Awareness is Not Enough: Commitment, Adoption, and Performance Implications of Supply Chain Integration

Abstract

Purpose: Given the tension between the rationale for and resistance to supply chain integration (SCI), our purpose is to provide an update on the rhetoric and reality of SCI and to test and extend theory related to adoption and efficacy of integration strategies. We examine changes in the level of integration engagement and its influence on firm performance.

Design/methodology/approach: We employ a multi-method – survey and interview – replication approach to 1) gauge the extent to which companies are increasing their engagement in SCI and 2) assess integration’s influence on firm performance.

Findings: Despite managerial awareness of SCI’s potential benefits, levels of integration have remained relatively unchanged over time. We find that integration is positively related to operational performance and firm performance. Integration’s primary influence is through productivity and customer service. The interviews indicate some firms are beginning to manage value co-creation initiatives across multiple tiers of the supply chain. They also reveal a major challenge to effective integration is a lack of managerial commitment. Awareness of integration’s competitive potential is insufficient to mobilize resources and mitigate resistance to collaboration.

Originality/value: Multi-method, replication research is extremely rare, but it is necessary to understand collaboration dynamics. We demonstrate that integration can improve operating and firm performance. Indeed, our approach enables us to delve into the paradox between the positive performance impact and the lack of progress toward greater integration. Theoretically, we link commitment and capability. Managerially, we propose a maturity framework that managers can use to benchmark their own SCI initiative.

Keywords: Supply Chain Integration, Collaboration, Integrated Business Models, Theory of Planned Behavior, Replication Study