Determining the core activities in the order fulfillment process: an empirical application

Abstract

Purpose: This work examines the relationship between internal and relational capabilities and the creation of value to the end consumer in the case of the process of receipt, manufacture, and delivery of orders within the supply chain. This work develops a methodology to identify operations that generate core competences and those that do not, with the aim of improving the management of the supply chain. Design/methodology/approach: This work analyses the order fulfillment process in a representative sample of firms operating in a region of Spain. To accomplish the research objectives, a personal survey was conducted using a questionnaire to evaluate 13 activities of the order distribution process in the supply chain. Findings: The results of the study reveal that internal and relational capabilities explain the creation of value to the consumer. They also identify two groups of operations in line with their ability to be sources of relational or internal competitive advantage. With regard to the activities, it was shown that there are some activities that form part of the core competences, while others constitute non-core competences. This work demonstrates that the core activities generate higher value to the end consumer; however, it also shows how important the non-core activities may be to the creation of value. Practical implications: The work offers orientation as to how the analyzed process should be redesigned to obtain a competitive advantage. Thus, this higher value to the end consumer will enable the firm to reduce prices or at least maintain them, in which case the firm will be able to offer additional services that differentiate it from the competition. Originality/value: Finally, although the literature contains some works that analyze capabilities or relational performance, none to date have used variables such as activity simplification, integration and relational competitiveness in the framework of relational capabilities in the order fulfillment process. Another significant innovation of this work is the analysis at operation level, in which 13 activities belonging to an important process in the supply chain are analyzed.