Modeling Financial Supply Chain Flexibility: Evidence from Iran’s Automotive Leasing Industry

Document Type : Research Paper

Authors

1 Prof., Department of Operations Management and Decision Sciences, Faculty of Industrial and Technology Management, College of Management, Tehran University, Tehran, Iran.

2 Assistant Prof., Department of Operations Management and Decision Sciences, Faculty of Industrial and Technology Management, College of Management, Tehran University, Tehran, Iran.

3 PhD Candidate, Department of Industrial Management, College of Kish, University of Tehran, Tehran, Iran.

10.22059/imj.2024.373340.1008130

Abstract

Objective
Considering the necessity of flexibility in the supply chain to manage uncertainties, this research aims to design and explain a flexibility process model for the financial supply chain in Iran's car leasing industry.
 
Methods
The research method is a mixed-methods exploratory approach. First, 21 qualitative interviews were conducted. Using grounded theory, a financial supply chain flexibility model for Iran's automotive leasing industry was developed, comprising 24 sub-categories within six main categories. Next, 260 questionnaires were distributed and completed in automotive leasing companies in Iran. Structural equation modeling was then employed to conduct a path analysis of the hypotheses concerning the relationships among the model dimensions, and the validation of the model was assessed in the study.
 
 
Results
Based on the data analysis, the causal conditions of flexibility include "expectations related to customers," "factors related to suppliers," and "motivations related to financing." The contextual factors contain "legal-regulatory factors," "financial-economic factors," "environmental factors," and "cultural-social factors." The intervening factors of financial supply chain flexibility include "ownership and shareholders of leasing companies," "communication and IT-related factors," "industry systems and infrastructure," and "transportation and logistics." The phenomenon of financial flexibility in the supply chain was defined as "financing solutions," "effective communication of supply chain elements," "factors related to the ability to credit," and "proper risk management." Additionally, the strategies for the flexibility of the financial supply chain cover "innovation and development of new products," "development of sales network and after-sales services," "development of training and service skills," and "development of cooperation between supply chains." The consequences of financial flexibility in the supply chain of leasing companies encompass "increasing the production of automotive products," "increasing the level of access to services," "easier access to financial resources," "improving the circulation of financial information," and "increasing the efficiency of the supply chain." In the quantitative part of the research, based on the results of structural equation modeling and path analysis, it was found that intervening factors affect the antecedents and strategies of flexibility. The antecedents of flexibility have an impact on attention to flexibility. Besides, dimensions such as contextual factors, attention to flexibility, and intervening factors significantly affect strategies for financial flexibility in the supply chain, which ultimately affect the consequences of financial flexibility.
 
Conclusion
To enhance the flexibility of the financial supply chain, it is advisable for companies to draw insights from successful product development experiences. Additionally, efficient management of after-sales services, building trust and establishing effective communication with customers, and upgrading employees' knowledge, experience, and skills to align with industry developments are essential factors for fostering financial flexibility in the leasing industry.
 

Keywords

Main Subjects

References

 
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Industrial Management Journal
Volume 16, Issue 3
2024
Pages 398-425

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