Supply chain integration and its impact on sustainability
| Pages | 1749-1765 |
| Date | 15 October 2018 |
| DOI | https://doi.org/10.1108/IMDS-01-2018-0004 |
| Published date | 15 October 2018 |
| Author | Mingu Kang,Ma Ga (Mark) Yang,Youngwon Park,Baofeng Huo |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
Supply chain integration and its
impact on sustainability
Mingu Kang
School of Management, Zhejiang University, Hangzhou, China
Ma Ga (Mark) Yang
Department of Management, College of Business and Public Management,
West Chester University of Pennsylvania, West Chester, Pennsylvania, USA
Youngwon Park
Graduate School of Humanities and Social Sciences, Saitama University,
Saitama, Japan and
Manufacturing Management Research Center, Faculty of Economics,
The University of Tokyo, Tokyo, Japan, and
Baofeng Huo
School of Management, Zhejiang University, Hangzhou, China
Abstract
Purpose –The purpose of this paper is to examine the role of supply chain integration (SCI) in improving
sustainability management practices (SMPs) and performance.
Design/methodology/approach –Based on data collected from 931 manufacturing firms in multiple
countries and regions, the authors conducted a structural equation modeling analysis to test the
proposed hypotheses.
Findings –The findings suggest that supplier and customer integration are vital enablers for both intra- and
inter-organizational SMPs. The results also reveal that both intra- and inter-organizational SMPs are
significantly and positively associated with sustainability performance (i.e. economic, environmental and
social performance) and function as complements to jointly enhance environmental and social performance.
Originality/value –This study incorporates SCI into the sustainability literature, providing a new
perspective on sustainability and supply chain management research.
Keywords Supply chain integration, Sustainability performance, Sustainability management practices
Paper type Research paper
1. Introduction
Over the past few decades, as firms have vigorously pursued competitive advantages within
the turbulent global business environment, the importance of sustainability to a firm’s
bottom line has steadily grown (Kleindorfer et al., 2005; Lubin and Esty, 2010).
Commensurate with the increasing importance of sustainability, supply chain researchers
have examined whether extending sustainability issues into a firm’s supply chain (which is
beyond its internal operations) is a crucial step in improving its sustainability performance
(Beske and Seuring, 2014; Seuring and Müller, 2008; Winter and Knemeyer, 2013). In this
regard, given the complex and global nature of sustainability issues, one of the expanding
areas of interest has been whether companies understand the importance of collaboration
within their supply chains (Kiron et al., 2015). Because there are three dimensions to supply
chain integration (SCI) (i.e. internal, supplier and customer integration) that comprise
strategic collaboration with internal and external supply chain partners (Flynn et al., 2010;
Bill et al., 2016), SCI may play an important role in improving sustainability management
practices (SMPs) and performance. Industrial Management & Data
Systems
Vol. 118 No. 9, 2018
pp. 1749-1765
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-01-2018-0004
Received 4 January 2018
Revised 16 March 2018
Accepted 1 April 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This work was supported by the National Natural Science Foundation of China (Grant Nos 71525005,
71372058).
1749
Supply chain
integration
Despite the growing research on sustainable supply chain management, it is still unclear
how manufacturing firms cooperate with supply chain partners to achieve their desired
sustainability performance. Several sustainability studies have examined external pressure
as a main driver of firm sustainability (Dimaggio and Powell, 2000; Liu et al., 2010; Sarkis
et al., 2010). However, little research has been conducted on how manufacturers adopt SCI
activities to facilitate their SMPs and enhance their sustainability performance. Research
has investigated the positive influence of customer integration (Gelhard and von Delft,
2016), supply management capabilities (Bowen et al., 2001) and strategic purchasing in
supply management (Paulraj, 2011) on SMPs or sustainability performance, indirectly
representing a possible link between SCI and sustainability.
This study recognizes the need to further investigate the interrelationship between internal
and external SCI and a firm’s supply chain activities to improve sustainability. It is important to
explore a research framework within which SCI is a valuable enabler of a firm’s sustainability
practices and performance. This study thus seeks to answer the following research questions:
RQ1. How do the three dimensions of SCI influence SMPs?
RQ2. How do SMPs influence manufacturing firms’sustainability performance?
By answering these important questions, this study, which extends sustainability research
into supplychains, makes the following contributions. First, it providesnew perspectives from
which to understand the important role of SCI in improving intra- and inter-organizational
SMPs and sustainability performance. Second, it provides practical insights into the ways
manufacturers successfully implement SCI and SMPs to achieve their desired sustainability
performance.
2. Theoretical background and hypotheses development
We examined the literature related to SCI and SMPs to develop the theoretical background
for this study. In the following sections, we discuss each construct and develop hypotheses
on how they are related.
2.1 Supply chain integration (SCI)
SCI refers to “the degree to which a manufacturer strategically collaborates with its supply
chain partners and collaboratively manages intra- and inter-organization processes. The
goal is to achieve the effective and efficient flows of products and services, information,
money and decisions, to provide maximum value to the customer at low cost and high
speed”(Flynn et al., 2010, p. 59). The three dimensions of SCI (i.e. internal, supplier and
customer integration) have been widely accepted in the literature (Flynn et al., 2010; Wong
et al., 2011; Zhao et al., 2011). Internal integration can be defined as “the degree to which a
manufacturer structures its own organizational strategies, practices and processes into
collaborative, synchronized processes, in order to fulfill its customers’requirements and
efficiently interact with its suppliers”(Flynn et al., 2010, p. 59). Internal integration within a
firm requires data and information system integration that enables firms to integrate
activities within different functional areas (Kim, 2009; Zhao et al., 2011), including
information sharing, collaboration and joint decision making among the different functions
(Williams et al., 2013). Through cross-functional information sharing and collaboration,
internal integration facilitates functional goal alignment and responsiveness (Williams et al.,
2013), thereby leading to better outputs, such as operational performance (Lotfi et al., 2013;
Williams et al., 2013; Wong et al., 2011), competitive capabilities (Antonio et al., 2009) and
firm performance (Huo, 2012; Swink et al., 2007).
External integration can be defined as the degree to which a manufacturer joins with its
external partners to structure inter-organizational strategies, practices and processes into
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