Impact of supply chain cost management practices on competitive advantage: Evidence from the Indian automobile industry

Abstract

This study examines how strategic supply chain cost management practices (SCCMP) influence the competitive advantage (CA) of Indian automobile companies. Utilizing a descriptive, cross-sectional survey design, data were collected from 49 companies affiliated with the Society of Indian Automobile Manufacturers (SIAM). Exploratory and confirmatory factor analyses validated the constructs, while Partial Least Squares Structural Equation Modelling (PLS-SEM) tested the hypothesized relationships. Results show that practices such as Target Costing, Activity-Based Costing, Kaizen Costing, and Open Book Accounting significantly enhance firms’ abilities to compete on price, quality, delivery dependability, innovation, and time to market. The structural model demonstrated strong explanatory power (R² = 0.896), large effect size (f² = 0.469), and excellent out-of-sample predictive accuracy. The findings underscore the strategic value of cost-focused supply chain initiatives, offering critical insights for both academia and practitioners in emerging economies.