Role of compatibility and supply chain process integration in facilitating supply chain capabilities and organizational performance

• Published in: Supply chain management Vol. 24; no. 2; pp. 301 - 316
• Main Authors: Rajaguru, Rajesh, Matanda, Margaret J
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Publishing Limited 13.03.2019; Emerald Group Publishing Limited
• Subjects: Compatibility; Competition; Competitive advantage; Customer retention; Design factors; Hypothesis testing; Logistics; Market shares; Researchers; Retailing; Structural equation modeling; Studies; Supply chain management; Supply chains; Dynamic capabilities; Integration; Supply-chain management; Operational performance
• ISSN: 1359-8546; 1758-6852
• DOI: 10.1108/SCM-05-2017-0187

Purpose This study aims to investigate how compatibility between supply chain partners’ technological systems, as well as cultural and operational values, enhance supply chain process integration. Additionally, the paper examines whether supply chain capabilities mediate the relationship between supply chain process integration and organizational performance. The contradictory findings on the relationship between supply chain process integration and organizational performance in prior research point to the need for investigating the possibility of supply chain capabilities having a mediating effect on the link between the two factors. Design/methodology/approach The study used survey data from 302 managers and executives responsible for supply chain functions in food and hardware retailing businesses in Australia. Structural equation modeling (SEM) was used to test the proposed hypotheses, and then Zhao et al.’s (2010) procedure was used to test for mediation effects. Findings The results indicate that technical, operational and cultural compatibility facilitates supply chain process integration. In support of dynamic capabilities theory, the study reveals the importance of integrating resources among supply chain partners to achieve supply chain capabilities, operational and competitive performance. Additionally, the current study found supply chain capabilities to play a mediating role on the relationships between supply chain process integration and organizational performance. Originality/value The paper contributes to supply chain management literature by identifying technical, operational and cultural compatibility as antecedents to supply chain process integration. By revealing the mediating role of supply chain capabilities, the paper highlights how supply chain process integration enhance operational and competitive performance.