Supply chain integration and logistics performance: the role of supply chain dynamism

• Pages: 668-685
• DOI: https://doi.org/10.1108/IJLM-06-2015-0100
• Date: 14 November 2016
• Published date: 14 November 2016
• Author: Hee-Yong Lee,Young-Joon Seo,John Dinwoodie
• Subject Matter: Management science & operations,Logistics

Supply chain integration and

logistics performance: the role

of supply chain dynamism

Hee-Yong Lee

School of International Economics and Business, Yeungnam University,

Gyeongsan, Republic of Korea, and

Young-Joon Seo and John Dinwoodie

Plymouth Graduate School of Management,

Plymouth University, Plymouth, UK

Abstract

Purpose –The purpose of this paper is to expand knowledge of supply chain management (SCM) by

empirically testing the moderating effects of supply chain dynamism (SCD) on the association between

supply chain integration (SCI) and logistics performance.

Design/methodology/approach –Survey methods were used to measure the perspective of South

Korean manufacturers. Moderated hierarchical regression analysis was undertaken to test the

proposed hypotheses empirically.

Findings –The findings suggest that SCI can enhance logistics performance when the level of SCD is

high, but the effects of SCI on logistics performance are blurred at low levels of SCD.

Originality/value –This finding provides empirical evidence of the moderating effects of SCD on the

SCI-logistics performance link and offers a new interpretation of the relationship. This work

contributes to SCM disciplines by providing theory-driven and empirically tested explanations.

Keywords Supply chain integration, Moderating effect, Logistics performance,

Hierarchical regression analysis, Supply chain dynamism

Paper type Research paper

1. Introduction

Narrow conceptions of logistics have broadened to embrace all actors from suppliers to

customers and now include the entire value chain system (Zailani and Rajagopal, 2005).

Nowadays, manufacturers and their corresponding supply chain partners including

suppliers, customers and distributors strive to co-create increased customer value and even

collaborative advantage by adopting supply chain management (SCM). The concept of

SCM is predicated by the integration of various processes such as manufacturing,

procurement, distribution and warehousing with supply chain partners (Richey et al., 2009).

Extensive research has examined the relationship between supply chain integration

(SCI) and performance, arguing that SCI has a positive impact on performance

(Mostaghel et al., 2015; Tsanos et al., 2014; Mellat-Parast and Spillan, 2014; Danese and

Romano, 2013). However, this link is largely influenced by the specific current

situations which confront participating firms, which deflect the research-focus from

justification of its value towards an understanding of the contextual conditions under

which it is effective (Wong et al., 2011; Liu et al., 2013; Fynes et al., 2005). The question

relating to how one firm acquires better logistics performance than other firms which

The International Journal of

Logistics Management

Vol. 27 No. 3, 2016

pp. 668-685

©Emerald Group Publishing Limited

0957-4093

DOI 10.1108/IJLM-06-2015-0100

Received 16 June 2015

Revised 1 October 2015

Accepted 3 October 2015

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

This paper was supported by the 2014 Yeungnam University Research Grant. The authors

express their gratitude to Editor-in-Chief, Prof Benjamin Hazen and anonymous reviewers for

their constructive and invaluable comments on this paper.

668

IJLM

27,3

similarly pursue SCI still remains vague. To this end, contingency theories offer a new

framework with an assumption that there is no universal set of choices that is optimal

for all businesses (Ginsberg and Venkatraman, 1985). Thus, consideration of various

contingency factors which affect the impact of SCI on logistics performance would be

an important and timely contribution.

Supply chain dynamism (SCD), defined as the pace of change in both products and

processes (Zhou and Benton, 2007), has become increasingly important as the

importance of knowledge has grown. Vital in the SCM context, it can significantly

affect information sharing such as information quality, manufacturer information,

customer information and information sharing support technology and supply chain

practices (Zhou and Benton, 2007). Nonetheless, empirical corroboration for SCD

remains otherwise anecdotal. Because knowledge is typically dispersed and

organizational specialization drives innovation, one firm cannot develop product and

process innovations in isolation (Svahn and Westerlund, 2007). Accordingly, when a

firm recognizes the characteristics of its supply chain including SCD this may assist it

to perform better by becoming more flexible and acquiring superior information-

processing capabilities (Fisher, 1997; Svahn and Westerlund, 2007). Despit e its

importance, SCD may cause uncertainty due to the preparation of innovative products

and services which can influence performance (Zailani and Rajagopal, 2005).

However SCM literature does not examine how SCD, a cont extual variable,

moderates a SCI-logistics performance link. Whether the interaction between SCI

and SCD can have a positive impact on logistics performance by taking the

contingency approach to SCI-performance relationships (Flynn et al., 2010) is

overlooked. As Lee (2002) and Fisher (1997) illustrate, an organization which focuses

on manufacturing innovative products with highly unpredictable demand and

evolving supply processes is more likely to have different supply chain strategies

compared to one producing stable, low-margin functional products. Differing levels of

SCD which they encounter may yield differing results on the link SCI-logistics

performance. Thus, investigating how SCI influences logistics performance contingent

upon SCD would shed new light on understanding the underlying mechanisms which

influence logistics performance.

This study assumes that the need for internally and externally integrating supply

chains is heightened when there are high levels of demands for innovation in

production, services or operational processes from customers. High SCI may increase

responsiveness to the volatility of SCD due to improved supply chain visibility and

operational knowledge. Under such circumstances, manufacturers may need to focus

on monitoring the flow of products, forecasting and information through the use of

integrated information systems, which facilitate quick adjustments and decision

making. This is less critical in environments where demands for innovation are low.

In short where SCD is high, SCI will be positively related to logistics performance.

Where SCD is low, SCI and logistics performance will not be related. The important role

of South Korean manufacturers in the world economy emanating from their innovation

and modern technologies (Nelson and Pack, 1999) presents an authoritative content to

explore SCI-logistics performance links and the role of SCD in moderating them.

The objective of this work is to evaluate how SCD moderates the influence of SCI on

logistics performance in Korea. Reviews of prior research guide the develo pment of

research hypotheses in Section 2 and precede the research methodology. The results

of hierarchical moderated regression analysis in Section 4 determine the contribution of

this work and directions for future research.

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The role of

supply chain

dynamism