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An investigation on the direct and indirect effect of supply chain integration on firm performance

  • Kim, Soo Wook
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    The purpose of this research is to examine the causal linkages among supply chain management (SCM) practice, competition capability, the level of supply chain (SC) integration, and firm performance. This is helpful in developing a framework for linking a firm's SC integration strategy to its competitive strategy, and in identifying how such linkage can be connected to the improvement of organizational performance. Such effort should enable us to derive a set of advisable utilization strategies of supply chain practices for SC integration. From the results of LISREL analysis on Korean and Japanese manufacturing firms and subsequent equality test for multi-group, this paper finds that, in case of Korean firms, efficient supply chain integration may play more critical role for sustainable SCM competitiveness, while, in Japanese firms, the close interrelationship between the level of SCM practices and competition capability may have more significant effect on SCM competitiveness. This finding derives a strategic framework that, in early stage, the emphasis on systemic supply chain integration may be more crucial, and, in the stage after setting supply chain integration on its way somewhat, the movement of strategy focus into the pursuit of high level of consistency between SCM strategy and competitive strategy may be advisable.

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    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 119 (2009)
    Issue (Month): 2 (June)
    Pages: 328-346

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    Handle: RePEc:eee:proeco:v:119:y:2009:i:2:p:328-346
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    1. Welker, Gera A. & van der Vaart, Taco & Pieter van Donk, Dirk, 2008. "The influence of business conditions on supply chain information-sharing mechanisms: A study among supply chain links of SMEs," International Journal of Production Economics, Elsevier, vol. 113(2), pages 706-720, June.
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    5. Wong, Chee Yew & Boon-itt, Sakun, 2008. "The influence of institutional norms and environmental uncertainty on supply chain integration in the Thai automotive industry," International Journal of Production Economics, Elsevier, vol. 115(2), pages 400-410, October.
    6. B Kogut & U Zander, 2003. "A memoir and reflection: knowledge and an evolutionary theory of the multinational firm 10 years later," Journal of International Business Studies, Palgrave Macmillan, vol. 34(6), pages 505-515, November.
    7. Vachon, Stephan & Klassen, Robert D., 2008. "Environmental management and manufacturing performance: The role of collaboration in the supply chain," International Journal of Production Economics, Elsevier, vol. 111(2), pages 299-315, February.
    8. Jeffrey G. Miller & Aleda V. Roth, 1994. "A Taxonomy of Manufacturing Strategies," Management Science, INFORMS, vol. 40(3), pages 285-304, March.
    9. Nurmilaakso, Juha-Miikka, 2008. "Adoption of e-business functions and migration from EDI-based to XML-based e-business frameworks in supply chain integration," International Journal of Production Economics, Elsevier, vol. 113(2), pages 721-733, June.
    10. van der Vaart, Taco & van Donk, Dirk Pieter, 2008. "A critical review of survey-based research in supply chain integration," International Journal of Production Economics, Elsevier, vol. 111(1), pages 42-55, January.
    11. de la Fuente, M. Victoria & Ros, Lorenzo & Cardos, Manuel, 2008. "Integrating Forward and Reverse Supply Chains: Application to a metal-mechanic company," International Journal of Production Economics, Elsevier, vol. 111(2), pages 782-792, February.
    12. Naresh K. Malhotra & Sung S. Kim & Ashutosh Patil, 2006. "Common Method Variance in IS Research: A Comparison of Alternative Approaches and a Reanalysis of Past Research," Management Science, INFORMS, vol. 52(12), pages 1865-1883, December.
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