The influence of supply chain integration on operational performance

Abstract

PurposeAn implicit assumption of current supply chain integration (SCI) research is that the results obtained from product supply chains can be directly extrapolated to service supply chains. The purpose of this paper is to question this assumption of equivalence by proposing that the effects of internal integration (II) and external integration (EI) on operational performance (OP) are contingent on whether a firm operates in a product and service supply chain.Design/methodology/approachDrawing on the contingency theory, a model that specifies and contrasts the interrelationships between II, EI, and OP in product and service supply chains was proposed. Subsequently, measures were developed and survey data were collected from 138 product and 174 service companies in Singapore. The data were then analysed using multi-sampling analysis.FindingsThe effects of II and EI on OP varied significantly between product and service supply chains. In addition, the relationship between II and OP was found to be partially mediated by EI in product supply chains whereas a fully mediated relationship was observed in service supply chains.Research limitations/implicationsWithin the context of SCI, different mediation patterns exist in product and service supply chains. The results suggest adopting a contingency rather than a universalistic approach in the management of firms’ internal and external integrative capabilities to maximise OP. Specifically, managers should adjust their II and EI efforts to achieve congruency with the type of supply chain they serve.Originality/valueThis paper tests the assumption of equivalence and extends the current scope of SCI contingency research by cross-examining the effects of II and EI on OP in both product and service supply chains simultaneously.