A Review of Structural Relationship between Supply Chain Management and Organizational Performance in Malaysian Automotive Industry

Nowadays, in international business dynamic, supply chain management has become a critical strategic initiative in a global competitive environment. In consequence of increased competition in both domestic and international market, firm can no longer effectively compete in isolation of the suppliers and other entities in the supply chain. Supply Chain Management (SCM) practices have mostly been analyzed in manufacturing business. The SCM has been recognized as a strategy that could lead companies to gain competitive advantage, other than to achieve greater business performance. The SCM seeks to enhance competitive performance by closely integrating internal functions within a company and effectively linking them with external operations of suppliers, customers, and other channel members. There are several elements that can be selected to support SCM practices and organizational performance in the automotive industries. The purpose of this study is to propose a structural relationship of supply chain management practices and organizational performance model for Malaysian automotive industries. Since this study is a concept paper, most of the previous study taken as a basic guided for this research. Therefore, the conceptual model using Structural Equation Model (SEM) has been proposed and research hypothesis are also being developed. The paper culminates with suggested future research.