Supply Chain Strategy: Its Impact on Shareholder Value

Abstract

In the last few years there has emerged a strongly held view that the ultimate purpose of the firm is to maximize shareholder value, that is the long run worth of the business to its owners. Many influences clearly impact upon shareholder value, but there is a growing recognition that the supply chain strategy employed by the firm can have a significant effect. This paper examines the concept of shareholder value and the related organizational framework of Value Based Management (VBM) and explores the connections with supply chain strategy.

Analyzing Supply Chain Uncertainty to Deliver Sustainable Operational Performance: Symmetrical and Asymmetrical Modeling Approaches

“…Demand uncertainty (DU) is characterized by the unforeseen demand variability, in turn creating problems in planning and control that jeopardize delivery performance [23], while supply uncertainties are the supply side actions that are manifested through late deliveries, poor quality of incoming materials or parts. On the other hand, SCS refers to coordination and commitment of many firms to implementing company strategic objectives and utilizes inter-firm coordination as the capability that facilitates achievement of targets [32]. According to Lee, some uncertainty characteristics require supply chain strategies with initiatives and innovations that can provide a competitive edge to companies [22].…”

Cash flow management and manufacturing firm financial performance: A longitudinal perspective

“…Prevalent working capital management theory advocates that firms can improve liquidity, and hence their competitive positioning by manipulating their cash flows (Brewer & Speh, 2000;Farris & Hutchinson 2002, 2003Christopher & Ryals, 1999;Moss & Stine, 1993;Stewart, 1995). Further, a firm's ability to convert materials into cash from sales is a reflection of the firm's ability to generate returns effectively from its investments (Gunasekaran, et al, 2004).…”

Supply Chain Integration

“…The framework of value-based management (VBM) plays a potentially important role in achieving these improvements in practice. The paper concludes by noting that: "By seeking out opportunities for partnership in the supply chain combined with an emphasis on the reduction of non-value-adding time, the evidence suggests, enduring improvement in shareholder value can be achieved" (Christopher and Ryals, 1999). The emphasis on time compression is important as it has the potential to reduce cost and improve customer service.…”

“…Firstly, Christopher and Ryals (1999) argue that SCM has a central position in the creation of shareholder value. In this context, shareholder value is defined as the financial value created for shareholders in the companies in which they invest.…”