The development of supply chain performance index by structural equation model approach: a case of Thai automotive industry

The supply chain is influenced by various factors in an ecosystem. The dynamic environment of the global supply chain differently influences the firm’s performance.The situation and influential factors of each supply chain are different due to the variety of industries, countries, organizational cultures, and other directly and indirectly related factors. Since the performance of suppliers critically influences the overall supply chain performance (SCP), the identification and evaluation of SCP through the standard indexis an important approach to improving SCP. Therefore, it is imperative to develop a SCP measurement index in a specific context and environment. In addition, the index for SCP should be adjustable to be compatible with a specific ecosystem (industry, country, culture, etc.). The purpose of this research is to construct an adaptable SCP measurement model based on the perception of stakeholders who directly takeparticipate in a supply chain. In order to validate the research method, the most complex and huge supply chain of the automotive industry is carefully chosen as an illustration of the index development. Furthermore, the automotive sector is one of the most popular industries in the world due to the transformation of key components from theinternal combustion engine to the electric system and business platform. Moreover, Thailand is known as a stronghold for global automotive and parts producers. Hence, a case of Thai automotive industry can be a representative of the index development for SCP. This research conducted an empirical survey of 210 companies from 1st tier, 2nd tier, and other suppliers of automotive companies in Thailand to test the proposedmodel. The field survey, interview, and mail survey were employed from the perceptive of stakeholders in supply chains. Then, the structural equation model (SEM) was employed to test relationships among influential factors in a supply chain. Inconsequence, an index is constructed by employing influential weights obtained from SEM. The result of SEM indicates both direct and indirect relationships among critical factors for improving SCP. It is expected to provide a crucial benefit for SCMdevelopment under the era of the disruptive technology.