Reconsidering the Supply Chain Integration–Performance Relationship: In Search of Theoretical Consistency and Clarity

Abstract

Supply chain integration (SCI) purportedly helps firms achieve performance returns on supply chain management (SCM) activities and resource investments that exceed the sums of their parts. Thus, several of the SCM field's seminal models focus on SCI as a central construct. However, the rapid development of literature on SCI has yielded some inconsistent and confusing findings. For example, two recent meta-analyses of the SCI-performance relationship have attempted to clarify SCI's identity and value (authored by Leuschner et al. 2013, and Mackelprang et al. 2014). Both were rigorously executed and based on their differing initial assumptions, appear to be "right." But, they derive different conclusions pertaining to the overall "value proposition" of SCI. How can this be? THE META-ANALYSIS PROCESS: COMPARISONS AND IMPLICATIONSThe two meta-analytic studies shared a common research objective. The similarities end there. The respective authors pursued distinct research processes because of differing underlying assumptions about what constitutes SCI. Key differences in the meta-analytic processes and assumptions included:• Different definitions: The definitions of integration were inconsistent across the studies. One focused on the locus of integration (i.e., which functional groups are being integrated). The other on its substance (i.e., which information and organizational processes are being integrated). This led to:• Different operationalizations: One study focused on extent of collaboration; the other on strength of linkages. These differences were based on and exacerbated by alternative keyword searches within the sampling process. This led to:• Different levels of analysis: One study suggested that SCI occurs at the strategic level of the firms in a supply chain only; the other suggests that SCI occurs at strategic, operational, and tactical levels of the organization.These differences culminated in the collection of two distinct sets of data, in the form of sample articles-one of much broader scope/sample size than the other. The result: different conclusions regarding the value of SCI:• Leuschner et al. (2013) find that firms move through "layers" of SCI, and the degree of SCI at each layer associates with operational outcomes such as delivery performance, but there is a lack of statistically significant association with financial, cost, and flexibility measures.• Alternatively, Mackelprang et al. (2014) find significant relationships between SCI and financial, cost, and flexibility performance outcomes, but in doing so, they view SCI only as occurring at the strategic layer of the firm; they find differences in performance based on which partners are doing the integrating, but these differences are agnostic to the type of processes and information actually being integrated.In short, one study finds limited benefits of SCI because it focuses on "what" is being integrated. The other study finds more benefits because the focus is on "who" is being integrated with "whom"-without regard to the "what." WHITHER ...

Supply chain integration and firm financial performance: A meta-analysis of positional advantage mediation and moderating factors

“…More specifically as pointed out by Autry et al (2014), while Leuschner et al (2013) report limited benefits of SCI by showing several nonsignificant correlations between SCI and types of firm performance, Mackelprang et al's (2014) analyses reveal more consistent benefits. Going beyond the differences in definitions and operationalizations of key SCI constructs that Autry and colleagues suggest are potential reasons for the inconsistent conclusions in the two previous meta-analytic studies, our study focuses more on minimizing the potential for tainted results due to selection bias and failure to consider direct and indirect as well as moderating effects.…”

“…As pointed out by Autry et al (2014), the literature on SCI has developed from divergent and often inconsistent perspectives. For example, Leuschner et al (2013) focus on SCI characteristics and activities by classifying SCI as information integration that refers to the coordination of information and the availability of supporting information technology among firms in the supply chain (e.g., Hill & Scudder, 2002;Holweg, Disney, Holmstrӧm, & Småros, 2005), operational integration that focuses on the collaborative joint activities and work processes among firms (e.g., Ireland & Webb, 2007;Saeed, Malhotra, & Grover, 2005), and relational integration that emphasizes a strong connection between firms in the supply chain based on trust, commitment, and long-term orientation (e.g., Chen, Paulraj, & Lado, 2004;Johnson, 1999).…”

“…Autry et al (2014) contend that the inconsistent findings are largely due to the application of different definitions, operationalizations, and levels of analysis for SCI. However, in addition to differences in definitions and operationalizations of key constructs highlighted by Autry et al (2014), other issues such as selection bias, failure to consider the mediating routes by which SCI affects firm financial performance, and lack of investigation of moderators may have constrained the researchers from coming to comprehensive and generalized conclusions about the benefits of SCI. To develop a more complete understanding of the SCI-firm performance linkage by taking into account these other issues, we apply the resource-based view (RBV) and positional advantage theory (PAT) to conduct a meta-analysis that aggregates 170 samples representing a total of 39,495 observations.…”

“…Flynn, Huo, and Zhao (2010, p. 58) therefore argue that "to fully understand SCI and its relationship to performance, there is a need to examine … how individual dimensions of SCI are related to different dimensions of performance." Given that inconsistent findings on the value of SCI come from differences in definitions and operationalization of key constructs (Autry et al, 2014), we first explicitly define each dimension of SCI and type of firm performance.…”

Antecedents of Organizational Performance in Challenging Business Environment: The role of Employee Commitment and Supply Chain Integration

“…According to Stevens (1989) firms realized the value of integrating supply chain quite early and there has been growing consensus between academics and practitioners regarding their importance of integrating suppliers, internal processes and flows and customers [see also Frohlich and Westbrook (2001); Tan (2001)]. Despite research confirming the positive affect of SCI (Prajogo, Oke, & Olhager, 2016), and its value in firm's sustainability (Flynn, Chan, Zhu, & Yu, 2017); yet it remains puzzling as to what institutes SCI (Autry, Rose, & Bell, 2014;Fabbe-Costes & Jahre, 2008) and has been defined and operationalized in a number of ways (Pagell & Shevchenko, 2014). Traditionally, SCI has been classified into internal integration (II) and external integration (EI).…”