The inﬂuence of supply chain management
competency on customer satisfaction and
Alexander Ellinger, Hyunju Shin, William Magnus Northington and Frank G. Adams
Culverhouse College of Commerce and Business Administration, University of Alabama, Tuscaloosa, Alabama, USA
Debra Hofman and Kevin O’Marah
Gartner Supply Chain Research Group, Boston, Massachusetts, USA
Purpose – The relationship between supply chain management (SCM) competency and ﬁrm performance is not well established empirically. This is
largely because proven metrics for quantifying the effects of SCM are scarce. Drawing on the strategic managerial concept of supply chain orientation
as a source of competitive advantage, this paper aims to apply three independent sources of secondary data to examine the inﬂuence of SCM
competency on two important ﬁrm performance metrics: customer satisfaction and shareholder value.
Design/methodology/approach – SCM competency is assessed with data from the expert opinion element of Gartner Supply Chain Group’s
(formerly AMR Research) supply chain top 25 rankings; the American Customer Satisfaction Index (ACSI) database and the recently developed
Economic Value Added (EVA) Momentum ﬁnancial metric are utilized as outcome measures.
Findings – Firms recognized by peers and experts for superior SCM competency exhibit higher levels of customer satisfaction and shareholder value
than their respective industry averages.
Research limitations/implications – Further evidence is required to prove causality does exist between these variables. Limitations associated with
the use of secondary data restricted the number of top performer ﬁrms available for this analysis. Nevertheless, the strong correlations found between
SCM competency and two critical ﬁrm performance metrics may help senior managers and managers from other functional areas to better understand
potential advantages associated with developing greater SCM competency.
Practical implications – The assessment of two metrics that differentiate top SCM performers from their industry competitors may also help SCM
professionals to better convey the impact of SCM competency to non-supply chain managers and external participants in the supply chain whose
support and cooperation are critical to the success of process improvement initiatives.
Originality/value – In addition to the study ﬁndings, blending qualitative expert opinion, formal customer satisfaction and quantitative ﬁnancial
performance secondary data represents a relatively novel and informative method that responds to contentions that different approaches should be
employed to develop a more holistic understanding of SCM.
Keywords Supply chain management competency, Customer satisfaction, Shareholder value analysis, Economic value added,
Supply chain management metrics, Delphi method
Paper type Research paper
Supply chain management (SCM) “will ultimately separate
the winners from the losers,” (Spekman et al., 2002, p. 41).
Yet, the relationship between SCM competency and ﬁrm
performance is not well established empirically (Christopher
and Ryals, 1999; Lambert and Burduroglu, 2000; Timme and
Williams-Timme, 2000). A major reason for this shortcoming
is that proven metrics for quantifying the effects of SCM are
scarce (Farris and Hutchison, 2002, 2003; Johnson and
Templar, 2011; Lambert and Pohlen, 2001; Melnyk et al.
2004). Consequently, many senior managers (Hammer,
2004; Slone et al., 2007) and non-SCM managers (Trent,
2004) struggle to fully appreciate the potential strategic,
tactical and ﬁnancial beneﬁts associated with developing
SCM competency. Moreover, SCM professionals frequently
struggle to successfully articulate the inﬂuence of SCM
operational initiatives and resource investments on ﬁrm
performance (Moberg et al., 2008; Timme and Williams-
SCM competency plays a major role in creating (or
destroying) shareholder value by inﬂuencing customer
satisfaction (Daugherty et al., 1998; Green et al., 2006) as
well as the major drivers of ﬁrm ﬁnancial performance:
revenue growth, operating costs and working capital efﬁciency
(Camerinelli, 2009; Lambert and Burduroglu, 2000). Since
The current issue and full text archive of this journal is available at
Supply Chain Management: An International Journal
17/3 (2012) 249 –262
q Emerald Group Publishing Limited [ISSN 1359-8546]
Received: 1 August 2011
Revised: 4 November 2011
11 November 2011
15 November 2011
Accepted: 18 November 2011