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From Supply Chain Integration to Operational Performance: The Moderating Effect of Market Uncertainty

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Abstract

This research examines the moderating effect of market uncertainty on the causal effects from supply chain integration to operational performance of a typical supply chain. Based on an extensive and critical literature review, two exploratory conceptual hypotheses have been developed for the nonlinear relationship between the supply chain integration and operational performance of the original equipment manufacturer, and how may that relationship be moderated by a specific construct of market uncertainty. Empirical survey instrument has been designed and applied to gather the data from a wide spectrum of automotive industry in China. Confirmative factor analysis and threshold regression analysis were used as the primary research methodology to test the hypotheses. We find strong support to the hypotheses from the empirical evidence, which leads to the finding that the relationship between the supply chain integration and operational performance is ‘nonlinear’, and the ‘nonlinearity’ can be significantly moderated by the market uncertainty as one of the key environmental factors for the supply chain. This study extends the current literature by contributing for the first time the discussion of an analytical model that represents the causal effects from supply chain integration to its operational performance with respect to the market uncertainty as a moderating factor.

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Authors and Affiliations

  1. WMG, University of Warwick, Coventry, CV4 7AL, UK

    Dawei Lu & Yi Ding

  2. College of Business, RMIT University, Melbourne, VIC, 3000, Australia

    Sobhan Asian

  3. UTS Business School, University of Technology Sydney, Sydney, Australia

    Sanjoy Kumar Paul

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  1. Dawei Lu
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  2. Yi Ding
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Correspondence to Sobhan Asian.

Appendices

Appendix 1

See Table 9.

Table 9 Summary of literature on the relationship between SCI and performance
Full size table

Research findings summary of reviewed articles.

Appendix 2: Measurement items (with factor loading)

Supply chain integration (eigenvalue = 4.311). Please indicate the extent of integration or joint activities or information sharing between your organisation and your major 1st-tier supplier in the following areas (1 = not at all; 7 = extensive).

The level of strategic partnership with your key suppliers

0.846

The participating level of your suppliers in the design and planning stage

0.736

Collaboration and coordination level through all your internal functions

0.870

You share your customer demand forecasting with your internal planning and scheduling

0.909

Synchronising your suppliers’ capacity with your internal production and customer demand

0.853

The level of information gathering from your customers through information network

0.862

Operational performance (eigenvalue = 3.073). Please indicate the degree to which you agree to the following statements concerning your company’s performance with respect to your major customer (1 = strongly disagree; 7 = strongly agree).

Your company can quickly modify your products to meet your customer’s requirement

0.773

Your company can quickly introduce new products into the market

0.829

The lead time for fulfilling your customers’ order is short

0.747

Your company can quickly respond to the changes in the market

0.809

Your company provides a high level of customer service

0.758

Market uncertainty (eigenvalue = 2.423). Please indicate the degree to which you agree to the following statements concerning the market uncertainty with respect to your primary/major products (1 = strongly disagree; 7 = strongly agree).

The market demand for your major products in terms of volume is stable

0.795

Your product sales pattern over different seasons in a year is predictable

0.770

Customer anticipation for the products’ features and functions is always known

0.772

Technological innovation arisen from competitors’ products will have no impact on the market of your product

0.775

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Lu, D., Ding, Y., Asian, S. et al. From Supply Chain Integration to Operational Performance: The Moderating Effect of Market Uncertainty. Glob J Flex Syst Manag 19 (Suppl 1), 3–20 (2018). https://doi.org/10.1007/s40171-017-0161-9

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