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Supplier integration—Finding an optimal configuration
Author(s) -
Das Ajay,
Narasimhan Ram,
Talluri Srinivas
Publication year - 2006
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/j.jom.2005.09.003
Subject(s) - operationalization , bundle , set (abstract data type) , business , industrial organization , empirical research , yield (engineering) , process management , vertical integration , computer science , operations management , economics , mathematics , statistics , philosophy , materials science , epistemology , composite material , metallurgy , programming language
Abstract There has been increased interest in supplier integration in recent years, much of it supporting such initiatives in organizations. We operationalize supplier integration as a bundle of practices that include a set of “internal” and “external” practices. We hypothesize that such practices in specific configurations can be as important a source of performance differentials as the adoption of individual practices themselves. We theorize the existence of a level of integration that results in optimal performance. The paper uses data from a cross‐section of more than 300 US manufacturing companies to test the notion of an optimal level of supplier integration, and examine the conditions surrounding its development. The results provide empirical support for the concept of an optimal set of supplier integration practices. We show that deviations from the optimal profile are associated with performance deterioration, and that indiscriminate and continued investments in integration may not yield commensurate improvements in performance.