Supply chain integration and performance: The moderating effect of supply complexity

Purpose: The purpose of this paper is to investigate the effectiveness of supply chain integration in different contexts. More specifically, it aims to show that supply chain integration is only effective in buyer-supplier relationships characterised by high supply complexity. Design/methodology/approach: A survey-based research design is developed to measure different dimensions or aspects of supply chain integration and supply complexity. Data were collected among manufacturers in The Netherlands and Spain. Findings: This research shows that supply chain integration increases performance if supply complexity is high, while a very limited or no influence of supply chain integration can be detected in case of low supply complexity. The results also show that in high supply complexity environments the use of structured communication means to achieve supply chain integration has a negative effect on cost performance. Research limitations/implications: The limited sample size prohibits estimating and testing of more comprehensive models of the relationship between supply chain integration and performance. Specifically, the authors were not able to further investigate how different supply chain integration dimensions are inter-related and mutually reinforce one another to improve performance. Practical implications: The main managerial lesson is that, in contrast to what has been written in many books and other popular publications, high levels of supply chain integration are only necessary in environments characterised by high supply complexity. Originality/value: This study helps to better understand context in supply chain management research. Specifically, it investigates the moderating effect of supply complexity on the integration-performance relationship, a topic suggested by Bozarth et al. as a line for further research.