Investigating the impact of supply chain integration on operational performance with a mediating role of supply chain capabilities of the SME sector in Pakistan
Keywords:
Supply chain management, Supply chain integration, Integration, Supply chain capabilities, Operational performance, ManufacturingAbstract
Different firms do not compete like distinct units from extremely competitive business perspectives but slightly as participants in numerous supply networks. Therefore, this research aims to study the impact of supply chain integration (supplier, internal and customer) on operational performance with a mediating role of supply chain capabilities of the manufacturing industry of Karachi, Pakistan. This research will analyze 175 survey responses from employees working in the SME sector of Karachi, Pakistan. Partial Least Square-Structural equation modelling is used to analyze the data. Results show that supply chain integration has a significant impact on operational performance. Furthermore, supply chain integration significantly impacts operational performance by mediating supply chain capabilities. The results of the current study suggest that supply chain integration improves performance.
References
Adebanjo, D., Teh, P.-L., & Ahmed, P. K. (2018). The impact of supply chain relationships and integration on innovative capabilities and manufacturing performance: the perspective of rapidly developing countries. International Journal of Production Research, 56(4), 1708–1721. https://doi.org/10.1080/00207543.2017.1366083
Agha, A. A., Rashid, A., Rasheed, R., Khan, S., & Khan, U. (2021). Antecedents of Customer Loyalty in Telecomm Sector. Turkish Online Journal of Qualitative Inquiry, 12(9), 1352–1374. https://www.tojqi.net/index.php/journal/article/view/5873/4175
Albhirat, M. M., Rashid, A., Rasheed, R., Rasool, S., Zulkiffli, S. N. A., Zia-Ul-Haq, H. M., & Mohammad, A. M. (2024). The PRISMA Statement in Enviropreneurship Study: A Systematic Literature and a Research Agenda. Cleaner Engineering and Technology, 18(2024), 100721. https://doi.org/10.1016/j.clet.2024.100721
Alfalla-Luque, R., Marin-Garcia, J. A., & Medina-Lopez, C. (2015). An analysis of the direct and mediated effects of employee commitment and supply chain integration on organizational performance. International Journal of Production Economics, 162, 242–257. https://doi.org/10.1016/j.ijpe.2014.07.004
Allred, C. R., Fawcett, S. E., Wallin, C., & Magnan, G. M. (2011). A dynamic collaboration capability as a source of competitive advantage. Decision Sciences, 42(1), 129–161. https://doi.org/10.1111/j.1540-5915.2010.00304.x
Ataseven, C., & Nair, A. (2017). Assessment of supply chain integration and performance relationships: A meta-analytic literature investigation. International Journal of Production Economics, 185, 252–265. https://doi.org/10.1016/j.ijpe.2017.01.007
Baloch, N. & Rashid, A. (2022). Supply chain networks, complexity, and optimization in developing economies: a systematic literature review and meta-analysis. South Asian Journal of Operations and Logistics, 1(1), 1–13. https://doi.org/10.57044/SAJOL.2022.1.1.2202
Barreto, I. (2010). Dynamic capabilities: Review past research and an agenda for the future. Journal of Management, 36(1), 256–280. https://doi.org/10.1177/0149206309350776
Brus, D. J., & de Gruijter, J. J. (2003). A method to combine non-probability and probability sample data in estimating spatial means of environmental variables. Environmental Monitoring and Assessment, 83(3), 303–317. https://doi.org/10.1023/a:1022618406507
Brusset, X., & Teller, C. (2017). Supply chain capabilities, risks, and resilience. International Journal of Production Economics, 184, 59–68. https://doi.org/10.1016/j.ijpe.2016.09.008
Chavez, R., Yu, W., Gimenez, C., Fynes, B., & Wiengarten, F. (2015). Customer integration and operational performance: The mediating role of information quality. Decision Support Systems, 80, 83–95. https://doi.org/10.1016/j.dss.2015.10.001
Chen, I. J., & Kitsis, A. M. (2017). A research framework of sustainable supply chain management: The role of relational capabilities in driving performance. The International Journal of Logistics Management, 28(4), 1454-1478. https://doi.org/10.1108/IJLM-11-2016-0265
Cheng, Y., Farooq, S., & Jajja, M. S. S. (2021). Does the plant's role moderate the relationship between internal manufacturing network integration, external supply chain integration, and operational performance in the manufacturing network? Journal of Manufacturing Technology Management, 32(6), 1267–1289. https://doi.org/10.1108/jmtm-06-2019-0237
Choon Tan, K., Kannan, V. R., Hsu, C.-C., & Keong Leong, G. (2010). Supply chain information and relational alignments: mediators of EDI on firm performance. International Journal of Physical Distribution & Logistics Management, 40(5), 377–394. https://doi.org/10.1108/09600031011052831
Chowdhury, P., Lau, K. H., & Pittayachawan, S. (2019). Operational supply risk mitigation of SME and its impact on operational performance: a social capital perspective. International Journal of Operations & Production Management, 67(21), 144–3577.
Danese, P., & Bortolotti, T. (2014). Supply chain integration patterns and operational performance: a plant-level survey-based analysis. International Journal of Production Research, 52(23), 7062–7083. https://doi.org/10.1080/00207543.2014.935515
Das, S., Ghani, M., Rashid, A., Rasheed, R., Manthar, S., & Ahmed, S. (2021). How customer satisfaction and loyalty can be affected by employee’s perceived emotional competence: The mediating role of rapport. International Journal of Management, 12(3), 1268–1277. https://doi.org/10.34218/IJM.12.3.2021.119
Duhaylongsod, J. B., & De Giovanni, P. (2019). The impact of innovation strategies on the relationship between supplier integration and operational performance. International Journal of Physical Distribution & Logistics Management, 49(2), 156–177. https://doi.org/10.1108/ijpdlm-09-2017-0269
Etikan, I., Musa, S. A., & Alkassim, R. S. (2016). Comparison of convenience sampling and purposive sampling. American Journal of Theoretical and Applied Statistics, 5(1), 1–4.
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of Operations Management, 28(1), 58–71. https://doi.org/10.1016/j.jom.2009.06.001
Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. JMR, Journal of Marketing Research, 18(3), 382. https://doi.org/10.2307/3150980
Ganbold, O., Matsui, Y., & Rotaru, K. (2021). Effect of information technology-enabled supply chain integration on firm’s operational performance. Journal of Enterprise Information Management, 34(3), 948–989. https://doi.org/10.1108/jeim-10-2019-0332
Gawankar, S., Kamble, S., & Raut, R. (2016). Developed, measured, and validated supply chain performance measurement (SCPM) scale in the Indian retail sector. Benchmarking An International Journal, 23(1), 25–60. https://doi.org/10.1108/bij-06-2013-0068
Hair, J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modelling (PLS-SEM): An emerging tool in business research. European Business Review, 106-121. https://doi.org/10.1108/EBR-10-2013-0128
Hair, Joe F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed, a silver bullet. The Journal of Marketing Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/mtp1069-6679190202
Hair, Joseph F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/ebr-11-2018-0203
Haq, Z. U., Rasheed, R., Rashid, A., & Akhter, S. (2023). Criteria for Assessing and Ensuring the Trustworthiness in Qualitative Research. International Journal of Business Reflections, 4(2), 150–173. Available at: http://journals.pu.edu.pk/journals/index.php/ijbr/article/view/7358
Haque, I., Rashid, A., & Ahmed, S. Z. (2021). The Role of Automobile Sector in Global Business: Case of Pakistan. Pakistan Journal of International Affairs, 4(2), 363-383. https://doi.org/10.52337/pjia.v4i2.195
Hashmi, A. (2022). Factors affecting the supply chain resilience and supply chain performance. South Asian Journal of Operations and Logistics, 1(2), 65–85. https://doi.org/10.57044/SAJOL.2022.1.2.2212
Hashmi, A. R., & Mohd, A. T. (2020). The effect of disruptive factors on inventory control as a mediator and organizational performance in the health department of Punjab, Pakistan. International Journal of Sustainable Development & World Policy, 9(2), 122-134. https://doi.org/10.18488/journal.26.2020.92.122.134
Hashmi, A. R., Amirah, N. A., & Yusof, Y. (2020a). The mediating effect of integrated systems on the relationship between supply chain management practices and public healthcare performance: Structural Equation Modeling. International Journal of Management and Sustainability, 9(3), 148-160. https://doi.org/10.18488/journal.11.2020.93.148.160
Hashmi, A. R., Amirah, N. A., & Yusof, Y. (2021b). Organizational performance with disruptive factors and inventory control as a mediator in public healthcare of Punjab, Pakistan. Management Science Letters, 11(1), 77-86. https://doi.org/10.5267/j.msl.2020.8.028
Hashmi, A. R., Amirah, N. A., Yusof, Y., & Zaliha, T. N. (2020b). Exploring the dimensions using exploratory factor analysis of disruptive factors and inventory control. The Economics and Finance Letters, 7(2), 247-254. https://doi.org/10.18488/journal.29.2020.72.247.254
Hashmi, A. R., Amirah, N. A., Yusof, Y., & Zaliha, T. N. (2021a). Mediation of inventory control practices in proficiency and organizational performance: State-funded hospital perspective. Uncertain Supply Chain Management, 9(1), 89-98. https://doi.org/10.5267/j.uscm.2020.11.006
Hashmi, R. (2023). Business Performance Through Government Policies, Green Purchasing, and Reverse Logistics: Business Performance and Green Supply Chain Practices. South Asian Journal of Operations and Logistics, 2(1), 1–10. https://doi.org/10.57044/SAJOL.2023.2.1.2301
Hong, J., Liao, Y., Zhang, Y., & Yu, Z. (2019). The effect of supply chain quality management practices and capabilities on operational and innovation performance: Evidence from Chinese manufacturers. International Journal of Production Economics, 212, 227–235. https://doi.org/10.1016/j.ijpe.2019.01.036
Hou, C.-K. (2020). The effects of IT infrastructure integration and flexibility on supply chain capabilities and organizational performance: An empirical study of the electronics industry in Taiwan. Information Development, 36(4), 576–602. https://doi.org/10.1177/0266666919884352
Ju, K.-J., Park, B., & Kim, T. (2016). The causal relationship between supply chain dynamic capabilities, technological innovation, and operational performance. Management and Production Engineering Review, 7(4), 6–15. https://doi.org/10.1515/mper-2016-0031
Kalyar, M. N., Shafique, I., & Ahmad, B. (2019). Effect of innovativeness on supply chain integration and performance: Investigating the moderating role of environmental uncertainty. International Journal of Emerging Markets, 362-386. https://doi.org/10.1108/IJOEM-09-2018-0486
Kareem, M. A., & Kummitha, H. V. R. (2020). The impact of supply chain dynamic capabilities on operational performance. Organizacija, 53(4), 319–331. https://doi.org/10.2478/orga-2020-0021
Kauppi, K., Longoni, A., Caniato, F., & Kuula, M. (2016). Managing country disruption risks and improving operational performance: risk management along integrated supply chains. International Journal of Production Economics, 182, 484–495. https://doi.org/10.1016/j.ijpe.2016.10.006
Khan, S. K., Ahmed, S., & Rashid, A. (2021). Influence of social media on purchase intention and customer loyalty of Generation Y with the mediating effect of conviction: A case of Pakistan. Pakistan Journal of International Affairs, 4(2), 526–548. https://doi.org/10.52337/pjia.v4i2.207
Khan, S. K., Rashid. A., Benhamed, A., Rasheed, R., & Huma, Z. (2023b). Effect of leadership styles on employee performance by considering psychological capital as mediator: evidence from airlines industry in an emerging economy. World Journal of Entrepreneurship, Management and Sustainable Development, 18(6), 799–818. https://doi.org/10.47556/J.WJEMSD.18.6.2022.7
Khan, S., Rasheed., R., Rashid, A., Abbas, Q., & Mahboob, F. (2022). The Effect of Demographic Characteristics on Job Performance: An Empirical Study from Pakistan. Journal of Asian Finance, Economics and Business, 9(2), 283–294. https://doi.org/10.13106/JAFEB.2022.VOL9.NO2.0283
Khan, S., Rashid, A., Rasheed, R., & Amirah, N. A. (2023a). Designing a knowledge-based system (KBS) to study consumer purchase intention: the impact of digital influencers in Pakistan. Kybernetes, 52(5), 1720-1744. https://doi.org/10.1108/K-06-2021-0497
Kim, M., & Chai, S. (2016). Assessing the impact of business uncertainty on supply chain integration. International Journal of Logistics Management, 27(2), 463–485. https://doi.org/10.1108/ijlm-11-2014-0175
Lee, C.-S. (2001). An analytical framework for evaluating e‐commerce business models and strategies. Internet Research, 11(4), 349–359. https://doi.org/10.1108/10662240110402803
Lee, J., Kim, S., & Lee, S.-Y. (2016). Sustainable supply chain capabilities: Accumulation, strategic types and performance. Sustainability, 8(6), 503. https://doi.org/10.3390/su8060503
Mathivathanan, D., Govindan, K., & Haq, A. N. (2017). Exploring the impact of dynamic capabilities on sustainable supply chain firm’s performance using Grey-Analytical Hierarchy Process. Journal of Cleaner Production, 147, 637–653. https://doi.org/10.1016/j.jclepro.2017.01.018
Munir, M., Jajja, M. S. S., Chatha, K. A., & Farooq, S. (2020). Supply chain risk management and operational performance: The enabling role of supply chain integration. International Journal of Production Economics, 227(107667), 107667. https://doi.org/10.1016/j.ijpe.2020.107667
Oh, S., Ryu, Y. U., & Yang, H. (2019). Interaction effects between supply chain capabilities and information technology on firm performance. Information Technology and Management, 20(2), 91–106. https://doi.org/10.1007/s10799-018-0294-3
Olavarrieta, S., & Ellinger, A. E. (1997). Resource‐based theory and strategic logistics research. International Journal of Physical Distribution & Logistics Management, 27(9/10), 559–587. https://doi.org/10.1108/09600039710188594
Pooe, R. I. D., & Mahlangu, D. (2017). Enhancing SME performance through supply chain integration, collaborative planning, and supply chain capabilities. Journal of Contemporary Management, 14(1), 238-269.
Radhakrishnan, A., Davis, J. S., Sridharan, S. V., Moore, D. W., & David, D. (2018). The impact of inter-organizational information systems-enabled external integration on capabilities of buyer–supplier dyads. European Management Journal, 36(4), 558–572. https://doi.org/10.1016/j.emj.2017.09.006
Rajaguru, R., & Matanda, M. J. (2019). Role of compatibility and supply chain process integration in facilitating supply chain capabilities and organizational performance. Supply Chain Management. An International Journal, 100, 1359-8546. https://doi.org/10.1108/SCM-05-2017-0187
Rasheed, R., & Rashid, R. (2023). Role of service quality factors in word of mouth through student satisfaction. Kybernetes, In press. http://dx.doi.org/10.1108/k-01-2023-0119
Rasheed, R., Rashid, A., Amirah, N. A., & Afthanorhan, A. (2023). Quantifying the moderating effect of servant leadership between occupational stress and employee in-role and extra-role performance. Calitatea, 24(195), 60-68. https://doi.org/10.47750/QAS/24.195.08
Rashid, A. & Rasheed, R. (2022). A Paradigm for Measuring Sustainable Performance Through Big Data Analytics–Artificial Intelligence in Manufacturing Firms. Available at SSRN 4087758. https://doi.org/10.2139/ssrn.4087758
Rashid, A. (2016). Impact of inventory management in downstream chains on customer satisfaction at manufacturing firms. International Journal of Management, IT and Engineering, 6(6), 1–19.
Rashid, A., & Amirah, N. A. (2017). Relationship between poor documentation and efficient inventory control at Provincial Ministry of Health, Lahore. American Journal of Innovative Research and Applied Sciences, 5(6), 420–423.
Rashid, A., & Rasheed, R. (2023). Mediation of Inventory Management in the Relationship between Knowledge and Firm Performance. SAGE Open, 13(2), 1–11. https://doi.org/10.1177/21582440231164593
Rashid, A., & Rasheed, R. (2024). Logistics Service Quality and Product Satisfaction in E-Commerce. SAGE Open, 14(1), 1–12. https://doi.org/10.1177/21582440231224250
Rashid, A., Ali, S. B., Rasheed, R., Amirah, N. A. & Ngah, A. H. (2022a). A paradigm of blockchain and supply chain performance: a mediated model using structural equation modelling. Kybernetes, 52(12), 6163-6178. https://doi.org/10.1108/K-04-2022-0543
Rashid, A., Amirah, N. A., & Yusof, Y. (2019). The statistical approach in exploring factors of the documentation process and hospital performance: a preliminary study. American Journal of Innovative Research and Applied Sciences, 9(4), 306-310.
Rashid, A., Amirah, N. A., Yusof, Y., & Mohd, A. T. (2020). Analysis of demographic factors on perceptions of inventory managers towards healthcare performance. The Economics and Finance Letters, 7(2), 289-294. https://doi.org/10.18488/journal.29.2020.72.289.294
Rashid, A., Baloch, N., Rasheed, R., & Ngah, A. H. (2024a). Big Data Analytics-Artificial Intelligence and Sustainable Performance through Green Supply Chain Practices in Manufacturing Firms of a Developing Country. Journal of Science and Technology Policy Management, In press, https://doi.org/10.1108/JSTPM-04-2023-0050
Rashid, A., Rasheed, R., & Amirah, N. A. (2023). Information technology and people involvement in organizational performance through supply chain collaboration. Journal of Science and Technology Policy Management, In press. https://doi.org/10.1108/JSTPM-12-2022-0217
Rashid, A., Rasheed, R., Amirah, N. A., & Afthanorhan, A. (2022b). Disruptive factors and customer satisfaction at chain stores in Karachi, Pakistan. Journal of Distribution Science, 20(10), 93–103. https://doi.org/10.15722/jds.20.10.202210.93
Rashid, A., Rasheed, R., & Ngah, A. H. (2024b). Achieving Sustainability through Multifaceted Green Functions in Manufacturing. Journal of Global Operations and Strategic Sourcing, In press. https://doi.org/10.1108/JGOSS-06-2023-0054
Rashid, A., Rasheed, R., Amirah, N. A., Yusof, Y., Khan, S., & Agha, A., A. (2021). A Quantitative Perspective of Systematic Research: Easy and Step-by-Step Initial Guidelines. Turkish Online Journal of Qualitative Inquiry, 12(9), 2874–2883. https://www.tojqi.net/index.php/journal/article/view/6159/4387
Rashid, A., Rasheed, R., Ngah, A. H., Pradeepa Jayaratne, M. D. R., Rahi, S. & Tunio, M. N. (2024c). Role of Information Processing and Digital Supply Chain in Supply Chain Resilience through Risk Management. Journal of Global Operations and Strategic Sourcing, In press. https://doi.org/10.1108/JGOSS-12-2023-0106
Revilla, E., & Knoppen, D. (2015). Building knowledge integration in buyer-supplier relationships: The critical role of strategic supply management and trust. International Journal of Operations & Production Management, 158(626), 1437-1459. https://doi.org/10.1108/IJOPM-01-2014-0030
Ringle, Sarstedt, & Straub. (2012). Editor's comments: A critical look at using PLS-SEM in "MIS quarterly." MIS Quarterly: Management Information Systems, 36(1), iii. https://doi.org/10.2307/41410402
Sanders, J. (2014). Process management, innovation, and efficiency performance: The moderating effect of competitive intensity. Business Process Management Journal, 20(2), 335–358. https://doi.org/10.1108/BPMJ-03-2013-0026
Saragih, J., Tarigan, A., Silalahi, E. F., Wardati, J., & Pratama, I. (2020). Supply Chain Operational Capability and Supply Chain Operational Performance: Do the Supply Chain Management and Supply Chain Integration Matter? International Journal of Supply Chain Management, 9(4), 1222-1229.
Schoenherr, T., & Swink, M. (2012). Revisiting the arcs of integration: Cross‐validations and extensions. Journal of Operations Management, 30(1–2), 99–115. https://doi.org/10.1016/j.jom.2011.09.001
Shou, Y., Li, Y., Park, Y., & Kang, M. (2018). Supply chain integration and operational performance: The contingency effects of production systems. Journal of Purchasing and Supply Management, 24(4), 352–360. https://doi.org/10.1016/j.pursup.2017.11.004
Soosay, C. A., & Hyland, P. (2015). A decade of supply chain collaboration and directions for future research. Supply Chain Management: An International Journal, 20(6), 613–630. https://doi.org/10.1108/scm-06-2015-0217
Tenenhaus, M., Vinzi, V. E., Chatelin, Y.-M., & Lauro, C. (2005). PLS path modeling. Computational Statistics & Data Analysis, 48(1), 159–205. https://doi.org/10.1016/j.csda.2004.03.005
Weingarten, F., Humphreys, P., Gimenez, C., & McIvor, R. (2016). Risk, risk management practices, and the success of supply chain integration. International Journal of Production Economics, pp. 171, 361–370. https://doi.org/10.1016/j.ijpe.2015.03.020
Wiengarten, F., Pagell, M., Ahmed, M. U., & Gimenez, C. (2014). Do a country’s logistical capabilities moderate the external integration performance relationship? Journal of Operations Management, 32(1–2), 51–63. https://doi.org/10.1016/j.jom.2013.07.001
Wong, C. Y., Boon-itt, S., & Wong, C. W. Y. (2011). The contingency effects of environmental uncertainty on the relationship between supply chain integration and operational performance. Journal of Operations Management, 29(6), 604–615. https://doi.org/10.1016/j.jom.2011.01.003
Wu, F., Yeniyurt, S., Kim, D., & Cavusgil, S. T. (2006). The impact of information technology on supply chain capabilities and firm performance: A resource-based view. Industrial Marketing Management, 35(4), 493–504. https://doi.org/10.1016/j.indmarman.2005.05.003
Yoo, Y., & Alavi, M. (2001). Media and group cohesion: Relative influences on social presence, task participation, and group consensus. MIS Quarterly, 25(4), 371-390. https://doi.org/10.2307/3250922
Yu, W., Chavez, R., Jacobs, M. A., & Feng, M. (2018). Data-driven supply chain capabilities and performance: A resource-based view. Transportation Research Part E: Logistics and Transportation Review, 114, 371-385. https://doi.org/10.1016/j.tre.2017.04.002
Zhang, C., Gunasekaran, A., & Wang, W. Y. C. (2015). A comprehensive model for supply chain integration. Benchmarking: An International Journal, 22(3), 481-501. https://doi.org/10.1108/BIJ-05-2013-0060
Zhao, L., Huo, B., Sun, L., & Zhao, X. (2013). The impact of supply chain risk on supply chain integration and company performance: a global investigation. Supply Chain Management: An International Journal, 18(2), 115–131. https://doi.org/10.1108/13598541311318773
Ziaullah, M., Feng, Y., & Akhter, S. N. (2015). The synergistic and complementary effects of supply chain justice and integration practices on supply chain performance: A conceptual framework and research propositions. South African Journal of Economic and Management Sciences, 18(4), 519-533. https://doi.org/10.4102/sajems.v18i4.123
Published
How to Cite
Issue
Section
Copyright (c) 2024 South Asian Journal of Operations and Logistics
This work is licensed under a Creative Commons Attribution 4.0 International License.