Journal of International Trade, Logistics and Law, Vol. 7, Num. 1, 2021, 58-66 58 AN IN-DEPTH INTERVIEW: SUPPLY CHAIN MANAGEMENT IN DENIZLI INTEGRATED TEXTILE COMPANIES Evrim İldem DEVELİ Istanbul Commerce University, Turkey Received: April 12, 2021 Accepted: May 10, 2021 Published: June 15, 2021 Abstract: In this study, the process between supply chain management, production and distribution is explained through in-depth interviews. It’s focused on examining the meaning of supply chain management (SCM) in literature and flow process of money, information and raw material of SCM. Also, it is pointed out that SCM as a system having principles. As a research method, SCM system is examined in an in-depth interview with towel -bathrobe textile companies in Denizli with facilities integrated from yarn production to fabric production. In-depth interviews were conducted with production managers of 15 towel-bathrobe textile companies. With this study, it is aimed to reveal how the basic rules required for the establishment of a successful SCM apply to the relations with suppliers and customers in the production and distribution processes of towel-bathrobe textile enterprises. In addition, three main SCM flows; money, information and material were analyzed in the participating companies. As a result of this analysis, a common flow diagram was created for these enterprises. Keywords: Supply chain management (scm), scm flows, scm rules, scm practices 1. Introduction In today’s economical and business system, business world focuses on reducing costs, sustainability in financing, marketing, producing and supplying. This study is based on one of the marketing mix; place as supply chain system. Supply chain (SC) is a network of a distribution system that contains raw materials (yarn), finished (dyed fabric) and semi-finished (unpainted knitted fabric) products through logistics. It’s a progressive process that answers needs of customer. The customer is the driver of the chain, because paying money to the members of SCM is the customer. 2. Supply Chain Management in Literature: According to Pounder et al. (2013) SCM is a system that is gaining importance in business world in internally and internationally. For Christopher (1992) SC refers to meaning of today, which is an organization consisting of operations creating value for company and parts of the chain like suppliers and the customer. By known definition of SCM; planning, implementing and controlling the operations for the effective use of raw materials and operating process (Oliver and Webber, 1992), the view of Council of Supply Chain Management Professionals (CSCMP) by laws (2013) enlarges the definition’s scope with the third and fourth parties of the operating system. In Stevens’ study (1989) it’s mentioned the cost effectiveness of SCM. According to Porter (1980) to have competitive advantage in the market, companies should have generic strategies like; overall cost leadership, focus and differentiation. So, an integrated company can achieve a competitive advantage by implementing its cost leadership strategy. In this study, it’s aimed to express meaning, flow process, importance and the principles of SCM. The literature review on these two part is the guide for research part in order to have information about SCM flow process from production planning and to finished product level within the in-depth interviewed companies who have integrated factories including yarn factories, which lead them as cost effective companies, as mentioned in Porter’s competitive advantage model. An In-Depth Interview: Supply Chain Management in Denizli Integrated Textile Companies 59 2. Supply Chain Management in Literature According to Pounder et al. (2013) SCM is a system that is gaining importance in business world in internally and internationally. For Christopher (1992) SC refers to meaning of today, which is an organization consisting of operations creating value for company and parts of the chain like suppliers and the customer. By known definition of SCM; planning, implementing and controlling the operations for the effective use of raw materials and operating process (Oliver and Webber, 1992), the view of Council of Supply Chain Management Professionals (CSCMP) by laws (2013) enlarges the definition’s scope with the third and fourth parties of the operating system. In Stevens’ study (1989) it’s mentioned the cost effectiveness of SCM. According to Porter (1980) to have competitive advantage in the market, companies should have generic strategies like; overall cost leadership, focus and differentiation. So, an integrated company can achieve a competitive advantage by implementing its cost leadership strategy. In this study, it’s aimed to express meaning, flow process, importance and the principles of SCM. The literature review on these two part is the guide for research part in order to have information about SCM flow process from production planning and to finished product level within the in-depth interviewed companies who have integrated factories including yarn factories, which lead them as cost effective companies, as mentioned in Porter’s competitive advantage model. 2.1. Process in Supply Chain Management There are 3 main flows within the SC system, which are; money, information and raw material flow (Lee, 2000) shown in figure 1. Figure 1: SCM System Through Money, Information and Material Flow Source: Kramarz, M. & Kramarz, W. (2019). “Managing The Flow Components in Supply Chains”. METABK, 58(1- 2): 158. Blue arrow shows money flow where money comes from the customer from end of the chain to distributor-seller etc. and from distributor-seller to the factory and to the supplier (Kramarz and Kramarz, 2019). Information flow is also shown with blue arrow since information also comes from the region-customer, whether there is any product in storage or in stocks. It’s directly forwarded to factory from distributor-seller etc. For production it’s important to have the information on raw materials. Material input is first stage of the SC system as the beginning point is shown with green arrow. Other two flows start from the end of chain. The material changes to the order of customer (Kramarz and Kramarz, 2019). To be part of this system members of SC should share the information needed for production and logistics. In chain if the customer is satisfied with the service or product that she/he has paid for, the company is also satisfied because of the loyalty of its customer, hence long and profitable life of the company depends on loyal customer. The loyal customer who buys the product from regular buying channel knows the regularity of raw material, so if there’s any change within the raw material or raw material supplier, the customer feels the change. Stability is vital within the system in order to protect the satisfaction of loyal customer in order to win- win point. SCM structurally has long-term relationships. Within this the manufacturer stabilizes the relationship between customer and supplier. Evrim İldem DEVELİ 60 2.2. The Principles of Supply Chain Management System The SC has necessary rules for managing the partners in harmony for having sustainable efforts (Mentzer et al., 2008). Unity of Purpose; one of the main purposes of the companies is having profit (Vereecke et al., 2016). According to Fliedner (2003) SC system foresees the allocation of resources and uses resources in an effective way through system management. Collaboration; as defined in the studies of Panahifar et al. (2015), Simatupang and Sridharan (2005) it is a way of coming together of two or more companies in order to plan and manage the SC system successfully. In the study of Whipple and Russell (2007) coming together for a common purpose supports also flow of information between parties simultaneously. Collaboration requires intention of working together and sharing time for being effective in managing the SCM (Audy et al., 2012; Fawcett et al., 2002). Coordination: According to Niemann et al. (2018) visible and effective leadership is needed to set and enact the plan in accompany with operators. The producer company who organizes and manages the SCM system provides coordination according to the needs of parties in chain (Nuttall, 2013; Mentzer et al, 2001). There is need of transparency in order to have effective management. Information Sharing: Clean information flow is the most important function in sharing (Voigt and Karl, 2012). In the study of Al-Doori (2019) information sharing is described as an input like sale forecasts, production planning of some knowledge on making strategies through SC (Cao and Zhang, 2013). The SCM system contains parties besides suppliers i.e. logistic companies, retailers, wholesalers and dealers. In a case of incomplete information, these parties will be affected and they will be damaged as economically also as efficiency in working system. For Panahifar et al. (2013) the other important issue is the security of information flow between parties of SCM system. To preserve the information within flow and also the competitive advantages of the parties a contract is necessary. Trust serves as a guarding mechanism of the SC partners’ know-how, experience, price, profit, money-raw material- information flow and win-win relationship. For Lehoux et al. (2014) and Niemann et al. (2018) this can be applied through a long-term contract between the parties. In the study of Barratt and Oliveira (2001) in order to set trust in relationship between parties, there are time and also cooperation that organizes the implementation of promises given by the parties needed. Trust is mechanism, which firstly works inside the company and between employees. (Almeida et.al., 2015). Transparency is needed to have effective cooperation and collaboration in managing the system. The parties in the SCM system monitor money, information and raw material flows of the SC. The parties need clear information about the flows’ position. Information about these flows is secured by the contract, so that there is more trust to be transparency about sharing the information (Ding, 2013; Niemann et al., 2018; Klaas and Delfmann, 2005). Institutionalization: The companies, which don’t have the mind of institutionalization they keep themselves from information flow, where the SCM system doesn’t work effectively (Parulekar and Verulkar, 2015). For an effective SCM sharing information on time and having the view of keeping all needed within the money-raw material- information flow triangle between parties (Sorensen, 2005; Ford, 1984). 3. Research Method The research technique of this study is based on explorative research. In this research method first step is secondary data, literature review, which is mentioned in the beginning part of the study. The other step is to find answers to questions of the researcher through in-depth interview. In-depth interview is an explorative research method that contains one to one interview with the parties related to the searched topic (Gegez, 2007). The main reason of why this research technique is chosen is to make depth-interviews with 15 production managers who are the managers of companies, which have yarn factories where they get the raw material to produce towel-bathrobe. With in-depth interview there are two main aims. One is to present the supply chain system process of these 15 companies and explain three flow of SCM system within these companies and their parties. The other is to put forward the principles of SCM from their business point of view. 3.1. Sampling In this study, the textile sector is divided into branches and reduced to fabric production. In the report of Ministry of Trade (2019) it’s told that Denizli and Bursa are important cities in Turkey that have large production level on An In-Depth Interview: Supply Chain Management in Denizli Integrated Textile Companies 61 towels. Referring to this statement the report on ‘81 Provincial Industry Status in Turkey’ published by the Ministry of Science, Industry and Technology of Turkey textile production rate is 25% in Bursa, 44% in Denizli. According to report of Denizli Chamber of Commerce (2019) nearly 65% exports in Denizli belong to textile and apparel products. In the field of textile and apparel exports, Denizli accounts for nearly 35% of the country's annual home textile exports. From this point, Denizli is decided to choose for the research, where the fabric production is highly observed as 170 company referenced by Denizli Organized Industrial Zone. 31 of them are on towel-bathrobe business. The number of companies is the universe of this study. The sampling for this study is decided according to companies in towel-bathrobe sector, which have integrated factories from yarn to towel-bathrobe where there are 15. In this study, 15 companies are examined through in-depth-interview with production managers. These are the managers of companies, which have yarn factories where they get the raw material to produce towel-bathrobe. 3.2. Reliability and Validity of the Study In this study qualitative research method is used through in-depth interview. In qualitative research method view for reliability and validity changes according to some scholars. For Guba and Lincoln (1982) there needs to be trustworthiness instead of validity and reliability. In their study they mention about some criterias; credibility, dependability, confirmability and transferability. Credibility includes prolonged involvement, member checking, peer debriefing-peering by scholars (Holloway and Wheeler, 1996:10). For prolonged involvement time is needed to have objective point of view about the respondents and also to understand the environment that they live during the production process. Within this in-depth interview in order to provide objectiveness and trust interview was executed in afternoon hours in the office of product manager and also before the interview the day was spent withi n the factory observing the applications of processes of SC. Member checking involves two interviews. First is the main depth-interview, second is to cite findings about the interview to the respondents in order to check (Başkale, 2016). In this study to check the information given about the process of SC management and perception of principles, the findings are told to the respondents. For dependability, triangulation technique is used. The questions asked to increase the internal validity were “are the results credible” and “can these findings be repeated with the same or similar respondents”. In triangulation technique there is comparison between two or more interviews or the results of two or more data sources (such as, individual interviews with different group members). In this study first comparison is used as a triangulation technique, which points out that 15 companies are interviewed (Başkale, 2016; Mays and Pope, 2000; Streubert and Carpenter, 2011). For Creswell (2003) in order to check for the validity of the findings it’s said that at least one of these criterias are to be mentioned within research method. For confirmability of study there some points to be checked like recordings or notes, blogs, findings, process of findings, methods, aim of study, expectations, questions and observations (Holloway and Wheeler, 2016) which are mostly mentioned in this study. In transferability, there is generalization about the findings. But in qualitative research method the aim is to focus on understanding and explaining the situation that is investigated or interviewed. From this view to verify transferability in qualitative research method the environment of the research, sampling process and features of the respondents need to be explained (Sharts-Hopko, 2002; Başkale, 2016). Last criteria of trustworthiness in qualitative research method, transferability is explained in sampling and in-depth interview process of this study. 3.3. The Limitations of Study Because of time and cost limitations, sampling in this study is limited by 15 companies that have integrated factories on towel-bathrobe production in Denizli. 3.4. In-depth Interview Process Questions are asked to 15 production managers of yarn factories. The in-depth interview process took 15 days. Time period was in September-November 2020. In order to be objective and clear during the interview the aim of the study was shortly told to the product managers. The interview was executed in afternoon hours in the office of product manager and duration of in-depth interview was about 90 minutes for per product manager. Before the interview the day was spent within the factory observing the applications of processes of SC. Taking notes was the method of interviews rather than recording. Recording was not preferred in order to provide trust. In analyzing period, the findings were told to the respondents for checking whether the information given about the process of SCM and perception of principles are right or not. The age range of the respondents was 30 to 50. The professional Evrim İldem DEVELİ 62 experience of the respondents was at least 5 years. The questions, which are asked to the respondents, are grouped in two sections accordance with the aim of the study. Section 1 - Aim: Understanding the organization of SCM process within companies in towel-bathrobe sector in Denizli which have integrated factories from yarn to towel bathrobe. Questions: To explain about planning and production process from raw material to finished product, logistics process as a part of SC, money, raw material and information flow within SC members. Section 2 - Aim: Implementing the principles of SCM according to their understanding. Questions: Definition and implementation of unity of purpose, coordination, cooperation, implementation, transparency, reliability and institutionalism according to their point of view. 4. Findings The aims of this study are to understand how the companies in towel-bathrobe sector in Denizli, which have integrated factories from yarn to towel-bathrobe, organize their SCM process and to explain how they implement the principles of SCM from their point of view. The questions are asked in two sections through in-depth interviews to 15 product managers. 4.1. SCM Process in Towel-Bathrobe System flows backward where the customer initiates process when he or she places an order instead of company having a production plan. When the company receives an order for a new product which has not been manufactured before, there should be a sample production phase where the company creates a sample in the laboratory with the correct colour fix, weight, quality and gets the sample approved by the customer before the serial production starts. Findings are explained following SCM stages; planning, production, logistics and information flow. Planning is one of the most important phases in an integrated factory; prioritizing operation plans through time is vital, because in factory there are multi processes in action. Prioritizing operation plans is organized depending on the order deadline. Production phases identified in this study are as follows: Yarn Supply Phase: Since yarn is needed to produce fabric, integrated companies have their own yard factories. So this is the first supplier in the chain where the order has come into production process. Needle Selection Phase: The types of needles that will be used in production of towel-bathrobe differ according to weight of towel-bathrobe knitting. Dyeing Phase: Once the towel-bathrobe knitted, dyeing of fabric will be the following process. The integrated company, which has a dye house, orders the dye and other chemical products if needed in this production process. Washing Phase: After the dyeing process is completed, the fabric is washed in the water that’s supplied by artesian well. Pre-Packaging Phase: The materials for packaging are purchased from other suppliers. Quality Control Phase: At the end of the production process, the quality control officer checks the finished product for approval and then the finished product get ready for packaging. Packaging and Delivery Phase: Following the packaging, logistics distribution is conducted and the ordered product is delivered to the delivery point mentioned in the contract. The planning department should be prepared to take action in a case of any machine breakdown. Considering probable breakdowns, the planning department should foresee the estimated time of repair in order to plan the deadline of an order. The satisfaction levels of the customer are strongly connected to delivery on time given in the contact and fulfilling the material standards studied at lab and approved by the customer at the beginning. Logistics, since some of the customers are located in different parts of country and there are long distances between them and Denizli where the factories are located in, timely delivery is the key factor for success. If the factories fail to deliver the orders to customers on time, they are faced the penalty fees specified in the contract. Delivery on time and logistics are key factors in success of SCM where these factors are heavily dependent on information flow and harmony in operations. Information flow in the SC and between employees is generally conducted by phone. The companies utilize order forms in order to collect information from the customers and most companies use more or less the same sets of information in these forms. The order form, including quantity, weight, size, deadline, production company and An In-Depth Interview: Supply Chain Management in Denizli Integrated Textile Companies 63 signatures (if it is not a repeating order), is sent to the production company's accounting department. The accounting department investigates the financial risks of the potential customer. If a high-risk level is defined, the order will not be processed, but if there is a medium or low risk, small quantity orders are approved for production. After the approval of the accounting department, the order form is processed and sent to the production department in order to be inserted in the production queue. The SCM process is as shown in figure 2 below. Figure 2: The SCM Process of Interviewed Companies Source: Output of the in-depth interview 5. Conclusion and Suggestions In this study, findings about the applied principles within 15 towel-bathrobe integrated textile companies show that some SCM principles are not implemented properly. It’s hard to say there is a standard or common use of SCM system between companies. The companies reviewed in this study are mostly semi or non-institutionalized. The companies, which don’t have the understanding of institutionalization, are away from information flow, where the SCM system doesn’t work effectively. As a result of being non-institutionalized, information is not shareable between the parties in chain. To be part of SC system members of the chain should share the information needed for production and logistics. In case of a technical difficulty in production line, it is not common practice to share information and estimated delay with the customer by these companies. They prefer continuing the production process with a back up producer in order to deliver the order on deadline. Informing the customer in case of a problem affecting the delivery date is very important, as it will affect the workflow of the customer and is also an ethical responsibility. Only general information is ensured to customer and the parties in SCM. The results of the in- depth interview with the companies indicate that coordination is mostly not part of the production process. It may be because of the result of un-professional behaviours of the employers. As a result of the in-depth interview; it was found that companies in this study generally exchanged information in the SC via telephone or e-mail. Other finding was that employees of these companies did not have the knowledge and understanding required to use mobile technologies and software applications. It has been determined that using the phone as the main tool for information flow may cause some problems like not fully understanding the order details due to ambient noise or forgetting details because taking notes is not practical while the calls answered in production factory. The relationships between the SCM principles described in the literature and the information obtained from this study is explained below. There is unity of purpose between the participant companies but less ability to implement. Collaboration in information, money and raw material flow is interrupted because of limited use of information technology. There is also lack of Coordination due to this interruption. Information Sharing is not conducted effectively because of limited use of technology. Trust applies varies from company to company. Transparency differs depending on the performance of coordination and cooperation between manufacturer and customer firms. Institutionalization varies according to the companies understanding. Evrim İldem DEVELİ 64 SC system is a value chain that gathers the abilities of partners and creates harmony and synergy, which make the system powerful, competitive and cost effective where the long-term relationship is established between partners (Almeida et.al., 2015). In order for the SCM system to function as a machine, all parties involved in the system must complete their duties and responsibilities and comply with the flow diagram. For customer satisfaction it is important to ensure a smooth flow of information and materials to create an effective SCM process. This satisfaction will affect the existence and profitability of the enterprise. Customer share determines the market share of enterprises. Therefore, the loss of loyal customer reduces the profit of the enterprise and its market share. For an effective SCM system, the businesses in the SC needs long term contracts, in building long-term relationship with other parties implementing the SCM principles. The nature of SC is a living organism shaping up according to system length and needs of the partners. This study's importance, originality and uniqueness are because of the limited number of integrated yarn companies producing towel-bathrobe in Denizli. There is also limited research on such companies, particularly on the flow of SC management principles and SCM system details. These companies’ being small and medium-sized enterprises (SMEs) also makes this study significant, since 98 percent of the Turkish economy is composed of SMEs (İrten, 2020). For future research subjects SCM system can be examined within other integrated textile companies in other cities and also sectors as durable goods. 5.1. 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