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Factors that affect internal supply chain integration

Factors that affect internal supply chain integration. Dissertation Proposal Ana L. Rosado Feger Clemson University. Motivation. Competition based on Supply Chain vs. Supply Chain Supply chain management is a source of competitive advantage.

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Factors that affect internal supply chain integration

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  1. Factors that affect internal supply chain integration Dissertation Proposal Ana L. Rosado Feger Clemson University

  2. Motivation • Competition based on Supply Chain vs. Supply Chain • Supply chain management is a source of competitive advantage. • Sustainable competitive advantage results from managing linkages. (Porter 1985)

  3. Motivation • Much has been written about the benefits of supply chain integration (external and internal), but there are few studies examining how firms can achieve it. • This research project will develop a model of the factors that affect integration of three key SC departments.

  4. Why Internal Integration? • The strength of a chain is limited by the strength of its weakest link. • Understanding the supply chain begins with understanding internal processes. • An integrated firm presents a united front to customers, suppliers, and competitors. • Process view is the customer’s view.

  5. Key Internal SC Processes • Purchasing, Operations, and Logistics are responsible for delivering the product to the customer. • Purchasing: • Gatekeeper for process inputs • Operations: • Transforms raw materials into final product • Logistics: • Responsible for physical transfer and delivery

  6. Research Question • What factors affect the integration of the three focal departments? • How are these factors interrelated? • What can plant managers do to facilitate integration?

  7. Research Model • Starting point: Pagell 2004 • Modified to enhance generalizability • Combined with findings of St.John et al 2001, Vickery et al 2003

  8. Outcome Variable: Integration • Definition: • A process of interaction and collaboration in which manufacturing, purchasing and logistics work together in a cooperative manner to arrive at mutually acceptable outcomes for their organization (Pagell 2004)

  9. Outcome Variable: Integration • Shared Goals • the extent to which the manager of each focal function (purchasing, operations, logistics) is familiar with the strategic goals of each of the other two focal functions • Cooperation • the frequency of requests from other focal functions that are fulfilled by the members of each focal function • Collaboration • is the frequency at which a member of a focal function actively works on issues with members from the other focal functions

  10. Management Support • Management sets the tone for the organization • Three dimensions • Individual vs. Collective • Normative vs. Facilitative • Strategic vs. Tactical

  11. Structure • The structure of the firm determines the balance between differentiation and integration: • Span of control • Levels of authority

  12. Human Resource Management • Job rotation programs • Cross-functional teams • Measurement/Rewards • Departmental vs. Firm Goals

  13. Communication • Formal • Frequency • Content • Informal • Frequency • Content • Mode (personal, email, telephone)

  14. Information Systems • Facilitators of data and information transfer (St.John et al 2001) • Precursor to supply chain integration (Vickery et al 2003) • Computerized production systems • MRP, MRPII • Integrated information systems • Enterprise systems (ERP) or interfaced function-specific systems

  15. Research Model Management Support Structure • HR Strategy: • Measurement—Rewards • Job Rotation • Cross-functional Teams • Communication • Formal • Informal INTERNAL INTEGRATION Information Technology

  16. Research Hypotheses • H1: Management Support has a direct effect on plant Structure. • H2: Management Support has a direct effect on HR Strategies • H3: Management Support has an indirect effect on Internal Integration. • H4: Structure has a direct effect on Communication.

  17. Research Hypotheses • H5: HR Strategies has a direct effect on Communication • H6: HR Strategies has a direct effect on Internal Integration • H7: Information Technology has a direct effect on Communication • H8: IT has a direct effect on Internal Integration • H9: Communication has a direct effect on Internal Integration

  18. Methodology • Cross-sectional survey • Web-, e-mail, mail-, and phone-based • Domain: Manufacturing plants in the US • Target respondents • Managers of Purchasing, Operations, and Logistics departments • 1-3 respondents per firm

  19. Analysis • Structural Equation Modeling using EQS

  20. Contributions: Academic • Contribute to theory-building in Supply Chain Management • Empirical tests of proposed models • Initial look at managerial levers

  21. Contributions: Practitioners • Understand how factors influence internal integration • Develop action plans to improve internal integration • Encourage “systems thinking” to address supply chain issues

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