INTERRELATIONSHIP ANALYSIS IN SUPPLY CHAIN MANAGEMENT USING STRUCTURAL EQUATION MODELING (SEM)

Abstract

This in-depth review examines the development and current The landscape of supply chain management (SCM) is a theoretical framework and an applied business approach integration of legally independent entities within supply chains has redefined traditional organizational boundaries, shifting from straightforward business-to-business interactions to complex networks of multidirectional relationships. Contemporary SCM leverages the interplay between internal and external integration to drive operational efficiency while fostering collaborative partnerships across the value chain. Existing literature highlights that effective supply chain management encompasses a variety of functions, from planning and product development to post-distribution customer service, ensuring that goods are pulled through the value chain by consumer demand rather than pushed by manufacturers. Successful SCM initiatives share common characteristics, adopting comprehensive strategies that integrate both strategic and tactical elements while maintaining a holistic perspective that delivers benefits greater than the sum of the individual parts. Decision-making approaches, especially the Decision Analysis and Evaluation Laboratory (DEMATEL) method, play a key role in improving supply chain operations. Its ability analyzes and establish cause-and-effect relationships between factors influencing supplier selection, production flexibility, and strategic decision-making provides valuable insights without the need for extensive datasets. Its strength lies in transforming complex relationships into structured models, making it particularly useful for optimizing supply chains. As global market uncertainties increase, companies are increasingly adopting a holistic approach to their supply chains – extending upstream to raw material suppliers and downstream to end customers – to leverage the core strengths of partners and increase customer value. However, the multidisciplinary nature of SCM has posed challenges in developing comprehensive conceptual frameworks. This review highlights future research opportunities, such as developing integrated theories that consider macroeconomic influences Exploring The evolution of supply chains and the impact of big data analytics SCM. By integrating various perspectives, this study provides a structured overview of existing knowledge while identifying key elements essential for improving supply chain performance in an increasingly complex business landscape.