Supply chain integration and its impact on supply chain agility and organizational flexibility in manufacturing firms

Abstract

PurposeThis study investigates the impact of environmental uncertainty and organizational ambidexterity on supply chain integration and its relationship between supply chain agility and organizational flexibility in the manufacturing firms.Design/methodology/approachThe data were collected from 526 managers in services and manufacturing industry in Kuala Lumpur. The partial least square (SmartPLS 3.0) tool was applied through the use of the structural equation modeling (SEM) technique.FindingsThe results revealed that a strong relationship exist between environmental uncertainty and supply chain integrations including customer, supplier and internal integration. Organizational ambidexterity has a significant relationship with supply chain integration. Supply chain integrations were shown to have a positive impact on the firm's supply chain agility and organizational flexibility.Originality/valueThe findings may assist to establish a set of key drivers for enhancing supply chain agility and organizational flexibility as a supply chain management initiative in the manufacturing and service industry.

Supply Chain Integration Enables Resilience, Flexibility, and Innovation to Improve Business Performance in COVID-19 Era

“…This result shows that when the company shared complete product information and production planning with internal cross-function and external partners could increase the company's flexibility, which is called supply chain flexibility. This research supports the research statement that supply chain integration can increase supply chain flexibility [9,17,19,23,27,60]. The third hypothesis (H3), that supply chain integration affects supply chain resilience, as expected, is also supported by data.…”

“…The demand for finished products that increase substantially and suddenly from customers affects its production planning, which is increasingly complicated in fulfilling customer demand [32]. Supply chain integration is integration with suppliers, also known as backward integration or upstream integration, and integration with customers, also known as forward integration or downstream integration [12,20,23]. The company's ability to collaborate and integrate with suppliers can help find new sources and ultimately improve the raw materials supply [7].…”

“…Supply chain flexibility (SC flexibility) can be defined as a company's ability to adapt the supply chain practices following environmental changes to improve performance. The company's flexibility is determined by the supplier's ability to anticipate a sudden change to support manufacturing to meet customer demands [23,40]. Company flexibility cannot be determined independently, but it requires collaboration with company partners [41].…”

“…SCM integration impacts supply chain flexibility in the Chinese food industry because companies can share information with external partners to get fast information about the market [9]. Supply chain integration consisting of supplier integration, internal integration, and customer integration directly impacts supply chain flexibility in the manufacturing and services industry in Malaysia [23]. Sharing information with partners in supply chain management as a form of integration helps companies improve company efficiency and cash flow as a form of operational performance [27,30].…”

“…The company's ability to manage flexibility properly will improve company performance [22]. Supply chain integration, which consists of supplier integration and internal integration, does not directly impact supply chain agility, but in contrast to customer integration, it has a direct impact on supply chain agility from the Malaysian industry [23].…”