The value of supply chain integration in the Latin American agri-food industry: trust, commitment and performance outcomes

• Published date: 25 August 2020
• Date: 25 August 2020
• Pages: 281-301
• DOI: https://doi.org/10.1108/IJLM-02-2020-0097
• Subject Matter: Management science & operations,Logistics
• Author: Manuel Jesus Ramirez,Ivonne Eliany Roman,Edgar Ramos,Andrea Stefano Patrucco

The value of supply chain

integration in the Latin American

agri-food industry: trust,

commitment and

performance outcomes

Manuel Jesus Ramirez, Ivonne Eliany Roman and Edgar Ramos

Department of Industrial Engineering Program,

Universidad Peruana de Ciencias Aplicadas, Lima, Peru, and

Andrea Stefano Patrucco

Department of Marketing and Logistics,

Florida International University College of Business, Miami, Florida, USA

Abstract

Purpose –This paper aims to explore the antecedents and performance outcomes of supply chain integration

in the agri-food industry in Latin America, a context that the literature on supply chain management has not

extensivelyaddressed. The quinoa supply chain, an industry that has encountered a boost in market demand in

the past year, is selected as the unit of analysis. Supply chain integration dynamics are analyzed to provide

recommendations about integration strategies and benefits in the agricultural sector.

Design/methodology/approach –A conceptual model was designed in this study, which includes the

drivers (i.e. trust and commitment) and outcomes (i.e. operational and economic performance) of supply chain

integration. The relationships were verified through a unique survey, the data of which were collected from 79

respondents operating at different levels of the Peruvian quinoa supply chain (i.e. suppliers, producers and

customers). The proposed hypotheses were tested through the partial least squares (PLS) regression.

Findings –The results underscore the relevance of trust and commitment as enablers of supply chain

integration initiatives in the agri-food industry. These factors are particularly essential for involving the

farmers who are the most upstream actors in the supply chain and characterized by unstructured

organizations. A high level of integration in these types of supply chain enhances the capacity to improve

operational performance, which in turns positively affects the main economic indicators.

Originality/value –This study contributes to the discussion of supply chain integration in the agri-food

industry, which remainsunexplored thus far. It relies on a multitier collection of responses, which is extended to

all the levels of the quinoa supply chain, thereby providing the study with a unique depth of analysis.

Furthermore, this work contributes to the ongoing discourse on the performance impact of supply chain

integration, which several SCM scholars have recently questioned.

Keywords Agri-food supply chain management, Supply chain integration, Supply chain performance

Paper type Research paper

1. Introduction

Supply chain management (SCM) refers to the integration of key business processes from end

users to suppliers, providing products, services and information that add value to customers

and other stakeholders (Lambert and Cooper, 2000;Mentzer et al., 2001). This definition

recognizes the importance of “integration between partners”for a successful SCM, and this

topic has been extensively addressed by the SCM literature (e.g. Frohlich and Westbrook,

2001;Richey et al., 2009;Chen et al., 2011;Leuschner et al., 2013;Ralston et al., 2015;Shou et al.,

2018;Wiengarten et al., 2019;Mora-Monge et al., 2019).

Flynn et al. (2010) define supply chain integration (SCI) as “the degree to which a

manufacturer strategically collaborates with its SC partners and collaboratively manages

IJLM

32,1

284

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 16 February 2020

Revised 31 May 2020

Accepted 10 July 2020

The International Journal of

Logistics Management

Vol. 32 No. 1, 2021

pp. 284-304

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-02-2020-0097

intra- and inter-organizational processes, in order to achieve effective and efficient flows of

products and services, information, money and decisions, to provide maximum value to the

customer.”According to this perspective, SCI represents a possible form of collaboration

between the actors in the chain, aimed at establishing intrafirm and interfirm connections

through the alignment of objectives, information transparency and linkages between process

flows (Lii and Kuo, 2016). In modern markets characterized by intense pressure to exceed

customer expectations, integration with supply chain partners becomes a critical element for

achieving sustained competitive advantages, as the ultimate goal of SCI is to maximize the

value delivered to the customers through the facilitation of a seamless flow of materials and

information across the supply chain (Kim, 2009;Prajogo and Olhager, 2012).

Several authors have focused on the dynamics of SCI, including different levels of

integration (e.g. Wiengarten and Longoni, 2015;Robinson et al., 2018), drivers and enablers

(e.g. Richey et al., 2011;Alfalla-Luque et al., 2013;Leuschner et al., 2013;Zhao et al., 2013;Mora-

onge et al., 2019) and an extensive discussion of the links between SCI and performance (e.g.

Fabbe-Costes and Jahre, 2008;Zhao et al., 2015;Ataseven and Nair, 2017;Feyssa et al., 2019).

Considering the richness of the theoretical and practical findings provided by the

literature, SCM scholars are challenged to discover the other aspects that can be discussed

about integration in supply chain networks.

Wiengarten et al.’s (2019) recent contribution attempts to respond to this challenge by

providing additional insights into this topic. The authors raise the question that the principle

stating that a “higher SCI equals performance improvement”might not always be true; SCI is

a complex and multifaceted process, and the relationship between SCI and performance has

different nuances that are connected to several contingent factors, such as the competitive

priorities of companies in the network and the nature of the industry. For the former, the

recent discussion in the SCM literature is largely focused on the relationship between SCI and

the capacity of the supply chain to achieve sustainability objectives (e.g. Brockhaus et al.,

2013). The creation of sustainable supply chains requires an alignment of objectives between

all the partners in the network, who must operate their processes following shared

environmental, social and ethical principles (e.g. Wu, 2013;Herczeg et al., 2018). This process

in turn entails a strict integration and interconnection between intracompany processes.

Recent studies (e.g. Wiengarten and Longoni, 2015;Shee et al., 2018;Kang et al., 2018)

explicitly demonstrate that the development of a certain level of SCI represents a necessary

condition for designing and operating in supply chain networks in which profitability and

environmental and social effects are balanced.

In connection with this aspect and the aforementioned second factor, the volume of

sectoral studies in the SCM literature has grown, specifically research on the role of

integration in sustainable supply chains, with consideration of project-based industries such

as construction (e.g. Dallsega and Rauch, 2017;Zeng et al., 2018). However, less attention has

been given to the agri-food industry where the intense pressure to “be sustainable”in

purchasing, production and logistics increases the need for integration with other supply

chain members (Beske et al., 2014;Mena et al., 2014). In this context, SCI is difficult to achieve

due to environmental uncertainty (e.g. unforeseen climate changes and water scarcity),

market complexity (e.g. price volatility and high fluctuations in demand), process complexity

(e.g. perishable products, risk of logistical interruptions and limited capacity), need to

coordinate between a large set of heterogenous actors (e.g. isolation of producers from

markets) and multiple operational and regulation objectives (Jraisat et al., 2013;Bourlakis

et al., 2014;Sharma et al., 2017;Dania et al., 2018). Findings on supply chain network

integration in the agri-food industry are limited, and they either adopt a theoretical

perspective or consider the influence of integration on performance (e.g. Hobbs and Young,

2000;Doukidis et al., 2007;van Donk et al., 2008;Eksoz et al., 2014;Tan et al., 2017;Kumar

et al., 2017). Nonetheless, in the agri-food industry, the improvement of the integration of

Integration in

the agri-food

supply chain

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