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Retail supply chain management practices in India: A businessintelligence perspective

Mohua Banerjee a,n, Manit Mishra b

a International Management Institute IMI Kolkata 2/4C, Judges Court Rd, Alipore, Kolkata 700027, West Bengal, Indiab International Management Institute IMI Bhubaneswar Gothapatna, Bhubaneswar 751003, Odisha, India

a r t i c l e i n f o

Article history:Received 9 December 2014Received in revised form21 September 2015Accepted 25 September 2015

Keywords:Supply chain managementBusiness intelligenceEmerging marketFood retailerCompetitive advantageFirm performance

a b s t r a c t

The study surveyed executives of a major food retailer in India and explored their perspectives on supplychain management practices, competitive advantage and firm performance; to assess the importanceaccorded to application of business intelligence (BI) in their operations. Nine dimensions for SCMpractices and four dimensions for competitive advantage are identified which are found to strongly relateto each other. The dimensions of SCM also strongly relate to firm performance. Though informationsharing with suppliers and their inclusion in strategic decision-making emerge as key dimensions ofSCM, their impact on competitive advantage is perceived to be insignificant by retailers.

& 2015 Elsevier Ltd. All rights reserved.

1. Introduction

The understanding and execution of supply chain management(SCM) practices have a key role for an organization in stayingcompetitive and for enhancing profitability in the increasinglycompetitive global marketplace (Childhouse and Towill, 2003).Existing literature consistently uses terms such as supplier in-tegration, supply base management, synchronization, partnershipsand supply chain management to define elements of this man-agement viewpoint (Tan et al., 1998; La Londe and Masters, 1994).The concept and practice of SCM has received increasing attentionamongst business managers, consultants and academicians(Hamister, 2012). The implementation of SCM practices is notconfined to manufacturing firms only (Li et al., 2006), it has spreadits wings in the retail sector also (Randall et al., 2011). In themodern and competitive retail environment, SCM is the key tosuccess and survival (Arnold, 2002; Ganesan et al., 2009). Previousstudies have identified several antecedents and consequences ofSCM practices in numerous contexts. Though the Supply-ChainCouncil has developed a supply-chain operations reference modelas a cross-industry standard for supply chain management, it doesnot describe specific activities and practices and its impact on firmperformance.

One important problem of managing SCM practice is handlingthe huge amount of information regarding its members (e.g.manufacturers, distributors, sales agents, retailers) and thereforecoordinating their current business. SCM is influenced by the in-formation associated with each business, where the several in-teractions between the business processes may be coordinatedand the product flows can be continually supervised (Filos andBanahan, 2000). Yet as organizations rely more heavily on in-formation, its usage in an efficient and effective manner becomestough. Rather than assisting an organization's core objective oftaking swift and responsive decisions, more information hampersthe process. In this perspective, the business intelligence (BI)paradigm has been introduced. BI is defined as the process ofprocuring digital information regarding the entire organizationso that it may be used for providing competitive advantage(Malhotra, 2000). BI is an important component for effectivesupply chain management practice (Rabelo et al., 2002). In SCMcontext, BI entails the extent and nature of information sharing.

As an emerging market India has occupied 20th position in theGlobal Retail Development Index (Kearney, 2014) and remained ahigh-potential market with accelerated retail growth of 14% to 15%expected over 2015 as per the previous Global Retail DevelopmentIndex (Kearney, 2013). The Indian retail market is broadly classi-fied as unorganized/traditional retail which is made up of open‘bazaars/haats' and corner stores called ‘kiranas', and organized/modern retail, which resembles the modern Western-style su-permarkets and department stores. Modern retail is limited to 8%in 2014 (Kearney, 2014). Among other factors, expensive supply

Contents lists available at ScienceDirect

journal homepage: www.elsevier.com/locate/jretconser

Journal of Retailing and Consumer Services

http://dx.doi.org/10.1016/j.jretconser.2015.09.0090969-6989/& 2015 Elsevier Ltd. All rights reserved.

n Corresponding author.E-mail addresses: [email protected] (M. Banerjee),

[email protected] (M. Mishra).

Please cite this article as: Banerjee, M., Mishra, M., Retail supply chain management practices in India: A business intelligenceperspective. Journal of Retailing and Consumer Services (2015), http://dx.doi.org/10.1016/j.jretconser.2015.09.009i

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chain has been identified as a concern for modern retailers. It is anecessity for Indian retailers to focus on factors and strategies thatwill aid them in gaining competitive advantage (Singh et al., 2010)and they are now concentrating on improving operations andback-end processes to increase profitability (Kearney, 2014).

There has not been any significant study on supply chainpractices in India (Austin, 1990) and till recent times supply chainpractices in India exhibit inadequate visibility (Srivastava, 2006). Astudy of the forms and dynamics of the dispersion of modern foodretail in India has traced the phenomenon since the 1960s andidentified domestic capital investment, early diversification intosmall formats and early penetration into tier-two, tier-three citiesand rural areas, as factors that have facilitated the growth (Rear-don and Minten, 2011). As modern retail is an emerging phe-nomenon in India, there has been no official statistics based oncomprehensive inventory of sales of modern or traditional re-tailers available for their study; hence the form of their data is“small samples” and more on the lines of business case study re-search to extract an overall image of the phenomenon. Researchershave focused on demand side effectiveness and studies havemonitored the factors that affect non-vegetarian food consump-tion behavior among consumers in the state of Odisha (India)where organized retailing is in its early stages (Kumar and Kapoor,2014); buying behavior of consumers with respect to food andgrocery items (Ali et al., 2010). A study of SCM practices in theIndian industry encompassing diverse segments such as agroproducts, automotive, chemicals/fertilizers, computer hardware,etc., along with retail, has recommended aligning supply chainstrategy with business strategy, streamlining processes for supplychain integration, forming partnerships for minimizing inventoryand focusing on infrastructure and technology deployment forbuilding India-specific supply chains (Sahay and Mohan, 2003).Researchers aiming to identify structural and relational factorsthat influence the upstream channel management of organizedretailers in India have identified government regulations, in-formational transparency, and long-term orientation fosteringtrust between channel partners leading to collaborative partner-ships as key factors (Dabas et al., 2010). However researchers havenot focused on the aspect of retailers developing their supply sideefficiencies through BI implementation, though the studies sug-gest that managers and executives should devote sufficientthought to implementing a policy of information sharing in theprocess of SCM execution and to augment the specific competitivestrengths of the organization (Pandey et al., 2010).

This research is a survey initiative to study contemporary SCMpractices in the Indian retail context and in particular, the extentand nature of information sharing among retail channel membersfor enabling BI usage. The study also relates the dimensions of SCMpractices to the retail firm's competitive advantage and firm per-formance. The survey respondents were managers and executivesof a food chain retailer with operations mostly confined to easternand southern India.

The subsequent section examines existing literature in theglobal as well as the Indian supply chain management context. Inthe succeeding sections the research constructs are defined,characteristics of the respondents are described and the surveymethodology is provided. It is followed by an analysis of theresults and concluded with the managerial implications of thestudy.

2. Supply chain management defined

SCM is defined as identifying the strategic nature of coordina-tion within a specific organization and across trading partnerswithin the supply chain for the purpose of improving an individual

organization's performance and the performance of the wholesupply chain (Li et al., 2006). It encompasses all activities relatedto design, developing, synthesis, establishment and control ofsupply chains (Chan and Qi, 2003). Each linkage in a supply chainsignifies a relationship between a specific customer and a specificsupplier; purpose of this association being to provide deliveryrequirements of the immediate customer and subsequently toreplicate the practice throughout the supply chain for the benefitof the end consumer (Towers and Burnes, 2008). In the existingresearch studies the concept of SCM has been studied from twoseparate perspectives: purchasing and supply management, andtransportation and logistics management (Tan et al., 1998). As perthe purchasing and supply management perspective, SCM is de-fined by the integration of supply base that developed from thetraditional procuring and materials functions (Banfield, 1999).From the perspective of transportation and logistics management,SCM is defined by the integrated logistics systems and thus focuseson inventory reduction, spanning both within and across the or-ganizations that are part of the supply chain (Rudberg and Olha-ger, 2003). In due course the philosophy of SCM developed andcombined into a collective body of knowledge that incorporatedthe entire gamut of value-adding activities of the manufacturersand logistics providers (Tan, 2001).

It is recognized that since SCM has firm-level consequences, itis necessary to measure the effects of SCM practices on an orga-nization's performance measures (Green et al., 2006). The issuepertaining to which dimensions are specifically related to SCMpractice and finally to a firm's overall performance has largelygone unnoticed (Mentzer et al., 2004). Challenges exist in terms ofidentifying appropriate performance measures for the analysis ofthe supply chain (Akyuz and Erkan, 2010). Past studies (Li et al.,2006) have reported the impact of SCM practice on salient con-structs like firm performance and competitive advantages. Theirstudy has identified strategic supplier partnership, customer re-lationship, level of information sharing, quality of informationsharing and postponement to represent SCM practices. Ganesanet al. (2009) examined how retailers are considering factors be-yond their organizational limits to improve and leverage thecompetencies of their supply chain partners to create greater valueand competitive advantages. They identified three trends that af-fect retail supply chains: global sourcing practices, multichannelroute to market and relationship-based innovation. Moberg et al.(2002) identified both the quality and quantity aspects of in-formation sharing as important aspects for effective SCM practicesand have treated both constructs as independent. In their study onrelationships among supply chain practices, competitive ad-vantage and organizational performance, Singh et al. (2010) in-cluded in their list of SCM practices: technology use, SC speed,customer satisfaction, supply chain integration and inventorymanagement.

In the developed markets, the growth of value/discount re-tailers has led to a fundamental transition in marketplace powerfrom manufacturers to retailers (Arnold, 2002; Srinivasan, 2004).With the evolution of power on the demand side, it has becomeimportant to understand SCM from a retail perspective (Davies,2009). Retail SCM (R-SCM) has received inadequate coverage inretailing journals (Randall et al., 2011). The articles that areavailable on retail SCM incline to be focused on particular aspectsonly, e.g. dealing with traditional inter-firm relationship issuesinclusive of power (Bloom and Perry, 2001), partnering (Mentzeret al., 2004), co-ordination (Ingene and Parry, 2000), conflictmanagement (Bradford et al., 2004), guaranteed profit marginprograms (Lee and Rhee, 2008) and automatic replenishment(Levy and Grewal, 2000). This single-point focus of retail researchis predictable and has its reasons. Rather than develop as a holisticresearch domain, retail SCM research has been an off-shoot of

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research on other critical areas like manufacturing and distribu-tion, and consumer product marketing.

3. Business intelligence and decision making in supply chainmanagement

In an emerging and rapidly changing business environment,organizations that have the competency to leverage informationabout their customers, marketplace and business operations willbe able to benefit from the business opportunities and achievesustained competitive advantage (Berson et al., 2002). Firms needto essentially examine accurate and timely information in a sce-nario where global markets are getting increasingly competitive,consumers and market places are exhibiting greater volatility andproduct life cycles are gradually shortening (Gangadharan andSwamy, 2004). For monitoring activities and assessing perfor-mance of a firm's business processes, the firm needs access toinformation and also an effective data management mechanism.The information systems collect and process enormous data invarious forms in the firms and understanding and assessing theinformation about the processes of an organization becomes achallenging proposition. BI encompasses an extensive range ofanalytical software and solutions for gathering, consolidating,analyzing and providing access to information in a manner that isexpected to facilitate an enterprise's employees make better de-cisions (Adelman et al., 2002).

If a firm faces no problem with data and the business operatessmoothly and data is available to relevant executives as per theirneed, then the firm does not need BI (Whitehorn and Whitehorn,1999). However when an organization is growing and the numberof customers is consistently increasing, then there emerges a needto understand the reports in order to monitor the trends, marketpotentials, growth segments and customer behavior changes. Forforecasting trends and forming strategies, analysis of cross-tabu-lated data is essential. BI decision support applications facilitatemany such multi-dimensional analysis like online analytical pro-cessing (OLAP), click-stream analysis, balanced scorecard pre-paration, visualization, querying, reporting and charting, datamining for text content and voice, forecasting, geospatial analysis,enterprise portal implementation, knowledge management, digi-tal dashboard access and other cross-functional activities. In es-sence, the purpose of investing in BI is to transform a firm from areactive-to-data environment to one that is pro-active.

However it cannot be ignored that though more retailers inIndia today are focusing on major investments in their organiza-tions, retail businesses in India are still striving to achieve com-petitive advantage. While the aforesaid review highlights thebenefits of BI applications in businesses, it also makes vitally ob-vious that businesses must firstly have access to the right in-formation at the right time before it can be put to effective usagethrough BI. Availability of timely and accurate information is cru-cial to a firm's ability to leverage it using BI for gaining profitableinsights in business. This context provides the impetus for thepresent study to examine the extent to which retail firms in Indiacollect and integrate relevant information, so that they can sub-sequently leverage the information through BI implementation intheir SCM practices.

4. Supply chain management in the context of India's retailenvironment

Strong microeconomic conditions including a 5% GDP growthrate, higher disposal incomes and rapid urbanization are thecauses favoring the growth in Indian retail environment (Kearney,

2013). India not only has the highest number of retail outlets perperson (7 per thousand), but also registers the highest density ofretail outlets in the world with more than 15 million outlets ascompared to 900,000 in America (Halepete and Iyer, 2008). Indianretail sector contributes to 22% of India's GDP. The government ofIndia currently allows 51% (from 0%) and 100% (from 51%) foreigndirect investment (FDI) in multi-brand and single brand retail re-spectively. These changes in FDI regulations are attracting foreignretailers and accelerating the growth in the Indian retail sector. Tomaintain this growth and reap the benefits of the reformed FDIpolicy, Government of India has taken cognizance of the role ofretail infrastructure, including supply chain. Indian supply chainsuffers from poor infrastructure and consequently the Indiangovernment has mandated that half of the total FDI investment inIndian retailing must be allotted for the back-end infrastructurethat includes the supply chain.

In India, presently low profitability, high overheads and in-adequate investment in technology are the constraints of modernretail. Modern retail sector is not optimally using information thatis being collected by prevailing information technology (IT) sys-tems. Current strategies are based on intuitive approaches as thedata generated in the different systems within an organizationlacks integration and therefore making predictions on customers'future behavior, demand forecast, or gaining insights on the dy-namics of market shifts becomes challenging. Quality analytics ispossible by using effective data warehousing, data mining andbusiness intelligence applications, and retailers are exploringtechnology-based solutions to analyze structured data from dif-ferent applications spanning operations like strategic sourcing,procurement, logistics and warehousing, merchandising and pro-motion, shelf-space management, customer service, back-endprocess, sales and marketing process, and financial management.They are also contemplating analysis of unstructured data fromsocial networks like Facebook, Twitter, Google, web logs, mobiledevices, etc.

Indian retail practitioners have established a retail SCM sub-discipline with earmarked careers and annual professional con-ferences (e.g. India Retail Forum, East India Retail Summit, IndiaShopping Centre Forum) but SCM researchers have taken awhile toaddress the retailer-centric business model and there is an in-sufficient number of studies that address SCM issues, capabilitiesand outcomes (Defee et al., 2009) and business intelligence in-tegration in SCM processes. The aforesaid literature has examinedSCM practices from different perspectives and this knowledge gapis unanticipated in the context of the critical nature of SCM tosuccess in the context of Indian retail (Brown et al., 2005; Ganesanet al., 2009).This gap is the basis of the motivation to develop thefollowing objectives of this study: to explore retail SCM practice inIndia with a special focus on the extent and nature of informationsharing that enables BI; and relate these SCM practices to the retailfirm's performance.

5. Research constructs

5.1. SCM practices

Previous research has defined SCM practice as a set of activitiesundertaken in an organization for promotion of effective man-agement of its supply chain. Existing studies conducted pre-dominantly in the USA have indicated possible dimensions of SCMpractices. Alvarado and Kotzab (2001) in their study of SCMpractices have included concentration on core competencies, useof inter organizational systems such as EDI, and elimination ofexcess inventory levels by postponing customization towards theend of the supply chain. Li et al. (2006) have identified strategic

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supplier partnership, customer relationship, level of informationsharing, level of information quality and postponement as factorsto measure SCM practices. Tan et al. (2002) studied the prevalentsupply chain management and supplier evaluation practices andfound supply chain integration, information sharing, supply chaincharacteristics, customer service management, geographicalproximity and JIT capability as the six constructs of SCM practices.With an underlying common goal of eventually improving a firm'sperformance, existing literature describes SCM practices from arange of different dimensions. A detailed discussion of the possibledimensions that could emerge in this study of SCM practices inIndian retail has been provided below.

Organizations that strategically align to each other can elim-inate wasteful time and effort by working closely together (Bals-meier and Voisin, 1996). When organizations enter into strategicpartnerships with suppliers, they are in a position to work moreeffectively with a limited number of key suppliers who areagreeable to share the responsibility of the product's success (Liet al., 2006). An effective supply partnership is a critical element ofa successful supply chain (Noble, 1997). The long term relationshipthat exists between an organization and its suppliers identifies astrategic supplier relationship.

Relationship management with customers is becoming funda-mental for an organization's survival with the transition into aperiod of mass customization and personalized service (Wines,1996). An organization can differentiate its product from itscompetitors' offering, maintain customer loyalty and increase thevalue it provides to its customers by maintaining a good customerrelationship (Magretta, 1998). Dedicated relationships pose anintrinsic barrier to competition and hence provide the most sus-tainable advantage (Day, 2000). The entire gamut of practices thatan organization employs in order to improve customer satisfac-tion, handle customer complaints and build long-term relation-ships with customers describes its customer relationship (Clay-comb et al., 1999).

The degree to which the success of an individual organizationin a supply chain relationship is dependent on the activities of theother organizations indicates their interdependence (Larson,1992). Interdependence between the organizations comprising asupply chain facilitates cooperation. Cooperation between suppli-ers and customers in a relationship is an important attribute(Pilling and Zhang, 1992). An integrated supplier–customer re-lationship exhibits flexibility between the two organizations(Dahlstrom et al., 1996). Integration within the supply chain takesinto account the role of inter-organizational systems. Modern andrefined information systems connect separate organizations (Samliet al., 1998). IT can be used effectively for promoting integrationbetween organizations such as groups of suppliers and customersthat are organized into networks. Companies that operate theirSCM processes as an integrated system rather than optimizedfunctional sub-systems gain cost benefits (Stock et al., 2000). Tocompete effectively, supply chains act as a cohesive entity andmodify from a group of unrelated units to an asset of units that actas a productive enterprise.

Sharing a certain level of trust simplifies information sharingbetween involved partners and helps in maintaining long termrelationships. This results in improvement in knowledge man-agement and overall benefits to the organization (Griffith et al.,2006). Involvement of customers during the early stages results inan effective supply chain (Divett et al., 2003). The identification ofadditional supply chain amongst the suppliers, customers andbuyers and their early involvement during the product/servicedesign stage (concurrent engineering) helps in reduction of leadtime (Celtek and Kaynak, 1999). Strategically selecting the sup-pliers and aligning the purchasing function with the organization'sstrategic orientation, keeping the long term issues of the

organization in mind, and providing adequate knowledge of theorganization's strategic goal to the suppliers help an organizationachieve competitive advantage (Chen and Paulraj, 2004a, 2004b).

The extent to which the supply chain is either focused or dis-tributed geographically most likely has a major effect on the de-cision making authority and coordination within the organization(Stock et al., 2000). Coordination of the supply chain is required inthe physical movement of products from one location to another.Greater distances and a wider range of locations separating theconstituents of the supply chain is therefore likely to have sig-nificant consequences for the management of the supply chain(Stock et al., 2000). The extent to which the units in an organi-zation's supply chain including suppliers, production facilities,distributors and customers are located across a range of geo-graphic regions indicate its geographical proximity. An organiza-tion with high geographic dispersion would show a low propor-tion of supply chain units within an individual geographic area; onthe other hand low geographic dispersion would reveal a highproportion of supply chain units within one area and low pro-portions in other areas.

From a supply chain perspective, inventory levels should beoptimized, because maintenance of inventory is expensive andposes problems (Piplani and Fu, 2005). Inventory cost is measuredin terms of the cost associated with management of inventory instocks and loss of sales due to shortage of inventory accounting forlost sales (Agarwal and Shanker, 2002). JIT purchasing does notmean pushing back inventories on suppliers (Adair-Heeley, 1988);rather it emphasizes reduction in inventory levels throughout thesupply chain. JIT is the capability of an organization to directly linkits supply strategy to the organization's overall strategy byagreements that strengthen buyer–supplier cooperation (Polakoff,1992). For utilizing a JIT system, shorter delivery times are man-datory and point-of-sales data are essential to know which pro-ducts require prompt replenishment.

The level of communication of proprietary and important in-formation to one's supply chain partners (quantity aspect) denotesthe level of information sharing (Monczka et al., 1998). It is pos-sible for supply chain partners who on a regular basis exchangeinformation, to work as a single entity. Together they can com-prehend the needs of the end customer better and this enablesthem to respond to market changes quicker (Stein and Sweat,1998). Information sharing builds trust among channel members(Henriott, 1999). It also offsets the risks pertaining to market anddemand uncertainty and enables reduction in the bullwhip effect(Yu et al., 2001). Functional silos that exist within a company affectthe flow of materials and information in the same manner asmulti-firms do in the supply chain (Chandra and Kumar, 2000).Effective usage of pertinent and timely information by all thefunctional elements within a supply chain can be used as a dis-tinguishing factor to build competitive advantage (Tompkins andAng, 1999; Jones, 1998; Novack et al., 1995).

It has been observed that several organizations have an intrinsicreluctance to provide information beyond the minimal requirementsince information disclosure is taken as a loss of power (Berry et al.,1994). The impact of the quality of information sharing on SCMdepends on what type of information is shared, with whom it isshared, and when and how it is shared (Chizzo, 1998; Holmberg,2000). Ensuring the quality of the shared information becomes acritical aspect of effective SCM (Feldmann and Müller, 2003). Theaccuracy, timeliness, adequacy and credibility of the exchangedinformation affect the quality of the information that is shared(Moberg et al., 2002; Monczka et al., 1998).

However despite the significance and theoretical developmentof SCM, in the Indian context there is inadequate research on howIndian retailers/SCM practitioners assess their suppliers, defineand implement SCM practices and how these practices impact



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firm performance. Also, there is insufficient mention of the im-portance to the retailer, regarding the level and quality of in-formation sharing among the retail channel partners that conse-quently enables their BI systems. This research investigates theseissues to evaluate their relevance for Indian retailers based onempirical data collected from an Indian organized food retailer. Forthe purpose of this study, by discussions with Indian managersoperating in corporate office and in stores, and with store execu-tives, along with reviewing and combining the existing literature,36 SCM practices have been identified (Appendix, Section I). Theseincluded practices related to management issues of supply andproduct management, relationship with their customers, in-formation sharing, technology sharing, geographical location andcapability issues of partners in the supply chain.

5.2. Competitive advantage

Empirical literature is replete with factors like price/cost,quality, delivery and flexibility as possible dimensions of compe-titive competencies (Skinner, 1985; Roth and Miller, 1990). In de-scribing a research framework for competitive competenciesKoufteros et al. (1997) have proposed competitive pricing, pre-mium pricing, value to customer quality, dependable delivery andproduction innovation. Competitive advantage refers to the levelto which an organization can create a secure position over itscompetitors (McGinnis and Vallopra, 1999). It consists of compe-tencies that allow an organization to differentiate itself from itscompetitors and is an outcome of certain critical managementdecisions (Tracey et al., 1999). Based on deliberations with Indianretail practitioners and review of the existing literature, a total of16 items for related to price/cost, quality, delivery dependability,product innovation and time to market have been considered forthis study (Appendix, Section II).

5.3. Firm performance

While the short-term objectives of SCM are primarily to reduceinventory and cycle time, and increase productivity, the long-termobjectives are to increase market share and profits for all unitscomprising the supply chain (Tan et al., 1998). Past studies indicatethat financial metrics have been used as tools for comparing orga-nizations and assessing an organization's performance (Holmberg,2000). Financial performance measures are more likely to reflect afirm's evaluation by factors external to the firm. Firm performancedenotes to what extent the organization attains its market-orientedgoals as well as its financial goals (Yamin et al., 1999). Organiza-tional performance is improved by any organizational initiativeundertaken on its SCM. Previous studies have proposed firm per-formance using both financial and market criteria, including returnon investment, market share, profit margin on sales, growth of ROI,growth of sales, market share and competitive position (Vickeryet al., 1999; Stock et al., 2000). Based on the existing literature andinsights from senior managers a total of seven dimensions areconsidered for this study (Appendix, Section III).

6. Research methodology

6.1. Objectives

The study endeavored to explore the constructs of SCM, com-petitive advantage and firm performance in Indian conditions. Theobjectives of the study are as follows:

(1) To identify the underlying dimensions of the constructs: SCMpractices and competitive advantage.

(2) To determine importance of sharing information with suppli-ers as an SCM practice among food retailers.

(3) To assess the relationship between the constructs of SCMpractices and competitive advantage; and, SCM practices andfirm performance.Hypotheses 1 and Hypotheses 2 have been formulated toattain the objective.

(4) To assess retail executives' perspective on whether BI canenable the SCM practices of the company to contribute to-wards competitive advantage.

Objectives (a) and (b) were achieved by using exploratoryfactor analysis (EFA). Objectives (c) and (d) were attained throughdetermination of bivariate correlations.

6.2. Respondent's profile

Modern retail is still an emerging phenomenon in India and sothis study is an attempt to derive a general impression of thesupply chain management practices and its relevance from the BIperspective, of a particular retailer on the lines of business casestudy research. For the study a specific retailer with operations ineastern, southern and a recent foray in northern India has beenchosen. The retail business is a part of the Business Conglomerate'sRs.15,000 crore businesses in eastern India, and has 127 stores in2014 out of which 33 are hypermarkets with store size in excess of20,000 ft2 and employs more than 7,000 people. The retailer hasbeen operating with the supermarket format since 2001 and hasachieved several awards (Most Admired Food and Grocery Retailerof the Year Award for Largest Expansion, Highest Trading Density,and Same Store Sales Growth 2014; Best Visual Merchandising andRetail Design in the category Hypermarket [415,000 ft2] 2014;Most Admired Retail Company of the Year (East India) at the EastIndia Retail Summit 2013, etc.). The retailer has recently hired theservices of Boston Consulting Group to enhance processes andcapabilities such as space management and analytics in order togrow the business at a faster pace and become competitive. Hencea detailed understanding of the retailer's SCM practices includingthe extent and nature of information sharing the firm undertakesthat enables BI systems, and relating these SCM practices to thefirm's performance forms the basis of this study. A survey ques-tionnaire has been used as a primary instrument to collect in-formation. The study proposed 500 executives as respondentswith random sampling. A snowball sampling process was used.The randomness of the sample was protected by ensuring that thechoice of each sampling unit was not preconceived and that eachsampling unit was selected independent of the selection of anyother sampling unit. The proposed sample size is justified on thebasis of minimum requirements of statistical tools to be used inthe study. The questionnaire was sent to the Indian food chainretail CEO operating in eastern and southern regions of India, inconvenience, supermarket and hypermarket format. He forwardedthe questionnaire to their professionals (executive directors, gen-eral managers, deputy managers and store executives) operatingin the supply management, transportation, logistics and IT func-tions in eastern and southern India. The reason for this approach isthat mid-level managers were hesitant to provide information forthe survey as they were indecisive in determining what informa-tion was confidential to their business and what could be shared.The CEO was proactive in his role and as an initiator of the orga-nization-building process, had his focus on understanding theconcerns existing within the supply chain. He was forthcoming inusing his authority to direct the appropriate personnel to makeavailable specific information for the survey. Respondents wereasked to indicate the activities included as part of their firm'ssupply chain management efforts. 481 responses were received for



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supply chain management practices, competitive advantage andorganizational performance.

7. Statistical analysis

7.1. Hypotheses

In order to fulfill the objectives of the study, following hy-potheses were formulated and put to test:

H1. : There is a significant relationship between the constructs ofSCM practices and competitive advantage.

H2. : There is a significant relationship between the constructs ofSCM practices and firm performance.

7.2. Item generation

The item generation for the three constructs relied on bothpopular and theoretical notions. In exploratory research, a con-venience sample of 20 retail practitioners and academicians in thefield of retail SCM was asked to describe in an open-ended formatthe key aspects of SCM practices, competitive advantage and firmperformance. Frequently mentioned descriptions were convertedinto items. Another source of items was adaptation from earlierstudies in which these constructs have been used (see Li et al.,2006; Day, 2000; Yu et al., 2001; Feldmann and Müller, 2003;Stock et al., 2000; Griffith et al., 2006; Piplani and Fu, 2005;McGinnis and Vallopra, 1999; Holmberg, 2000). The process led toidentification of 36 items for SCM practices, 16 items for compe-titive advantage and seven items for firm performance. A Likertscale format was used for all items with response categories ran-ging from strongly disagree (1) to strongly agree (7), for SCM

Table 1Exploratory factor analysis of supply chain management practices items.

# Factor (Variance explained)/Item Factor

1 2 3 4 5 6 7 8 9

Supply chain characteristics (42.5%)1 We work on suppliers' on-time delivery directly to our points of use. .8552 We communicate our future strategic needs to our suppliers. .8093 We work on creating a greater level of trust among supply chain members. .8094 We work on locating closer to our customers. .7325 We work on identifying additional supply chain. .6976 We participate in the marketing efforts of our customers. .552Level of information sharing (8.85%)1 Our trading partners keep us fully informed about issues that affect our business. .7492 Our trading partners share business knowledge of core business processes with us. .7313 Information exchange between our trading partners and us is reliable. .6624 We inform trading partners in advance of changing needs. .6375 We and our trading partners exchange information that helps establishment of business planning. .5666 Information exchange between our trading partners and us is adequate. .5627 We and our trading partners keep each other informed about events or changes that may affect the other

partners..508

Customer relationship (7.6%)1 We frequently measure and evaluate customer satisfaction. .8732 We facilitate customers' ability to seek assistance from us. .8563 We frequently interact with customers to set reliability, responsiveness and other standards for us. .8554 We frequently determine future customer expectations. .7775 We periodically evaluate the importance of our relationship with our customers. .497Supply chain integration (5.3%)1 We reduce response time across the supply chain. .8112 We work on improving integration activities across supply chain. .7913 We work on creating a compatible communication/information system. .7154 We search for new ways to integrate SCM activities. .6745 We work on establishing more frequent contact with supply chain members. .565Quality of information sharing (5%)1 Information exchange between our trading partners and us is accurate. .7332 Information exchange between our trading partners and us is timely. .7043 Information exchange between our trading partners and us is complete. .6934 We regularly solve problems jointly with our suppliers. .565JIT capabilities (4.1%)1 We aid our suppliers to increase their JIT capabilities. .7932 We require suppliers to locate closer to our firm. .6793 We work on increasing our firm's JIT capabilities. .563Inclusion in strategic decision making (3.8%)1 We include our key suppliers in our planning and goal-setting activities. .7712 We have continuous improvement programs that include our key suppliers. .763Involvement in product quality & development (3.4%)1 We consider quality as our number one criterion in selecting suppliers. .7982 We have helped our suppliers to improve their product quality. .668Mutual trustworthiness (2.9%)1 Our trading partners share proprietary information with us. .5582 We actively involve our key suppliers in new product development processes. .516

Extraction method: Principal Component Analysis. Rotation method: Varimax with Kaiser Normalization.a. Rotation converged in 13 iterations.



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practices and competitive advantage. For firm's overall perfor-mance, the response categories ranged from significant decrease(1) to significant increase (7).

7.3. Factor analysis

Exploratory factor analysis was carried out on the data ob-tained in order to identify the underlying dimensions. Exploratoryfactor analysis is considered to be a valuable tool for carrying outan empirical examination of constructs to support a priori modelsthat are based on theoretical deduction. A principle componentsanalysis with varimax rotation was used to obtain the factors andenable explanation of the factor matrix. The eigenvalue criteriawas used to extract the factors and conclude the number of di-mensions in each construct. A high value of KMO measure ofsampling adequacy and existence of substantial correlation as in-dicated by a significant value of Bartlett's test of sphericity allowedfactor analysis of the data.

7.3.1. SCM practicesPrincipal component analysis with eigenvalues greater than

one was used to extract factors. A total of nine factors have beenextracted (Table 1). The first factor (labelled “supply chain char-acteristics”) represents the various characteristics of a retail supplychain essential to gain competitive advantage. The second factor(labelled “level of information sharing”) concerns the importancegiven to mutual sharing of information in terms of urgency andadequacy. The third factor (labelled “customer relationship”) de-picts the significance being given to proactively nurture a re-lationship with customers so as to execute a backward flow ofinformation essential for generating a customer-centric supplychain. The fourth factor (labelled “supply chain integration”) re-presents the cohesiveness between organizations which reflects intheir coordinated endeavors. The fifth factor (labelled “quality ofinformation sharing”) is concerned with the exhaustiveness andaccuracy of the information sharing between channel partners.The sixth factor (labelled “just-in-time capabilities”) reflects theimportance being given to inventory management through de-veloping a zero-inventory capability. The seventh factor (labelled“inclusion in strategic decision making”) is concerned with aninclusive effort towards attainment of goals, as opposed to sepa-rate efforts. The eighth factor (labelled “involvement in productquality and development”) represents specifically the joint effortstowards selling quality products and making a sustained efforttowards developing products to keep pace with emerging custo-mer needs. The ninth and last factor (labelled “mutual trust-worthiness”) represents willingness to share critical informationwith channel partner which symbolizes trust. The factors togetheraccounted for 83.3% of the variance in the data. The factor loadingsrange from a low of 0.497 to a high of 0.873.

The nine factors extracted from the data mostly correspond tothe elements of supply chain management practices noted inconstruct definition. Even as the review of literature suggestedgeographical proximity to emerge as a key dimension, the tech-nological progress and consequent flattening of the world ofsupply chain seems to have made geographical closenessirrelevant.

7.3.2. Competitive advantageThe 16 items scale operationalizing competitive advantage

generated four dimensions (Table 2). The first factor (labelled“accessibility”) reflects how approachable a retail outlet is due toconvenient location and competitive prices. The second factor(labelled “product”) is concerned with the various functional as-pects of the product assortment available at a retail outlet. Thethird factor (labelled “service”) represents the timely delivery of

products in acceptable condition. The fourth factor (labelled“customer centricity”) is concerned with the proactive behavior onthe part of retailer to meet customer needs profitably. The fourfactors extracted collectively explain 75.2% of the variance in thedata. The factor loadings range from a low of 0.408 to a high of0.877. The four factors extracted correspond to the elements ofcompetitive advantage elucidated upon in the section on constructdefinition.

7.4. Reliability analysis

The reliability of the scales for SCM practices, competitive ad-vantage and firm performance were evaluated using Cronbach'salpha (Cronbach, 1951). Coefficient alpha was calculated separatelyfor the factors and for the entire scale (Table 3).

The reliability scores were found to be acceptable for all thescales and sub-scales (Nunnally, 1988), except the mutual trust-worthiness sub-scale of supply chain management practices scale.However, considering the high level of reliability of the scalemeasuring the constructs of SCM practices, no change was made tothe scale.

7.5. Bivariate correlation

Bivariate correlation analysis was used to study the relationsbetween the factors extracted from supply chain managementpractices and competitive advantage; and, supply chain manage-ment factors and firm performance parameters. A significant andstrong relationship between the factors would indicate an asso-ciation that deserves attention on the part of retailers.

7.5.1. SCM factors and competitive advantage factorsThe SCM factors of supply chain characteristics, customer re-

lationship and inclusion in strategic decision making have an un-equivocally significant impact on all components of competitive

Table 2Exploratory factor analysis of competitive advantage items.

# Factor (Variance explained)/Item Factor

1 2 3 4

Accessibility (41.2%)1 We offer competitive prices. .8032 We are able to offer prices as low or lower than

our competitors..781

3 We are able to compete based on locality. .737Product (17.7%)1 We offer products that are highly reliable. .7682 We offer products that are very durable. .8463 We offer high quality products to our customers. .7544 We deliver the kind of products needed. .408Service (8.8%)1 We deliver customer order on time. .8642 We provide dependable delivery. .729Customer centricity (7.6%)1 We provide customized products. .6002 We alter our product offerings to meet client

needs..728

3 We respond well to customer demand for “new”

features..706

4 We deliver product to market quickly. .7675 We are first in the market in introducing new

products..844

6 We have time-to-market lower than industryaverage.

.877

7 We have fast product development. .873

Extraction method: Principal Component Analysis. Rotation method: Varimax withKaiser Normalization.a. Rotation converged in 8 iterations.



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advantage viz. accessibility, product, service and customer cen-tricity (Table 4). Supply chain characteristics are positively corre-lated to all attributes of competitive advantage. This corroboratesthat the retailer attributes great importance to the trust compo-nent prevalent with their suppliers and shares future strategicneeds with them, also works cohesively with their channel part-ners in order to ensure customization in a timely and efficientmanner. It also indicates that to build competitive advantage byresponding early to customer's need for new product features andbeing first in the market to introduce new products; doing so ef-ficiently with a faster time-to-market, the retailer focuses onseamless operations by identifying additional supply chain andensuring suppliers deliver on-time directly to the retailer's pointsof use.

Customer relationship has the highest positive correlationcoefficient to accessibility and service. This is not surprising sinceregular and frequent evaluation of customer satisfaction, inter-acting frequently with customers to set retailer's reliability, re-sponsiveness and other standards, providing an environmentconducive for customers to seek assistance from the retailer

enables the retailer to benchmark with their competitors and offercompetitive prices, provide goods on time and in a timely mannerminimizing stock outs.

Inclusion in strategic decision making shows an inverse re-lationship to accessibility, product and service. However it shows apositive correlation to customer centricity. A probable explanationis that inclusion of key suppliers in the retailer's planning andgoal-setting activities, and continuous improvement programsincluding key suppliers currently are a strain to the retailer's re-sources and therefore are considered a deterrent to deliveringcustomer orders on time. Inclusion in strategic decision makingrequires information system compatibility among supply chainpartners and without an IT system that is user-friendly and en-ables channel partners to have access to common databases thatare updated in real-time, such inclusion is not possible. Advancesin information and communication technologies along with so-phisticated decision support systems will enable planning, ex-ecuting and monitoring strategies that are indispensable for or-ganizing integrated supply chain systems. The retailer has takencognizance of the fact that involving suppliers in strategic decisionmaking enhances their capabilities to deliver products that suit thecustomer's requirements in a timely manner which contributessignificantly towards building their competitive advantage, as in-dicated by the correlation to customer centricity.

Level of information sharing has no significant relationship tothe attributes of competitive advantage other than customercentricity while quality of information sharing has no significantrelationship with accessibility and service attribute of competitiveadvantage. The result is not surprising since though globally thesetwo dimensions are considered to be important in the context ofretail SCM practices, information sharing as a precursor to BI im-plementation is still in a nascent stage in India. Collaborativebusiness planning between the retailer and its trading partnersand keeping each other fully informed on issues that affect theirbusinesses, are still not considered crucial to the retailer being ableto offer competitive prices, quality products and customer-centricservices. This is because modern trade is in an emerging phase andthe retailer continues to operate in functional silos within theirinter-firm departments and with their external trading partners.The retailer is now in the process of adopting some form of ana-lytics to reduce cost and improve services. Currently while someform of technology rudimentarily exists as facilitators of businessprocesses for the retailer, in-depth integration and analysis ofdetailed business data using databases, application technologiesand analysis practices that construe BI is significantly lacking. Theunderlying reason for it is that the retailer still feels that BI sys-tems are expensive. Calculating the return on investment (ROI) forBI systems implementation is difficult because the output of BI isbusiness-related insights and does not provide a direct linkage tocost savings or increased sales.

All of the SCM factors have a significant relationship withcustomer centricity. Overall, the bivariate correlations (Table 4)reveal that 75% of the correlations are significant, suggesting astrong relationship between the constructs of SCM and competi-tive advantage, as perceived by retail executives. Hence, Hypoth-esis 1 stands not-rejected.

Even as BI (level and quality of information sharing) emergedas an important dimension of SCM (Table 1) and a strong re-lationship exists between dimensions of SCM and competitiveadvantage (Table 4), conspicuous in its absence is the significantrelationship between the BI aspects of SCM and dimensions ofcompetitive advantage. Out of a possible 18 relationships, 4 areinsignificant. The finding is critical as it suggests indifference ofretail executives towards the ability of BI to contribute to thecompetitive advantage of the retailer.

Table 3Reliability assessment.

Supply chain management practices scale

# Scale Reliability

1 Supply chain characteristics 0.9172 Level of information sharing 0.9303 Customer relationship 0.8914 Supply chain integration 0.8745 Quality of information sharing 0.8666 JIT capabilities 0.8297 Inclusion in strategic decision making 0.7538 Involvement in product quality & development 0.7359 Mutual trustworthiness 0.495SCM practices 0.958

Competitive advantage scale1 Accessibility 0.8532 Product 0.8083 Service 0.8644 Customer centricity 0.907Competitive advantage 0.901

Firm performance scaleFirm performance 0.909

Table 4Bivariate correlations.

Accessibility Product Service Customercentricity

Supply chain managementfactors

Supply chain characteristics .244a .460a .265a .670a

Level of information sharing .020 .060 � .006 .618a

Customer relationship .276a .204a .376a .417a

Supply chain integration � .067 � .072 .149a .343a

Quality of informationsharing

� .021 .121a .098b .538a

JIT capabilities � .016 .339a .102b .565a

Inclusion in strategic deci-sion making

� .210a � .115b � .192a .173a

Involvement in productquality and development

.213a .306a � .053 .415a

Mutual trustworthiness .046 .182a .126a .215a

a Correlation is significant at the 0.01 level (2-tailed).b Correlation is significant at the 0.05 level (2-tailed).



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7.5.2. SCM factors and firm performanceThe bivariate correlation outputs suggest that the supply chain

management factors have a tremendous amount of influence onfirm performance (Table 5).

The supply chain factors are positively correlated to all attributesof firm performance though with varying levels of significance.

Supply chain characteristics, quality of information sharingwith the channel partners, just-in-time inventory managementcapabilities, inclusion of channel members in strategic decisionmaking by the firm, involvement of all channel members in pro-duct quality and product development, and, level of mutual trustbetween the channel members influence the different parametersof the retail firm's performance. Interestingly, the findings suggestthat customer relationship and integration of supply chain do nothave a significant relationship with profit margin on sales of thefirm. A plausible explanation is that both these activities entail aninvestment into the future of the firm which may or may not yieldany immediate monetary benefits. Similarly, level of informationsharing, customer relationship and supply chain integration do notexhibit a significant relationship with overall competitive positionof the firm. This finding can be explained with the fact that thelead time for the retailer, towards installation of IT to bring aboutgreater degree of information sharing with channel partners, im-plementation of customer relationship management systems andintegration of supply chain constituents, is reducing. Therefore, thecapability of these SCM factors to provide an overall competitiveposition to the retailer against its rival firms is also diminishing. Infact, these factors are no longer points-of-differentiation and arerather points-of-parity. Most of the SCM factors that have a sig-nificant impact on competitive advantage are factors that are alsocontributing towards firm performance outcomes. Hence Hy-pothesis 2 stands not-rejected.

8. Research findings and implications to managers

8.1. Summary of findings

This paper studies the implementation of SCM practices of theIndian food retailers and in particular, the extent and nature ofinformation sharing among retail channel members for enabling BIusage. The study also relates these SCM practices to the retailfirm's competitive advantage and firm performance. The researchidentifies that SCM practices comprise of nine dimensions: supplychain characteristics, level of information sharing, quality of in-formation sharing, customer relationship, supply chain

integration, just-in-time capabilities, inclusion in strategic decisionmaking, involvement in product quality and development, andmutual trustworthiness. The competitive advantage of the retaileris characterized by four dimensions: accessibility, product, service,and customer centricity.

This research reveals that presently retailers are limited incollaborative business planning with their trading partners. Prac-tices like inclusion in strategic decision making, keeping eachother fully informed on issues that affect their businesses andhaving access to each channel partner's data, do not seem tosubstantially influence their current operations. Rather than fa-cilitation, the above parameters are considered as restraints totimely delivery of customer orders and hindrances in workprocesses.

Information sharing with channel members is presently not animportant characteristic with Indian retailers. Timely, accurate andcomplete information sharing for joint problem solving is still notcentral to the retailer's operations. Joint business planning, sharingcore business processes and informing partners in advance ofchanging needs are considered insignificant factors in their busi-ness processes. This prevalent situation is indicative of the factthat modern retail in India is in an emerging phase and retailersprimarily focus on attracting customers to stores and investing innew stores for their growth. Retailers also lack the necessary ITinfrastructure platform with their channel partners for seamlessinformation flow. Their operations in departmental silos renderthe information fragmented and not conducive to the im-plementation of BI.

In a nutshell, the key findings from the study are as follows:

(a) The dimensions of the construct SCM are: supply chain char-acteristics, level of information sharing, customer relationship,supply chain integration, quality of information sharing, JITcapabilities, inclusion in strategic decision making, involve-ment in product quality and development, and mutualtrustworthiness.

(b) The dimensions of the construct competitive advantage are:accessibility, product, service, customer centricity.

(c) Inclusion of suppliers in strategic decision making and in-formation sharing with suppliers are perceived as importantdimensions of SCM by retail executives.

(d) There is a strong and significant relationship between di-mensions of SCM and competitive advantage.

(e) Inclusion of suppliers in strategic decision-making is largelyperceived to be a hindrance in attaining competitive ad-vantage vis-à-vis rival retailers.

Table 5Bivariate correlations.

Marketshare

Return oninvestment

The growth ofmarket share

The growth ofsales

Growth in return oninvestment

Profit marginon sales

Overall competitiveposition

Supply chain managementfactors

Supply chain characteristics .140a .170a .287a .347a .291a .240a .256a

Level of information sharing .460a .472a .557a .383a .322a .237a .050Customer relationship .351a .274a .378a .182a .120a .065 � .008Supply chain integration .379a .387a .380a .185a .234a .009 .028Quality of information sharing .406a .399a .423a .362a .378a .283a .137a

JIT capabilities .170a .286a .436a .392a .386a .360a .299a

Inclusion in strategic decisionmaking

.218a .265a .277a .279a .254a .185a .162a

Involvement in product qualityand development

.494a .527a .453a .463a .462a .557a .337a

Mutual trustworthiness .278a .406a .541a .362a .482a .398a .213a

a Correlation is significant at the 0.01 level (2-tailed).



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(f) As per the perspective of retail executives, level and quality ofinformation sharing does not impact the retailer's competitiveadvantage vis-à-vis its rival retailers.

(g) There is a strong and significant relationship between di-mensions of SCM and firm performance.

Scope for future research exists in testing the measurementand structural models depicting the causal relationships betweenthe factors by using two-step structural equation modeling. Itwould explain the extent of impact exogenous constructs have onthe endogenous construct. A confirmatory factor analysis wouldfurther validate the instrument.

8.2. Implications for retail industry

Indian organized retail is in a nascent stage with prospects ofaccelerated growth that will be enabled by favorable demo-graphics, economy and political environment. At present retailersare facing constant pressures of margins and profitability. Thisstudy shows that to ensure competitive advantage and profit-ability, retailers are focused on addressing the product-needs ofthe customers and they have built their business processes andSCM practices to support this focal point.

Yet, in the near future Indian retailers are contemplating scal-ing up their operations to grow significantly not only in the majormetropolitan cities where they are currently located, but also inthe Tier-2 and Tier-3 cities. In this scenario, current existingpractices and mind-set, as is evident from the study, will not besufficient to ensure sustainable growth. To scale up operationssignificantly, retailers will have to look beyond the confines oftheir organizations to integrate data, capabilities and resources oftheir suppliers and channel partners to create superior value andlong-term competitive advantage. For this, they will need to col-lect, store, access, share and analyze large amount of information,across locations and channel partners, for making better opera-tional decisions. So businesses must first gear up to allow access tothe right information at the right time so that it can be put toeffective usage through BI. Availability of timely and accurate in-formation will thus be critical to a firm's ability to leverage it usingBI in extracting meaningful insights in information and data pat-terns obtained from diverse touch points for improving operatingmargins, profitability, competition and growth.

While the above requires an investment in the IT infrastructure,systems and processes, it also calls for a radical shift in the re-tailers' outlook as reflected from the study. Reliance on informa-tion sharing is considered as impeding timely and dependabledelivery of products to market. On the contrary, retailers have toappreciate that effective sharing of information among channelpartners will provide retailers the ability to respond promptly tochanges in consumer demand and reduce response time to marketneeds. Rather than impede operations, information sharing willenable narrower segmentation of customers leading to moreprecisely tailored products/services and also improvement in de-velopment of new products/services. Furthermore, informationsharing among channel partners will contribute to generation ofrelevant data which will be available for BI. Once retailers findcost/benefit calculations pertaining to information sharing amongchannel partners satisfactory, opportunity will exist for enhancedapplication of BI in SCM practices.

However at this juncture, it is prudent to take a realistic ap-proach to the future road ahead in BI implementation in Indianretail and keep in mind several exogenous constraints that mayimpact BI implementation, which are beyond the control of theretailer. First, India is currently marked by poor IT infrastructurefacilities in suburban and rural areas and such condition cannot beimproved by any individual retailer. Secondly, India has an

abundance of cheap labor that makes current SCM practices labor-intensive rather than technology-driven. To implement BI in theirbusiness processes, Indian retailers will face a shortage of skilledman-power who have the technical knowledge to decide whataction to take based on the outcomes of BI analysis. It is imperativeto know that BI system will present retailers with structured andanalyzed data but without proper skill sets they may not be able tomake informed decisions on the basis of that analysis. Thirdly,apart from the right talent and technology, it will be fundamentalfor retail firms to re-design their business processes, structureworkflows and put proper incentives in place so that analyticsbecome a vital part of enabling managers to accomplish theirgoals. Ideally the CEO should be at the helm of the process in-itiation and gradually all levels of the management should have athorough understanding of its business processes and the objec-tives that are to be achieved. Also the functional units impacted bythe BI initiative must be closely involved with the BI im-plementation processes to iron out dissidence and seamlesslymerge analytics with a firm's ongoing management tasks.

8.3. Limitations

This study is conducted on an Indian food retailer operating inspecific zones of the country. Research needs to be conducted tostudy whether the SCM practices and the outlook to informationsharing among channel partners are unvaryingly applicable toretailers operating in non-food categories as well as to retailerswith operations across other geographical locations. Extendingthis study to retailers operating in other categories would enhancethe external validity of the study and improve the accuracy ofparameter estimates. This research has a relatively small samplesize which is a usual phenomenon amongst initial-stage researchstudies. Yet such studies pose certain limitations to itsgeneralization.

Future study can increase the comprehension of a retail firm'seffectiveness by gathering objective performance data. But sincemost of the organized Indian retailers are usually not publiclylisted, published financial reports are unavailable. Obtaining suchinformation may require support from Indian retail trade groupslike Retailers Association of India (RAI) for cases where the re-tailers may not be forthcoming to participate without such officialsupport.

Further research is necessary to extend the findings of thisstudy. Specifically more study is needed to validate the scales inIndian conditions. Post-validation, research needs to be carried outto determine the possible existence of a second order SCM prac-tices construct and whether such a higher order factor model isappropriate for SCM practice. The model, as a whole, needs to betested through path analysis to ascertain its veracity.

Note: Early version of this paper was presented at the OxfordRetail Futures Conference 2014, organised by the Oxford Institute ofRetail Management, University of Oxford.

Appendix

I. Supply chain management practices:

With regard to SCM practice, please circle the number thataccurately reflects your firm's present conditions: (1–stronglydisagree; 7–strongly agree)1. We consider quality as our number one criterion in selecting

suppliers.2. We regularly solve problems jointly with our suppliers.3. We have helped our suppliers to improve their product quality.4. We have continuous improvement programs that include our



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key suppliers.5. We include our key suppliers in our planning and goal-setting

activities.6. We actively involve our key suppliers in new product devel-

opment processes.7. We frequently interact with customers to set reliability, re-

sponsiveness and other standards for us.8. We frequently measure and evaluate customer satisfaction.9. We frequently determine future customer expectations.

10. We facilitate customers' ability to seek assistance from us.11. We periodically evaluate the importance of our relationship

with our customers.12. We inform trading partners in advance of changing needs.13. Our trading partners share proprietary information with us.14. Our trading partners keep us fully informed about issues that

affect our business.15. Our trading partners share business knowledge of core busi-

ness processes with us.16. We and our trading partners exchange information that helps

establishment of business planning.17. We and our trading partners keep each other informed about

events or changes that may affect the other partners.18. Information exchange between our trading partners and us is

timely.19. Information exchange between our trading partners and us is

accurate.20. Information exchange between our trading partners and us is

complete.21. Information exchange between our trading partners and us is

adequate.22. Information exchange between our trading partners and us is

reliable.23. We search for new ways to integrate SCM activities.24. We reduce response time across the supply chain.25. We work on improving integration activities across supply

chain.26. We work on establishing more frequent contact with supply

chain members.27. We work on creating a compatible communication/information

system.28. We work on identifying additional supply chain.29. We work on suppliers' on-time delivery directly to our points

of use.30. We communicate our future strategic needs to our suppliers.31. We work on creating a greater level of trust among supply

chain members.32. We work on locating closer to our customers.33. We require suppliers to locate closer to our firm.34. We participate in the marketing efforts of our customers.35. We aid our suppliers to increase their JIT capabilities.36. We work on increasing our firm's JIT capabilities.

II. Competitive advantage:

With regard to competitive advantage of your firm, please cir-cle the appropriate number to indicate the extent to which youagree or disagree with each statement:

(1–Strongly disagree; 7–strongly agree)1. We offer competitive prices.2. We are able to offer prices as low or lower than our

competitors.3. We are able to compete based on locality.4. We offer products that are highly reliable.5. We offer products that are very durable.6. We offer high quality products to our customers.7. We deliver the kind of products needed.

8. We deliver customer order on time.9. We provide dependable delivery.

10. We provide customized products.11. We alter our product offerings to meet client needs.12. We respond well to customer demand for “new” features.13. We deliver product to market quickly.14. We are first in the market in introducing new products.15. We have time-to-market lower than industry average.16. We have fast product development.

III. Firm's Performance:

Please circle the appropriate number which best indicates yourfirm's overall performance:

(1¼Significant decrease, 7¼significant increase)1. Market share.2. Return on investment.3. The growth of market share.4. The growth of sales.5. Growth in return on investment.6. Profit margin on sales.7. Overall competitive position.

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