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Management and Industrial Engineering

Liliana Avelar-Sosa
Jorge Luis García-Alcaraz
Aidé Aracely Maldonado-Macías

Evaluation of
Supply Chain
Performance
A Manufacturing Industry Approach
Management and Industrial Engineering

Series editor
J. Paulo Davim, Aveiro, Portugal
More information about this series at http://www.springer.com/series/11690
Liliana Avelar-Sosa Jorge Luis García-Alcaraz
•

Aidé Aracely Maldonado-Macías

Evaluation of Supply Chain

Performance
A Manufacturing Industry Approach

123
Liliana Avelar-Sosa Aidé Aracely Maldonado-Macías
Department of Industrial Engineering Department of Industrial Engineering
and Manufacturing, Institute and Manufacturing, Institute
of Engineering and Technology of Engineering and Technology
Universidad Autónoma de Ciudad Juárez Universidad Autónoma de Ciudad Juárez
Ciudad Juárez, Chihuahua, Mexico Ciudad Juárez, Chihuahua, Mexico

Jorge Luis García-Alcaraz

Department of Industrial Engineering
and Manufacturing, Institute
of Engineering and Technology
Universidad Autónoma de Ciudad Juárez
Ciudad Juárez, Chihuahua, Mexico

ISSN 2365-0532 ISSN 2365-0540 (electronic)

Management and Industrial Engineering
ISBN 978-3-319-93875-2 ISBN 978-3-319-93876-9 (eBook)
https://doi.org/10.1007/978-3-319-93876-9
Library of Congress Control Number: 2018946583

© Springer International Publishing AG, part of Springer Nature 2019

This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part
of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
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The use of general descriptive names, registered names, trademarks, service marks, etc. in this
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With respect, admiration, and Love,
I dedicate this book to all the people who
helped me to identify my own potential,
which I did not even believed possessed.
Especially To:
God. He is who giving peace to my life.
My daughter Andrea Sifuentes, she is my
daily motivation and my best life project.
My husband Ernesto Sifuentes, he is mine
major pillar and support, and the best
competition of overcoming.
My parents Mariía A. Sosa and Arturo
Avelar, they who sowed in me a great seed of
superation. My sisters and brother, they have
taught me the value of the family.
My teachers, colleagues, students, and
friends for their advice and teachings.
Liliana Avelar-Sosa

Humans take inspiration when they set a

goal. To me, my family is my inspiration,
which is why I dedicate this book to:
God. I thank Him for everything.
My parents, my life teachers.
My to my children (Jorge Andres
García-Rodríguez and Mariana Odette
García-Rodriguez) reason to be of my life, my
greatest pillars and strengths.
My wife, Ana Blanca Rodríguez-Rendon, for
her unconditional support in all the projects
I undertake.
My brothers and sisters, who taught me the
best lessons at home.
My brothers who recognize me and accept me
as such.
Jorge Luis García-Alcaraz

I dedicate this book to my parents who have

been an example of strength and love on the
struggles o life. Thanks for all your support.
Aidé Aracely Maldonado-Macías
Foreword

Supply chain management has experienced a rapid evolution as a subdiscipline

inside operation management; it is well known that successful world-class com-
panies compete fiercely with their supply chain’s performance. In this manner, a
critical aspect of successfully managing the supply chain lies in measuring and
observing the proper factors that conduct higher benefits. Export-oriented manu-
facturing industries in developing countries such as México face an even greater
challenge in the race for competitiveness, and the performance evaluation
approaches applied for them present a great opportunity for research.
Accordingly, the book is divided into three parts. Part 1, Competitive Aspects of
Supply Chain encompasses Chaps. 1–4. Chapter 1 presents the concept and
importance of competitiveness for the supply chain. This chapter introduces the
topics of competitive advantage and comparative advantage in supply chain’s
performance. Chapter 2 presents additional relevant concepts for a global approach
of modern supply chain management and improvement. Chapter 3 introduces the
reader to the manufacturing industry in Mexico and its transformation; it helps to
understand the context of this research and offers an overview of this industry in
developing countries, and Chap. 4 explains the relationship between the supply
chain and the export-oriented manufacturing industry and discusses how this
relationship can impact the ability of companies to stay competitive in a global
market. Additionally, an overview of the most common supply chain evaluation
approaches in the export-oriented manufacturing industry is presented.
Part II is entitled Supply Chain Performance Factors and includes Chaps. 5–8.
Chapter 5 debates about the concepts related to supply chain performance and
supply chain performance evaluation. Companies around the world are continu-
ously searching for a wide range of benefits for competitiveness; in this pursuit,
several supply chain attributes play an important role and the proper metrics must
be employed for their evaluation. The chapter explains how these attributes and
metrics are classified from a financial perspective and how an operational, tactical,
or strategic approach can be used to describe the qualitative and quantitative aspects
of the supply chain. In Chap. 6, these factors associated with supply chain per-
formance in the manufacturing industry are explained. The main concepts and the

vii
viii Foreword

overview of the elements that impact on the supply chain performance are dis-
cussed. In this manner, some important topics, such as supply chain risks, manu-
facturing practices, and regional factors are extensively explained. Chapter 7
describes the performance factors associated with benefits in the supply chain
considered in this book. These attributes present relationships with financial and no
financial performance. Some attributes include flexibility, agility, customer service,
transportation, quality, delivery times, inventory, and financial performance.
Chapter 8 discusses some of the most used supply chain evaluation methodologies
in the industrial environment. The first chapter addresses the multivariate tech-
niques and then the regression and factor analysis techniques. These methods are
needed to understand the methodology proposed in Chap. 9 for determining the
critical factors on supply chain performance for achieving competitiveness in
manufacturing industry.
Finally, Part III presents the Impact of Competitiveness Aspects on the Supply
Chain. Chapter 9 describes the complete methodology for validating latent variables
which will help define and measure the constructs needed in this research. This step
precedes the determination of structural equations models to establish the rela-
tionship among variables and determine their impact on the declared dependent
variables. Proper interpretation for each model is provided with respect to the
impact of these variables on supply chain’s performance. Chapter 10 makes an
exploratory analysis of the data collected in the research and discusses the aspects
used to measure supply chain risks, manufacturing practices, and regional impact
factors. Statistical data of 225 questionnaires are reported, out of which the 67% are
companies with more than 500 employees, and the 29.8% are of automotive
industrial sector. Chapter 11 presents the effects of manufacturing practices and risk
factors on supply chain performance through structural equation models to consider
the relationships between three types of supply chain risk factors—supply risks,
demand risks, production process risks—and supply chain performance indices.
Chapter 12 explains the impact of regional aspects on supply chain performance.
Specifically, these aspects are: regional infrastructure, regional costs, services,
service quality, and the role of the government as regulator. Simple and more
complex models are developed to understand the influence of these aspects on
achieving supply chain performance benefit variables. Chapter 13 explores the
Regional Impact Factors with supply chain performance benefits. Main results
indicate that aspects such as infrastructure and government support are important
for companies to operate, yet they cannot be controlled inside of the facilities and
depend on external forces. In his manner, they are the cause of uncertainty for
companies. Chapter 14 explores the impact of manufacturing practices on supply
chain performance. The relation between four management strategies for manu-
facturing are studied, total quality management, just in time, maintenance and
advanced manufacturing technology. The results show that advanced manufactur-
ing technologies present a significant contribution in achieving better results in the
process and in quality control.
Foreword ix

Finally, Chap. 15 presents the impact of manufacturing practices on the per-

formance of the supply chain, for example, in agility and flexibility. Furthermore,
this chapter shows an integrator model that summarizes all the contents explained in
this book, since it is, perhaps, the most important contribution. The integrator model
points out the impact that risk factors, regional impact factors, and manufacturing
practices present to the performance of supply chains for exportation. Therefore,
some conjectures are validated, such as the fact that to improve the competitiveness
of a company, it is necessary to consider the features of the environment, where it
operates. For example, it can be considered the Government participation, sup-
porting companies, available infrastructure, services, or qualified task force among
many others.
We genuinely believe that this book contributes to increase the knowledge of the
supply chain attributes and their relationship with main benefits to remain com-
petitive. Accordingly, this book offers specific strategies to improve the supply
chain performance and the metrics to develop reliable actions for continuous
improvement among all the supply chain members. Therefore, we widely recom-
mend it for being very useful to students, decision makers, researchers in academia,
and professional engineers working in these areas. We hope that you find its lecture
not only useful but also enjoyable and help you in your profession to visualize a
new perspective of modern logistics for manufacturing industry.

Logroño, Spain Emilio Jiménez Macías

University of La Rioja

Pamplona, Spain Juan Ignacio Latorre Biel

Public University of Navarre
Institute of Smart Cities
Preface

Nowadays, globalization has made supply chains more complex and brings
important challenges related to products, customer locations, suppliers, trans-
portation requirements, trade regulations, and taxes on international trade. All these
challenges appear from the beginning of the production process, yet companies, as
inherent elements of the supply chain, must work to simplify the supply chain
stages and process as much as possible to increase earnings and achieve success. To
the largest extent possible, and according to the particular characteristics of each
supply chain, it is important to reincorporate new business strategies to transform
the organization and guarantee its survival and competitiveness. A supply chain
consists in many parties and production stages (Liu and Liu 2017). More explicitly,
a supply chain involves a system of organizations, people, activities, information,
and resources working together for moving a product or service from supplier to
customer. In a supply chain takes place the transformation of natural resources, raw
materials, and components into a finished product that is provided to the end
customer (Kain and Verma 2018). The study of supply chains starts in the early
1990s when old business paradigms must be changed due to globalization.
Nowadays, companies around the world recognize that they can gain competitive
advantage through its supply chain proficiencies. However, supply chain of
export-oriented manufacturing industries in developing countries such as Mexico
present peculiarities of interest and very little has been published about them.
Competitiveness in exporting manufacturers is a hot topic for scholars and indus-
trialists alike in their pursuit of the best recipe for higher profitability within an
uncertain and dynamic competitive environment. However, the legal and govern-
ment institutions that nowadays regulate the economies also have an important role
in the implementation of long-term economic development projects that provide not
only long-lasting competitive strategies, but also ways to systematically improve
these strategies, thereby reinventing their ability to enter complex global value
chains successfully. The competitiveness of exporting companies in Mexico largely
depends on the global value chains in which these companies participate. That said,
these companies must comply with specific tasks, forms of work, basic knowledge
requirements, experience, abilities, and skills (including foreign language skills) to

xi
xii Preface

produce better products at lower costs and with timely deliveries. This allows them
to move from a regionally competitive industry to an internationally competitive
sector.
This book presents a quite complete approach for increasing the knowledge
of the logistics and supply chain management of these industries. Export-oriented
manufacturing industries entail intensive mounting processes that requires majorly
handwork. They arose from the presence of Mexico into the North American Free
Trade Agreement (NAFTA) with the USA and Canada, facilitating the exportation
of their products. As a result, logistic activities among these industries have
increased their relevance due to the movement of import of raw materials and
export of finished goods thru their supply chains (Avelar-Sosa et al. 2015).
Once this context is explained, the book presents the conceptualization of the
supply chain performance in which several performance indicators are described
and the evolution of these measurements is overviewed. Additionally, in order to
conduct evaluation practices, several factors must be considered. In this way, those
related to supply chain’s performance in the manufacturing industry are widely
discussed in twosome chapters. Accordingly, the book presents several risk man-
agement perspectives and risk assessment methodologies. Accordingly, evaluation
approaches for supply chain performance have proliferated in the literature and this
book has compiled the most accepted methodologies. Nevertheless, the book
proposes an entire methodology to determine the relationship among supply chain
factors with their corresponding benefits using structural modeling. It also includes
an integrative model to clarify these relationships and determine direct, indirect and
total effects to quantify the impact of these factors to obtain mayor benefits.
During its 15 chapters, this book offers valuable information that encourages
companies to evaluate their supply chain performance and proposes a complete
methodology to achieve this goal as well. A competitive world requests for the best
companies, and this book is offering a clear methodology to determine those
specific factors that impact companies’ profits.
In this manner, we believe that this book is the ideal way for spreading
knowledge among decision makers, postgraduate students, academics, researchers,
and other professionals interested in the improvement of supply chain performance
and manufacturing industries around the world. We have confidence that readers
can find our work useful, interesting, innovative and a real contribution to
improving supply chain performance in manufacturing environments.

Ciudad Juárez, Mexico Liliana Avelar-Sosa

Jorge Luis García-Alcaraz
Aidé Aracely Maldonado-Macías
Preface xiii

References

Avelar-Sosa L, García-Alcaraz JL, Vergara-Villegas OO, Maldonado-Macías AA, Alor-Hernández

G (2015) Impact of traditional and international logistic policies in supply chain performance.
Int J Adv Manuf Technol 76:913–925 https://doi.org/10.1007/s00170-014-6308-3
Kain R, Verma A (2018) Logistics Management in Supply Chain—An Overview Materials
Today: Proceedings 5:3811–3816 https://doi.org/10.1016/j.matpr.2017.11.634
Liu F-hF, Liu Y-c (2017) A methodology to assess the supply chain performance based on
gap-based measures. Comput Ind Eng 110:550–559 https://doi.org/10.1016/j.cie.2017.06.010
Acknowledgements

Authors would like to acknowledge the tireless efforts of all those people involved
in the publication of this book. Without their support, this project would be much
impaired. We specially thank our research group UACJ CA 93, also called Design,
Evaluation, Processes, and Products Optimization. This research group is currently
consolidated nationally through the Program for Professional Teacher Development
led by the Secretariat of Public Education of Mexico.
In addition, we particularly express our gratitude to Manufacturing Industry
Enterprises of Ciudad Juárez for the essential contribution of data, which were the
principal ingredient for this book, and because with these information we finding
important regional contributions of Manufacturing Industry and Supply Chain
Management in this type of companies.
Mention must also be made of María Fernanda Villafuerte Bianchi for her
valuable comments concerning the translation and editing process of this work.
However, we hereby confirm that the book content is our responsibility.
Finally, we thank the National Council of Science and Technology (CONACYT),
and the Teachers’ Professional Development Program (PRODEP) for providing
the financial resources in this research, through project Thematic Network of
Industrial Process Optimization (ROPRIN) no. 293683. We thank the Universidad
Autónoma de Ciudad Juárez for providing the facilities and databases needed for
this research.

xv
Contents

Part I Competitiveness Aspects of Supply Chain

1 Conceptualization of Supply Chain Competitiveness . . . . . . . . . . . . 3
1.1 Evolution of the Concept of Competitiveness . . . . . . . . . . . . . . 3
1.2 Definitions of Competitiveness . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2.1 Competitiveness from an International Approach . . . . 5
1.2.2 Competitiveness from a National Approach . . . . . . . . 6
1.2.3 Competitiveness from an Industrial Approach . . . . . . 7
1.2.4 Competitiveness from a Regional Approach . . . . . . . . 8
1.3 Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.4 Comparative Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Competitiveness and Supply Chain . . . . . . . . . . . . . . . . . . . . . 10
1.6 Definition of Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2 The Importance of Supply Chains in Global Competitiveness .... 15
2.1 Global Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 15
2.2 The Supply Chain and Its Relationship with Global
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 18
2.3 Successful Companies with an Excellent Supply Chain
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 20
2.4 Why Do Companies Want to Improve Their Supply
Chains? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 22
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 23
3 Conceptualization and Environment of Competitiveness
in the Manufacturing Industry . . . . . . . . . . . . . . . . . . . . ........ 25
3.1 The Manufacturing Industry in Mexico
and Its Transformation . . . . . . . . . . . . . . . . . . . . . . ........ 25
3.2 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ 26
3.3 Trade Opening . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ 27

xvii
xviii Contents

3.4 Importance of Manufacturing Industry and Numbers . . . . . . . . . 29

3.5 Mexican Manufacturing Industry: Peculiarities . . . . . . . . . . . . . 30
3.5.1 Industrial Upgrading in Mexico: An Overview . . . . . . 31
3.5.2 Main Export-Oriented Manufacturing Industries . . . . . 33
3.6 The Manufacturing Industry in Ciudad Juárez and Its
Evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 36
3.6.1 The Manufacturing Industry in Ciudad Juárez:
Important Data . . . . . . . . . . . . . . . . . . . . . . . . ..... 37
3.7 Competitiveness in the Manufacturing Industry . . . . . . . . ..... 38
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 41
4 Supply Chain Evaluation in the Manufacturing Industry . . . . . . . . 47
4.1 The Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.1.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.1.2 Modern Supply Chains . . . . . . . . . . . . . . . . . . . . . . . 51
4.2 Supply Chain in the Export-Oriented Manufacturing
Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 53
4.2.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 53
4.2.2 The Supply Chain in the Export-Oriented
Manufacturing Industry . . . . . . . . . . . . . . . . ....... 55
4.3 Supply Chain Evaluation Trends . . . . . . . . . . . . . . . . ....... 57
4.4 Supply Chain Evaluation in the Export-Oriented
Manufacturing Industry . . . . . . . . . . . . . . . . . . . . . . . ....... 60
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 61

Part II Supply Chain Performance Factors

5 Conceptualization of Supply Chain Performance . . . . . . . . . . . . . . 69
5.1 Supply Chain Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.1.1 Definition of Performance . . . . . . . . . . . . . . . . . . . . . 69
5.1.2 Goal of Performance Measurement . . . . . . . . . . . . . . 70
5.1.3 Performance Indicators . . . . . . . . . . . . . . . . . . . . . . . 71
5.1.4 Performance Improvement Goals in the Supply
Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.1.5 Evolution of Supply Chain Performance . . . . . . . . . . 73
5.2 Supply Chain Performance Attributes (Metrics) . . . . . . . . . . . . 76
5.2.1 Performance and Measurement Categories . . . . . . . . . 77
5.3 Supply Chain Performance Measurement Models . . . . . . . . . . . 82
5.4 Performance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Contents xix

6 Supply Chain Performance Factors in the Manufacturing

Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 91
6.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 91
6.2 Factors Associated with Performance in the Manufacturing
Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.3 Supply Chain Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
6.3.1 Definition of Risk and Risk Management . . . . . . . . . . 95
6.3.2 Risk Assessment Methodologies . . . . . . . . . . . . . . . . 97
6.3.3 Types of Supply Chain Risk . . . . . . . . . . . . . . . . . . . 99
6.4 Manufacturing Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
6.4.1 Toyota Production System and Competitiveness
Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
6.5 Regional Aspects of the Supply Chain . . . . . . . . . . . . . . . . . . . 113
6.5.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
7 Supply Chain Performance Attributes and Benefits
in the Manufacturing Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
7.1 Overview of Supply Chain Performance (SCP) . . . . . . . . . . . . . 129
7.2 Concept of Supply Chain Performance . . . . . . . . . . . . . . . . . . . 130
7.3 Attributes for Supply Chain Performance Measurement . . . . . . . 131
7.3.1 Agility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
7.3.2 Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
7.3.3 Customer Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
7.3.4 Delivery Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
7.3.5 Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
7.3.6 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
7.3.7 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
7.3.8 Financial Performance . . . . . . . . . . . . . . . . . . . . . . . 137
7.4 Firm Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.4.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.4.2 Financial Performance Benefits . . . . . . . . . . . . . . . . . 140
7.4.3 Firms Benefits Associated to Non-financial
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
7.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8 Supply Chain Evaluation and Methodologies . . . . . . . . . . . . . . . . . 149
8.1 Analysis of Performance Factors . . . . . . . . . . . . . . . . . . . . . . . 149
8.2 Multivariate Analysis Methods . . . . . . . . . . . . . . . . . . . . . . . . 151
8.2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.2.2 Multiple Linear Regression . . . . . . . . . . . . . . . . . . . . 153
xx Contents

8.2.3 Path Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

8.2.4 Factor Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
8.2.5 Structural Equations (SE) . . . . . . . . . . . . . . . . . . . . . 158
8.3 Structural Equation Modeling (SEM) . . . . . . . . . . . . . . . . . . . . 160
8.3.1 Partial Least Squares (PLS) . . . . . . . . . . . . . . . . . . . . 161
8.3.2 Characteristics of PLS Path Modeling . . . . . . . . . . . . 163
8.3.3 Observed Variables and Latent Variables . . . . . . . . . . 164
8.3.4 Sample Size in PLS Path Modeling . . . . . . . . . . . . . . 165
8.3.5 Specifications of PLS Path Modeling . . . . . . . . . . . . . 165
8.3.6 Basic Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.3.7 Evaluation Criteria for the Measurement Model . . . . . 169
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

Part III Impact of Competitiveness on the Supply Chain

Performance
9 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
9.1 Stage 1. Survey Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
9.2 Stage 2. Survey Development . . . . . . . . . . . . . . . . . . . . . . . . . 177
9.2.1 Section 1. Demographic Data . . . . . . . . . . . . . . . . . . 178
9.2.2 Section 2. Risk Assessment . . . . . . . . . . . . . . . . . . . . 178
9.2.3 Section 3. Regional Elements Assessment . . . . . . . . . 179
9.2.4 Section 4. Manufacturing Practices Assessment . . . . . 179
9.2.5 Section 5. Supply Chain Performance . . . . . . . . . . . . 180
9.3 Stage 3. Assessment Scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
9.4 Stage 4. Survey Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
9.5 Stage 5. Pilot Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
9.6 Stage 6. Final Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
9.7 Stage 7. Survey Administration . . . . . . . . . . . . . . . . . . . . . . . . 183
9.8 Stage 8. Data Capture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
9.9 Stage 9. Data Screening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
9.9.1 Missing Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
9.9.2 Extreme Values or Outliers . . . . . . . . . . . . . . . . . . . . 184
9.9.3 Zero Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
9.9.4 Normality Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
9.9.5 Homoscedasticity Test . . . . . . . . . . . . . . . . . . . . . . . 186
9.9.6 Multicollinearity Tests . . . . . . . . . . . . . . . . . . . . . . . 186
9.10 Stage 10. Descriptive Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 187
9.10.1 Descriptive Analysis of the Sample . . . . . . . . . . . . . . 187
9.10.2 Descriptive Analysis of the Items . . . . . . . . . . . . . . . 188
9.11 Stage 11. Data Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
9.11.1 Cronbach’s Alpha—Internal Consistency . . . . . . . . . . 189
Contents xxi

9.11.2 Average Variance Extracted (AVE), Convergent

and Discriminant Validity . . . . . . . . . . . . . . . . . . . . . 190
9.11.3 Correlation Coefficient, Predictive Validity . . . . . . . . . 191
9.11.4 Dillon–Goldstein’s Rho Indicator, Composite
Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
9.12 Stage 12: Hypotheses and Structural Equation Models . . . . . . . 192
9.12.1 Latent Variable Effects . . . . . . . . . . . . . . . . . . . . . . . 193
9.12.2 Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
9.12.3 Model Fit and Quality Indices . . . . . . . . . . . . . . . . . . 196
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
10 Exploratory Analysis of the Data . . . . . . . . . . . . . . . . . . . . . . . . . . 205
10.1 Introduction and Generalities . . . . . . . . . . . . . . . . . . . . . . . . . . 205
10.2 Sample Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
10.3 Descriptive Analysis of Risk Factors . . . . . . . . . . . . . . . . . . . . 208
10.4 Descriptive Analysis of Regional Factors . . . . . . . . . . . . . . . . . 210
10.5 Descriptive Analysis of Manufacturing Practices . . . . . . . . . . . . 214
10.6 Descriptive Analysis of Supply Chain Performance . . . . . . . . . . 215
10.7 Exploratory Factor Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 219
10.7.1 Risks Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
10.7.2 Regional Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
10.7.3 Manufacturing Practices . . . . . . . . . . . . . . . . . . . . . . 221
10.7.4 Supply Chain Performance . . . . . . . . . . . . . . . . . . . . 224
10.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
11 Supply Chain Risks in Supply Chain Performance . . . . . . . . . . . . . 227
11.1 Model Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
11.2 Simple Models: Risk—Supply Chain Performance . . . . . . . . . . 228
11.2.1 Simple Model A: Supply Risks—Delivery Times . . . . 228
11.2.2 Simple Model B: Production Process
Risk—Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
11.2.3 Summary for Simple Models A and B . . . . . . . . . . . . 234
11.3 Complex Risk Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
11.3.1 Complex Model C: External Risks—Internal
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
11.3.2 Complex Model D: Interrelations Among Supply
Chain Risk Variables . . . . . . . . . . . . . . . . . . . . . . . . 250
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
12 The Role of Regional Factors on Supply Chain Performance . . . . . 261
12.1 Latent Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
12.2 Simple Models: Regional Factors—Supply Chain Performance
(Benefits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262
xxii Contents

12.2.1 Simple Model A: Regional Infrastructure–Agility . . . . 262

12.2.2 Simple Model B: Workforce-Flexibility . . . . . . . . . . . 266
12.3 Summary of Simple Models: Regional Factors—Benefits . . . . . 270
12.3.1 Latent Variable Validation for Regional Factors . . . . 271
12.3.2 Latent Variable Validation for Supply Chain
Performance (Benefits) . . . . . . . . . . . . . . . . . . . . . . . 271
12.3.3 Simple Hypotheses: Regional Factors–Benefits . . . . . . 273
12.4 Validation of Simple Hypotheses: Regional
Factors—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
12.5 Conclusions on Simple Hypotheses: Regional
Factors—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
12.5.1 Validation of Hypotheses: Regional
Infrastructure—Benefits . . . . . . . . . . . . . . . . . . . . . . 277
12.5.2 Conclusions and Implications of Hypotheses:
Regional Infrastructure—Benefits . . . . . . . . . . . . . . . 278
12.5.3 Validation of Hypotheses: Regional
Costs—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
12.5.4 Conclusions and Implications of Hypotheses:
Regional Costs—Benefits . . . . . . . . . . . . . . . . . . . . . 280
12.5.5 Validation of Hypotheses: Services—Benefits . . . . . . . 280
12.5.6 Conclusions and Implications of Hypotheses:
Services—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 281
12.5.7 Validation of Hypotheses: Government—Benefits . . . . 282
12.5.8 Conclusions and Implications of Hypotheses:
Government—Benefits . . . . . . . . . . . . . . . . . . . . . . . . 283
12.5.9 Validation of Hypotheses: Quality
of Life—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
12.5.10 Conclusions and Implications of Hypotheses:
Quality of Life—Benefits . . . . . . . . . . . . . . . . . . . . . . 284
12.5.11 Validation of Hypotheses: Proximity—Benefits . . . . . . 285
12.5.12 Conclusions and Implications: Proximity—Benefits . . . 286
12.5.13 Validation of Hypotheses: Workforce–Benefits . . . . . . 287
12.5.14 Conclusions and Implications of Hypotheses:
Workforce–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 288
12.6 Complex Models: Interrelations Among Regional Factors . . . . . 288
12.6.1 Complex Model C: Regional Factors . . . . . . . . . . . . 288
12.6.2 Complex Model D: Interrelations Among Regional
Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
Contents xxiii

13 Models of Regional Factors—Supply Chain Performance

(Benefits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
13.1 Complex Models: Regional Factors—Benefits . . . . . . . . . . . . . 309
13.1.1 Complex Model A: Regional Factors—Benefits . . . . 309
13.1.2 Complex Model B: Regional Factors—Benefits . . . . . 318
13.1.3 Complex Model C: Regional Factors—Benefits . . . . . 328
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337
14 The Role of Manufacturing Practices in Supply Chain
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343
14.1 Latent Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343
14.2 Simple Models: Manufacturing Practices–Supply Chain
Performance (Benefits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344
14.2.1 Simple Model A: Total Quality
Management–Quality . . . . . . . . . . . . . . . . . . . . . . . . 344
14.2.2 Simple Model B: Just in Time–Delivery Times . . . . . . 347
14.3 Summary of Simple Relations: Manufacturing
Practices–Performance (Benefits) . . . . . . . . . . . . . . . . . . . . . . . 350
14.3.1 Latent Variable Validation for Manufacturing
Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
14.3.2 Simple Hypotheses: Manufacturing Practices–
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
14.3.3 Latent Variable Validation Process: Supply Chain
Performance (Benefits) . . . . . . . . . . . . . . . . . . . . . . . 354
14.3.4 Hypotheses Validation: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 354
14.3.5 Conclusions for Simple Hypotheses: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 355
14.4 Complex Models: Relationships Among Manufacturing
Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361
14.4.1 Complex Model C: Manufacturing Practices . . . . . . . 362
14.4.2 Conclusions and Industrial Implications of Complex
Models: Relationships Among Manufacturing
Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371
15 Models of Manufacturing Practices and Integrative Model . . . . . . . 373
15.1 Model A: Manufacturing Practices–Benefits . . . . . . . . . . . . . . . 373
15.1.1 Hypotheses Formulation: Model A . . . . . . . . . . . . . . 373
15.1.2 Latent Variable Validation Process in Model A . . . . . 376
15.1.3 Evaluation of Model A: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 377
15.1.4 Efficiency Indices in Model A: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 378
xxiv Contents

15.1.5 Direct Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378

15.1.6 Effect Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379
15.1.7 Sum of Indirect Effects . . . . . . . . . . . . . . . . . . . . . . . 380
15.1.8 Total Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381
15.1.9 Conclusions and Industrial Implications for Model
A: Manufacturing Practices–Benefits . . . . . . . . . . . . . 381
15.2 Model B: Manufacturing Practices–Benefits . . . . . . . . . . . . . . . 382
15.2.1 Hypotheses Formulation: Model B . . . . . . . . . . . . . . 383
15.2.2 Latent Variable Validation Process of Model B . . . . . 386
15.2.3 Evaluation of Model B: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
15.2.4 Efficiency Indices in Model B: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 387
15.2.5 Direct Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388
15.2.6 Effect Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388
15.2.7 Sum of Indirect Effects . . . . . . . . . . . . . . . . . . . . . . . 389
15.2.8 Total Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390
15.2.9 Conclusions and General Implications for Model B:
Manufacturing Practices–Benefits . . . . . . . . . . . . . . . 391
15.3 Integrative Model (Regional Factors–Risks
Factors–Manufacturing Practices–Supply Chain
Performance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392
15.3.1 Hypotheses in the Integrative Model . . . . . . . . . . . . . 393
15.3.2 Latent Variable Validation Process of Integrative
Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
15.3.3 Results of Integrative Model Evaluated . . . . . . . . . . . 400
15.3.4 Direct Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
15.3.5 Effect Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
15.3.6 Sum of Indirect Effects . . . . . . . . . . . . . . . . . . . . . . . 403
15.3.7 Total Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403
15.3.8 Conclusions and Industrial Implications
for Integrative Model . . . . . . . . . . . . . . . . . . . . . . . . 404
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406
List of Figures

Fig. 1.1 Dual double diamond model. Adapted from Cho et al.
(2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
Fig. 4.1 Supply chain stages. Source Chopra et al. (2013) . . . . . . . . . .. 49
Fig. 4.2 Relationship between CRM and SRM. Source Lambert
(2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50
Fig. 4.3 Supply chain management. Source Ballou (2004), Mentzer
et al. (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 51
Fig. 5.1 Characteristics of traditional and innovative performance
vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 75
Fig. 5.2 Performance challenges and trends. Source Bititci et al.
(2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 76
Fig. 8.1 Example of path analysis. Source Wright (1971) . . . . . . . . . . . 156
Fig. 8.2 Example of factor analysis. Source Prepared
by the authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Fig. 8.3 Example of structural equations. Source Own . . . . . . . . . . . . . 159
Fig. 8.4 A measurement model and a structural model in SEM.
Source Own . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Fig. 8.5 Structural equation model with indicators, example.
Source Own . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Fig. 8.6 Parameters to be estimated in a structural equation model.
Source Own . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Fig. 8.7 Parameter estimation process diagram. Source Own . . . . . . . . . 168
Fig. 9.1 Causal model with a simple hypotheses . . . . . . . . . . . . . . . . . . 192
Fig. 9.2 Causal model with multiple hypotheses . . . . . . . . . . . . . . . . . . 193
Fig. 11.1 Simple Model A proposed: Supply Risks—Delivery Times . . . . 228
Fig. 11.2 Simple Model A evaluated: Supply Risks—Delivery Times . . . 229
Fig. 11.3 Relationship between Supply Risks and Delivery Times . . . . . . 231
Fig. 11.4 Simple Model B proposed: Production Process
Risk—Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
Fig. 11.5 Simple Model B evaluated: Production Process
Risk—Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

xxv
xxvi List of Figures

Fig. 11.6 Complex Model C proposed: External Risks—Internal

Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
Fig. 11.7 Complex Model C evaluated: External Risks—Internal
Benefits (performance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Fig. 11.8 Initial complex Model D proposed: interrelations among
supply chain risks variables . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Fig. 11.9 Complex Model D evaluated: interrelations among supply
chain risks variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
Fig. 12.1 Simple Model A proposed: Regional
Infrastructure–Agility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262
Fig. 12.2 Simple Model A evaluated: Regional
Infrastructure–Agility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Fig. 12.3 Relationship of standardized values between Regional
Infrastructure–Agility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
Fig. 12.4 Simple Model B proposed: Workforce–Flexibility . . . . . . . . . . 266
Fig. 12.5 Simple Model B evaluated: Workforce–Flexibility . . . . . . . . . . 268
Fig. 12.6 Relationship of standardized values between workforce
and flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270
Fig. 12.7 Complex Model C proposed: Regional Factors . . . . . . . . . . . . 289
Fig. 12.8 Complex Model C evaluated: Regional Factors . . . . . . . . . . . . 292
Fig. 12.9 Complex Model D proposed: Regional Factors . . . . . . . . . . . . 298
Fig. 12.10 Complex Model D evaluated: Regional Factors . . . . . . . . . . . . 301
Fig. 13.1 Complex Model A proposed: Regional Factors—Benefits . . . . 310
Fig. 13.2 Complex Model A evaluated: Regional Factors—Benefits . . . . 314
Fig. 13.3 Complex Model B proposed: Regional Factors—Benefits . . . . 319
Fig. 13.4 Complex Model B evaluated: Regional Factors—Benefits . . . . 323
Fig. 13.5 Complex Model C proposed: Regional Factors—Benefits . . . . 329
Fig. 13.6 Complex Model C evaluated: Regional Factors—Benefits . . . . 333
Fig. 14.1 Simple Model A proposed: Total Quality
Management–Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344
Fig. 14.2 Simple Model A evaluated: Total Quality
Management–Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345
Fig. 14.3 Relationship standardized values between Total Quality
Management–Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
Fig. 14.4 Simple Model B proposed: Just in Time–Delivery Times . . . . . 347
Fig. 14.5 Simple Model B evaluated: Just in Time–Delivery Times . . . . . 348
Fig. 14.6 Relationship standardized values between Just in Time
and Delivery Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Fig. 14.7 Complex Model C proposed: Manufacturing Practices . . . . . . 362
Fig. 14.8 Complex Model C evaluated: Manufacturing Practices . . . . . . 366
Fig. 15.1 Model A proposed: Manufacturing Practices–Benefits . . . . . . . 374
Fig. 15.2 Model A evaluated: Manufacturing Practices–Benefits . . . . . . . 377
Fig. 15.3 Model B proposed: Manufacturing Practices–Benefits . . . . . . . 383
Fig. 15.4 Model B evaluated: Manufacturing Practices–Benefits . . . . . . . 387
List of Figures xxvii

Fig. 15.5 Integrative model proposed: Regional Factors–Risks

Factors–Manufacturing Practices–Supply Chain
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
Fig. 15.6 Integrative model evaluated: Regional Factors–Risks
Factors–Manufacturing Practices–Supply Chain
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
List of Tables

Table 4.1 Supply chain attributes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 58

Table 5.1 Evolution of performance measurement and context
organizational . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Table 5.2 Evolution of performance measurement vision . . . . . . . . . . . . 75
Table 5.3 Types of supply chain performance . . . . . . . . . . . . . . . . . . . . 80
Table 5.4 Classification of performance, according to Chan (2003) . . . . 80
Table 5.5 Supply chain performance categories . . . . . . . . . . . . . . . . . . . 82
Table 6.1 Risk attributes and risk assessment methodologies . . . . . . . . . 99
Table 6.2 Supply chain risk types, factors, and elements . . . . . . . . . . . . 100
Table 6.3 Demand risks elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Table 6.4 Supply risks elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Table 6.5 Regional attributes reported in the literature . . . . . . . . . . . . . . 115
Table 8.1 Trends in supply chain analysis and methodologies . . . . . . . . 150
Table 8.2 Multivariate methods for supply chain performance
analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Table 8.3 Characteristics of PLS path modeling . . . . . . . . . . . . . . . . . . . 163
Table 9.1 Assessment scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Table 10.1 Industrial sector and participation . . . . . . . . . . . . . . . . . . . . . . 206
Table 10.2 Industrial sector and sample gender . . . . . . . . . . . . . . . . . . . . 207
Table 10.3 Company size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Table 10.4 Work experience and job positions. . . . . . . . . . . . . . . . . . . . . 208
Table 10.5 Descriptive analysis of risk attributes . . . . . . . . . . . . . . . . . . . 209
Table 10.6 Descriptive analysis of the regional attributes . . . . . . . . . . . . . 211
Table 10.7 Descriptive analysis of manufacturing practices . . . . . . . . . . . 214
Table 10.8 Descriptive analysis of performance attributes . . . . . . . . . . . . 217
Table 10.9 Factor analysis of risk attributes . . . . . . . . . . . . . . . . . . . . . . . 221
Table 10.10 Factor analysis of regional attributes . . . . . . . . . . . . . . . . . . . 222
Table 10.11 Factor analysis of manufacturing practices . . . . . . . . . . . . . . . 223
Table 10.12 Factor analysis of supply chain performance benefits . . . . . . . 224
Table 11.1 Latent variable validation—simple Model A . . . . . . . . . . . . . 230
Table 11.2 Latent variable validation—simple Model B . . . . . . . . . . . . . 233

xxix
xxx List of Tables

Table 11.3 Latent variable coefficients—Supply Chain Risks . . . . . . . . . . 236

Table 11.4 Latent variable coefficients—Supply Chain Performance . . . . 237
Table 11.5 Summary of simple models (Supply Chain Risks—Supply
Chain Performance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
Table 11.6 Latent variable validation in complex Model C:
External Risks—Internal Benefits . . . . . . . . . . . . . . . . . . . . . . 246
Table 11.7 Effect sizes in complex Model C . . . . . . . . . . . . . . . . . . . . . . 248
Table 11.8 Sum of indirect effects in complex Model C . . . . . . . . . . . . . 249
Table 11.9 Sum of total effects in complex Model C . . . . . . . . . . . . . . . . 249
Table 11.10 Latent variable validation in complex Model D:
interrelations among supply chain risks variables . . . . . . . . . 254
Table 11.11 Total effects in complex Model D: interrelations among
supply chain risks variables . . . . . . . . . . . . . . . . . . . . . . . . . . 256
Table 12.1 Latent variable validation–simple Model A . . . . . . . . . . . . . . 264
Table 12.2 Latent variable validation–simple Model B . . . . . . . . . . . . . . 268
Table 12.3 Latent variable coefficients–Regional Factors. . . . . . . . . . . . . 271
Table 12.4 Validation of hypotheses: Regional factors–Benefits . . . . . . . 272
Table 12.5 Latent variable validation complex Model C: Regional
Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
Table 12.6 Effect sizes in complex Model C . . . . . . . . . . . . . . . . . . . . . . 295
Table 12.7 Sum of indirect effects in complex Model C . . . . . . . . . . . . . 296
Table 12.8 Total effects in complex Model C . . . . . . . . . . . . . . . . . . . . . 296
Table 12.9 Latent variable validation in complex Model D:
Regional Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
Table 12.10 Effect sizes in complex Model D . . . . . . . . . . . . . . . . . . . . . . 304
Table 12.11 Sum of indirect effects in complex Model D . . . . . . . . . . . . . 304
Table 12.12 Total effects in complex Model D . . . . . . . . . . . . . . . . . . . . . 305
Table 13.1 Latent variable validation complex Model A: Regional
Factors—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313
Table 13.2 Effect sizes complex Model A . . . . . . . . . . . . . . . . . . . . . . . . 315
Table 13.3 Sum of indirect effects in complex Model A . . . . . . . . . . . . . 316
Table 13.4 Total effects in complex Model A . . . . . . . . . . . . . . . . . . . . . 317
Table 13.5 Latent variable validation complex Model B: Regional
Factors—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322
Table 13.6 Effect sizes for complex Model B . . . . . . . . . . . . . . . . . . . . . 326
Table 13.7 Sum of indirect effects in complex Model B . . . . . . . . . . . . . 326
Table 13.8 Total effects in complex Model B . . . . . . . . . . . . . . . . . . . . . 327
Table 13.9 Latent variable validation complex Model C: Regional
Factors—Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332
Table 13.10 Effect sizes in complex Model C . . . . . . . . . . . . . . . . . . . . . . 335
Table 13.11 Sum of indirect effects in complex Model C . . . . . . . . . . . . . 335
Table 13.12 Total effects in complex Model C . . . . . . . . . . . . . . . . . . . . . 336
Table 14.1 Latent variable validation simple Model A: Total Quality
Management–Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345
List of Tables xxxi

Table 14.2 Latent variable validation simple Model B: Just in

Time–Delivery Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348
Table 14.3 Latent variable coefficients: Manufacturing Practices . . . . . . . 351
Table 14.4 Hypotheses validation: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355
Table 14.5 Latent variable validation complex Model C:
Manufacturing Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
Table 14.6 Effect sizes in complex Model C . . . . . . . . . . . . . . . . . . . . . . 368
Table 14.7 Sum of indirect effects in complex Model C . . . . . . . . . . . . . 369
Table 14.8 Total effects in complex Model C . . . . . . . . . . . . . . . . . . . . . 369
Table 15.1 Latent variable coefficients in Model A: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377
Table 15.2 Effect sizes in Model A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379
Table 15.3 Sum of indirect effects in Model A . . . . . . . . . . . . . . . . . . . . 380
Table 15.4 Total effects in Model A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381
Table 15.5 Latent variable coefficients in Model B: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
Table 15.6 Effect sizes in Model B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389
Table 15.7 Sum of indirect effects in Model B . . . . . . . . . . . . . . . . . . . . 389
Table 15.8 Total effects in Model B: Manufacturing
Practices–Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390
Table 15.9 Latent variable coefficients: Integrative Model . . . . . . . . . . . . 399
Table 15.10 Effect sizes in the integrative model . . . . . . . . . . . . . . . . . . . . 402
Table 15.11 Sum of indirect effects in the integrative model . . . . . . . . . . . 403
Table 15.12 Total effects in the integrative model . . . . . . . . . . . . . . . . . . . 404
 Part I
Competitiveness Aspects of Supply Chain
Other documents randomly have
different content
never harasses the minister with original suggestions, but is quite
content to do his duty and say naught about it."
"Is his family good enough?"
"Gentle born," explained the Chancellor; "father was Baden
Minister, mother not of noble birth—Sophie Bohlen—but she had
money, I believe. The present Councillor of Legation is university
bred, of course, and belongs to the Guard Hussars, Landwehr, Chef
d'escadron, says the army 'Who's Who.' Nevertheless," concluded
the Chancellor in his most persuasive style, "I don't think him the
right sort of husband for Bertha."
"Right sort for me," cried the War Lord.
Bülow, conscious that His Majesty at the time could not afford
to quarrel with him, risked a none too gentle rebuke by disregarding
the interruption.
"She is so young," he went on, "and, as I pointed out before,
there is the making of a cruel master in his face. Think of the
wealthiest girl in the world tied to a man who will not let her have
her own way—a sort of drill-sergeant husband. Your Majesty is too
whole-hearted, too generous, too gallant," he added with a smile,
"to impose a husband of that kind upon your ward."
In response the War Lord dropped the high falsetto of command
which had marked his interruptions, and said in a more conciliatory
tone: "There is not a man alive against whose choice as a husband
objections may not be marshalled à la advocatus diaboli. Now, for a
change, listen to the advocatus Dei, please: It goes without saying
that I have my ward's happiness very much at heart. Indeed, if she
was of my own flesh and blood, I could not cherish more tender
feelings for her. I love her like one of my own children, and haven't I
accepted Cecile much as I loathe her mother? But with Bertha it's
not a mere matter of getting married and preserving her
unexampled wealth, if you will——" The War Lord stopped short, but
after a moment's thought continued: "It will be more public spirited
for Bertha to marry the man of my selection than to imperil the
Fatherland's right arm. Where would we be if she chose for lord and
master one of those fool-pacifists, some von Suttner milksop, seeing
that without Krupp's loyal co-operation our great war would go to
pot—that even a mere defensive war would better be avoided."
"If Fraulein Krupp or her husband went to extremes, the State
could step in and take over the Krupp works," objected the
Chancellor.
"And do you suppose that our agents in Brussels, Lisbon, Rome,
the South Americas and so forth would be allowed to buy guns from
the King of Prussia?" The War Lord answered his own question with
an emphatic "No!" then suggested slyly:
"To sell the enemy war materials is part of our ante-war
programme, is it not?"
After walking the length and breadth of the room, he planted
himself firmly before Bülow, whom, by the way, he had not asked to
be seated.
"I command," he said with an air of finality; "Bohlen is the man.
Your own suggestion, you can't escape from it," he quickly added,
when Bülow protested. "You said the fellow, though capable, is not
self-opinionated—no swelled head—always obeys orders—in short:
adaptable. That kind of man we need at the head of the Krupp
establishment to do the Fatherland's work according to my directions
—hence Bertha will marry him and no one else."
 Then, to forestall further arguments: "Let's join the ladies now."
He rang for an orderly. "The Grand Master," he commanded.
Count Augustus zu Eulenburg had evidently anticipated that he
would be wanted, as he stood waiting in the Shell Grotto, facing the
park. The walls and ceiling of this gorgeous entrance hall are clad
with semi-precious stones in their natural growth: mountain-crystal
and malachite, coral trees and amethyst rocks, agate and garnets,
gold and silver ore; presents from royal friends for the most part.
"I'll leave for Essen to-night. Wire Frau Krupp to expect me for
breakfast. The small entourage, and warn messieurs my humble
servants not to take too many lackeys. I am tired of carting their
households around."
"At Your Majesty's orders." The Marshal bowed low. Then in a
whisper: "Is Phili to be of the party?"
"Certainly not," replied the War Lord so Bülow might hear him.
"Report to me later," he added in an undertone.
"Later" the following tripotage was overheard:
War Lord: "Phili hasn't left?"
"He is awaiting Your Majesty's further commands."
"Tell him to get ready for Essen."
"He begs to remind Your Majesty that he is not in the Baroness's
good graces."
"Am I not painfully aware of that? She would prefer the measles
to a morning call from Phili."
"Then he is to stay on the train while Your Majesty visits Villa
Huegel?"
"Until I require him. He may be needed to quicken her
ladyship's decision about matters in hand, as under pressure of his
presence she will consent more readily, just to get your precious
cousin out of the house."

CHAPTER XXIV
THE WAR LORD'S DAY IN ESSEN

The Krupp Free Hotel—The War Lord and the Cinder—

Bertha's Little Surprise—The Blue Ribbon of the Son—A
Mad Idea—The War Lord Apes the Expert—Enter the
Pawn—A Wily Game—Disposing of Franz

"A wonderful country, the United States," said the War Lord to Chief-
Engineer Franz; "it produced two Maxims. The British War Office
captured Hiram, but there is another, Hudson, who seems to know
as much about explosives and guns as his more celebrated
namesake. I want you to take a year's leave and study him—him
and Pittsburgh. Your salary goes on, of course, and there will be a
suitable allowance for expense. I will arrange this with the Director-
General."
Franz bowed his thanks, for Wilhelm, big with his subject,
showed plainly that he meant to do all the talking.
"Hudson Maxim," he continued, "claims priority as inventor of
half a hundred discoveries that would seem to spell success in war.
He knows a lot about dynamite, torpedoes, and detonating fuses
too, and is great in chemistry. Try and learn all he knows by fair
means or—foul," he added. Then, musingly:
"I have lately looked into some recipes suggesting chemical
preparations for means of attack. The War Office will furnish details.
Consult Hudson Maxim and other American authorities on the
subject, using the utmost discretion, of course, for I don't quite trust
those Yankees. They manage to cover up their British sympathies,
but I have had a peep or two beneath the surface. I know Armour."
His mind took a sudden leap. "How soon will you start?" he
demanded. "Do you want a week's time? Very well."
"May it please Your Majesty, Frau Krupp invited me to
accompany herself and daughters on their jaunt—sort of maréchal
de logis——" ventured Franz.
"Duty, sir! Fatherland first. Tuesday's French liner, then; and
don't fail to investigate whether steamers of this class are liable to
be of use as auxiliary vessels in case of war. Ballin and the
Norddeutscher Lloyd people pronounce them veritable men-of-war.
But, to my mind, Ballin and Company are after subsidies."
Thus was Franz politely requested and cruelly coerced to leave
Villa Huegel. It was on the eve of the day after the interview
between War Lord and Chancellor. Events had moved swiftly since
then.
A comfortable night on Majesty's train de luxe, preceded by a
variety performance by Phili Eulenburg, star impersonator.
Breakfast, 9 A.M., at the Krupp villa, better and more plentiful
than at home.
A drive next? No; Uncle Majesty would not allow Bertha to
handle the ribbons of the four-in-hand. Never doubted her ability, of
course—yet that experience of his at Count Dohna's. No amateurs
on the box for him. "His little girl was to sit by his side," and they
were to discuss "grave business matters."
Wilhelm, who always looks for chances to combine business
with pleasure, asked to be driven to the Essener Hof, a hotel in the
city of Essen proper, where intending buyers of guns and
ammunition are lodged, and, it may be added, wined and feasted at
the War Lady's expense. Be sure that the Krupp hostelry is never
lacking in guests pretending to be unsatisfied with the tests of war
material conducted for their benefit as long as there is the slightest
excuse for delay in going home, since, once satisfied, they must buy,
and, the deal concluded, give up their comfortable apartments at the
Hof.
Wilhelm left half a dozen of his large, ugly visiting-cards at the
door of the hotel for the Jap, Chinese, Turkish and other
representatives, bending down the lower right-hand corner of the
pasteboards to indicate his regrets that he had failed to find the
gentlemen in.
"If any of them attempt to pay me a return visit, I shall put
them under 'old Fritz' and pulverise their yellow bones," he said to
Bertha.
But before they had finished laughing at the piece of raillery the
War Lord uttered a cry of anguish. An infinitesimal cinder or a bit of
soot had got into his left ear, causing him the most excruciating
pains.
"Home," he gasped piteously. "Let's pick up a physician on the
way." (For some reason or other no doctor was included in the small
Imperial party.)
 Dr. Shrader was dumbfounded when the royal chasseur, in
feather hat, broadsword at his side, summoned him. "My consulting
hour; dozens of people waiting," he protested. The chasseur bent
over the doctor's ear and whispered, whereupon Shrader ran into
the street in his dressing-gown, apparently to interview the gutter,
for, in his anxiety to pacify the War Lord with stammered excuses,
his nose was close to the stream of mucky water running down the
hill.
Naturally, the humour of the thing did not appeal to Wilhelm,
racked with pain as he was. He rose from the seat, and, pushing the
obsequious doctor aside, jumped up the steps, saying: "Attend me, I
command." Of course, in the meanwhile the doctor's household had
got wind of the royal radiance, and flocked from parlour, bedrooms
and scullery, males and females and children, all eager to prostrate
themselves in hall or on staircases, wherever they might be.
The War Lord turned to Shrader: "Send them upstairs; lock
them in if necessary." And, with a look through the glass door of the
waiting-room: "These people must leave instantly; I won't be their
Grossebeest."
He let himself drop into the doctor's ample desk-chair.
"The ear-pump and antiseptics!" he commanded with a cry of
pain. Then, as the doctor approached with the instruments: "Oh,
take off that dirty dressing-gown first. Roll up your sleeves. Wash
your hands."
More insulting orders were thundered at the man of science by
a supposed gentleman, but their execution gave Shrader time to
recover.
 He handled the ear-pump with consummate ease, as he
happened to be a specialist in the line, and soon had the satisfaction
of showing the War Lord the annoying fragment of cinder which his
skill had discovered and extracted.
"May it please Your Majesty, it would be well to clear all the
passages by blowing air through them," he humbly suggested.
"Do all that's necessary, doctor."
Shrader produced another instrument fitted with a spiral
trumpet and a long rubber tube, and went to work vigorously. By the
time the War Lord was ready to leave the doctor laid down his
microscope: "I congratulate Your Majesty; no evidence of
putrefaction, hence no gangrenous inflammation."
"Who said there was?" demanded the War Lord severely.
"I meant to submit to Your Majesty that the ear will give no
further trouble."
"That's better," said Wilhelm in a pleasant voice. He strode
through the hall at such a pace that the chasseur had hardly time to
open the door for him.
The street was black with people. "Hochs!" resounded from a
thousand throats, basso, tenor, soprano, what not. A good many
people had been talking to Bertha—all at once, of course. "Prating of
their misfortunes—the usual racket," suggested the War Lord, with a
look of contempt, as he sat down beside the heiress. And when the
carriage was clear of the mob he added: "You ought to have walked
the horses up and down in the neighbourhood while I was with the
doctor."
"I thought of that, likewise that the carriage might not have
been on hand when you wanted to start, Uncle Majesty. You told me
the remark of the French king: 'I almost waited,'" replied Fraulein
Krupp.
Dr. Shrader had indeed relieved the Majesty, who felt fresh and
buoyant after the invigorating ride over the hills and along the
shooting-ranges. The latter, while fully manned, were silent, for the
chasseur had telephoned to Count Helmuth von Moltke, and the
adjutant had countermanded all trial practice.
"Let's look at 'old Fritz' again," said the War Lord, after
refreshments. Unlike Charles V., the War Lord is never awakened
during the night to swallow some favourite dish, but five meals a day
are his rule, and to revive his animal spirits he takes a number of
raw eggs in a glass of cognac after the slightest exertion, when at
home, i.e. at his own expense, while more substantial and elaborate
provision is expected at friends' houses.
At Villa Huegel he is never disappointed. Even if he brought
those "forty scientist friends" he once imposed upon Dom Carlos of
Portugal, poor man!—indeed, even if he asked Frau Krupp to lodge
and feed a whole regiment of gold-laced or fringe-trousered
nobodies or impostors, there would be the most generous response
on her part and no questions asked.
"When I heard you were coming, Uncle Majesty, I planned a
little surprise," said Bertha, when showing the War Lord a short cut
to "old Fritz's" habitat. She led the way to a section of the armour-
plate department, whose employés burst into feverish activity at
their approach. No doubt they were expected.
"Eighty tons," said Bertha, pointing towards the huge crucible
steel block being placed under a giant hydraulic press.
 "How will you move a cannon of that size?" queried the War
Lord, who is liable to get his figures mixed.
"But it is not going to be a cannon, Uncle Majesty," explained
the mistress of the works.
"You are going to roll it out into an armour-plate for
Chimborazo, then?"
"Once more Uncle Majesty is pleased to be mistaken."
"Maybe it's a statue of England's lord high admiral you are
making?"
"Burning," said the smiling Bertha; "it has something to do with
the sea."
There was more guessing and repartee during the first half of
the thirty minutes required to coax and squeeze and handle and
form the block and drag its slow length along—150 feet of it. Seeing
that, the War Lord no longer could master his curiosity.
"What is it to be, Bertha?" he asked in a tone that would not be
denied, and the wonder is that he did not add the polite: "I
command!" of average Prussian bully ship.
"The shaft of a big steamer, Uncle Majesty; the biggest——"
"I know, I know," shouted the War Lord above the din of
machinery, "for Ballin. Wants to snatch the speed record from
Bremen. Fetch the superintendent, Bertha."
To the official, who was undecided whether he ought to drop
dead with devotion or burst with pride, he said in the tone of an
ancient Father of the Church: "Work of the utmost importance is
entrusted to you—in a measure you are the guardian of the
Fatherland's supremacy at sea. England is building a giant steamship
to steal our speed record. Her new ocean greyhound is to be ready
for passenger service in 1907. Pray to God fervently, asking Him to
grant you success that you may help to defeat the enemy of German
commerce and our development as a sea power. To assist in taking
the blue ribbon of sea power away from Great Britain should be the
aim of all good Germans, even as it is your War Lord's duty to secure
for the Fatherland the ocean coast-lines she needs." He dismissed
the man with a wave of the hand.
It is interesting to note here that this speech was delivered a
month before Wilhelm met King Edward at Wilhelmshohe to spout
"his sincere wishes for a frank understanding with Great Britain" and
for the "desirability of common action" where German or British
interests were involved.
Meanwhile the shaft had been completed, a towering, solid
mass, and the War Lord, walking round it, remarked admiringly:
"Fine, looks as if come out of Vulcan's own smithy. What next?" he
added, with his customary impatience.
The young girl was anxious to show her familiarity with the
business. Had she not undergone much coaching by Franz for this
very reason?
"Extracting the kernel," she answered, with an air of superiority.
"I should like to see the removal of the kernel," ordered the War
Lord, as if the idea were original with him. Bertha pulled his sleeve
and whispered again, after which Wilhelm admonished the
superintendent: "Take care that it comes out in one piece."
No doubt the man would have died of mortification if the well-
known "cussedness" of "inanimate objects" had played him a trick;
but, luckily for him, it refrained, which encourages the thought that
the supposed "inanimation" is not quite so hopeless after all. Maybe
in this case the "inanimate object" was intent upon beating the War
Lord out of a chance to scold and air his views on mechanics.
"Any more novelties?" asked Wilhelm, disappointed because the
machinery worked to perfection.
"The hydraulic shears are busy in the next shop," said Bertha.
There the War Lord saw sections of armour-plates for one of his
Dreadnoughts cut as if they were so many enormous Swiss cheeses.
"Some fine day," he commented, "we will mount one of these
shears on the Calais coast, and next to it a giant magnet." He
paused, contemplating the picture of his imagination.
"Yes, yes, Uncle Majesty!" cried the eager Bertha.
"The magnet," continued the War Lord, "will pull the English
Dreadnought fleet out of the Channel, and toss ship after ship over
into the jaws of the shears to be made mincemeat of. Fine heap of
scrap-iron for you, Bertha."
"But the sailors!" cried the young girl.
"Dulce et decorum est pro patria mori," declared the War Lord,
shrugging.
Next they looked at some enormous presses capable of bending
armour-plates to any shape desired. This amused the Majesty
hugely. He likes to bend men and things.
"Any shape desired?"
"Any Your Majesty will be pleased to command."
"Very well. Model one on the left half of my moustache."
The supervisor shouted orders and the machinery stopped for a
little while, then turned out the desired shape with photographic
accuracy. But the War Lord would not have it: "The point's missing,"
he declared.
 "I leave it to Fraulein," murmured the superintendent, wincing
under the rebuke. And with the vivacity and carelessness of youth
Bertha divined the situation, and instantly came to her employé's
rescue.
"Herr Grier is right; Your Majesty's moustaches are not trimmed
alike. The left one is much shorter."
Wilhelm put his hand up to his cheek. "So it is," he admitted
grudgingly. "I remember I set fire to it last night on the train lighting
a cigarette." This was addressed to Bertha. He was too small a
person to excuse his rudeness to the superintendent.
"There is a ninety-ton block of steel making. Would Uncle
Majesty like to see how it's done?" said Bertha, on the way back to
Villa Huegel.
"Ninety tons! What a cannon that would make! Of course I
would like to see it."
Bertha led the way to the crucible works, where at that moment
fifty pairs of workers were engaged in carrying about on long bars
white-hot crucibles of metal. They were acting with the utmost
precision, and one shudders to think of the wounds and mutilation
that would have ensued had either one of them stumbled or been
seized by sudden illness. As each couple of men advanced and tilted
the glowing mass into the mould, the War Lord observed:
"Much too long-winded and laborious. I will talk to the Director-
General about that, Bertha."
And, turning to the supervisor, he demanded curtly: "The
composition of the mixture?"
The man bowed to the ground to hide his confusion, and once
more Bertha jumped into the breach.
 "He doesn't know—nor do I. Secret formula of Grandfather
Frederick. Don't press him, Uncle Majesty, for even to speculate on
these technicalities means dismissal and disgrace for an employé."
Though she spoke in a pleading tone of voice, the War Lord
continued to frown.
"Perhaps he is allowed to explain why no shorter process is
used."
The supervisor fairly beamed with readiness and satisfaction.
"May it please Your Majesty, our way—I beg Fraulein's pardon, the
Krupp way—is the only absolutely sure method to forestall bubbles
and flaws."
"And a flaw, is it a serious matter?" asked the War Lord, very
much alert.
"Indeed, Your Majesty, for it may cause the shattering of a
shaft, the breakdown of machinery, the bursting of cannon."
"And all cannon turned out by the works have the benefit of this
process?"
"All without exception, Your Majesty."
A bystander says he heard the War Lord mutter under his
breath: "What rot!" And there is a further report that he burst into
the Director-General's room, and roared: "Fine kettle of fish I
discovered. Guarding against flaws in cannon intended for enemy
countries! Why not turn over to France and England and Russia all
the secret plans of the German War Office?"
But no authoritative record of Wilhelm's sayings relating to this
particular point has been obtainable. As a matter of fact, it isn't
worth the pains of special research. It is to be noted, however, that
after the Turkish defeat at Lule Burgas and Kirk Kilisse Bertha's
husband was moved to say that the stories about the "inefficiency of
Krupp guns and Krupp workmanship" were "fables," and that he was
ready at any time "to take the field against all comers with Krupp
guns and Krupp armour."
After tea the War Lord had a long, serious talk with Frau Krupp.
Happily her ladyship had been mistaken. Bertha was not actually in
love with Franz; just a sort of sisterly attachment, momentarily
intensified by girlish longings. So much the better, since the right
sort of husband for his ward had been found: Doctor von Bohlen und
Halbach, the young diplomat, distinguished, well-bred, sound
business head and ambitious. "Highest ambition to serve his king."
"Supposing Your Majesty understood Bertha correctly with
respect to Franz, her change of heart does not mean that she will
fall in love with Your Majesty's candidate for her hand," said Frau
Krupp.
"Preparing to jump," thought Wilhelm; "I wish Phili were here."
And as accident would have it, His Highness was announced that
very moment. Eulenburg, or Hohenzollern luck?
The Baroness opened her mouth to deny herself to the visitor
on the plea of unavoidable business, but Wilhelm got ahead of her.
"The Prince is most welcome," he said to the major-domo.
There is no denying that His Highness, ten or more years ago,
was a striking personality and had a peculiar charm. As Murat knew
more about the art of dressing than Napoleon, so Eulenburg
overshadowed Wilhelm as a glass of fashion, avoiding the latter's all-
too-apparent striving for effect and pretence.
Despite their close relations, he greeted Wilhelm without a trace
of familiarity and kissed Frau Krupp's hand.
 "Just in time," cried the War Lord. "I was telling the Baroness
about the Chancellor's young friend, von Bohlen. Bülow told me he
would ask you to allow him sight of your records concerning the
diplomat. Was he satisfied? Tell us all you know about Bohlen?"
That he was well aware of Frau Krupp's loathing for him need
not be reiterated, and that in her ladyship's eyes praise from Sir Phili
spelt the worst of condemnation for the party approved of he fully
realised, and framed his answer accordingly:
"I am pained to acknowledge that I have no personal
acquaintance with the young man who rejoices in the great Pontiff's
love and friendship——"
"You have Pius's own opinion," cried the War Lord. His
astonishment was equalled only by his appreciation of the lie told.
"At Your Majesty's service—through the kindness of the papal
legate. When Majesty commissioned me to get reliable information
about our foreign representatives, I went to headquarters—may it
please Your Majesty."
"It pleases me immensely. What did the Pontiff say?"
"Exemplary habits, God-fearing, able and ambitious—these few
words sum up the Holy Father's estimate of Bohlen."
"Did you hear that?" asked Wilhelm, addressing Frau Krupp.
"We will get the details from Bülow." And turning to Phili, he said:
"You wanted to meet my ward. I will summon her, and she shall
show you over the house and grounds. Beats Liebenberg," he added
in an undertone.
Phili beamed. "His Majesty is joking," he said to Frau Krupp. "To
compare my poor Tusculum to Villa Huegel and surroundings is to
put my Skalde songs next to the immortal ballads of Beranger."
 Frau Krupp dared not object to Wilhelm's arrangements. She
played into the War Lord's hands.
"I will meet you and His Highness at the fountain in five
minutes," she told Bertha—a welcome cue to Uncle Majesty.
"Aside from the Pope's estimate, does the Chancellor himself
approve of Herr von Bohlen?" asked Frau Krupp.
"Enthusiastically. Bohlen's record in Washington and in Peking
equalled his success at the Holy See. Gnädige Frau," added Wilhelm
in a tone of conviction, "let's hope that the estimable young man's
heart is still free. I have no doubt that he would be a dieu-donné to
Bertha, yourself and—Essen."
"And Your Majesty desires me to broach the matter to my
daughter?"
"What is gnädige Frau thinking of? Do you suppose I would
have wooed Augusta if I had known that Bismarck wanted me to
marry her? No, no; matters of that kind must be left to accident, or
apparent accident. This is the time for diplomatic furloughs. Tell me
where you want to take the girls on their holiday, and I will have
your son-in-law-to-be introduced quite casually. Bülow will manage."
"Bertha spoke of having another look into Rome before the hot
season," said the Baroness.
"Fate," cried Wilhelm (if he was a Catholic he would have
crossed himself). "God's will," he corrected his lapsus linguæ. "Herr
von Bohlen und Halbach will be ordered not to leave his post until
further notice. When you are in Rome he will present himself with
Bülow's compliments, offering to act as my ward's cicerone. This will
give you abundant opportunity for intimate observation and Bertha a
chance to fall in love if she cares.
 "All's arranged, then," he added in the finality vein peculiar to
his nature, when he kissed Frau Krupp's hand at the door, which he
had opened for her. In the Teuton Majesty's eye this was a great and
almost overpowering act of condescension; the twentieth-century
Prussian-en-chef rather prides himself on such mannerisms, fondly
mistaking them for dignity.
Well satisfied with the success of his stratagem, Wilhelm rang
for his adjutant and dictated to him a long dispatch to the
Chancellor, giving a well-coloured version of the interview with Frau
Krupp and instructing Count Bülow how to answer the lady's
forthcoming inquiries.
"The holiest of the holies, of course," ordered Wilhelm, referring
to the telegraphic code. "I don't trust these Essen fellows," he
deigned to explain; "the Chasseur shall take the message to
Düsseldorf and personally hand it to the President to be sent over
the official wire."
Afterwards he joined the ladies and Phili, finishing up the day's
strenuous work of intrigue and sight-seeing with the talk to Franz,
recorded at the opening of this chapter.
Just before leaving Villa Huegel he had another tête-à-tête with
Frau Krupp. "I have conferred signal honours on your protégé"
(meaning the chief engineer), he said. "I am sending him to the
States to study new inventions and investigate patents relating to
war materials—greatest chance that ever came to a young man. If
he does as well as I expect, I will make him special representative of
my General Staff. Is your Ladyship satisfied now?"
Frau Krupp breathed her humblest thanks. What else could she
do?
 CHAPTER XXV
A ROYAL LIAR

High-Placed Plagiarists—Diplomatic Trickery—The

Kaiser Whitewashes Himself—"What of the German
Navy?"—Clumsy Espionage

October 10th, 1905, 6 p.m.

The red disc betraying the War Lord's presence at the other end of
the wire thrust itself between the Chancellor's eyes and the copy of
Echo de Paris he was reading.
"I command Bohlen," said Wilhelm's impatient voice.
"I am afraid he is not available just now, Your Majesty. Gone
shopping with his fiancée the last I heard."
"Order Wedell to find him. He shall be at the Chancellery at nine
sharp, when I expect to find you too, Prince."
"Gracing my wife's soirée?"
"Soirée to-night? Excellent! I will order all my boys to kiss
Madame's hand. It will put her into good humour, and she will the
more readily allow you to attend to business."
"And, Majesty," said Bülow, hopefully, "the Princess Maria is
counting on having the honour of Your Majesty's presence."
"I will send the insignia of dell' Annunciata instead."
 "I beg Your Majesty, don't. Maria might not remember that
Charles XII. sent his boots to preside at the Swedish Council of
State."
As before remarked, it is one of Bülow's tricks always to have on
the tip of his tongue some historic bon mot suitable to the occasion.
There was an outburst of rough laughter. "He did, did he? And
yet they called him the Madman of the North. Next time Herr Bebel
has a congress, I will send the Reds a pair of my riding breeches,
and no new ones either. But revenons à Bohlen. Devil of a chap!
Made Bertha his goods, his chattel, his stuff, his field, his barn, his
horse, his ox, his ass, his everything! That's the way! Make them eat
out of your hand, Prince!"
Bülow was a Prince since the 6th of June, and the War Lord
never tired of calling him by the title of his own creation. He had just
borrowed boldly from the Bard, and the theft being apparently
undiscovered by his literary Chancellor, Wilhelm felt justified in
relaxing his imperious mien some more.
"Can't you prescribe a dose of sleeping sickness for that fool
Liebert? His shouting about 'our war' to obtain supreme sea power is
co-responsible for the Entente Cordiale. Of course I like to strike
terror into the hearts of the enemy, but in his Navy League speech
Liebert went too far. If he keeps it up, I shall put him on half-pay.
Tell him so." (The War Lord referred to General von Liebert, ex-
Governor of German East Africa, who had made a speech
threatening Great Britain and France.)
And more talk of that kind. The more gossipy, the better for
Bülow, as there had been no time to digest the Echo de Paris article
and to enter into its discussion before he had fully made up his mind
what to say about the reported Anglo-Franco-Russo-Japanese
Alliance. His comments might lead to serious dissension with
Majesty, for Wilhelm was sure to fasten on to some supposed
negligible point in the Chancellor's argument to distort the whole
tenor of his interpretation.
Tit for tat. Only when Bülow was the victim, there was no
prearrangement like in the case of the repudiations of the Joseph
Chamberlain and the London Daily Telegraph interviews.
When in England five years before, the War Lord had prompted
Mr. Chamberlain to make his historic appeal in favour of co-operation
between Great Britain, Germany and the United States, assuring him
that Germany's future policy would rest on such an understanding as
on a roche de bronze.
Mr. Chamberlain, being under the impression that only
gentlemen were invited to Sandringham House, thought His Majesty
sincere and gave public utterance to the message, promising peace
and mutual understanding.
But the Roi de Prusse had no sooner shaken the dust of England
from his boots than Bülow was ordered to repudiate the whole thing
(without directly impugning his Sovereign's word, of course) and to
ridicule Chamberlain's "Utopian schemes."
Notwithstanding, the then German Ambassador in London,
Count Wolff-Metternich, later had the impudence to complain to Sir
F. Lascelles, British representative in Berlin, that the state of English
opinion toward Germany and the British Foreign Office's coldness
toward the Wilhelmstrasse gave him considerable uneasiness;
whereupon Sir Lascelles demanded to know whether Germany
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