Relationship between supply chain performance and degree of linkage among supplier, internal integration, and customer

The purpose of this paper is to present the relationship between supply chain linkages and supply chain performance (cost‐containment and reliability of supply chain partners).

Multivariate regression models are developed in order to identify the characteristics of determinants of linkages in the supply chain stakeholders (suppliers, internal stakeholders and customers). The survey was administered to individuals identified from a list of US executive officers, directors, presidents, or vice presidents. Among four hundred respondents, 122 were considered as valid from those who practice supply chain management for their business operations.

Internal integration is the most important contributor to cost‐containment while integration with the supplier is the best strategy to achieve supply chain reliable performance. Availability of electronic ordering systems for customers is an important strategy in cost‐containment. Fast and easy ordering is the best strategy for customer in performance reliability. Reliable delivery with supplier collaboration in managing a broad supply chain operation is the best way to link with suppliers. Access to the inventory information creates the most favorable environment in internal integration.

A vigorous multivariate statistical modeling process was employed to seek a possible linkage between the level of integration and the supply chain performances at a different linkage stage. This study would open an avenue for further investigation using micro data such as financial performances, and other key supply chain indicators to operationalize some of the findings that this study presented.

This paper explored the relationship between supply chain linkages and supply chain performance so that management will be able to pursue better supply chain strategies applicable directly to their business environment. Study results provide management with innovative insights for planning and executing applicable supply chain strategies.

This study presented overall and individual determinants of each linkage affecting supply chain performance. In addition, this study presented a valid and reliable measurement instruments that academicians as well as practitioners can use in measuring the supply chain performance.