The measurement of internal supply chain integration

Abstract

Purpose: Internal supply chain refers to the chain of activities within a company that concludes with providing a product to the customer. This process involves multiple functions within companies such as sales, production, and distribution. It is obvious that a company's performance would be enhanced by the integration of these functions. However, there is no consensus yet on how integration is to be defined and measured. The purpose of this paper is to present research that was conducted with the goal of developing an instrument for the measurement of internal supply chain integration. Design/methodology/approach: Scale items were identified from current literature and the resulting survey instrument was sent out to a sample of New Zealand manufacturers. Statistical analysis was conducted to purify and validate the instrument. Findings: In total, three dimensions of integration were identified, labelled coordination, communication, and affective relationship. This paper makes a contribution towards developing a consensus in the understanding and measurement of the integration construct. Research limitations/implications: The selection and exclusion of measurement items for the survey have followed established principles of survey research, but may have been affected by the personal bias of the author. While every attempt has been made to comprehensively capture the state of the research up to the time of the study, there may be some omissions. The sample for the survey was drawn from a database of New Zealand businesses, thus the results are generalizable only to the extent that these businesses represent the population of all businesses. Another limitation is that no prior survey/case studies were carried out to collect practitioner's definitions/measures for integration. Practical implications: The authors hope to have made a contribution here towards building a consensus among practitioners and researchers in defining and measuring internal supply chain integration. For practitioners, the measurement instrument offers a self-assessment tool for internal supply chain integration. This should help them in identifying areas for improvement. Originality/value: The contribution of this paper consists of: development of an instrument for the measurement of integration, validating the instrument against a criterion, and the identification of three dimensions of integration - communication, coordination, and affective relationship. The unique contributions of this paper are the validation of the instrument against a criterion and the identification of "affective relationship" as a dimension of internal supply chain integration.