Empirical Evaluation of an Integrated Supply Chain Model for Small and Medium Sized Firms

With increased global competitive pressures, companies operating in these competitive environments are not only looking to their distribution division to save money, but also to generate competitive advantages. One technique is the integrated supply chain. However, this process has not met with success for all companies, leading some managers to consider the appropriateness of an integrated supply chain. This dearth of success could be attributed to the lack of scholarship to guide managers in their efforts to formulate and then implement their integrated supply chain strategies. In an effort to fill this gap, our paper draws on resource dependency theory and the realities of ever-increasing information technology sophistication as enablers of successful supply chain integration, IDEA GROUP PUBLISHING This chapter appears in the book, Advanced Topics in Information Resources Management, Volume 5 edited by Mehdi Khosrow-Pour © 2006, Idea Group Inc. 701 E. Chocolate Avenue, Suite 200, Hershey PA 17033-1240, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com ITB11807 212 Sakaguchi, Nicovich, & Dibrell Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. resulting in the creation of our model to guide managers throughout this process. Through a Web-based survey, 329 responses were collected and analyzed through a structural equation modeling technique using LISREL to confirm the relationships in the model. INTRODUCTION Five days before the release of the fourth Harry Potter book, Harry Potter and the Goblet of Fire, Amazon.com found its supply chain strained. Over 275,000 copies of the book had to be delivered on time within the next few weeks (King, 2000). By working closely with members in their supply chain such as FedEx, Amazon was able to handle the orders and avert a potentially damaging situation. While not every company is as dependent upon its partners as Amazon is, global pressures are forcing more and more companies to reassess the importance of working with others. Indeed much of the blame for K-mart’s bankruptcy and subsequent restructuring lay in its inability to compete with the likes of Target and Wal-Mart (Sliwa, 2002). Both Target and Wal-Mart had been able to streamline their supply chains, whereas K-Mart had struggled to keep up. Both of these incidents show that successfully managing the supply chain has become not just a means of distribution, but a means of competitive advantage as well. The rapid advancement of information technologies, such as the explosive growth of enterprise resource planning (ERP) and the continuing development of e-commerce applications and the Internet, has forced many companies to reevaluate their roles and positions within their competitive environments. This new business paradigm is forcing business processes to be reconsidered and redesigned (Hackney, Burn, & Dhillon, 2000). As such, many companies like Kmart are modifying their logistics functions by forging strategic alliances with suppliers and buyers to more thoroughly integrate their supply chains. An integrated supply chain is simply “taking those functions that originate at point of origin and ultimately end up at a point of consumption” and integrating them together through alliances (Bowman, 1997, p. 30). As stated by Hertz (2001), for example, an integrated supply chain involves greater coordination and collaboration among all members of a company’s supply chain. It is sharing information across organizational boundaries within a network of alliances, including suppliers and end-users. The potential benefits of employing an integrated supply system include overall cost and time reduction in the design through product stages (Davenport & Short, 1990). However, within both academic and practitioner journals, there has been inconclusive evidence that an integrated supply chain is an essential strategic tool for companies to succeed (Bowman, 1997). While most (but not all) voices state that an integrated supply chain is a benefit, several voices have argued that an integrated supply chain is 19 more pages are available in the full version of this document, which may be purchased using the "Add to Cart" button on the product's webpage: www.igi-global.com/chapter/empirical-evaluation-integrated-supplychain/4649?camid=4v1 This title is available in InfoSci-Books, InfoSci-Knowledge Management, Business-Technology-Solution, Library Science, Information Studies, and Education, InfoSci-Library Information Science and Technology. Recommend this product to your librarian: www.igi-global.com/e-resources/library-recommendation/?id=1