The effect of efficient supply chain management on firm profitability:

Abstract

The study's objective was to investigate the effects of efficient supply chain management on the firm profitability of seven (7) listed manufacturing companies on the DSE (2010 to 2020) using panel data analysis over an eleven-year period. The information was derived from secondary data found in the company under study's audited annual financial reports. Stata version 15 was used for the analysis. The regression coefficients were determined using the Ordinary Least Squares (OLS) model. The results of the study showed that the supply chain cost ratio variable had a positive relationship with firm profitability and was statistically significant at the 1% level, while the days sales outstanding variable had a negative relationship with firm profitability and was statistically significant at the 10% level. Although statistically insignificant, the days payable outstanding and the responsive inventory had a negative impact on the firm's profitability. According to the study's findings, managers shouldn't be lax in demanding payment from clients who purchase items on credit in order to maximize revenue for listed companies. According to the study, in order to meet the shareholders' goal of maximizing wealth across their operations, the management team should work on lowering supply chain costs, reducing days sales outstanding, and eventually maintaining highly successful companies.