Supply chain integration and efficiency performance: a study on the interactions between customer and supplier integration

This research intends to investigate whether there are synergies that a firm could or should exploit by simultaneously implementing customer and supplier integration. In particular, the aim is to analyze the impact of customer integration on efficiency, and the moderating role of supplier integration.

This study analyzes data from a sample of 200 manufacturing plants. Two hypotheses are tested through a hierarchical regression analysis. Customer and supplier integration constructs consider items related to different aspects of the integration (e.g. sharing of production plans and customers' forecasts, feedback on performance, communication on quality considerations and design changes, joint quality improvement efforts, close contact, partnerships). The focus of the integration clearly extends beyond the dyad, as it includes the integration of focal operations upstream and downstream, with both suppliers and customers.

Supplier integration positively moderates the relationship between customer integration and efficiency, whereas the analyses do not support the hypothesis that in general customer integration positively impacts on efficiency. They also reveal that, when supplier integration is at a low level, customer integration can even produce a reduction in efficiency.

Efficiency performance optimization requires levering simultaneously on customer and supplier integration to foster their interaction, rather than investing and acting on customer integration only. In addition, before deciding whether to invest in customer integration, managers should ascertain the level of supplier integration, since it acts as a prerequisite for the successful implementation of customer integration.

Compared with previous studies investigating the main impact of customer and supplier integration on a company's performance, this research analyzes a model that considers the interaction effect between these integration strategies. This provides a number of original implications for the interpretation of the relationship between customer and supplier integration and efficiency.