Abstract
The need for aligning products and processes has been emphasized in the operations strategy literature for a long time. Drawing on the product–process fit perspective, this study aims to examine the relationships between product-level characteristics (i.e., product complexity and product variety) and the three dimensions of supply chain integration (SCI) (i.e., internal, supplier and customer integration). Structural equation modeling is employed to test the proposed hypotheses using survey data. The results show that for high product complexity, firms tend to implement internal and supplier integration, while product complexity does not directly impact customer integration. Product variety is confirmed as being positively related to all three dimensions of SCI. This study contributes to the SCI literature by providing empirical evidence on the relationships between product complexity, variety, and SCI.
This chapter is a revised version of the following journal paper:
Shou, Y., Li, Y., Park, Y. W., & Kang, M. (2017). The impact of product complexity and variety on supply chain integration. International Journal of Physical Distribution & Logistics Management, 47(4), 297–317.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Al Zu’Bi, Z. M., & Tsinopoulos, C. (2012). Suppliers versus lead users: Examining their relative impact on product variety. Journal of Product Innovation Management, 29(4), 667–680.
Ambulkar, S., Blackhurst, J., & Grawe, S. (2015). Firm’s resilience to supply chain disruptions: Scale development and empirical examination. Journal of Operations Management, 33–34, 111–122.
Arya, A., Mittendorf, B., & Sappington, D. E. (2008). Outsourcing, vertical integration, and price vs. quantity competition. International Journal of Industrial Organization, 26(1), 1–16.
Bagozzi, R. P., Yi, Y., & Phillips, L. W. (1991). Assessing construct validity in organizational research. Administrative Science Quarterly, 36(3), 421–458.
Bode, C., & Wagner, S. M. (2015). Structural drivers of upstream supply chain complexity and the frequency of supply chain disruptions. Journal of Operations Management, 3, 215–228.
Boeing Company. (2021). Boeing around the globe. https://www.boeing.com/global/. Accessed 14 Sept 2021.
Buzacott, J. A. (2000). Service system structure. International Journal of Production Economics, 68(1), 15–27.
Chadwick, C., Super, J. F., & Kwon, K. (2015). Resource orchestration in practice: CEO emphasis on SHRM, commitment-based HR systems, and firm performance. Strategy Management Journal, 36, 360–376.
Chen, H., Daugherty, P. J., & Roath, A. S. (2009). Defining and operationalizing supply chain process integration. Journal of Business Logistics, 30(1), 63–84.
Chhetri, P., Hashemi, A., Lau, K. H., & Lim, M. K. (2021). Aligning supply chain complexity with product demand and design characteristics. International Journal of Logistics: Research and Applications, 1–27.
Conner, K. R., & Prahalad, C. K. (1996). A resource-based theory of the firm: Knowledge versus opportunism. Organization Science, 7(5), 477–501.
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16(3), 297–334.
Das, A., & Narasimhan, R. (2001). Process-technology fit and its implications for manufacturing performance. Journal of Operations Management, 19(5), 521–540.
Das, A., Narasimhan, R., & Talluri, S. (2006). Supplier integration—Finding an optimal configuration. Journal of Operations Management, 24(5), 563–582.
Doty, H. D., Glick, W. H., & Huber, G. P. (1993). Fit, equifinality, and organizational effectiveness: A test of two configurational theories. Academy of Management Journal, 36(6), 1196–1250.
Drazin, R., & Van de Ven, A. H. (1985). Alternate forms of fit in contingency theory. Administrative Science Quarterly, 30, 514–539.
Eckstein, D., Goellner, M., Blome, C., & Henke, M. (2015). The performance impact of supply chain agility and supply chain adaptability: The moderating effect of product complexity. International Journal of Production Research, 53(10), 3028–3046.
Ellinger, A. E., Daugherty, P. J., & Keller, S. (2000). The relationship between marketing/logistics interdepartmental integration and performance in US manufacturing firms: An empirical study. Journal of Business Logistics, 21(1), 1–22.
Ellram, L. M., & Cooper, M. C. (2014). Supply chain management: It’s all about the journey, not the destination. Journal of Supply Chain Management, 50(1), 8–20.
Eyers, D. R., Potter, A. T., Gosling, J., & Naim, M. M. (2021). The impact of additive manufacturing on the product-process matrix. Production Planning & Control, 1–17. https://doi.org/10.1080/09537287.2021.1876940
Fisher, M., Ramdas, K., & Ulrich, K. (1999). Component sharing in the management of product variety: A study of automotive braking systems. Management Science, 45(3), 297–315.
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of Operations Management, 28(1), 58–71.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Frohlich, M. T., & Dixon, J. R. (2001). A taxonomy of manufacturing strategies revisited. Journal of Operations Management, 19(5), 541–558.
Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17, 109–122.
Hayes, R. H., & Wheelwright, S. C. (1979). Link manufacturing process and product life cycles. Harvard Business Review, 57(1), 133–140.
Hayes, R. H., & Wheelwright, S. C. (1984). Restoring our competitive edge: Competing through manufacturing. Wiley.
Helkiö, P., & Tenhiälä, A. (2013). A contingency theoretical perspective to the product-process matrix. International Journal of Operations & Production Management, 33(2), 216–244.
Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling, 6(1), 1–55.
Hullova, D., Trott, P., & Simms, C. D. (2016). Uncovering the reciprocal complementarity between product and process innovation. Research Policy, 45(5), 929–940.
Huo, B., Han, Z., Chen, H., & Zhao, X. (2015). The effect of high-involvement human resource management practices on supply chain integration. International Journal of Physical Distribution & Logistics Management, 45(8), 716–746.
Inman, R. R., & Blumenfeld, D. E. (2014). Product complexity and supply chain design. International Journal of Production Research, 52(7), 1956–1969.
Jüttner, U., & Maklan, S. (2011). Supply chain resilience in the global financial crisis: An empirical study. Supply Chain Management: An International Journal, 16(4).
Kaufmann, L., & Carter, C. R. (2006). International supply relationships and non-financial performance—A comparison of US and German practices. Journal of Operations Management, 24(5), 653–675.
Kim, D., & Lee, R. P. (2010). Systems collaboration and strategic collaboration: Their impacts on supply chain responsiveness and market performance. Decision Sciences, 41(4), 955–981.
Kimberly, J. R. (1976). Organizational size and the structuralist perspective: A review, critique, and proposal. Administrative Science Quarterly, 21(4), 571–597.
Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3), 383–397.
Kogut, B., & Zander, U. (1996). What firms do? Coordination, identity, and learning. Organization Science, 7(5), 502–518.
Kotha, S., & Orne, D. (1989). Generic manufacturing strategies: A conceptual synthesis. Strategic Management Journal, 10(3), 211–231.
Kumar, M., Tsolakis, N., Agarwal, A., & Srai, J. S. (2020). Developing distributed manufacturing strategies from the perspective of a product-process matrix. International Journal of Production Economics, 219, 1–17.
Lavie, D., Stettner, U., & Tushman, M. L. (2010). Exploration and exploitation within and across organizations. Academy of Management Annals, 4(1).
Lomax, R. G., & Schumacker, R. E. (2012). A beginner’s guide to structural equation modeling. Routledge.
Lu, Y., Song, J., & Yao, D. D. (2003). Order fill rate, leadtime variability, and advance demand information in an assemble-to-order system. Operations Research, 51(2), 292–308.
Lucchetta, G., Bariani, P. F., & Knight, W. A. (2005). Integrated design analysis for product simplification. CIRP Annals-Manufacturing Technology, 54(1), 147–150.
Lummus, R. R., Vokurka, R. J., & Duclos, L. K. (2006). The produce-process matrix revisited: Integrating supply chain trade-offs. SAM Advanced Management Journal, 71(2), 4–45.
Miller, J. G., & Roth, A. V. (1994). A taxonomy of manufacturing strategies. Management Science, 40(3), 285–304.
Mintzberg, H. T. (1979). The structuring of organizations. Prentice-Hall.
Narasimhan, R., & Kim, S. W. (2002). Effect of supply chain integration on the relationship between diversification and performance: Evidence from Japanese and Korean firms. Journal of Operations Management, 20(3), 303–323.
Nickerson, J. A., & Zenger, T. R. (2004). A knowledge-based theory of the firm—The problem-solving perspective. Organization Science, 15(6), 617–632.
Novak, S., & Eppinger, S. D. (2001). Sourcing by design: Product complexity and the supply chain. Management Science, 24(47), 189–204.
Nunnally, J. C., Bernstein, I. H., & Berge, J. M. T. (1978). Psychometric theory. McGraw-Hill.
O’Leary-Kelly, S. W., & Vokurka, R. J. (1998). The empirical assessment of construct validity. Journal of Operations Management, 16(4), 387–405.
Procter & Gamble. (2021). P&G’s supply chain. https://www.pgcareers.com/supply-chain-masters. Accessed 14 Sept 2021.
Randall, T., & Ulrich, K. (2001). Product variety, supply chain structure, and firm performance: Analysis of the US bicycle industry. Management Science, 47(12), 1588–1604.
Ramdas, K. (2003). Managing product variety: An integrative review and research directions. Production and Operations Management, 12(1), 79–101.
Sawik, T. (2013). Selection of resilient supply portfolio under disruption risks. Omega, 41, 259–269.
Schmenner, R. W., & Swink, M. L. (1998). On theory in operations management. Journal of Operations Management, 17(1), 97–113.
Schoenherr, T., & Swink, M. (2012). Revisiting the arcs of integration: Cross-validations and extensions. Journal of Operations Management, 30(1), 99–115.
Shou, Y., Kang, M., & Park, Y. (2022). Supply chain integration for sustainable advantages. Springer.
Shou, Y., Li, Y., Park, Y., & Kang, M. (2018). Supply chain integration and operational performance: The contingency effects of production systems. Journal of Purchasing and Supply Management, 24(4), 352–360.
Spekman, R. E. (1988). Strategic supplier selection: Understanding long-term buyer relationships. Business Horizons, 31(4), 75–81.
Swink, M., & Nair, A. (2007). Capturing the competitive advantages of AMT: Design–manufacturing integration as a complementary asset. Journal of Operations Management, 25, 736–754.
Um, J., Lyons, A., Lam, H. K., Cheng, T. C. E., & Dominguez-Pery, C. (2017). Product variety management and supply chain performance: A capability perspective on their relationships and competitiveness implications. International Journal of Production Economics, 187, 15–26.
Van Donk, D. P., & van der Vaart, T. (2004). Business conditions, shared resources and integrative practices in the supply chain. Journal of Purchasing and Supply Management, 10(3), 107–116.
Venkatraman, N. (1989). The concept of fit in strategy research: Toward verbal and statistical correspondence. Academy of Management Review, 14(3), 423–444.
Wan, X., Evers, P. T., & Dresner, M. E. (2012). Too much of a good thing: The impact of product variety on operations and sales performance. Journal of Operations Management, 30(4), 316–324.
Weller, C., Kleer, R., & Piller, F. T. (2015). Economic implications of 3D printing: Market structure models in light of additive manufacturing revisited. International Journal of Production Economics, 164, 43–56.
Williamson, O. E. (1981). The economics of organization: The transaction cost approach. American Journal of Sociology, 87(3), 548–577.
Williamson, O. E. (1985). The economic institutions of capitalism. Free Press.
Wong, C. Y., Boon-Itt, S., & Wong, C. W. (2011). The contingency effects of environmental uncertainty on the relationship between supply chain integration and operational performance. Journal of Operations Management, 29(6), 604–615.
Acknowledgements
This work was supported by the National Natural Science Foundation of China under Grant Number 71472166, the Fundamental Research Funds of Shandong University, and Shandong Provincial Social Science Foundation under Grant Number 16CGLJ13.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Shou, Y., Kang, M., Park, Y.W. (2022). Product Complexity, Variety and Supply Chain Integration. In: Supply Chain Integration for Sustainable Advantages. Springer, Singapore. https://doi.org/10.1007/978-981-16-9332-8_3
Download citation
DOI: https://doi.org/10.1007/978-981-16-9332-8_3
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-16-9331-1
Online ISBN: 978-981-16-9332-8
eBook Packages: Business and ManagementBusiness and Management (R0)