They were obtained from different fields such as electronics, mechanics, etc. Many of them were related
to non-integration between supply, production, and construction, and as such, can cause problems and
challenges.
Based on previous literature, the challenges of PSCM in R&D industries were extracted. In the next
stage, the different challenges of PSCM were classified by reviewing the related literature and
thereafter, conducting a semi-structured interview with 12 experts that were asked to either verify or
reject the existence of each challenge. Accordingly, 42 challenges were identified and extracted from
the interview, and after the elimination of duplicated challenges and integration/removal of some with
the same themes, 25 key challenges were obtained. In order to categorize the identified key challenges,
10 experts were selected using the Delphi technique; however, the majority opinion of the experts was
considered. Subsequently, the PSCM challenges were classified into six categories. The sources of the
extraction of these challenges have been mentioned previously. Then each of the PSCM identified
challenges was put into one of these groups.
Co1 Lack of understanding and comprehension of concepts and principles of PSCM (Asbjrnslett, 1998), (Simchi-
and its importance for research-development projects Levi, et al., 2000)
Co2 Lack of necessary development in the field of process design and layers Contextual (Morris & pinto, 2007)
interaction procedure
Co3 Lack of consistency of project approach with its supply chain type (Young, 2003), (Shapiro, 2004)
Pr1 Weaknesses in the needed mechanisms for the establishment of PSCM (Young, 2003)
P22 Weakness in the definition, standardization, frameworks and rules and transparency of (Basu & Wright, 2008),
collaboration and cooperation between layers involved in the project (Morris & pinto, 2007),
(Nassimbeni, 1998)
Process
Pr3 Lack of transparency in tasks and role of each layer in research cycle process (Shapiro, 2004)
Pr4 Lack of audit processes in research PSC and preventive and corrective actions (Morris & pinto, 2007),
(Simchi-Levi, et al., 2000)
Lack of mature industry and full control overcome the design and integration (Morris & pinto, 2007), (Schmidt &
Ca4 of systems and products Glen, 2011), (Caron, et al., 1998),
Lack of understanding and identification of knowledgeable and proficient (Basu & Wright, 2008) , (Dainty, et
Ca5 partners to manage, execute, and better control network partners al., 2001)
Lack of information and full awareness of the capabilities of the suppliers (Basu & Wright, 2008)
Ca6
and sub-contractors by the industry
Mo1 Unmotivated and indifferent of staff due to lack of attention to training and (Shapiro, 2004)
motivational issues
Mo2 Lack of financial commitments by some layers and reduced cooperation (Basu & Wright, 2008)
incentive among them Motivational
Mo3 Decrease in External partners incentives (motivation)due to legal issues and (Schultzel & Unruh, 1996), (Basu &
financial-intellectual property Wright, 2008), (Seneviratne,2020)
Cu1 Lack of cultural definition of long-term cooperation, strategic win-win (Basu & Wright, 2008),
(Moradi,2020)
Cu2 Reduced Attention to cultural issues such as trust, dishonesty, teamwork, and (Basu & Wright, 2008), (Kanji &
Cultural Wong, 1998)
collaborative learning among layers
Cu3 Existence of competition environment between the layers, instead of (Forozandeh, 2015), (Shapiro, 2004)
collaboration and cooperation among them
St1 Lack of necessary development in the field of ICT-IT infrastructure (Morris & pinto, 2007), (Shapiro,
2004), (Edum, et al., 2001),
(Ghorbani ,2020)
St2 Lack of consistency between the product nature and selected supply chain (Vollmann, et al., 1995)
type
St3 Lack of integration between quality management activities and PSC infrastructural (Morris & pinto, 2007), (Young,
members 2003), (Basu & Wright, 2008)
St4 Standardization of processes between PSC partners (Basu & Wright, 2008) , (Khalfan,
et al., 2001)
St5 Lack of examination of qualified layers in terms of quality and capability (Young, 2003), (Khalfan, et al.,
through related certificates 2001)
St6 The lack of precise and systematic identification and application of (Burton & Lanciault, 1999),
technology through the agile supply chain and leaning in different phases (Khalfan, et al., 2001), (Borodako,
of the project life cycle, as well as to resolve the project key bottlenecks et al ,2019)
Subsequently, a questionnaire was prepared to confirm the results of the interview and to prioritize the
identified challenges. The questionnaire consisted of six parts, in which each part included one class of
PSCM identified challenges. In each part, the related challenges were listed (25 identified challenges),
The statistical population of this research is composed of different responsibilities in the three sectors
of the contractor, executor, and consultor in R&D projects. These industries fulfilled the following three
criteria: Being project-based; Functioning in the research-development projects of different areas, and
having an SCM sector within the organization. The population information is given in the table below.
30-40 17 Female 12 M sc 32
40-50 17 Phd 3
50-60 4
The main hypotheses to be tested are H0: All challenges identified are of the same priority, H1: At least
a challenge has different priorities from other challenges.
The collected data were analyzed using two methods: descriptive and deductive. A single sample t-test
and Friedman test were used for the deductive analysis of the data. The single sample t-test was applied
for the approval or rejection of the 42 identified challenges. The identified challenges were prioritized
using the Friedman test (nonparametric test). SPSS software was used for data analysis.
The Cronbach’s alpha coefficient of the questionnaire was equal to 0.919. The reliability coefficient
was 0.7 and as such, it can be concluded that the applied questionnaire required research reliability. On
the other hand, evaluation of the conditions for each variable indicated that omission of each variable
does not lead to a significant increase or decrease in the reliability coefficient of the questionnaire.
Subsequently, the rank means of challenges for each category were averaged. Thus, this is the criteria
for the determination of the priority of each category of challenges (Table 9).
In the next step, a questionnaire was designed to determine and evaluate the intensity of the relationship
between the challenges and was provided to a number of experts active in the field of scope. They were
asked to assign a number between 0 and 4 according to Table 2, according to the effect of each index
on the other indices. Due to the limited values, the data were analyzed in a fuzzy environment to be
more accurate. According to the collected data, the initial decision matrix was formed according to
Table 10.
Table 10. Fuzzy decision-making matrix base on experts active
C8 C7 C6 C5 C4 C3 C2 C1 Z
By performing the mentioned steps, the total relations matrix was obtained as follows (Table 11):
0.15 (0.24, 0.16, 0.01) -2 (-1.89, -2.03, -1.97) (-1.06, -1.09, -0.98) (-0.82, -0.93, -0.98) C1
0.16 (065, 0.067, 0.034) -1.79 (-1.12, -1.91, -1.99) (-0.88, -0.99, -1.01) (-0.23, -0.92, -0.97) C2
0.19 (0.39, 0.15, 0.066) -1.99 (-1.96, -1.99, -2) (-1.17, -1.07, -1.03) (-0.78, -0.92, -0.96) C3
-0.21 (-0.53, -0.16, -0.07) -1.94 (-1.95, -1.94, -1.96) (-0.71, -0.88, -0.94) (-1.24, -1.05, -1.01) C4
0.22 (0.65, 0.15, 0.05) -1.92 (-1.81, -1.93, -1.98) (-1.22, -1.04, -1.01) (-0.58, -0.88, -0.96) C5
-0.1 (-0.52, -0.02, 0.013) -2.03 (-2, -2..03, -2.02) (-0.74, -1.01, -1.01) (-1.26, -1.03, -1.00) C6
According to the calculations and the results, it was found that indices C2 and C5 have the most
interaction with other indices because they have the highest amount of D + R. Is effective, so the most
important among the indicators is C2. On the other hand, index C6 has the least interaction with other
indices (D + R = -2.03).
It was also found that indices C1, C2, C3, and C5 are causal variables and affect other indices. In
contrast, indices C4, C6 are disabled variables and are influenced by other indices. In addition, we have:
▪ C1 is an indicator that affects all other indicators. C1 is one of the key problem-solving
indicators and should be given priority.
▪ C2, like C1, is an indicator that affects all other indicators. This index is also one of the main
problem solvers.
▪ C3 is affected by the C4 index and other indicators are affected. This indicator, like the other
two indicators, should be a priority.
▪ C4 is affected by all other indicators and does not affect any criteria.
▪ C5 is an indicator that affects all other indicators. This index is also one of the effective
indicators.
▪ C6 affects the C4 index. Thus C6 is an independent indicator that affects quantitative indicators.
The weight of the indicators was calculated in Table 12.
Table 12. The weight of the indicators based on the Dematel method
In the last stage, the challenges were ranked with TOPSIS technique. TOPSIS technique is one of the
multidisciplinary decision-making methods, from the compensatory group and the subgroup of
adaptation techniques. The strength of this technique is in solving multiple-choice problems due to the
overlap of indicators in strengths and weaknesses (Kohansal and Rafiei, 2008). Using this technique
and the weights obtained in the previous step, the challenges are ranked to form a challenges basket.
The initial matrix is formed after data collection. Table 13 is used to convert verbal variables to fuzzy
numbers.
Table 13. Fuzzy verbal variables
Fuzzy values Verbal expressions
(0.7,0.9,1) Much
(0.5,0.7,0.9) Medium
(0.3,0.5,0.7) Few
After forming the initial matrix and scaling it, the weightless scaling matrix was obtained by multiplying
the weights (Table 12) obtained in the scaled matrix (Table 14).
Table 14. The fuzzy weightless scaling matrix
C1 C2 C3 C4 C5 C6
According to the mentioned steps, we calculate the distance of each point from the positive and anti-
ideal ideal points. We use the results in the final ranking of challenges. Challenges that are closest to
the positive ideal and farthest away from the counter-ideal are preferred. However, due to the
availability of opportunities to modify constraints or set new constraints for decision-makers, the project
selection composition may change, meaning that decision-makers remove or add specific challenges
6 0.308295 C1
1 0.70959 C2
5 0.442117 C3
3 0.649088 C4
4 0.641494 C5
2 0.657088 C6
According to the collected data of the initial matrix, the decision matrix for analyzing the sub-criteria
was formed using the FUZZY DEMATEL technique. By performing different steps of this technique,
the following information was obtained (Table 16).
U -2 U 0.0353 0.01319
C3
L -2.082 L -0.016 0.01393
Examining the relationships between challenges will help us achieve better results. According to the
results of Demetel technique, it was found that co2 challenge has the least interaction and the st4
challenge has the most interaction among other challenges. This shows the great importance of the st4
challenge. The challenges were ranked using the fuzzy TOPSIS technique and the weights obtained in
the previous step, the results of which can be seen in Table 17.
Table 17. Results of fuzzy TOPSIS technique and ranking of challenges for sub-criteria
challenges 𝐷𝑖+ 𝐷𝑖− 𝐶𝑙𝑖 rank challenges 𝐷𝑖+ 𝐷𝑖− 𝐶𝑙𝑖 rank
4. Conclusion
In project-based organizations with high uncertainty levels, it is important to predict challenges in
supply and project management together. Many instances of events and impacts affect project supply
chain operations. Due to the nature of project-oriented organizations' activities, this organization is
always faced with the possibility of consistent challenges in the external environment. Therefore, this
article, by reviewing previous research in the field of project supply chain, first examines the important
indicators and parameters of this chain; Then, according to these organizations' nature, it tried to
integrate project parameters in this supply chain. Therefore, according to studies conducted in this field,
key challenges were extracted, and finally, challenges of project supply chain in project-based
organizations were given. Many researchers consider only supply chain and project management
separately. In addition, in the present work PSCM, challenges of different stages of the life cycle are
considered and their performance is studied. The research results from the opinions of managers and
supply chain experts of project-oriented organizations.
Iran R&D organization with research-development projects context require the implementation of PSCM
in order to take advantage of the knowledge and technological potentials and reduce the cost and time
of access to products and systems. The successful implementation of SCM depends on the existence of
different factors, and their utilization can resulting in better performance. However, the lack or
inefficiency of the factors can pose difficult challenges and obstacles to an organization. This research
was carried out to identify, categorize and prioritize the most important challenges of this issue.
As shown in Table 11, the contextual challenges with scores 2, 5, and 7 and a rank mean of 14.50 are
very important in the implementation of SCM. This means that R&D projects need to work hard on soft
issues such as culture, customs, and norms governing ratio to systems, processes, and procedures.
However, process, capabilities, cultural, motivational, and infrastructure challenges can be considered
as important, moderate to high importance, moderate to low importance, little importance, and least
important sequence in the next priorities. The results of this research are in agreement with the logic
and existing status of the Iranian R&D organization.
The major reason is that there are no proper contextual conditions for the implementation of PSCM, the
existing environment of R&D projects influenced the past cultural and contextual factors. Therefore, to
change this condition requires enough time and cost. Also, the necessary process cannot identify and
optimize the real condition. PSCM in R&D projects requires integrated information systems from
different capabilities in different industries. They should use the different capabilities to save cost and
time.
Based on the research findings, the following conclusions regarding managers, decision-makers, and
future researchers were drawn: