The influence of an integration strategy on competitive capabilities and business performance: An exploratory study of consumer products manufacturers

Abstract

In this paper, we expand upon recent research by Frohlich and Westbrook [J. Operations Manage. 19 (2) (2001) 185] that characterizes the influence of supply chain integration on performance. Introducing supply chain integration intensity as a proxy variable for Frohlich and Westbrook’s [J. Operations Manage. 19 (2) (2001) 185] ‘outward-facing supply chain strategy’, we investigate the ways that manufacturing-based competitive capabilities mediate the relationship between supply chain integration and business performance. While previous research suggests that supply chain integration is directly related to superior business performance, the mediating role of manufacturing capabilities has not been explored. Using hierarchical regression analysis, we develop and test a theory-based model using a sample of consumer products manufacturers. Contrary to Frohlich and Westbrook’s [J. Operations Manage. 19 (2) (2001) 185] assertions regarding the applicability of the ‘outward-facing strategy’ to the consumer goods sector, our results provide empirical evidence that supply chain integration intensity leads directly to improved business performance, thus corroborating the conventional wisdom concerning the increasing importance of supply chain integration in the consumer products sector. In addition, this study uncovers empirical evidence for the mediating role of manufacturing-based competitive capabilities in supply chain management. These results support the growing call for a broader, more generalized view of manufacturing strategy.