A STRUCTURE–CONDUCT–PERFORMANCE PERSPECTIVE

OF HOW STRATEGIC SUPPLY CHAIN INTEGRATION

AFFECTS FIRM PERFORMANCE
PETER M. RALSTON
University of West Florida

JENNIFER BLACKHURST, DAVID E. CANTOR, AND MICHAEL R. CRUM

Iowa State University

There are several factors that affect a firm’s ability to successfully integrate
internally and externally for organizational improvement. This study seeks
to understand the relationship between a firm’s strategy, its supply chain
integration efforts, and firm performance. Leveraging the theoretical lens
of structure–conduct–performance from the industrial organization eco-
nomics literature, and utilizing both archival and survey data, we describe
how firms may align their internal and external supply chain integration
strategies with customers and suppliers. In doing so, these internal and
external integration strategies affect the firm’s ability to respond to cus-
tomer demand, which then impacts operational and financial perfor-
mance. Our work provides theoretical and empirical evidence of these
relationships and thus extends prior strategic supply chain integration lit-
erature.

Keywords: strategic integration; capabilities; performance; buyer/supplier relation-

ships; structural equation modeling; survey; archival data

INTRODUCTION activities (Leuschner, Rogers & Charvet, 2013). Build-

Linking supply chain processes across enterprises is ing upon that foundation, supply chain integration is
a means to create efficiencies, generate customer value, viewed as a process by which a firm acquires, shares,
and gain a competitive edge (Devaraj, Krajewski & and consolidates strategic knowledge and information
Wei, 2007). One way to create supply chain efficien- internally throughout the firm and externally with
cies is to integrate processes both internally across supply chain partners (Swink, Narasimhan & Wang,
departments or functions and externally across firms 2007). Effective integration can reach beyond func-
(Narasimhan, Swink & Viswanathan, 2010; Paulraj & tional silos and firm boundaries to develop a unified
Chen, 2007). Stated differently, supply chain integra- value creation process that generates and delivers
tion enables a firm to meet customer demand by value for the customer.
bringing departments or partnering firms closer However, integration among firms, and even
together. In this study, integration is defined as the within, is not without challenges. Integration is a dif-
management of various sets of activities that aims at ficult undertaking that involves careful management
seamlessly linking relevant business processes both of resources (Koufteros, Edwin Cheng & Lai, 2007).
within and across firms, as well as eliminating dupli- For example, Fawcett and Magnan (2002) note that
cate or unnecessary parts of the processes for the pur- some firms have trouble forging relationships with
pose of building a better functioning supply chain external partners because they are busy coordinating
(Chen, Daugherty & Roath, 2009). internal activities. Richey, Roath, Whipple and Fawc-
Managing relationships in a supply chain requires ett (2010) discuss certain barriers to integration
cross-functional and cross-firm business processes including a unidirectional flow of information,
with appropriate levels of information sharing, close incongruent goals, and losing sight of the customer
partnerships, and the coordination of operational which could impact external or internal firm relation-

April 2015 47
 Journal of Supply Chain Management

ships. Additionally, integration efforts implemented SCP framework, we investigate the relationship
without a clear focus can lead to less than desired between demand response and both operational and
performance results (Fawcett & Magnan, 2002; financial performance because managers must balance
Springinklee & Wallenburg, 2012). This suggests that both metrics in competitive supply chain settings.
firms may need to rethink why they integrate as well Thus, the specific research questions are as follows:
as how integration, both internally and externally,
RQ1: Is corporate strategic (internal) integration
can impact firm performance.
related to strategic customer and supplier (external)
Integration is not a standard solution to every
integration?
business problem. Rather, integration may be better
utilized as a tool for firms to employ as a response
RQ2: Does strategic customer and supplier integra-
in certain market and environmental conditions
tion impact firm conduct, specifically demand
(Porter, 1980). Having a reason to integrate may
response?
provide the impetus for more successful relation-
ships. In this regard, firms can integrate due to com-
RQ3: What is the relationship between demand
mon issues and share a singular goal to maintain
response and firm performance?
individual firm performance while providing cus-
tomer value. The current research investigates this In the next section of this study, we discuss the liter-
broad research question by analyzing the extent to ature and theoretical framework supporting the
which strategic integration affects firm performance research. Next, we introduce the study’s conceptual
from a supply chain perspective. Specifically, we model and hypotheses. Afterward, we describe the
leverage the structure–conduct–performance (SCP) study’s methodology and sample population and pres-
framework from industrial organizational economics ent our findings. We conclude by discussing the theo-
to develop and empirically test theory about how a retical and managerial implications of the study’s
firm’s supply chain integration activities act as a findings.
structural response to basic market conditions to
impact firm performance (Caves, 1964; Caves & Por- LITERATURE REVIEW
ter, 1977; Chatain, 2011).
One contribution within this work is that the inte- Supply Chain Integration
gration constructs contain process-oriented, strategi- Firms realize that in order to remain competitive
cally focused elements that suggest a higher level of they have to offer goods or services to customers that
integration than solely at the operational level. A firm are of higher quality and/or priced lower than com-
integrates with its supply chain partners as a way to petitors (Cousins & Menguc, 2006). In other words,
deliver and provide customer value (Flynn, Huo & firms have to deliver value to customers while remain-
Zhao, 2010). Strategic integration of supply chain ele- ing profitable. This proves problematic in a time when
ments internally and externally help to further this firms are less vertically integrated and firms may have
endeavor (Mackelprang, Robinson, Bernardes & to rely on other parties to aid in providing customers
Webb, 2014). This is because integration allows busi- value (Saeed, Malhotra & Grover, 2005). One method
ness units or groups of firms to act as a single unit for a firm to address this challenge is to integrate sup-
potentially enhancing efficiencies and performance for ply chains internally and externally. Supply chain inte-
all parties (Frohlich & Westbrook, 2001; Schoenherr gration links intrafirm departments, buyers, suppliers,
& Swink, 2012; Tan, Kannan & Handfield, 1998). The and other chain members to improve the efficiency
current research specifically investigates corporate stra- and effectiveness of supply chains and their deliveries
tegic integration (internal integration) as well as stra- to end users (Morash & Clinton, 1998).
tegic customer integration and strategic supplier A rich literature base exists on the topic of integra-
integration (external integration). Another contribu- tion. Skinner (1969) espouses the benefits of internal
tion of the work is the use of the SCP framework to integration to make sure departments are unified
explain the conduct of firms. Finding ways to distin- along a single company goal. Bowersox, Closs and
guish firms from one another is a hallmark of compe- Stank (2000) concur by discussing how focusing on
tition (Porter, 1980). One such method in supply functional or departmental excellence can sometimes
chain management is to be responsive to customer come at the expense of firm goals. Rather, the authors
demand. Demand response is the ability to anticipate note that internally integrating can improve firm per-
or handle changes in marketplace demand (Braunsc- formance and prevent internal departments from cre-
heidel & Suresh, 2009). This ability allows firms to ating pockets of power that harm other corporate
meet customer expectations while also mitigating sup- functions. Additionally, internal integration can create
ply challenges that may be associated with stochasti- value by eliminating redundancies, creating efficien-
cally demanded goods (Fisher, 1997). Following the cies, and reducing costs (Mollenkopf, Frankel &

48 Volume 51, Number 2

 Strategic Supply Chain Integration and Performance

Russo, 2011; Mollenkopf, Russo & Frankel, 2007; characteristics of the industry in which they compete
Stank, Keller & Closs, 2001). (Bain, 1956; Caves, 1964; Mason, 1939). Firms pursue
However, the benefits of integration are not solely strategies in response to market conditions, which
held within firm boundaries. Firms integrate with alter firm (and supply chain) conduct to positively
external supply chain partners to streamline business impact the level of profits earned (Bettis, 1981; Weiss,
processes with the goal of meeting customer demand 1979). The main contribution of the theoretical
(Narasimhan et al., 2010). External integration has framework is the consideration of industry and firm-
been shown to positively benefit customer service, level factors on performance (Panagiotou, 2006).
innovation, and new product development (Koufteros, Porter (1979, 1980, 1991) points out that industry
Vonderembse & Jayaram, 2005; Koufteros et al., 2007; composition, derived from competitors and standard
Oke, Prajogo & Jayaram, 2013; Vickery, Jayaram, operating practices, influences the decisions firms
Droge & Calantone, 2003). While numerous examples make to survive. He also notes that a firm’s strategy is
promote the benefits of integration, why are more formulated in response to industry dynamics, which
firms not able to successfully integrate with their sup- affects conduct and ultimately firm performance. Strat-
ply chain partners? As Pagell (2004) notes, the impor- egy is defined as the match an organization makes
tance of integration is not in doubt. Benefits of between its internal resources and skills and the
integration have been shown both internally and opportunities available in its external environment
externally. Yet firms struggle to achieve these benefits (Grant, 1991). When organizations compete, it is
(Fawcett & Magnan, 2002). With challenges occurring important for them to consider the marketplace in
during integration, how can firms hope to capitalize which they participate (Lawrence & Lorsch, 1967;
on these benefits? The answer may lie with enmeshing McKone-Sweet & Lee, 2009). This consideration may
strategy and integration. lead to a strategy which defines corporate goals and
Strategic integration combines resources and compe- steps required to meet those goals (Gibson, Mentzer
tencies between business units and firms for the pur- & Cook, 2005; Stank, Davis & Fugate, 2005). In this
pose of supporting and/or advancing corporate manner, strategy can lead to reasoned, planned action
strategy (Burgelman & Doz, 2001). As such, the impe- driving firm conduct (Day, 1999).
tus to integrate is not necessarily to make a process Strategy formulation at the firm level needs to con-
more efficient or capitalize on economies of scale; sider internal and external environments as well as
instead integration occurs because it supports firm different organizational levels, that is, departments
goals or objectives. In this regard, strategically inte- and divisions (Bowersox & Daugherty, 1995). How-
grating may have a stronger relationship with ever, considering external environmental factors can
improved performance because the foundation for lead firms to realize that acting alone may not be
integration is not operational in nature; rather the enough. Firms usually do not possess all the necessary
foundation is to support an underlying strategy (Mac- resources and capabilities required to effectively com-
kelprang et al., 2014; Wiengarten, Pagell, Ahmed & pete in today’s marketplace (Ellram, Tate & Billington,
Gimenez, 2014). Consistent with our research ques- 2008; Leuschner et al., 2013). Therefore, creating a
tions, and for the purposes of contributing to the lit- differential advantage by maximizing value to end
erature related to strategic supply chain integration, consumers can require a multifirm focus (Jap, 1999,
we investigate the role of corporate strategic (internal) 2001). Operational processes and actions spanning
integration and its impact on strategic customer and firms may benefit from a strategic framework, which
supplier (external) integration. Additionally, this fosters cross-functional and cross-organizational inte-
higher order view of integration at the strategic level gration (Bowersox, Closs & Stank, 1999). Strategically
is examined to determine its impact on demand integrating with collaborative partners can lead to
response or the ability to handle demand changes in coordinated actions which align the processes of mul-
the marketplace (Braunscheidel & Suresh, 2009). tiple firms (Flynn et al., 2010; Porter, 1980).
Finally, the relationship between demand response Strategic integration internally and across supply
and performance, both operational and financial, is chain partners may also be a structural response to
examined. industry and market characteristics. Vertical integra-
tion has been noted as one way firms can structure
THEORETICAL BACKGROUND AND themselves to more effectively compete (Caves, 1964;
HYPOTHESIS DEVELOPMENT Morgan, Kaleka & Katsikeas, 2004; Porter, 1980). In
this manner, strategic supply chain integration may
Structure–Conduct–Performance represent the current structural business form required
The SCP framework finds its roots in industrial orga- for firms versus traditional approaches in the SCP
nization economics. The theory argues that firms framework. This is because achieving supply chain
derive competitive advantages by responding to the success and firm performance outcomes in today’s

April 2015 49
 Journal of Supply Chain Management

business environment may rely on the successful inte- Hult, 2005). A firm’s strategy can serve as a founda-
gration of multiple supply chain partners (Richey tion for, as well as a guide to, different company func-
et al., 2010). The current research aims at addressing tions on what needs to occur and be accomplished to
this gap by bringing together the theoretical frame- meet firm goals (Rodrigues, Stank & Lynch, 2004).
work of SCP and strategic integration. Specifically, we Chandler (1962) was one of the first authors to argue
argue for achieving internal integration and utilizing that strategy, born from knowing and understanding
this internal competency to drive external integration competitive opportunities, can drive firm conduct to
with both customers and suppliers. This is different improve or assure firm performance. A properly devel-
than past research because of the level of focus on oped strategy can serve as a signal to employees as to
strategic integration and how strategy plays a role in what a firm believes is important. Firm strategies also
integrative efforts, both internally and externally. The provide a unifying sense of purpose to employees
strategic emphasis helps to account for industry (Thun, 2010). Additionally, and perhaps more impor-
dynamics while providing a focus for firm and supply tantly, well-known and accepted firm strategies align
chain partner conduct to impact performance. The organizational departments and operations with the
conceptual model for the current research is provided intent of achieving firm goals (Baier, Hartmann & Mo-
below. The following section discusses the hypotheses ser, 2008; Wheelwright, 1984). Strategic alignment
underlying the research (Figure 1). between firm and operational strategies can lead to
efficiencies throughout the firm and improve overall
Hypothesis Development organizational effectiveness (Chan, Huff, Barclay &
Firms search and take note of market factors, includ- Copeland, 1997; Venkatraman & Prescott, 1990). In a
ing the characteristics of the industry (Jaworski & sense, strategic alignment facilitates the coordinated
Kohli, 1993; Porter, 1979, 1980), to compete with actions of firm departments and employees, assuring
other firms. Industry characteristics include the num- that efforts at work are being directed toward over-
ber and size of buyers and sellers in a given market, arching firm goals. This highlights the importance of
degree of product differentiation, extent of vertical ensuring that corporate strategy is diffused through-
integration, and the level of the barriers to entry or out, and fully integrated within, a firm.
switching in a given market (Caves, 1964; McWilliams Swink et al. (2007) define corporate strategic inte-
& Smart, 1993). Industry factors are an important gration as the process of acquiring and sharing objec-
determinant of firm competitive behavior because the tives, plans, and related knowledge pertaining to
signals that are communicated in the market provide business and operational strategies. The value of hav-
clues on which actions the firm needs to take. How- ing a corporate strategy fully integrated throughout
ever, noting how much firms could profit provides no the firm is the value generated and potential competi-
indication on how they should act, or toward what tive advantages created (Day & Wensley, 1983). While
purpose they should strive, to achieve those profits. In this is aided by acquiring and sharing knowledge
other words, firms seek to understand how to struc- between business and operational strategies, other fac-
ture themselves to be a successful competitor. One tors may also play a role. These include alignment
such method may be through the development of cor- between corporate and functional level strategies, clar-
porate strategy. ity, intra-organizational communication, and top
The firm’s corporate strategy influences how a firm management support (Burgelman & Doz, 2001; Chan-
competes in an industry or market (Olson, Slater & dler, 1962; Fawcett, Magnan & McCarter, 2008). As

FIGURE 1
Theoretical Model

Strategic Cycle Time Process

Customer Performance
Integraon H3 H5
H1

Corporate Demand Response H7

Strategic
Integraon
H2 H4 H6
Financial
Strategic Supplier Performance
Integraon

50 Volume 51, Number 2

 Strategic Supply Chain Integration and Performance

such, corporate strategic integration is defined as the customer requirements. Recently, companies are more
diffusion of firm-level strategy within functional apt to rely on suppliers to help effectively deliver the
departments and functional goals being aligned with, goods and services customers want (Koufteros et al.,
and communicated throughout, the entire organiza- 2005, 2007). Strategically integrating with suppliers
tion. allows for mutual support, cooperation, and coordina-
Ellinger, Daugherty and Keller (2000) and Kahn and tion (Rosenzweig et al., 2003).
Mentzer (1996) both discuss the ineffectiveness of Strategic supplier integration is defined as the pro-
forcing employees across departments to work cess of acquiring and sharing operational, technical,
together without a clear objective. Corporate strategic and financial information and related knowledge with
integration solves this issue. Additionally, corporate the supplier to drive improvement and generate value
strategic integration can bring together firm depart- (Swink et al., 2007). Flynn et al. (2010) note that
ments highlighting functional capabilities that can strategic supplier integration facilitates the supplier’s
assist in meeting company goals as well as limitations understanding and anticipation of the focal firm’s
that might prevent a firm from achieving its goals. needs. Strategic supplier integration involves improved
When these limitations are known, a single corporate information sharing and supplier engagement (Swink
strategy unifies firm employees to find solutions (Ro- et al., 2007). Suppliers benefit from strategic supplier
senzweig, Roth & Dean, 2003). These solutions integration because they can become more quickly
include strategically integrating with external partners aware of the firm’s operational activities and what the
including customers and suppliers. supplier can do to meet the organization’s needs. This
Strategic customer integration is defined as the firm’s in turn can lead to an improvement in the focal firm’s
acquisition of information about customers that can customer service. Strategically integrating with suppli-
be used to generate customer value (Hayes & Wheel- ers also allows firms to focus on their core competen-
wright, 1984; Swink et al., 2007). Strategic customer cies. This helps firms handle what they do well while
integration serves multiple purposes. One benefit is being able to rely on the expertise of partners for
the ability of the firm to proactively seek information areas in which they need assistance (Zhao, Huo, Flynn
on customer preferences and needs (Vickery et al., & Yeung, 2008). There is a complementarity that
2003). This information should allow firms the exists between strategically integrated suppliers and
opportunity to align their actions to best meet cus- firms that facilitate improved coordination, capabili-
tomer demand because strategically integrating with ties, and performance (Paulraj & Chen, 2007).
customers requires more than process-level or opera- We propose that firms which have their corporate
tional task integration. A firm has little idea how satis- strategy integrated throughout the firm may be better
fied the customer is with performance or what else able to strategically integrate with suppliers because
the customer would like to see the providing firm an integrated corporate strategy will highlight oppor-
accomplish when information is exchanged electroni- tunities for external integration as well as what type
cally or operations occur through established routines. of supply partner may be best. As such, we argue
Customer intimacy and the sharing of customer satis- that corporate strategic integration helps in the pro-
faction information throughout the firm are more per- cess of integrating with suppliers. Thus, the following
tinent to strategically integrating with customers relationship is hypothesized:
(Flynn, Schroeder & Sakakibara, 1995; Flynn et al.,
H2: Corporate strategic integration is positively
2010; Swink et al., 2007). However, receiving the ben-
related to strategic supplier integration.
efits of strategically integrating with customers may
occur only when the firm realizes this is an important At the center of integrative efforts is the desire to
undertaking. One way to espouse these benefits may improve performance by developing or enhancing
be through having a corporate strategy integrated competencies with which to meet customer demand
throughout the firm. Therefore, the following hypoth- (Flynn et al., 2010). These collaborative relationships
esis is offered: create synergistic resources where summed parts can
be greater than individual components (Corsten &
H1: Corporate strategic integration is positively
Kumar, 2005; Ellram et al., 2008). Frohlich and
related to strategic customer integration.
Westbrook (2001) note that integration can spawn
Strategic customer integration is of limited value if new, or coordinate existing, capabilities and provide
the firm cannot successfully capitalize on the a competitive advantage. Further, these partnerships
information and requirements shared by customers are enhanced when they are strategically integrated
(Narasimhan et al., 2010). Sometimes possessing (Flynn et al., 2010; Narasimhan et al., 2010; Swink
knowledge or information is not enough, especially if et al., 2007). This is because strategy helps to coordi-
firms have no means of producing or providing the nate and manage the value creation process to create

April 2015 51
 Journal of Supply Chain Management

activities designed for customer benefit (Payne & tain or improve operational performance (Braunschei-
Frow, 2005). In this manner, strategy serves as the del & Suresh, 2009; Richey, Adams & Dalela, 2012).
structural foundation for firm and supply chain part- Understanding the linkage between customer demand
ner integration to create value for the customer. In response and operational performance is one way in
this study, we measure value to the customer as the which firms can generate a competitive advantage.
ability to be responsive to demand. Once the needs, preferences, and capabilities of sup-
Demand response is the ability to anticipate or han- ply chain partners are known, a supply chain can
dle changes in marketplace demand (Braunscheidel & operate more efficiently (Hult, Ketchen & Nichols,
Suresh, 2009; Christopher, 2000; van Hoek, Harrison 2002). One potential benefit of this awareness is
& Christopher, 2001). Responding quickly to demand order cycle time process performance (Hult, Ketchen
changes is almost a competitive priority in dynamic & Slater, 2004).
business environments (Danese, Romano & Formen- Order cycle time process performance is defined as
tini, 2013; Handfield & Bechtel, 2002). Demand the interval between a buyer’s request for a good or
response derives its value from not only assisting in service and this good or service’s delivery or fulfill-
meeting customer desires, but also predicting or allevi- ment (Hult et al., 2004). Cycle time process perfor-
ating any supply issues which might prevent meeting mance is one potential outcome of efficient
customer demand. This occurs as strategic integration operations. Reliable and consistent cycle times repre-
with customers and suppliers helps organizations sent a competitive advantage for firms (Gunaseka-
match resource deployments with demands (Swink ran, Patel & Tirtiroglu, 2001) due to the value
et al., 2007). Integrating customers and suppliers derived by customers from receiving timely orders
based on a foundation of end customer value creation (Hult et al., 2002, 2004). Anticipating or responding
can lead to a knowledge sharing process between to changes in demand should help maintain or
firms (Esper, Ellinger, Stank, Flint & Moon, 2010). enhance the performance of the cycle time pro-
Having the ability to synthesize information from cess. Therefore, we hypothesize the following rela-
supply chain partners about their operations and tionship:
changes they estimate will happen in the marketplace
H5: Demand response is positively related to
greatly enhances a firm’s capability to respond to
improved cycle time process performance.
demand (Fisher, 1997). This also enables all firms in
the supply chain to understand customer require- Another desired effect of demand response is the
ments. Once these requirements are known, firms can positive impact on financial performance. The firm
prioritize and fulfill customer orders based upon the needs to react quickly to demand signals because mar-
shared generation, dissemination, interpretation, and ket and consumer conditions change rapidly (Oliva &
application of real-time customer demand and poten- Watson, 2011). This ability to understand or even
tial supply constraints (Esper et al., 2010). forecast demand could have a large impact on
Strategic integration with both customers and sup- resource requirements cost, inventory expense, and
pliers can help firms effectively respond to changes in profitability (Gunasekaran, Patel & McGaughey, 2004;
demand. Strategic customer integration helps firms Peng, Verghese, Shah & Schroeder, 2013). Demand
understand customer preferences and predict how responsiveness highlights a firm’s ability to meet mar-
these preferences may change over time (Swink et al., ket needs. This responsiveness may even impact cus-
2007). This heightened customer awareness can lead tomer perceptions and signal to the competitive
to capabilities which represent value-added customer environment an effective utilization of firm resources
activities (Autry, Griffis, Goldsby & Bobbitt, 2005). (Day, 1999). As such, a firm may expect financial gain
Strategic supplier integration enhances information when it responds quickly to changes in customer
sharing and resource utilization to assist in meeting demand. Therefore, the following hypothesis is
demand (Koufteros et al., 2005). With the under- offered:
standing that demand response is vital to creating cus-
H6: Demand response is positively related to
tomer value, we offer the following hypotheses:
improved financial performance.
H3: Strategic customer integration is positively
Finally, we expect that operational performance
related to demand response.
influences firm financial performance (Ketchen &
Hult, 2007). Lambert and Burduroglu (2000) concep-
H4: Strategic supplier integration is positively
tualize a strategic profit model where operational
related to demand response.
capabilities and processes, in this case logistics, impact
One of the benefits of responding quickly to firm performance. Positive cycle time performance
changes in customer demand is the ability to main- may also affect firm performance.

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 Strategic Supply Chain Integration and Performance

Hult et al. (2004) specifically suggest that time- through early 2011. Of the total respondent pool,
based competition is prevalent in today’s business 2,284 were unreachable due to various reasons such
environment. The authors posit that improved cycle as bad contact information, the contacts no longer
time performance positively impacts overall firm per- being with the company, or being employees of com-
formance, with the rationale that shorter cycle times panies that did not allow their workers to participate
can provide firms a competitive advantage. This factor in surveys. Surveys were provided to the remaining
may differentiate firms from competitors and be val- 2,172 potential respondents in an email with a link
ued by customers contributing to overall firm profit- to a secure, online Web address. This online platform
ability. Handfield and Nichols (2002) as well as allowed the research team to collect responses elec-
Ketchen and Hult (2007) both state that cycle time tronically. Of the remaining 2,172 potential respon-
performance has a direct, positive link to firm profit- dents, 220 completed usable surveys were received
ability. As such, the following hypothesis is offered: which also represented 220 unique companies. This
resulted in a final response rate of 10.13 percent.
H7: Cycle time process performance is positively
The average respondent was 48.2 years old with an
related to firm financial performance.
average of 26.75 years of work experience. Approxi-
mately 80 percent of the respondents were male with
METHODOLOGY respondents representing the occupations of analysts,
managers, or executives. The average firm represented
Measurement Development and Sample in the sample had a market share of 26 percent and a
A Web-based survey utilizing Dillman’s (2000) rec- return on assets (ROA) of 3.2 percent. Thirty-one per-
ommended approach was developed to evaluate the cent of the respondents represented firms in the com-
study’s hypotheses. Multi-item measures were used to puter and electronic manufacturing industry, with
operationalize the constructs. The items used in the another 15 percent from the industrial chemical
survey were adapted from established scales in the lit- industry. Electrical equipment, food, heavy machinery,
erature (Churchill, 1979). Before administering the and transportation equipment manufacturers were
survey to the respondent pool, feedback was solicited industries represented by between 5 percent and
from eight industry practitioners and five academic 10 percent of other respondents. Various industries
faculties. The feedback provided by the experts were represented by the remaining respondents.
ensured survey representativeness, clarity, content Nonresponse bias was investigated by comparing
validity, and face validity. After modifying the survey demographic factors among companies that
based on the experts’ edits and recommendations, the responded to the survey and those that did not. Uti-
questionnaire was distributed to supply chain profes- lizing the Wharton Research Data Services (WRDS)
sionals employed in U.S. manufacturing firms. database, the research team collected firm financial
The sample pool of supply chain professionals was and operational level information for respondent and
acquired from a Dun & Bradstreet (D&B) database. nonrespondent firms alike. No statistically significant
The database contained professional contact informa- differences among the financial and operational vari-
tion, including telephone numbers and email ables collected existed among the respondent and
addresses of supply chain employees of firms located nonrespondent groups. Additionally, nonresponse
in the United States. The D&B database was pur- bias was tested by comparing the responses of early
chased because it was important to the research team versus late respondents (Armstrong & Overton,
to acquire a database containing both the telephone 1977). No statistically significant differences were
and email address of potential survey respondents. found between the groups. Therefore, it was con-
Having the contact information of the respondent cluded that nonresponse bias is not a serious concern
pool allowed the research team to pre-alert the supply in our sample.
chain professionals about the survey instrument (Dill- Common methods bias can be a concern when both
man, 2000). In so doing, a team of university stu- independent and dependent variables are collected
dents was hired and trained to contact the supply from the same survey respondent (Podsakoff & Organ,
chain professionals listed in the D&B database. Pre- 1986). Common method bias (CMB) concerns were
contacting the survey respondents was done to create addressed in a variety of ways. First, a Harman’s single-
awareness of the upcoming survey and attempt to mit- factor test of all of the measurement items was con-
igate the problems associated with a low response ducted (Harman, 1976). If all of the measurement
rate. Additionally, contacting the respondent pool also items across the constructs of interest were to load on
allowed the research team to gain insight as to why one single exploratory factor, or one factor accounted
potential respondents may not participate in the sur- for more than 50 percent of the explained variance,
vey. In total, the research team attempted to contact CMB would be assumed to be present (Podsakoff &
4,456 supply chain professionals from late 2010 Organ, 1986). An exploratory factor analysis was

April 2015 53
 Journal of Supply Chain Management

performed and the factor solution identified five differ- supply chain integration studies to employ objective
ent factors above the eigenvalue greater than 1.0 crite- firm financial and industry-level data.
rion. These five factors explained 73 percent of the
variance in the data with the largest factor reporting Control Variables
only 38 percent of the explained variance. A second test The control variables utilized in the analysis were
of CMB was completed using Lindell and Whitney’s derived from the WRDS database. Industry size,
(2001) marker variable technique. In this analysis, the assessed by the number of companies with a common
smallest correlation between constructs was used as a NAICS code, was one control variable. Similarly, mar-
post hoc proxy to represent CMB. This marker variable ket share was also utilized as a control variable. Mar-
correlation was then partialled out from the remaining ket share was calculated by taking a firm’s revenue
constructs to see whether the remaining relationship and dividing it by the industry’s total revenue. Market
between constructs was still significant. The remaining share serves as a proxy for the level of power that the
correlations remained significant, indicating CMB did firm has in the industry. Industry type was also
not play a significant role in our findings. included as a control variable to control for industry
Additionally, the latent variable constructs in the cur- factors that could affect firm financial performance
rent study utilized different response formats. Podsak- (e.g., industry concentration).
off, MacKenzie and Podsakoff (2012) advocate this
technique as another way to control for CMB. Finally, Analysis
one of the dependent variables (financial performance) Anderson and Gerbing’s (1988) two-step approach
and all of the control variables in the study were gath- was utilized. A confirmatory factor analysis was used
ered from the WRDS database. Use of multiple data to evaluate the measurement items. After confirming
sources, in this case the survey and the data from the the validity of the measurement model, we evaluated
WRDS database, helps to mitigate the effects of CMB the study’s structural model.
(Podsakoff, MacKenzie, Lee & Podsakoff, 2003).
Validity and Reliability
Independent and Dependent Variables Convergent validity was assessed by examining the
The variables utilized in the current research project standardized factor loadings of each measurement
are described below as well as in the Appendix. The item along with the average variance extracted (AVE)
first independent variable is corporate strategic inte- of each latent measurement construct. The items had
gration and is adapted from items found in Swink measurement loadings ranging from .63 to .87 and
et al. (2007). Respondents were asked to rate were all significant (p < .001). The loadings are above
(1 = strongly disagree, 7 = strongly agree) their level the .50 threshold and indicate convergent validity
of agreement with the four corporate strategic integra- (Hair, Black, Babin, Anderson & Tatham, 2006). As
tion items. Strategic customer integration and strategic shown in the Appendix, the AVE was calculated for
supplier integration were also adapted from Swink each construct. The AVE indicates the amount of vari-
et al. (2007) and each had three items. The constructs ance captured by the latent construct relative to error
were measured on a 7-point scale (1 = strongly dis- variances (Fornell & Larcker, 1981). The AVEs for the
agree, 7 = strongly agree). The items measuring constructs in this study range in value from .51 to
demand response were adapted from Braunscheidel .65. This also indicates convergent validity as the con-
and Suresh (2009), Christopher (2000), and van structs account for more than 50 percent of the vari-
Hoek et al. (2001). The four items were rated by ance explained in the constructs (Hatcher, 1994). We
respondents on a 5-point scale (1 = strongly disagree, tested for discriminant validity by comparing the
5 = strongly agree). Cycle time process performance, square root of the AVEs to the interitem correlations
one of the dependent variables in the current study, between pairs of constructs (Fornell & Larcker, 1981).
was rated using three items adapted from Hult et al. If the square root value of the AVE is larger than the
(2002). Respondents were asked to indicate their level correlations, discriminant validity is supported. Our
of agreement (1 = strongly disagree, 7 = strongly results, depicted in Table 1, support the discriminant
agree). Return on equity (ROE) serves as the financial validity of the study’s constructs based on this test. As
performance metric in the current study. This measure noted in the Appendix, the Cronbach’s alpha estimate
was calculated for fiscal year end 2011 based on archi- of the constructs ranged from .75 to .86, providing
val data from the WRDS database. ROE represents evidence of construct reliability (Cronbach, 1951).
organizational value as derived from, or recognized The measurement model demonstrates adequate fit
by, shareholders (Hillman & Keim, 2001) and has (v2 = 170.75, v2/d.f. = 1.57, CFI = .97, TLI = .96,
been used in existing supply chain research (Flynn RMSEA = .05, SRMR = .05). Each index falls within
et al., 2010; Petersen, Ragatz & Monczka, 2005). acceptable model ranges and indicates adequate mea-
However, the current paper represents one of the first surement model fit (Iacobucci, 2010).

54 Volume 51, Number 2

 Strategic Supply Chain Integration and Performance

TABLE 1 standardized path weight is .489 (p < .001), providing

support for H5. Demand response is predicted to pos-
Correlation Table
itively impact financial performance (H6). H6 is sup-
CSI SCI SSI DR CTPP ported with a standardized path loading of .173
(p < .05). Finally, cycle time process performance is
CSI 0.81 predicted to be positively related to financial perfor-
SCI 0.58 0.74 mance (H7). H7 is not supported. The control vari-
SSI 0.63 0.48 0.71 ables are not statistically significant. We discuss the
DR 0.68 0.38 0.54 0.75 implications of our results in the discussion section.
CTPP 0.39 0.25 0.10 0.49 0.81
CSI, Corporate Strategic Integration; SCI, Strategic Corpo- Mediation Testing
rate Integration; SSI, Strategic Supplier Integration; DR, We now turn to examining the mediating relation-
Demand Response; CTPP, Cycle Time Process Perfor- ships in our model as recommended by Zhao, Lynch
mance. and Chen (2010). In so doing, the model paths were
Square root of the AVE listed in the diagonal.
“bootstrapped” with an empirical sample distribution
of the various hypothesized relationships. This sam-
RESULTS pling process occurred 5,000 times, after which the
The structural model fit statistics indicate the data direct, indirect, and total effects estimates were gener-
sufficiently fit the hypothesized model (v2 = 251.76, ated. Results indicate that indirect effects were present
v2/d.f. = 1.95, CFI = .93, TLI = .92, RMSEA = .07, between corporate strategic integration and demand
SRMR = .08; Iacobucci, 2010; Figure 2). response as well as strategic customer integration and
We now turn to describing our findings. Corporate strategic supplier integration on cycle time process
strategic integration is predicted to positively influence performance and financial performance. Further, the
strategic customer integration (H1). The standardized confidence intervals surrounding these estimates were
path weight is .601 (p < .001), providing support for statistically significant (Preacher & Hayes, 2004). The
H1. Similarly, corporate strategic integration is direct effects, or direct relationships, between the
hypothesized to positively influence strategic supplier mediated constructs in the bootstrapping analysis
integration (H2). H2 is supported with a standardized were not statistically significant, indicating that indi-
path weight of .705 (p < .001). Strategic customer rect-only mediation is present (Zhao et al., 2010).
integration and strategic supplier integration were These results further support the conceptualization of
both predicted to positively impact demand response the structural model in the current research.
(H3 and H4, respectively). H3 is supported with a
standardized path value of .183 (p < .05). H4 is sup- Alternative Model
ported with standardized path loading of .527 To further support the mediation test’s results, an
(p < .001). Demand response is predicted to positively alternative model was examined in which the three
impact cycle time process performance (H5). The strategic integration variables—corporate strategic inte-

FIGURE 2
Path Model with Results

Strategic Cycle Time Process

Customer Performance
Integraon .183*
.601*** .489***
Corporate Demand Response -.195t
Strategic
Integraon .173*
.705***
.527***
Financial
Strategic Supplier Performance
Integraon

Structural Model: v2 = 251.76, v2/d.f. = 1.95, CFI = .93, TLI = .92, RMSEA = .07,
SRMR = .08.Confirmatory Factor Analysis:
v2 = 170.75, v2/d.f. = 1.57, CFI = .97, TLI = .96, RMSEA = .05, SRMR = .05,
*** = p<.001, * = p<.05, t = p<.10.

April 2015 55
 Journal of Supply Chain Management

gration, strategic customer integration, and strategic competition issues (Braunscheidel & Suresh, 2009;
supplier integration—each shared a direct relationship Flynn et al., 2010; Zhao, Huo, Selen & Yeung, 2011).
with cycle time process performance and financial per- The current research differentiates itself from past
formance. While adequate model fit statistics were work with the theoretical perspective utilized, the type
obtained, the relationships between four of the six of integration examined, and the use of both opera-
integration and performance variables were statisti- tional and financial performance as well as objective
cally insignificant. Corporate strategic integration and financial performance data sources.
strategic supplier integration each had a significant Corporate strategic integration was predicted to, and
relationship with cycle time process performance did, have a positive relationship to both strategic cus-
while strategic customer integration did not. None of tomer integration and strategic supplier integration.
the strategic integration constructs shared a significant These findings support similar conclusions reached by
relationship with financial performance. The results past researchers (Koufteros, Rawski & Rupak, 2010;
support the current model’s theoretical conceptualiza- Zhao et al., 2011). These results provide additional
tion of SCP. Stated differently, demand response support for Bowersox et al. (1999) and Cooper and
serves as an important conduct variable in our model. Ellram (1993), who propose that internal integration
Additionally, the structural model was estimated with should occur before external integration. The current
ROA as the financial performance measure of interest. research takes an additional step by discussing strategic
ROA, also derived from the WRDS database, measures integration. Ensuring that a corporate-wide strategy is
the profitability of a firm relative to the company’s total disseminated throughout the firm and matches to or
asset base (Dess & Robinson, 1984). The hypothesized has department strategies to support a firm’s overarch-
results and overall model fit statistics were consistent ing goals can lead to clarity and sense of purpose. It is
with our original structural model using ROE except for through this sense of purpose that suppliers and cus-
two differences. Hypothesis 6, the relationship between tomers can be identified to more fully integrate at a
demand response and financial performance, is sup- strategic level. The results support firms generating a
ported at the p < .10 level. Hypothesis 7, the relation- common platform from which all employees work to
ship between cycle time process performance and highlight needs and identify the best partners possible.
financial performance, is still not supported. However, Strategic customer integration and strategic supplier
the standardized path coefficient is negative and statisti- integration were both predicted to have a positive
cally significant at the p < .05 level. While the relation- relationship to demand response. Research findings
ship between operational performance and financial support these hypotheses. Companies that utilize cus-
performance will be discussed in more detail later, we tomer satisfaction information and regularly interact
believe operational efficiency as measured by the ROA with their customers as well as those that share infor-
financial performance metric may conflict with the mation with and require improvements by suppliers
speed required by cycle time process performance. are readily able to respond to market demand. This
can stem from the ability of firms to know and under-
stand what customers want while balancing this with
DISCUSSION, IMPLICATIONS, AND the abilities of their firm and suppliers. Managers can
FUTURE RESEARCH utilize this information by understanding that one
Leveraging the SCP framework from industrial orga- way to be responsive to customer demand is through
nizational economics, we develop and empirically test strategically integrating with both customers and sup-
theory about how a firm’s supply chain integration pliers.
activities impact firm performance. We utilize the SCP Demand response was predicted to, and did, have a
framework to examine how the firm can use its supply positive relationship to both order cycle time (opera-
chain integration activities as a structural response to tional performance) and financial performance. Being
competitive market conditions to enhance firm responsive to demand can have positive effects on
performance (Caves, 1964; Caves & Porter, 1977; operational and financial performance. Operationally,
Chatain, 2011). As firms integrate, both internally and demand response should result in a shortening of
externally, it is important to understand how these order cycle time process performance because more of
decisions impact firm and supply chain partner con- the right product or service should be on hand when
duct and firm performance. The current study analyzes it is demanded. Having product available is a prere-
the role of supply chain integration, its effect on quisite for ensuring cycle time process performance.
demand response, and the subsequent impact on both Demand response also has positive financial perfor-
operational and financial performance. This study has mance implications. This indicates that being able to
implications for researchers and managers alike as respond to demand is a way to influence financial
there has been increasing attention to the topic of performance. The obvious implication is that demand
supply chain integration and its role on firm-level response can be a way to improve firm finances.

56 Volume 51, Number 2

 Strategic Supply Chain Integration and Performance

Cycle time process performance was predicted to have lead to lasting and beneficial relationships. Demand
a positive relationship to financial performance. There response, impacted by strategic integration, has the ability
are many plausible reasons why we did not find sup- to influence both financial and operational performance.
port for this hypothesis. Firms sometimes face conflict- This supports the notion that managers must be cogni-
ing goals of operational and financial performance and zant of market demand and make attempts to balance
the two objectives are not always synergistic. Speeding demand and supply. Having the right goods on hand
up the delivery process of goods may result in harming provides firms opportunities to excel at both financial
financial performance, but firms see this as a necessary and operational performance. Finally, the study should
expenditure (Blank, 2014; Mouton, 2014). Perhaps, make managers pause when balancing operational and
managers may see some operational outcomes (i.e., financial performance.
cycle time process performance) as a cost or requisite of
doing business. Some firms may make this trade-off by Future Research
hoping for long-term loyalty or future business which Our study offers both theoretical and managerial
is difficult to immediately quantify, but could have insights regarding how to successfully integrate the
positive long-range implications. Further research is supply chain to realize improved performance. We
needed to fully understand this relationship. hope that this study provides the foundation for inter-
From a theoretical perspective, this article leverages esting extensions on the topic of supply chain integra-
the SCP paradigm when theorizing about the relation- tion. One extension is to expand on Richey et al.
ship among strategic integration, firm conduct (2010) by attempting to better understand the barriers
(demand responsiveness capability), and performance. and facilitators of strategic supply chain integration.
Selecting strategic supply chain integration as the struc- Additionally, future studies should look into dyadic
tural portion of the framework is a unique contribu- data or even gathering data from the focal firm, sup-
tion. Many factors such as barriers to entry, product pliers, and customers to gain a more encompassing
differentiation, and vertical integration have been supply chain perspective. Perhaps, further research can
noted as structural components firms can utilize in more fully analyze the relationship between opera-
response to market conditions (Caves & Porter, 1977). tional and financial performance. Looking at other
Integrating both internally and externally with supply aspects of operational performance could provide fur-
chain partners better reflects today’s business environ- ther insights. Another interesting extension would be
ment and expands the list of structural “foundations” to collect longitudinal data in order to see the results
firms can employ, and researchers can study, to impact of integration and both types of performance over
conduct and performance. Considering integration time. Lastly, future research should examine how a
from a strategic perspective also focuses researchers on focal firm’s supply chain integration efforts enable it
integration over and above simple process coordina- to better respond to a rival’s supply chain actions.
tion. While process integration has benefits, strategic
integration suggests a long-range goal or plan underly-
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capabilities: The moderation effect of product

60 Volume 51, Number 2

 Strategic Supply Chain Integration and Performance

Springinklee, M., & Wallenburg, C. M. (2012). Peter Ralston (Ph.D. Iowa State University) is an
Improving distribution service performance assistant professor of supply chain management at the
through effective production and logistics integra- University of West Florida. Dr. Ralston’s research is
tion. Journal of Business Logistics, 33 (4), 309–323. focused broadly under the umbrella of inter-organiza-
Stank, T. P., Davis, B. R., & Fugate, B. S. (2005). A stra- tional relationships where he specifically likes to
tegic framework for supply chain oriented logistics.
investigate areas such as supply chain collaboration,
Journal of Business Logistics, 26 (2), 27–46.
supply chain power, and supply chain strategy.
Stank, T. P., Keller, S. B., & Closs, D. J. (2001). Perfor-
mance benefits of supply chain logistical integra-
tion. Transportation Journal, 41 (2/3), 32–46. Jennifer Blackhurst (Ph.D. University of Iowa) is an
Swink, M., Narasimhan, R., & Wang, C. (2007). Man- associate professor of supply chain management at
aging beyond the factory walls: Effects of four Iowa State University. Her research is focused in the
types of strategic integration on manufacturing area of supply chain risk management, investigating
plant performance. Journal of Operations Manage- not only how firms can respond to disruptive events
ment, 25 (1), 148–164. in their supply chains, but also how they can proac-
Tan, K. C., Kannan, V. R., & Handfield, R. B. (1998). tively anticipate and plan for these disruptive events.
Supply chain management: Supplier performance Dr. Blackhurst has also been actively involved in the
and firm performance. International Journal of Pur-
national and international supply chain management
chasing and Materials Management, 34 (3), 2–9.
Thun, J.-H. (2010). Angles of integration: An empirical discipline by serving on a variety of editorial review
analysis of the alignment of internet-based informa- boards; she is associate editor for Decision Sciences
tion technology and global supply chain integration. Journal and Journal of Purchasing and Supply Chain
Journal of Supply Chain Management, 46 (2), 30–44. Management, and she serves on the editorial review
Venkatraman, N., & Prescott, J. E. (1990). Environ- boards for Journal of Operations Management, Journal of
ment-strategy coalignment: An empirical test of its Business Logistics, Journal of Supply Chain Management,
performance implications. Strategic Management and IEEE Transactions on Engineering Management.
Journal, 11 (1), 1–23.
Vickery, S. K., Jayaram, J., Droge, C., & Calantone, R. David E. Cantor (Ph.D. University of Maryland) is
(2003). The effects of an integrative supply chain
an associate professor of supply chain management at
strategy on customer service and financial perfor-
Iowa State University. His primary research interest is
mance: An analysis of direct versus indirect rela-
tionships. Journal of Operations Management, 21 in supply chain management with a particular focus
(5), 523–539. on safety and environmental management issues. Dr.
Weiss, L. W. (1979). The structure–conduct–perfor- Cantor also is interested in human decision making
mance paradigm and antitrust. University of Penn- in the supply chain. His research on these topics has
sylvania Law Review, 127 (4), 1104–1140. been published in many academic outlets including
Wheelwright, S. C. (1984). Manufacturing strategy: the Journal of Business Logistics, the Journal of Operations
Defining the missing link. Strategic Management Management, Decision Sciences Journal, the Transporta-
Journal, 5 (1), 77–91. tion Journal, Transportation Research (Logistics and Trans-
Wiengarten, F., Pagell, M., Ahmed, M. U., & Gimenez, portation Review), the International Journal of Physical
C. (2014). Do a country’s logistical capabilities
Distribution and Logistics Management and the Interna-
moderate the external integration performance
tional Journal of Logistics Management.
relationship? Journal of Operations Management, 32
(1), 51–63.
Zhao, X., Huo, B., Flynn, B. B., & Yeung, J. H. Y. Michael R. Crum (Ph.D. Indiana University) is a
(2008). The impact of power and relationship professor of supply chain management at Iowa State
commitment on the integration between University. Dr. Crum’s research interests are strategic
manufacturers and customers in a supply chain. supply chain relationships, supply chain security,
Journal of Operations Management, 26 (3), 368–388. motor carrier employee issues, and motor carrier
Zhao, X., Huo, B., Selen, W., & Yeung, J. H. Y. (2011). safety. He has authored or co-authored more than
The impact of internal integration and relation- 100 research publications, and he has been principal
ship commitment on external integration. Journal investigator on three U.S. Department of Transporta-
of Operations Management, 29 (1–2), 17–32.
tion research projects. He is the former editor of two
Zhao, X., Lynch, J. G., & Chen, Q. (2010). Reconsider-
ing baron and kenny: Myths and truths about academic journals and is currently on the editorial
mediation analysis. Journal of Consumer Research, review boards of five academic journals. In 1988–89
37 (2), 197–206. he was a Fulbright Scholar at the Warsaw School of
Economics in Warsaw, Poland.

April 2015 61
62
APPENDIX

Measurement Items

Cronbach’s
Standardized Average Variance
Standard Factor Adapted
Construct Label Item Mean Deviation Loadings Alpha Extracted From
Please complete the following set of items by circling the number (1 = strongly disagree, 7 = strongly agree) that corresponds to your level
of agreement on each of the statements below
Corporate CSI1 Our department’s supply 5.45 1.43 0.81 0.86 0.65 Swink et al.
Strategic chain strategy is well (2007)
Integration aligned with our
corporate strategy
CSI2 Our supply chain strategic 5.27 1.51 0.87
goals and objectives are
clearly defined
CSI3 Supply chain strategies 4.24 1.83 0.68
and goals are
communicated to all
employees
CSI4 Our firm’s strategic goals 5.34 1.30 0.86

Volume 51, Number 2

leverage our company’s
existing capabilities
Journal of Supply Chain Management

Please complete the following set of items by circling the number (1 = strongly disagree, 7 = strongly agree) that corresponds to your level
of agreement on each of the statements below
Strategic SCI1 Results of customer 4.45 2.00 0.80 0.78 0.55 Swink et al.
Customer satisfaction surveys are (2007)
Integration shared with all
employees
SCI2 We actively create 4.19 1.75 0.69
opportunities for
employee–customer
interaction
SCI3 We have a formal 4.58 2.00 0.74
customer satisfaction
program in place
(continued)
 Measurement Items (continued)

Cronbach’s
Standardized Average Variance
Standard Factor Adapted
Construct Label Item Mean Deviation Loadings Alpha Extracted From
Please complete the following set of items by circling the number (1 = strongly disagree, 7 = strongly agree) that corresponds to your
level of agreement on each of the statements below
Strategic Supplier SSI1 We require major 5.50 1.52 0.68 0.75 0.51 Swink et al.
Integration suppliers to make (2007)
improvements in terms
of both cost and quality
improvements
SSI2 We share real time supply 4.93 1.80 0.80
chain information with
suppliers (e.g.,
production schedules)
SSI3 We encourage our 4.40 1.91 0.65
suppliers to become
involved in product
design
Please complete the following set of items by circling the number (1 = strongly disagree, 5 = strongly agree) that corresponds to your level

April 2015
of agreement on each of the statements below
Demand Response DR1 Our supply chain is able 3.44 1.00 0.77 0.83 0.56 Braunscheidel
to respond to changes in and Suresh
demand without (2009), van
overstocks or lost sales Hoek et al.
DR2 Our supply chain is able 3.71 0.85 0.80 (2001), and
Strategic Supply Chain Integration and Performance

to leverage the Christopher

competencies of our (2000)
partners to respond to
market demands
DR3 Our supply chain is 3.12 0.99 0.63
capable of forecasting
market demand
DR4 Our supply chain is 3.71 0.90 0.77
capable of responding
to real market demand
(continued)

63
64
Measurement Items (continued)

Cronbach’s
Standardized Average Variance
Standard Factor Adapted
Construct Label Item Mean Deviation Loadings Alpha Extracted From
Please complete the following set of items by circling the number (1 = strongly disagree, 7 = strongly agree) that corresponds to your level
of agreement on each of the statements below
Cycle Time CTPP1 We have seen an 4.34 1.52 0.63 0.83 0.64 Hult et al.
Process improvement in the (2002)
Performance cycle time of the supply
chain process recently
CTPP2 We are satisfied with the 3.78 1.51 0.87
speediness of the supply
chain process
CTPP3 Based on our knowledge 4.00 1.43 0.87
of the supply chain
process, we think it is
short and efficient

Volume 51, Number 2

Journal of Supply Chain Management