Abstract
This study explores the significance of integration and flexibility as critical determinants of business performance by examining the connection amongst supply chain integration and flexibility on the one hand and business performance on the other. Using mainly a cross-sectional approach, structured questionnaire was used to collect responses from two hundred and fifty-five employees drawn registered companies in the Kumasi Metropolis and analyzed with the help of Pearson’s correlation and structural equation modeling (SEM). Three elements of supply chain integration (company integration with suppliers, cross functional integration within a company and company integration with customers) and three elements of supply chain flexibility (adaptability, alignment and agility) were subjected to analysis. The results indicate that supply chain integration and supply chain flexibility exhibit significant correlation with firm performance. Supply chain integration and supply chain flexibility have high correlation with ‘financial performance’ followed by ‘logistic performance’ and then ‘operational performance’. Also, the results demonstrate that four supply chain integration surrogates; ‘production data integration’, ‘going after customers for feedback’, ‘periodic connection with customers’ and ‘real time search of inventory’ and two supply chain flexibility proxies specifically ‘technology’ and ‘supply network strategies’ are crucial as they exhibit the most noteworthy influence on firm performance. Results of this study offer remarkable demonstrations of the effects of integration and flexibility in enhancing performance of businesses and greater attention must be paid to those proxies of supply chain integration and flexibility that exhibited the most significant impact on firm’s performance.
Highlights
The global nature of the business environment today is compelling businesses to pursue alternative and innovative ways of achieving efficiency and competitiveness in their daily operations
4.1 Measurement of Constructs using Factor Analysis and Reliability Test After the data collected was cleaned for errors, the Supply Chain Integration (SCINT), Supply Chain Flexibility (SCFLEX) and Business performance (BUSPERF) elements were subjected to factor analysis and reliability test
It is quite obvious from the results that, organisations can no longer ignore the potential benefits of integrating the supply chain alongside ensuring the adoption of prudent supply chain flexibility policies in responding to environmental uncertainty
Summary
The global nature of the business environment today is compelling businesses to pursue alternative and innovative ways of achieving efficiency and competitiveness in their daily operations. Among the accepted efficient and effective approaches is the proper management of the supply chain (Elmutiet al., 2008). Gibson et al (2005) describe supply chain management as a set of methods employed to competently integrate and coordinate the flow of materials, information and finances throughout the supply chain in such a way that products are produced, supplied, and or distributed in quantities that are right, to desired locations, and at the right time in the most cost efficient way, that satisfy customer requirements. Achieving the kind of flow described by Gibson et al (2005) has become progressively problematic because of the growing diversity and uncertainty in the business environment necessitating that businesses respond to it by promoting flexibility as a crucial component to their operational strategy. Upton (1994) describes flexibility as the capability of a business to alter or respond to environmental uncertainty with little penalty in time, effort, cost or performance. Developing the flexibility feature alone does not automatically result in flexible operations (Gupta and Somers, 1996) for the reason that flexibility is mostly seen ijbm.ccsenet.org
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