The outcome of the above conducted tests indicates that public and private sector firms adopting mass production, and mass customisation or mixed strategies have not
Supply chain Issues Rank Median
Supply chain Integration 1 2.00
Supply Chain Design 1 2.00
IT Infrastructure 2 2.50
Demand Forecasting 3 3.00
Delivery Terms 4 5.00
Procurement Volume & prices Fluctuation
4 5.00
Production cost & time 4 5.00
Market Share 5 6.00
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experienced these differences. Occurrence levels of each issue in supply chain deficiency are based on an ordinal scale rank. At this stage, the second set of hypotheses can be tested. The outcomes of hypothesis testing are indicated in table 28.
Accepted Hypotheses Decision Conducted test for difference detection
Evidence H11. Poor supply chain
design is an earlier stage of supply chain deficiency in textile industry in Egypt.
Accept alternate hypothesis and reject Null hypothesis Mann-Whiney U , Kruskal-Wallis H - Ordinal rank, Median value =2.00 - no difference in ordinal rank between different sector or different strategies was detected H12. Poor IT infrastructure or Non- justified IT investment is an earlier stage of supply chain deficiency in textile industry in Egypt.
Accept alternate hypothesis and reject Null hypothesis
Mann-Whiney U , Kruskal-Wallis H
- Ordinal rank, Median value =2.50
- no difference in ordinal rank between different sector or different strategies was detected
H13. Un-integrated supply chain is an earlier stage of supply chain deficiency in textile industry in Egypt.
Accept alternate hypothesis and reject Null hypothesis
Mann-Whiney U , Kruskal-Wallis H
- Ordinal rank, Median value =2.00
- no difference in ordinal rank between different sector or different strategies was detected
Table 28: Hypotheses Testing 4.11.5. Relationship between Supply Chain issues
Measuring relations between issues is conducted in the survey analysis; Pearson Correlation is used as it is recommended to explore the relationship between interval data (Colman and Pulford, 2006). “The correlation coefficient is a numerical index which
describes how closely related two variables are and whether it is a positive or negative relationship” (Howitt and Cramer, 2003). The strength of relation is indicated by the
numerical values of coefficient, while direction is indicated by the sign.
Pearson’s Correlations are represented in Appendix B. Based on these results, there are significant relations in the following, where (r) refers to the significance of relation and its direction, (p) is the significance level where this correlation could be achieved by chance, and finally (df) is the degree of freedom (df=Number of cases-1):
- Positive modest correlation between supply chain design and integrated platform of supply chain. (r= 0.50 ,df=32, p<0.005)
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- Positive modest correlation between supply chain design and IT infrastructure. (r= 0.40 ,df=32, p<0.005)
- Positive modest correlation between integrated platform of supply chain and IT infrastructure. (r= 0.50 ,df=32, p<0.005)
- Positive modest correlation between reliability of demand forecasting and supplies deliveries. (r= 0.50 ,df=32, p<0.005)
- Negative modest correlation between supplies deliveries and inventory cost. (r= 0.40 ,df=32, p<0.005)
- Positive modest correlation between IT infrastructure and information system investment. (r= 0.50 ,df=32, p<0.005)
To explain the equation, the modest relation is defined by Cohen and Holliday (1982) to be the range between 0.40 and 0.69 (Bryman and Cramer, 2005). The significance level of these relations ranges between 0.004 and 0.014 which is <0.05. There are several other positive and negative relations which cannot be considered as significant relations (p>0.005).
4.12. Discussion of Results
Based on the above results, there is a greater concern about internal organisation activities than supply chain activities by textile producers in Egypt. Production and procurement issues are the only obvious activities that lead to supply chain deficiency. Long delivery, unreliable demand forecasting and limited market share were not categorised by respondents into leading or non-leading issues of current deficiencies. Competitive Asian products have affected the textile industry and redirected the Egyptian producers to focus on optimising production and procurement activities apart from collaborative activities that may negatively influence these internal activities. Difficulties experienced by textile producers to compete with low-price Chinese fabrics result in limited market shares both locally and internationally. While internal issues optimisation can guarantee short term benefits, planning and collaboration activities can provide long term benefits. Production issues, diversity of procurement and limited marketplace shares are considered as the most important problems they suffer. This supports the fact that collaborative activities are still beyond consideration for these organisations, which in turn provide less flexibility for
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adopting a collaborative inventory or production strategy. Large and small size organisations that adopt a certain production strategy are trapped in it and can hardly change it. Mostly, public sector firms are wedded to mass production while private sector organisations adopt mass production, mass customisation or mixed strategies. Organisations, that have export records adopt mass customisation in order to reach a global customer’ preferences, while others firms that supply the local market have been trapped in the production of a standard product without paying attention to customer preferences. Machinery life time, non-skilled labour and out-dated production technologies have imposed more constraints on production capability. All these factors are inferred to cause a limited market share and a large finished product inventory.
Each firm applies a periodic plan for inventory replenishment. The procurements volume is pre-defined a year or several months before. Diversity of procurement is a critical issue facing customised production due to material availability. Most organisations consider huge inventory amounts as an indicator of large assets, as well as an order-driven strategy for raw materials is applied by a small number of organisations. That is why organisations do not consider high inventory costs as an issue that leads to supply chain deficiency. Delivery delay is managed with larger inventory buffers to avoid possible suspension or delay in production. Consequently, long delivery time hardly affects the production process.
In addition, participants did not correlate the unreliable demand forecasts to explain the limited share of Egyptian products locally and internationally. The technological infrastructure, supply chain design and integration have not been flagged as issues affecting supply chain performance although they ranked at early stages of supply chain deficiency. The reason for this relies on the perception of new technology adoption and its importance. Resistance to change is the main barrier that faces large organisations when adopting new technology. To avoid employee resistance, organisations are developing their own system that simulates its traditional and manual systems. The benefit gained from these systems is limited to process automation. Process execution and decision making features are excluded.
Supply chain design and integration are directly affected by a non-integrated infrastructure inside the organisation. Many organisations refer to the sensitivity of information which is hardly shared between different departments. Fragmentation between each organisational
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unit, despite objective similarities, can hardly formulate an integrated platform for a supply chain between the retailer and supplier. Lack of trust is the main reason behind that.
The respondents have indicated many external factors that cause the above supply chain issues. Government plans play an important role in procurement availability. The governmental policy of exporting Egyptian cotton and importing cotton of lower quality has imposed a huge barrier on these organisations to procure raw material with high quality. There is a need for supportive governmental plans that can assist the textile sector and enable it to face the Asian competition. The workspace has affected labour productivity negatively. Health protection and more tangible benefits are needed by labour. In addition, there is a need for training programmes to improve labour skills.
External and internal factors are inferred to cause current supply chain issues. After representing the survey outcome, the next part of this chapter will demonstrate the matches and differences between both conducted quantitative and qualitative methods. The conducted match has provided a validated framework of supply chain deficiencies.
133 Part Three: Quantitative and Qualitative Outcome
Based on interview discussions and the survey outcome, the following part focuses on matching the outcome of both qualitative and quantitative methods. Validated study results are used to re-structure the proposed framework. Table 29 indicates the outcome of surveys, interviews, observations and document analysis.
Supply Chain Issue
Survey Interviews Observation Documents Analysis Collaborative supply chain activities - Do not lead to supply chain deficiency. - occupy earlier stage
at supply chain deficiency. - had significant positive relationship with IT infrastructure.
- Managerial level does not
pay attention to these
activities.
- Inventory replenishment
follows periodic
replenishment approach. - Firms hold large buffer that may reach yearly basis
- There no collaborative
strategy between business
partners.
- There is no access is permitted to supplier for inventory tracking or other collaborative activities. - Information holding rather than sharing is applied due to cultural issues.
- Selection of supplier is based on price criteria regardless its location and delivery terms.
Demand Forecasting - Classified as leading or non- leading issue to supply chain deficiency. - had significant positive relationship with supplier deliveries. - based on:
1. CAPMAS reports are main sources of data. 2. Previous contracts. 3. Informal agreement with retailers.
4. International report for global markets demands.
- Manual based activity. - Firms suffer to get reliable source for future demands.
- CAPMAS does not provide rates of recent years.
Delivery Terms - Classified as
leading or non- leading issue to supply chain deficiency. - had significant negative relationship with inventory cost.
- is not considered as a
critical issue affect
production process due to large held buffer.
- is not considered as criteria in selecting suppliers. -Large firms rely on its own
logistic while SMEs use third
party logics.
- Delivery terms are critical for machinery spare parts.
- Despite that delay is limited and controllable for local
supplies; delay is
uncontrollable for imported
supplies due to poor
supporting infrastructure of country.
- to guarantee reliable
delivery, firms operate its own logistics system instead of third party logistics
Procurement Volume & prices Fluctuation
- is a major issue leads to supply chain deficiency. - Procurement issue is more obvious in mass customisation
rather than mass
production.
- Main problem face
managerial level to procure diversity of supplies. - filling requirement of
customised product is
challengeable.
- Deal with frequent supplier for local procurements. - Price is main criteria for supplier selection and in few
cases quality factor is
considered.
- Long systematic
cycle is used for
procurement if
supplies exceed
certain limit
Inventory Cost - Do not lead to
supply chain
deficiency.
- Large inventory is essential
to prevent production
suspension.
- rely on small buffer was experienced by few firms and it is unfeasible to implement.
- hold yearly buffer of main supplies. - hold Few months’ buffer for chemical
and production
supporting substance.
- Large inventory
buffer is indicator for assets growth which is
preferred by
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Supply Chain Issue
Survey Interviews Observation Documents Analysis Production cost
& time
- is major issue leads
to supply chain
deficiency.
- Producing customised
products with different
preference is challenging. - Labour skills are limited especially skills needed for machinery re- configuration to produce tailored products. There is a need for more training programs. - There is a need to adopting
recent production
technologies.
- public firms use out-dated machinery
- number of firms works as
original equipment
manufacturers globally. - High production cost. - High material wastage. - No predefined standards for quality assurance. - Lack of periodic machinery maintenance.
- Labour suffers from un- protected workspace.
-need for labours health
insurance.
- need for full utilisation of machinery and human power. - No pre-defined standards for
quality and production
monitoring. - low labour wages
- High production cost of spins leads textile producers to buy imported spins instead of local one.
- high material
wastage
Market Share - Do not be classified as leading or non-
leading issue to
supply chain
deficiency
- Asian competition had affected the market share of local producers badly. - Poor governmental plans could not save Egyptian
fabrics competitive
advantage and its share in
local and international
markets.
- Firms attempt to maintain
relations with existing
customers to market its products.
- rely on their own
distribution point for
marketing in addition to local distributors
- Firms struggle to get market share in global markets.
- there is an obvious decline of Egyptian textile fabrics at global markets IT Infrastructure
- Does not lead to
supply chain
deficiency. - occupy earlier stage
at supply chain
deficiency.
- Legacy system or basic IT application are used at many firms.
- Number of large
organisations adopts ERP modules.
- Limited or no connectivity between departments. - No connectivity between business partners.
- Large firms implemented ERP modules in finance,
payroll and procurement
department and are not fully utilised.
- Unplanned system
implementation, no pre-
defined system requirement. - Adoption of IT system is based on recent technology adoption or least price offered by IT rather than system requirements.
- Systems are
implemented as tool for process automation rather than process execution or decision making.
Table 29: Match between Quantitative and Qualitative Findings