Supply chain integration for middle-market firms: a qualitative investigation

• DOI: https://doi.org/10.1108/IJLM-03-2021-0157
• Published date: 23 December 2021
• Date: 23 December 2021
• Pages: 261-288
• Subject Matter: Management science & operations,Logistics
• Author: Matthew Schwieterman,Manus Rungtusanatham,Thomas J. Goldsby,W.C. Benton,Martha C. Cooper,Esen Andiç-Mortan

Supply chain integration for

middle-market firms:

a qualitative investigation

Matthew Schwieterman

Department of Management, Miami University, Oxford, Ohio, USA

Manus Rungtusanatham

Department of Operations Management and Information Systems, York University,

Toronto, Canada

Thomas J. Goldsby

Department of Supply Chain Management, College of Business Administration,

University of Tennessee Knoxville, Knoxville, Tennessee,

Knoxville, Tennessee, USA

W.C. Benton

Department of Operations and Business Analytics, Ohio State University,

Columbus, Ohio, USA

Martha C. Cooper

Department of Marketing and Logistics, Ohio State University,

Columbus, Ohio, USA, and

Esen Andiç-Mortan

Department of Management and Marketing, North Central College,

Naperville, Illinois, USA

Abstract

Purpose –This research seeks to identify the motivations, means and outcomes of supply chain integration

(SCI) among firms in the middle market (i.e. those with annual revenues between US$10m and US$1bn). These

firms often interface with larger, more powerful firms in the supply chain –both suppliers and customers.

Understanding how these firms are challenged and benefit from integrative mechanisms in supply chain

relations can lead to better outcomes more often.

Design/methodology/approach –The research utilizes an online focus group methodology featuring 39

participants. The participants were able to interact in written form with a professional moderator, as well as

each other, over the course of three days.

Findings –The research presents evidence that firms in the middle market adopt SCI as a response to pressure

from customers and suppliers. These firms also view technology as a primary means of achieving integration.

Despite their disadvantageous size position relative to larger customers and suppliers, firms in the middle

market achieved positive outcomes from integration.

Research limitations/implications –Because of the specific context of middle-market firms, this research

may lack generalizability. However, providing contextualization regarding firm size contributes specificity to

the large number of studies detailing the challenges and benefits of SCI.

Practical implications –Managers of firms in the middle market should find value in this study as it

explicates the possible benefits their firms may realize through integration with customers and suppliers.

Moreover, this research outlines several of the possible means through which integration can be achieved.

Further, managers in smaller and larger firms can better understand the motives and needs of middle-market

companies with which they interact.

SCI for middle-

market firms

261

Funding: The National Center for the Middle Market provided funding for this research.

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

https://www.emerald.com/insight/0957-4093.htm

Received 12 March 2021

Revised 13 September 2021

Accepted 31 October 2021

The International Journal of

Logistics Management

Vol. 33 No. 1, 2022

pp. 261-288

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-03-2021-0157

Originality/value –Despite voluminous literature on SCI, this paper provides context-specific findings by

isolating the implications of SCI to firms in the middle market.

Keywords North America, Small to medium-sized enterprises, Supply chain integration, Buyer–supplier

relationships, Qualitative interviews

Paper type Research paper

Introduction

At both the state and local levels, in every corner of the country, it is middle market companies that

are creating new jobs and driving economic growth in their regions and communities. Middle market

companies also play important roles in every industry [...] (quote from The Market That Moves

America: Insights, Perspectives, and Opportunities from Middle Market Companies, 2011)

The National Center for the Middle Market (https://www.middlemarketcenter.org/) defines

middle-market firms (MMFs) as those earning between $10m and $1b in annual revenue.

MMFs face many challenges. Included in these challenges are three specific to supply chain

management: how to strengthen ties with customers, how to source efficiently and how to

improve internal operational efficiency.

This paper represents a response to this encouragement by undertaking a qualitative

middle-range theory (MRT) examination of MMFs’pursuit of supply chain integration (SCI)

in buyer–supplier relationships, delving into their motivation to pursue SCI, SCI initiatives

they adopted or considered for adoption, as well as expected and realized benefits from

pursuing SCI. MRT is defined as “context-specific conceptualization that provides

theoretically grounded insights readily applicable to an empirical context”(Craighead

et al., 2016, p. 242). Middle-range theorizing provides a useful contextualization of findings

that apply to a specific domain, compared with general theories that apply to a broad range of

phenomena. Specifically, we set out to explore how a focal firm in the middle market will

utilize SCI in supply chain relationships, both upstream as a buyer and downstream as a

supplier.

Once trading partners are selected, one of the enduring challenges for supply chain

professionals is how to best integrate with partners as part of the ongoing process of

managing supply chain relationships. Our paper defines SCI as a deliberate effort to connect

the internal processes of a firm with similar processes of other firms within a supply chain

(Frohlich and Westbrook, 2001;Flynn et al., 2010). To date, empirical evidence reported in the

literature notes that firms pursuing SCI in buyer–supplier relationships have realized

improvements in operational and logistical performance –from more timely, accurate

delivery to better quality to increased operational flexibility to lower unit cost (Leuschner

et al., 2013;Mackelprang et al., 2014;Frohlich and Westbrook, 2001;Flynn et al., 2010). Much

of this evidence, however, derives from studying samples collected irrespective of firm size.

For example, Germain and Iyer (2006) and Schoenherr and Swink (2012) utilized samples

comprised of firms affiliated with the Council of Supply Chain Management Professionals

(CSCMP), which covers a spectrum of firm sizes. For MMFs specifically, whether or not SCI

offers the same benefits, given the unique supply chain management challenges they face,

remains unclear and deserves greater scrutiny.

Indeed, three attributes about MMFs raise reasonable doubt as to benefits they can

appropriate from pursuing SCI. First, MMFs, particularly those with annual revenue closer to

the lower bound, are likely to face the same “liability of smallness”that plagues small

enterprises (Freeman et al., 1983). This liability limits MMFs’efficient access to requisite

resources and capabilities to support integration efforts across their supply chains (Pfeffer

and Salancik, 2003;Blili and Raymond, 1993;Kale and Arditi, 1998). Second, when MMFs

engage in supply chain relationships with larger suppliers or customers (as both the buying

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