Supply chain integration and efficiency performance: a study on the interactions between customer and supplier integration

Abstract

Purpose – This research intends to investigate whether there are synergies that a firm could or should exploit by simultaneously implementing customer and supplier integration. In particular, the aim is to analyze the impact of customer integration on efficiency, and the moderating role of supplier integration. Design/methodology/approach – This study analyzes data from a sample of 200 manufacturing plants. Two hypotheses are tested through a hierarchical regression analysis. Customer and supplier integration constructs consider items related to different aspects of the integration (e.g. sharing of production plans and customers’ forecasts, feedback on performance, communication on quality considerations and design changes, joint quality improvement efforts, close contact, partnerships). The focus of the integration clearly extends beyond the dyad, as it includes the integration of focal operations upstream and downstream, with both suppliers and customers. Findings – Supplier integration positively moderates the relationship between customer integration and efficiency, whereas the analyses do not support the hypothesis that in general customer integration positively impacts on efficiency. They also reveal that, when supplier integration is at a low level, customer integration can even produce a reduction in efficiency. Practical implications – Efficiency performance optimization requires levering simultaneously on customer and supplier integration to foster their interaction, rather than investing and acting on customer integration only. In addition, before deciding whether to invest in customer integration, managers should ascertain the level of supplier integration, since it acts as a prerequisite for the successful implementation of customer integration. Originality/value – Compared with previous studies investigating the main impact of customer and supplier integration on a company’s performance, this research analyzes a model that considers the interaction effect between these integration strategies. This provides a number of original implications for the interpretation of the relationship between customer and supplier integration and efficiency

The Influence of Governance Mechanism on Supply Chain Performance in Developing Economies: Insights from Ghana

“…Over the years, extant literature has been unspecific in defining SC performance, and particularly, its dimensions. Some previous research have focused on delivery and flexibility (Huo, 2012;Prajogo & Olhager, 2012), customer service (Vickery et al, 2003), efficiency (Danese & Romano, 2011;Prajogo & Olhager, 2012), and service performance (i.e. delivery and support) (Droge et al, 2012), among others.…”

“…When SC is appropriately managed, the outcome is one of enhanced performance (Chopra et al, 2007). As business competition shifts from between individual entities to SCs, adoption of SC practices could offer competitive advantage in the face of fierce competition on the global market (Christopher et al, 2006;Danese & Romano, 2011). The integration of activities and processes among the members of the SC is usually referred to as SCM (Handfield & Nichols, 2003).…”

Competitive Advantage as Relationship Mediation between Supply Chain Integration and Fishery Company Performance In Southeast Sulawesi (Indonesia)

“…There are gaps in the results of studies in external integration involving supplier, where it is found that it does not have significant impact on company performance [3]. While the external integration involving customers does not significant impact on the performance of delivery [1].…”

“…This condition is caused by a lack of clarity and consistency in what is to be measured in the implementation of integrative SCM [1]. The theoretical basis for justifying the role of integrative SCM implementation in improving competitiveness and performance of the company is still weak and this has been the cause of many debates [2,3]. It is important to carry out further study in relation to this finding, especially by using a contingency approach where the impact of integration of supply chain on competitiveness and performance is variable from upstream to downstream [1].…”

“…Competition would determine the appropriateness of the activities carried out by company to support its performance [5]. Numerous studies have explored the concept of supply chain integration in different research areas such as inventory planning and logistics [3,7,8], information processing [1,6] or partnership/relationships [9,10]. The dominant belief is that supply chain integration is a useful approach to improve various measures of firm performance [4,6,11,12].…”