Overall business performance is dependent on performance in subordinate business
functions. For instance, excellence in logistics is related to higher business performance
(Fugate et al., 2010). In line with that, Johnson and Templar (2011) show that improved
supply chain management practices have a positive impact on firm performance.
An improved supply chain will result in more efficient processes, but it will also help to
increase the quality of products and services. Similarly, it has been demonstrated
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that quality performance is positively related to financial performance (Kaynak, 2003).
If the supply chain’s customer value increases due to higher product quality, this will
result in satisfied customers and improved reputation, which, in turn, will result in
higher sales. Customer value will be high, if the received products are not damaged or
wrong and no rework has to be done. But this can also decrease costs for the
manufacturer and its supply chain. As increased customer value leads to increased
sales and can also lead to reduced costs, it can be concluded:
H4. Business performance is positively influenced by the supply chain’s customer
value.