Understanding demand and supply side factors: a cross-sector analysis from Saudi Arabia

Abstract

PurposeIntegrating demand with supply has always been an evolving research area, which is affected by different factors including, but not limited to, sustainability, changing consumer demands and emerging supply chain practices. However, most of the research targeted developed countries due to better data access and enhanced information visibility. The research on supply and demand integration in Saudi Arabia is still in its infancy. This study explores this gap by providing a comprehensive analysis of demand and supply chain integration in the context of sustainability. This is done by first creating a developing countries-based research framework and then validating it through surveying 162 Saudi companies operating in multiple sectors like food, fashion and retail. Results suggest that there is more emphasis on supply-side factors relative to demand-side factors in the context of integration. Demand side factors only marginally impact waste reduction efforts. Similarly, the food sector is most sensitive to integration efforts attaching high importance to sustainability and efficiency initiatives. These results can be a useful guide for managers and policymakers who are planning and executing at the interface of demand and supply chains in developing countries.Design/methodology/approachCross-sector analysis by survey questionnaire of 162. Descriptive statistical analyses were performed on the data for the study participants. Continuous variables were summarised using mean and standard deviation (SD), median and IQR; and proportions were used for nominal and ordinal variables. A total score measuring perception of employees towards supply–demand integration was analysed and compared by company-related factors (sector/industry, length of service in firm (years) and the number of employees). Comparisons were made using the chi-square test or ANOVA. A linear regression model was utilised to examine the independent effect of supply and demand side factors on employees' perception of integration. The model controlled for the sector, length of service and number of employees. Statistical significance was considered at p < 0.05.FindingsThe linear regression results showed that supply items significantly predicted integration. That is, higher supply–demand integration scores were significantly related to indicators for using supply variables in supply chain management (SCM) improves operational efficiency (OE), integrating supply variables at the execution stage reduces overall waste and including at least one supply-side variable in supply planning (p < 0.05). The indicator for integrating demand variables at the execution stage reduces overall waste was only marginally related to an increased integration scores (p = 0.089). Lastly, a significantly better perception of supply–demand integration was reported by employees in the food sector compared to those in the fashion sector (p = 0.018). Length of service or number of employees in the firm was not related to perception towards supply–demand integration.Research limitations/implicationsThough accessing 162 companies in the Saudi market is a significant sample size given the fact that they are quite conservative in sharing supply and demand information. However, for better generalisation and richer insights, more sectors like manufacturing, oil and gas and hospitality should be added in future. Cross-country analysis from developing countries can be another interesting future direction.Originality/valueThis empirical paper draws its strength from the scale and depth of empirical data collected from Saudi companies belonging to multiple sectors to better understand demand and supply chain integration, especially from sustainability and waste reduction. This is true in the era of the pandemic and its associated risks for both upstream and downstream. The developing countries' perspective is important as not enough is written in the literature given the difficulties in accessing the information and subsequent analysis. The insights are bound to be unique as a consumer in these countries is undergoing significant socioeconomic changes affecting the supply chain of the companies.