Adversarial relationships have been traditional in business, but Supply Chain Management (SCM) entails a new perspective. SCM requires a movement away from arms-length relationships toward partnership style relations. In this paper, we studied the Spanish grocery sector to analyze the relationship between internal and external integration processes, their effect on firms' performance and their contribution to the achievement of competitive advantage. Performance improvements are analyzed through costs, stock-out and lead-time reductions. The achievement of a better competitive position is measured by comparing the firm's performance with its competitors' performance.