THE IMPACT OF SUPPLY CHAIN INTEGRATION ON FIRMS’ BUSINESS AND OPERATIONAL PERFORMANCE AT THE FOOD RETAIL SECTOR/INDUSTRY

Year 2018, , 18 - 30, 30.03.2018

Martin Boakye Osei Celal Hakan Kagnicioglu

https://doi.org/10.17261/Pressacademia.2018.804

Abstract

Purpose-This study researched into the impact of supply chain
integration and firm performance of food retailers in Turkey. The main purpose
of this study was to identify the impact of internal and external supply chain
integration on firms’ business and operational performance in the food retail
sector in Turkey.

Methodology-Two big cities in Turkey, namely, Istanbul and
Eskişehir were selected for this study due to the availability of major food
retailers in these cities. Stratified sampling method was used to select
respondents. In total, 216 firms were selected out of which only 208 firms
responded to the questionnaire distributed. Structural Equation Model
specifically Amos was used to analyse the data.     

Findings-The study found a positive and significant relationship
between internal and external integration, and the study also found a
significant and a positive relationship between internal integration and firms’
operational and business performance. On the other hand, the study also found a
significant and a positive relationship between external integration and firms’
operational and business performance. 

Conclusion- Consequently, retailers in Turkey were admonished to
practice and uphold supply chain collaboration with their suppliers and
customers. 

Keywords

Supply chain management, supply chain integration, food retailers, operational performance and business performance

References

• Afshan, N. (2013). The performance outcomes of dimensions of supply chain integration: a conceptual framework. Business: Theory and Practice/Verslas: Teorija ir Praktika, 14 (4), pp.323-331.
• Arbuckle, J. L. (2005). AMOS 6.0 User’s Guide. Spring House, PA: Amos Development Corporation.
• Chopra S. and Meindl, P. (2001). Strategy, Planning and Operation. Upper Saddle River, NJ: Prentice-Hall Inc.
• Cronbach, L.J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika 16, pp.297–334.
• Droge, C., Jayaram, J. and Vickery, S. K. (2004). The effects of internal versus external integration practices on time-based performance and overall firm performance. Journal of Operations Management 22(6), pp.557-573.
• Dyer, J. H., Cho, D. S. and Chu, W. (1998). Strategic Supplier Segmentation: The Next Best Practice in Supply Chain Management,” California Management Review 40(2), pp.57-77.
• El-Ansary, A.I. (1992). A strategic Perspective of Communication and Information Systems in Marketing Channels. Journal of Marketing Channels, 1(4), pp.3-16
• Fabbe-Costes, N. and Jahre, M. (2008). Supply Chain Integration and Performance: A Review of The Evidence. The International Journal of Logistics Management, 19(2), pp.130-154.
• Flynn, B. B., Huo, B. and Zhao, X. (2010). The Impact of Supply Chain Integration on Performance: A Contingency and Configuration Approach,” Journal of Operations Management, 28 (1), pp.58-71.
• Frohlich, M. T. and Westbrook, R. 2001, “Arcs of integration: an international study of supply chain strategies,” Journal of Operations Management, 19(2), pp.185-200.
• Germain, R. and Iyer, K. N. (2006). The interaction of internal and downstream integration and its association with performance. Journal of Business Logistics, 27(2), pp.29-52.
• Gimenez, C. and Ventura, E., 2005,” Logistics-production, logistics marketing and external integration: their impact on performance,” International Journal of Operations & Production Management, 25 (1), pp.20–38.
• Gimenez, C., & Ventura, E. (2003). Supply Chain Management as a Competitive Advantage in The Spanish Grocery Sector. The International Journal of Logistics Management, 14(1), pp. 77-88.
• Groves, G. and Valsamakis, V. (1998). Supplier-Customer Relationships and Company Performance,” The International Journal of Logistics Management, 9(2), pp. 51-64.
• Hu, L. T. and Bentler, P. M. (1999). Cutoff Criteria for Fit Indexes in Covariance Structure Analysis: Conventional Criteria Versus New Alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6 (1), pp. 1-55.
• Jayaram, J. and Tan, K. C. (2010). Supply Chain Integration with Third-Party Logistics Providers. International Journal of Production Economics, 125 (2), pp.262-271.
• Kahn, K. B. and Mentzer, J. T. (1996). Logistics and Interdepartmental Integration. International Journal of Physical Distribution & Logistics Management, 26 (8), pp.6-14.
• Lee, H.L. (2002). Aligning Supply Chain Strategies with Product Uncertainties. California Management Review, 44 (3), pp. 105-10.
• Leuschner, R., Rogers, D. S. and Charvet, F. F. (2013). A meta‐analysis of supply chain integration and firm performance. Journal of Supply Chain Management, 4(9), pp.34-57.
• Marquez, A. C., Bianchi, C. and Gupta, J. N. (2004). Operational and Financial Effectiveness Of E-Collaboration Tools in Supply Chain Integration. European Journal of Operational Research, 159 (2), pp. 348-363.
• Narasimhan, R. and Kim, S. W. (2002). Effect of Supply Chain Integration on The Relationship Between Diversification and Performance: Evidence from Japanese And Korean Firms. Journal of operations management, 20(3), pp. 303-323.
• Prajogo, D., and Olhager, J. (2012). Supply Chain Integration and Performance: The Effects Of Long-Term Relationships, Information Technology And Sharing, And Logistics Integration. International Journal of Production Economics, 135 (1), pp. 514-522.
• Rosenzweig, E. D., Roth, A. V. and Dean, J. W. (2003). The Influence of An Integration Strategy on Competitive Capabilities and Business Performance: An Exploratory Study of Consumer Products Manufacturers. Journal of Operations Management, 21(4), pp. 437-456.
• Scannell, T. V., Vickery, S. K. and Droge, C. L. (2000). Upstream Supply Chain Management and Competitive Performance in The Automotive Supply Industry. Journal of Business Logistics, 21(1), p. 23.
• Schoenherr, T. and Swink, M. (2012). Revisiting the Arcs of Integration: Cross-Validations And Extensions. Journal of Operations Management, 30 (1), pp. 99-115.
• Stank, T. P., Keller, S. B., and Daugherty, P. J. (2001). Supply chain collaboration and logistical service performance. Journal of Business logistics, 22(1), pp. 29-48.
• Stank, T.P., Crum, M., & Arango, M. (1999). Benefits of Interfirm Coordination in Food Industry Supply Chains. Journal of Business Logistics, 20 (2), pp. 21-41.
• Stank, T.P., Daugherty, P.J. and Autry, C.W. (1999). Collaboration Planning: Supporting Automatic Replenishment Programs. International Journal of Supply Chain Management, 4(2), pp.75-85.
• Stevens, G.C. (1989). Integrating the supply chain. International Journal of Physical Distribution and Materials Management, 19 (8), pp. 3–8.
• Van der Vaart, T. and Van Donk, D. P. (2008). A Critical Review of Survey-Based Research in Supply Chain Integration. International Journal of Production Economics, 111 (1), pp. 42-55.
• Vargas, G., Cardenas L. and Matarranz J.L. (2000). Internal and External Integration of Assembly Manufacturing Activities,” International Journal of Operations and Production Management, 20(7), pp. 809-822.
• Vickery, S. K., Jayaram, J., Droge, C. and Calantone, R. (2003). The Effects of An Integrative Supply Chain Strategy on Customer Service and Financial Performance: An Analysis of Direct Versus Indirect Relationships. Journal of operations management, 21 (5), pp. 523-539.
• Wang, E. T., Tai, J. C. and Wei, H. L. (2006). A Virtual Integration Theory of Improved Supply-Chain Performance. Journal of Management Information Systems, 23(2), pp. 41-64.
• Zailani, S. and Rajagopal, P. (2005). Supply chain integration and performance: US versus East Asian companies. Supply Chain Management: An International Journal, 10 (5), pp. 379-393.
• Zhao, X., Huo, B., Flynn, B. B. and Yeung, J. H. Y. (2008). The Impact of Power and Relationship Commitment on The Integration Between Manufacturers and Customers in A Supply Chain. Journal of Operations Management, 26(3), pp. 368-388.
• Zhao, X., Nie, W., Huo, B. and Yeung, J. (2006b). The Impact of Supply Chain Integration on Company Performance and Supply Chain Performance In Chin. Working Paper. The Chinese University of Hong Kong, Hong Kong.