The Impacts Of Product System And Production System On Supply Chain Integration

Supply chain integration (SCI) has attracted growing attention from both academic researchers and practitioners, due to its strategic importance to the competitiveness of organizations. With the shift from competition between enterprises to supply chains, manufacturers and their partners manage and coordinate the internal and external processes, resources and activities across the whole supply chain collaboratively. Recent studies have confirmed the positive effects of internal, customer and supplier integration on firm-centric performance (e.g., manufacturing cost and quality), supply chain-centric performance (e.g., delivery and flexibility), and aggregate performance (e.g., financial and market performance). However, there are still several research gaps on SCI. First, the basic definitions and contents of the constructs used in empirical studies are inconsistent and vague, which calls for a theoretical framework. Second, as three dimensions of SCI, the relationships between internal integration (Ⅱ), supplier integration (SI) and customer integration (CI) have not been determined. More empirical evidences should be provided to support how internal integration impacts on supplier and customer integration. Third, previous research on SCI focus more on the performance outcomes, but neglect the discussion on determinants and contingencies of SCI.Given the above practical background and research gaps, the research first reviews relevant literature and theories. Based on the governance theory, SCI is regarded as one kind of hybrid governance structure which is different from market and vertical integration. Specifically, the research discusses governance arrangements of SCI from ownership, administrative structre, incentive intensity, and adataption to contingencies, and reelaborates information sharing, collaboration, joint decision making, and system coupling as four elements of SCI. Furthermore, the research explores the relationship between internal integration and external integration from the perspectives of governance. Transaction cost theory suggests that external integration is always accompanied with exchange hazards and coordination difficulties, while internal integration implies firms’ governance capabilities which can help remove the barriers of external integration. Thus, it is hypothesized that internal integration promotes supplier integration and customer integration.Then the research focuses on the determinants of SCI, and explores how product complexity and variety affect the degree of internal integration, supplier integration and customer integration. Based on organizational information processing theory and knowledge based view, the research hypothesize that product complexity and variety is positively associated with internal integration, supplier integration and customer interation. The hypotheses testing is drawn upon the sixth round International Manufacturing Strategy Survey (IMSS-VI). A structural equation model is built to test the relationship among product complexity, product variety, internal integration, supplier integration and customer integration. This research shows that internal integration is an enabler to supplier and customer integration. The results also show that under high product complexity, firms tend to implement internal and supplier integration, while product complexity does not have a direct impact on customer integration. Product variety is confirmed to be positively related to all the dimensions of SCI.Finally, the research explores how the match between internal production system and external SCI impact on firms’ operational performance (OP). Mass production dominated system, batch production dominated system, and one of a kind production dominated system are identifies as three kinds of production system. And quality, flexibility, delivery and cost are considered as four dimensions of OP. Based on transaction cost theory, organizational information processing theory, knowledge based view and resource based view, the research discuss the relationships between external integration (i.e., supplier integration and customer integration) and operational performance (i.e., quality, flexibility, delivery and cost). And then analyze the moderation effects of production system on external SCI-OP relationships. Based on the data of IMSS-VI, the research builds a structural equation model and conducts multi-group analysis to test relevant hypotheses. The results reveal that firms’ internal production system interacts with external SCI to determine operational performance.In conclusion, the dissertation enriches and expands the SCI research through the lens of governance theory. The research addresses four major issues of SCI. First, the research reelaborates the definition, contents and elements of SCI based on the governance view, and enhances the understandings of scholars and managers on "what is SCI". Second, the research explores the inherent configuration mechanisms among internal integration, supplier integration and customer integration, which helps to answer the question about "how to implement SCI". Third, the research discusses how product complexity and variety impact on interal integration, supplier integration and customer integration, in order to find "what factors drive firms to implement SCI" Finally, the dissertation conducts the contingency research of SCI to find the match between internal production and external SCI, which aims at exploring "when to implement SCI".