Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration

• Published in: International journal of production economics Vol. 135; no. 1; pp. 514 - 522
• Main Authors: Prajogo, Daniel, Olhager, Jan
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 2012; Elsevier Sequoia S.A
• Subjects: Alliances; Drivers; Economics; Information integration; Information systems; Information technology; Logistics; Logistics integration; Operations research; Studies; Suppliers; Supply chain integration; Supply chain management; Supply chains; Vendor supplier relations; Australia; Logistics integration; Information integration; Supply chain integration; Performance
• ISSN: 0925-5273; 1873-7579; 1873-7579
• DOI: 10.1016/j.ijpe.2011.09.001

Supply chain integration is widely considered by both practitioners and researchers a vital contributor to supply chain performance. The two key flows in such relationships are material and information. Previous studies have addressed information integration and material (logistics) integration in separate studies. In this paper, we investigate the integrations of both information and material flows between supply chain partners and their effect on operational performance. Specifically, we examine the role of long-term supplier relationship as the driver of the integration. Using data from 232 Australian firms, we find that logistics integration has a significant effect on operations performance. Information technology capabilities and information sharing both have significant effects on logistics integration. Furthermore, long-term supplier relationships have both direct and indirect significant effects on performance; the indirect effect via the effect on information integration and logistics integration. ► Strategic supplier relationship has a positive effect on information integration. ► Information integration consists of information technology and information sharing. ► Increasing information integration has a positive effect on material integration. ► Material integration has a positive effect on operational performance. ► Strategic supplier relationship has direct and indirect effects on performance.