The effects of an integrative supply chain strategy on customer service and financial performance: an analysis of direct versus indirect relationships

TLDR

The study investigates how an integrated supply‑chain strategy affects customer service and financial performance among first‑tier automotive suppliers. Using data from 57 top independent suppliers, the authors model integrative information technologies as antecedents to supply‑chain integration, which in turn influences customer service and firm performance. Results show that integrative IT drives supply‑chain integration, which improves customer service and ultimately firm performance, with customer service fully mediating the link between integration and financial performance.

Abstract

Abstract This study examines the performance implications of an integrated supply chain strategy, with customer service performance followed by financial performance as performance constructs. Two major components of an integrated supply chain strategy are identified and defined: (1) integrative information technologies, which is modeled antecedent to (2) supply chain integration. The research model was tested using data from a sample ( n =57) of the top 150 independent first tier automotive suppliers to the Big 3 in North America. The results showed positive direct relationships between (1) integrated information technologies and supply chain integration, (2) supply chain integration and customer service, and (3) customer service and firm performance. The relationship of supply chain integration to financial performance was indirect , through customer service; i.e., customer service was found to fully (as opposed to partially) mediate the relationship between supply chain integration and firm performance for first tier suppliers in the automotive industry.