Effects of supply chain management practices, integration and competition capability on performance

Abstract

Purpose – The purpose of this research is to examine the causal linkages among supply chain management (SCM) practice, competition capability, the level of supply chain (SC) integration, and firm performance. Design/methodology/approach – This is helpful in developing a framework for linking a firm's SC integration strategy to its competitive strategy, and in identifying how such a linkage can be connected to the improvement of organizational performance. Such effort also should enable us to derive a set of recommended strategies of SCM practices for SC integration. Findings – From the results of LISREL analysis on small and large manufacturing firms, this paper finds that, in small firms, efficient SC integration may play a more critical role for sustainable performance improvement, while, in large firms, the close interrelationship between the level of SCM practices and competition capability may have more significant effect on performance improvement. It is concluded that, in early stage, the emphasis on systemic SC integration may be more crucial. Once SC integration has been implemented, it may be advisable to focus on SCM practice and competition capability. Orginality/value – Attempts to show how the potential benefits of integrating supply chain can no longer be ignored.