Measuring and comparing volume flexibility across Indian firms. (1st January 2013)

• Record Type: Journal Article
• Authors: Srivastava, Samir K.; Bansal, Sahil
• Is Part Of: International journal of business performance management. Volume 14:Number 1(2013)
• Page Start: 38
• Page End: 51
• Publication Date: 2013-01-01
• Subjects: business performance -- volume flexibility -- operations strategy -- supply chains -- performance measurement -- long-term competitiveness -- India -- empirical research; Industrial management -- Periodicals; 658.005
• Languages: English
• ISSNs: 1368-4892

Abstract

This paper measures and compares volume flexibility across 500 Indian firms using financial statement analysis to derive useful insights. These firms from six broad sectors were classified into three categories on basis of sales revenues. The results suggest that small firms derive their volume flexibility competitive advantage from their ability to use production technology to support output fluctuations. However, this does not enhance their financial performance. When sales demand uncertainty, technology and financial performance are measured simultaneously on a composite measure, large firms are found to be more volume flexible. Volume flexibility measures are found insignificant for sectors other than power and manufacturing. The results also indicate that inventory fluctuations are not always in line with the income and expenses for a firm. This is a unique aspect of Indian firms indicating that the inventory controls are not as strong as in developed countries.