The Effects of Supply Chain Integration on the Cost Efficiency of Contract Manufacturing

Yoon Hee Kim and Tobias Schoenherr

Journal of Supply Chain Management, 2018, vol. 54, issue 3, 42-64

Abstract: While the literature on supply chain integration (SCI) is proliferating, the link between SCI and a firm's contract manufacturing performance has not been investigated yet. To fill this gap in the literature, we investigate the effects of supply chain integration on contract manufacturing efficiency using the objective measure of return on contract manufacturing. Unlike prior studies, this research uses finer‐grained dimensions of SCI by not only differentiating between customer and supplier integration but also by separating integration activities depending on their purpose for either product development or process improvement, thus enhancing our understanding of the underlying theoretical dynamics by disentangling each dimension's respective contribution to a firm's contract manufacturing efficiency. Using archival survey data from 322 manufacturing firms collected by the Korea Productivity Center, we demonstrate that integration activities with customers and suppliers, depending on whether they focus on products or processes, generate contradicting outcomes in terms of return on contract manufacturing, thereby challenging the implicit assumption about the equivocal benefits of SCI across manufacturing systems. Furthermore, our findings substantiate the positive moderating effects of cross‐functional integration on the external integration–performance links by demonstrating the amplified effects, either positive or negative, of integration on return on contract manufacturing.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://doi.org/10.1111/jscm.12168

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jscmgt:v:54:y:2018:i:3:p:42-64

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1523-2409

Access Statistics for this article

Journal of Supply Chain Management is currently edited by Lisa Ellram, Craig Carter and Chad Autry

More articles in Journal of Supply Chain Management from Institute for Supply Management
Bibliographic data for series maintained by Wiley Content Delivery ().