Abstract
This study aims at examining the dynamic response of the relationship between supply chain integration (SCI) and operational performance (OP) to demand uncertainty (DU). Based on a wide spectrum data sample with 357 participants in the China automotive supply chains, threshold regressions are used to examine the dynamic moderating effects. DU was found to moderate supplier integration (SI)–OP and customer integration (CI)–OP relationship. Internal integration (II)–OP relationship did not response to DU. The SI–OP relationship turned from negative to positive as DU increases, and CI–OP relationship responded to DU reversely compare to SI–OP relationship. Scholars now know the moderating effect of DU is not static and monotonic. Both of direction and magnitude of the correlations between SI, CI and OP change when DU changes. Managers of automotive supply chain recognize that their integrations’ strength should be properly managed subject to the level of DU for propose of achieving optimal OP. This study extends the current literature by delivering a field study of China and introducing dynamic capability theory for the first time to examine a dynamic response model that represents the SCI–OP relationships with respect to the DU as a moderating factor.
Highlights
Researchers have long articulated the need for strategic integration between suppliers and customers in order to deliver the supply chain’s optimal performance (Flynn, Huo, & Zhao, 2010; Huang, 2014)
Research methodology To test the proposed hypothesis, we identified the automotive original equipment manufacturers (OEMs) in China as research universe, because China is considered to be the largest automotive market and the largest automotive producing country in the world (Bennett & Klug, 2012; Lockström, Schadel, Harrison, Moser, & Malhotra, 2010)
In line with contingency theory, the uncertain level of demand forces supply chain managerial behaviours to co-align integration strategies to cope with the environmental changes, and the various integration strategies lead to different operational performance
Summary
Researchers have long articulated the need for strategic integration between suppliers and customers in order to deliver the supply chain’s optimal performance (Flynn, Huo, & Zhao, 2010; Huang, 2014). By discovering the full spectrum of SCI–OP relationship distribution coupled with observation of a small number of inconsistent findings, the research focus shifted to examination of moderating and mediating effects of exogenous environmental factors by introducing contingency theory (Cao, Huo, Li, & Zhao, 2015; Wong, Boon-Itt, & Wong, 2011). These studies expanded our understanding of the scope required to establish strategic supply chain collaborations
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