How does supply chain management affect financial performance? Evidence from coffee sector

Abstract

The study investigates the impact of supply chain management on the corporate financial performance of the coffee industry in Vietnam. Particularly, supply chain management is measured in three dimensions, namely relationship with suppliers, relationship with intermediaries and distributors, and relationship with customers. Data are collected by conducting a survey among 248 coffee company representatives of supply chain participants in Vietnam. The multiple regression analysis is adopted in the model estimation. The findings reveal that financial performance (FP) was positively influenced by relationship with intermediaries and distributors (RID), relationship with customers (RC), and relationship with suppliers (RS). In specific, the relationship with intermediaries and distributors (RID) is the most significant driver of financial performance (FP). The study greatly succeeds in providing an unprecedented finding which is the considerable effect of the participants representing supply chain management on financial performance. The findings are essential to the management of supply chain members in the coffee sector. Accordingly, to boost the financial performance, the companies should pay more attention on improving supply chain management efficiency. Supply chain management can be achieved not only by improving processes internally but also by working with suppliers, customers and most notably partners like intermediaries and distributors.