The mediating effect of logistics integration on supply chain performance

Abstract

Purpose – The purpose of this paper is to analyze the impact of individual logistics-related factors, namely, supplier involvement (SI), length of supplier relationship (LSR), use of information technology (IT), and logistics integration (LI) on a firm's supply chain performance (SCP) and test for the mediating effect of LI in a multi-country survey conducted in Brazil, Korea and India. The paper also develops a composite variable, supply chain competency (SCC), as an overall measure of the quality of a firm's supply chain and demonstrate its effect on a firm's SCP. Design/methodology/approach – The research methodology was based on designing and administering a survey instrument. Data collected from 187 organizations in Brazil, Korea and India were analyzed using the partial least squares structural equation modeling methodology. Findings – Results show that for the combined data, the direct effects of SI, LSR and IT on SCP are insignificant while LI has a very significant direct effect on SCP. On the other hand, except for SI, LSR and IT have significant effects on SCP through LI establishing the mediating role of LI. The paper also finds that SCC has a significant effect on SCP. Further, when countries are considered individually the paper finds that IT has a significant indirect effect on SCP in the case of all the countries while LSR has a significant indirect effect on SCP, both in the case of Brazil and Korea. Additionally, in the case of Korea SI has a significant indirect effect on SCP. Research limitations/implications – Like other survey-based research, the findings of this paper are also limited by the sample size. Especially, the observations specific to individual countries are as good as the respective sample sizes. Also, since all the respondents belonged to manufacturing firms, the findings of this paper are relevant for the manufacturing sector. Practical implications – This paper establishes the mediating effect of LI in assessing the impact of logistics-related factors on a firm's SCP. It confirms that although logistics-related factors are necessary for a firm's superior SCP, they are not sufficient unless their interactions are taken into consideration, as evidenced by the significant positive relationship between SCC and SCP. Originality/value – To the best of the authors’ knowledge, this paper is the first paper to study the effect of logistics-related factors on a firm's SCP and establish the mediating role of LI in a multi-country setting. This paper also develops a composite variable SCC and examines its effect on SCP.

Effects of supply chain integration on firm’s performance: A study on micro, small and medium enterprises in India

“…At last, II is the third level of integration as it is the substance between SI and CI, and it is difficult to accomplish either SI or CI without II. Huo 2012, Gimenez et al (2012), Alam et al (2014) studies are consistent with above result. Results have also shown that SI was having the most remarkable impact on organisational performance, trailed by CI, lastly II.…”

“…In recent years, manufacturing organisations tend to form a stable relationship with their suppliers to deal with the variance in demands of the customers and lessening the production cycle time and delivery time defined by the firm and the customers (Bagchi et al, 2005;Zhao et al, 2011;Huo, 2012). Suppliers now are progressively associated with creating the products to promote production and remaining neighbouring to the customer (Kim, 2009;Alam et al, 2014). Therefore, the investigation characterised supplier integration (SI) as the procedure of cooperation among partners and organisation that encourage the distribution of data, experience, materials and services.…”

Characteristics of cross-functional integration processes

“…Organizational members are learning to "march to the beat of the same drummer" which is helping to meet the everchanging demands. Cross-functional integration is essential for providing and processing quality information and developing effective decision-making processes in the relationship with different agents along the supply chain (Mollenkopf et al, 2000;Alam et al, 2014).…”

Quality Management as Driver of Vertical Integration in Service Chain: A Study of 3rd Party Logistics Industry

“…Zhang and Okoroafo (2015) in a conceptual frame work for 3PL, discussing the importance of integration, mentioned that in a supply chain the 3PL must have the integrating capability to share and receive information with their clients in order to be able to improve the level of their service. Alam, Bagchi, Kim, Mitra & Seabra (2014) studying the impacts of supplier involvement, length of relationship, information technology and logistics integration competency on the success of supply chain management found that, in comparison to other factors, logistics integration has very significant impact on the success of supply chain and as a moderating factor it positively improves the impact of other factors on the success of logistics value chain.. The whole literature reviewed and referred above, no doubt, emphasized the importance of integration competency for the success of chain partners but what lacked here was the recipe or strategy how to achieve integration competency.…”