significant to on-time delivery, balance score card and inventory turn. As for this research, it is hypothesized to be significant, and the result provided indicate that the hypothesis is negative, meaning that financial risk as moderator is only has low moderating the relationship between IMS and SCM performance. Why financial risk as moderator is not relevant in this industry? The fact that the output support this statement can be explained by the following reasons; i. Although financial risk is an important part of any business and is part of the process in SCM but, the decision involving inventory and supply chain cannot totally be influenced on the part of finance as operation and order
fulfilment will take priorities. ii. Inventory is classified as assets in the accounting report and any losses or scrap, will impact the Profit and Lost (P&L) statement directly. Therefore, any mitigation of the financial risk is an internal management responsibility, but such roles should not influence the decisions on inventory management strategies which is proven to impact the supply chain management performance. iii. Any lost or shortage of inventory may directly affect the SCM performance in terms of order fulfilment or making it more costly to transport the materials in an expedite mode of transport. However, financial concerns, although important, are given less priority as the business decision such as inventory management strategies take precedents. Such business decisions affect the supply chain management performance and hence, impact the fulfilment of order and thus, meeting the expectation of customer which is the top priority in the
aerospace industry iv. Normally the level of inventory keeping is monitored closely by the finance department as the figures are reported in the monthly statement.
- Summer '17
- Supply Chain Management, SCM performance, inventory risks