Research Article


DOI :10.26650/JTL.2020.0002   IUP :10.26650/JTL.2020.0002    Full Text (PDF)

The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance

Bülent YıldızAhmet Çetindaş

This study investigates the mediating role of product performance on the effect of the supplier process integration on Firm performance. Additionally, the moderator effect of market uncertainty on the effect of process integration on firm performance is also analyzed. For this purpose, data were collected by surveys from 156 manufacturing companies operating in Istanbul. A structural equation model was established and analyzed. As a result of the analysis, it was found that process integration had a positive effect on company performance. In addition, it has been determined that product performance has a positive effect on firm performance. The mediation role of product performance on the effect of process integration on firm performance was made by a bootstrap method. The mediating role of product performance could be found but the moderating role of market uncertainty could not be proven. 

DOI :10.26650/JTL.2020.0002   IUP :10.26650/JTL.2020.0002    Full Text (PDF)

Tedarikçilerle Süreç Entegrasyonunun Firma Performansı Üzerindeki Etkisinde Ürün Performansının Aracı Rolü

Bülent YıldızAhmet Çetindaş

Bu çalışmada tedarikçilerle süreç entegrasyonunun firma performansı üzerindeki etkisinde ürün performansının aracılık rolü araştırılmıştır. Ayrıca süreç entegrasyonunun firma performansı üzerindeki etkisinde piyasa belirsizliğinin düzenleyici rolü analiz edilmiştir. Bu amaçla İstanbul’da faaliyet gösteren 156 imalat firmasından anket ile veri toplanmıştır. Araştırma kapsamında yapısal eşitlik modeli kurularak analiz edilmiştir. Analiz sonucunda süreç entegrasyonu ve ürün performansının firma performansını pozitif yönde anlamlı olarak etkilediği bulgusuna ulaşılmıştır. Ayrıca ürün performansının da firma performansını pozitif yönde anlamlı olarak etkilediği tespit edilmiştir. Süreç entegrasyonunun firma performansı üzerindeki etkisinde ürün performansının aracılık rolü boostrap yöntemi ile yapılmıştır. Analiz neticesinde ürün performansının aracılık rolü bulunduğu tespit edilmiştir. Araştırma sonucunda piyasa belirsizliğinin düzenleyici rolüne ulaşılamamıştır


EXTENDED ABSTRACT


As emphasized in this study, integration with suppliers is possible with the integration of processes. A process is a set of activities designed to produce a specific output for a particular customer or market (Davenport, 1993). Process integration, on the other hand, refers to the management of various activities that aim to combine relevant business processes within and across companies, and to eliminate duplicate or redundant processes in order to create a better functioning supply chain (Chen vd., 2009). 

Process integration with suppliers requires regular communication between cross-organizational work teams and partners. Firm integration ensures that inter-organizational business processes work in collaboration. Thus, it improves firm performance by creating synchronous processes (Frohlich ve Westbrook, 2001) throughout the supply chain and provides operational synergy, resulting in higher productivity.

Mellat-Parast and Spillan (2014) stated that supply chain process integration is the most important indicator of the competitive position of the company, and determined its positive effect on firm competitiveness. Chen et al. (2009) dimensioned process integration with suppliers as internal process integration and external process integration, and found that external process integration positively affects firm performance. Langerak et al. (2007) also investigated the effect of product performance on firm performance, and found a positive effect. Narasimhan and Kim (2002) investigated the moderating effect of market uncertainty in the relationship between planning integration and profitability, and found that profitability increased in markets with low uncertainty. Liao and Tu (2008) found that the integration of production processes had more impact on production performance under conditions of high environmental uncertainty. For these reasons, the hypotheses of the research are determined as follows.

H1: Process integration with the supplier has a positive effect on firm performance.

H2: Process integration with the supplier has a positive effect on product performance.

H3: The effect of process integration on firm performance is mediated by product performance.

H4: Product performance has a positive effect on firm performance.

H5: Market uncertainty has a moderating effect on the effect of Process Integration with Supplier on firm performance.

The research was applied on SMEs operating in Istanbul and Gebze. The sample of the research consists of 156 industrial companies. Exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and reliability analyzes were performed to test the validity and reliability of the scales. As a result of EFA, factor loads were obtained at over 0.50 for all scales, and KMO values were obtained at over 0.70. Reliability analysis showed that the alpha coefficient value for all scales was determined by over 0.70. CFA showed, that the scales meets the goodness of fit criteria. As a result of the correlation analysis, it was found that there was a significant relationship between variables in the same direction at the level of 0.01 significance. 

As a result of structural equation analysis of the model, the process integration with suppliers positively affected product performance and firm performance; It has also been determined that product performance affects firm performance positively. The bootstrap method was used to test the mediation role of product performance on the impact of process integration with suppliers on firm performance. In order to test the mediating role of product performance, the significance of indirect effects was examined, and the bootstrap method was used for this. The highest likelihood method was used in 95% confidence interval consisting of 1000 samples and the Monte Carlo parametric bootstrap option was chosen. Indirect effects confidence interval lower value was determined as 0.204, and the confidence interval upper value was found as 0.377. It was found that the significance level of indirect effects is below 0.01, which means it is meaningful. The fact that the confidence interval lower and upper value ranges do not include zero, and being meaningful indicates that product performance has an intermediary role in the impact of strategic integration with suppliers on firm performance.

Path analysis was conducted to analyze the moderating role of market uncertainty in the impact of process integration with suppliers on firm performance. For this purpose, an interaction variable is formed, which is the multiplication of the process integration and the market uncertainty variables. As a result of the moderating impact analysis, it was seen that process integration and market uncertainty had a positive effect on firm performance. However, the interaction variable did not significantly affect firm performance. This finding shows that market uncertainty has no moderating effect on the effect of process integration on firm performance. The reason for this is thought to be related to the fact that market uncertainty includes a more market-oriented perspective. According to this finding, it will be possible to say that the uncertainties in the market are not related to the procurement processes. As a result of the research, the H1, H2, H3 and H4 hypotheses were supported, while the H5 hypothesis could not be supported.


PDF View

References

  • Agustin, C. & Singh, J. (2005). Curvilinear effects of consumer loyalty determinants in relational exchanges, Journal of Marketing Research 42;96-108. google scholar
  • Boon-itt, S. & Wong, C.Y. (2011). The moderating effects of technological and demand uncertainties on the relationship between supply chain ıntegration and customer delivery performance. International Journal of Physical Distribution and Logistics Management. 41(3),253-276. google scholar
  • Bonaccorsi, A. & Lipparini, A. (1994). Strategic partnerships in new product development: an ıtalian case study. Journal of Product Innovation Management 11:134–145. google scholar
  • Chen, H., Daugherty, P. J., ve Roath, A. S. (2009). Defining and operationalizing supply chain process integration. Journal of Business Logistics, 30(1), 63-84 google scholar
  • Danese, P. & Romano, P. (2011). Supply chain integration and efficiency performance: a study on the interactions between customer and supplier integration, Supply Chain Management: An International Journal, 16(4),220-230. google scholar
  • Davenport, T.H. (1993), Process ınnovation–reengineering work through ınformation technology. Harvard Business School Press, Boston, MA. google scholar
  • Ettlie, J.E. & Reza, E., (1992). Organizational integration and process innovation. Academy of Management Journal 34, 795–827. google scholar
  • Flynn, B. B., B. Huo, & X. Zhao. (2010). The ımpact of supply chain ıntegration on performance: a contingency and configuration approach. Journal of Operations Management, 28(1),58–71. google scholar
  • Fynes, B., Burca, S. & Marshall, D. (2004). Environmental uncertainty, supply chain relationship quality and performance. Journal of Purchasing and Supply Management, 10, 179-190. google scholar
  • Frohlich, M. T. & R. Westbrook. 2001. Arcs of integration: An ınternational study of supply chain strategies. Journal of Operations Management. 19 (2), 185–200. google scholar
  • Frohlich, M.T. & Westbrook, R. (2001). Arcs of integration: An ınternational study of supply chain strategies. Journal of Operation Management. 19:185–200. google scholar
  • Gatignon, H. & Xuereb, J.M. (1997). Strategic orientation of the firm and new product performance. Journal of Marketing Research. 34, 77–90. google scholar
  • Gatignon, H. & Xuereb, J. (1997). Strategic orientation of the firm and new product performance. Journal of Marketing Research, 34(1), 77-90. google scholar
  • Jayaram, J. (2008). Supplier involvement in new product development projects: dimensionality and contingency effects”. International Journal of Production Research. 46(13), 3717-3735. google scholar
  • Jaworski, B.J. & Kohli, A.K. (1993). Market orientation: Antecedents and consequences. Journal of Marketing. 57(3),53-70. google scholar
  • Koufteros, X.A., Rawski, G.E. & Rupak, R. (2010), Organizational integration for product development: the effects on glitches, on-time execution of engineering change orders, and market success. Decision Sciences, 41(1), 49-80. google scholar
  • Lai, F., M. Zhang, D.M.S. Lee & X. Zhao. (2012). the ımpact of supply chain ıntegration on mass customization capability: An extended resourcebased view. IEEE Transactions on Engineering Management. 59(3), 443–456. google scholar
  • Lai, K.H., Wong, C.W.Y. & Cheng, T.C.E. (2010). Bundling digitized logistics activities and its performance implications. Industrial Marketing Management. 39(2), 273–286. google scholar
  • Langerak, F. Hultink, E.J. & Robben; H.S.J. (2007). The mediating role of new product development in the link between market orientation and organizational performance, Journal of Strategic Marketing. 15(4), 281-305. google scholar
  • Lau, A., Yam, R. & Tang, E. (2007). Supply chain product co‐development, product modularity and product performance. Industrial Management and Data Systems. 107(7), 1036-1065. google scholar
  • Lau, A.K.W., Tang, E. & Yam, R.C.M. (2010). Effects of supplier and customer ıntegration on product ınnovation and performance: empirical evidence in Hong Kong manufacturers. Journal of Product Innovation Management. 27(5),761-777. google scholar
  • Lee, P.K.C., Yeung, A.C.L. & Cheng, T.C.E. (2009). Supplier alliances and envioronmental uncertainty: An emprical study, ın. J. Production Economics. 120, 190-204. google scholar
  • Li, S. (2002). An integrated model for supply chain management practices, performance and competitive advantage. Unpublished Doctoral Dissertation, University of Toledo, Toledo. google scholar
  • Liao, K. & Tu, Q. (2008). Leveraging automation and ıntegration to improve manufacturing performance under uncertainty. Journal of Manufacturing Technology Management. 19(1) 38-51. google scholar
  • Liu, W. & Atuahene-Gima, K. (2018). Enhancing product innovation performance in a dysfunctional competitive environment: The roles of competitive strategies and market-based assets. Industrial Marketing Management. (73), 7-20. google scholar
  • Mellat-Parast, M. & Spillan, J. (2014), Logistics and supply chain process integration as a source of competitive advantage. International Journal of Logistics Management. 25(2), 289-314 google scholar
  • Monczka, R.M., Handfield, R.B., Scannell, T.V., Ragatz, G.L. & Frayer, D.L. (2000). New product development strategies for supplier ıntegration. ASQ Quality Press. Narasimhan, google scholar
  • R. & Kim, S.W. (2002). Effect of supply chain ıntegration on the relationship between diversification and performance: Evidence from Japanese and Korean firms. Journal of Operations Management. 20, 303-323. google scholar
  • Noble, C. H., Sinha, R. K. & Kumar, A. (2002). Market orientation and alternative strategic orientations: A longitudinal assessment of performance implications. Journal of Marketing. 66(3), 25–39. google scholar
  • O’Leary-Kelly, S.W. & Flores, B.E. (2002). The ıntegration of manufacturing and marketing/sales decisions: Impact on organizational performance. Journal of Operations Management. 20(3), 221-240. google scholar
  • Palomero, S. & R. Chalmeta. 2014. A guide for supply chain ıntegration in SMEs. Production Planning and Control. 25(5), 372–400. Pan, Y., Sheng, S. & Xie, F.T. (2012), Antecedents of customer loyalty: an empirical synthesis and reexamination. Journal of Retailing and Consumer Services. 19(1), 150-158. google scholar
  • Rafiq, M., Fulford, H. & Lu, X. (2013). Building customer loyalty in online retailing: The role of relationship quality. Journal of Marketing Management. 29(3), 494-517. google scholar
  • Ragatz, G.L., Handfield, R.B. & Peterson, K.J., (2002). Benefits associated with supplierintegration into new product development under conditions of technology uncertainty. Journal of Business Research. 55(5), 389–400 google scholar
  • Rodrigues, A.M., Stank, T.P. & Lynch, D.F. (2004). Linking strategy, structure, process and performance in ıntegrated logistics. Journal of Business Logistics. 25(2), 65-94. google scholar
  • Stonebraker, P.W. & Liao, J. (2004). Environmental turbulence, strategic orientation modeling supply chain integration. International Journal of Operations and Production Management. 24(9), 1037–1048 google scholar
  • Swink, M., Narasimhan, R. & Wang, C. (2007), “Managing beyond the factory walls: effects of four types of strategic integration on manufacturing plant performance”. Journal of Operations Management. 25(1), 148-164. google scholar
  • Swink, M., Narasimhan, R. & Wang, C. (2006). Managing beyond the factory walls: effects of four types of strategic ıntegration on manufacturing plant performance. Journal of Operations Management. 25(1):148–164. google scholar
  • Tsai, K.H. & Hsui T.T. (2014). Cross-Functional collaboration, competitive intensity, knowledge integration mechanisms, and new product performance: A mediated moderation model. Industrial Marketing Management. 43(2014), 293–303 google scholar
  • Waters, D. (2003). Logistics: An Introduction to Supply Chain Management. (1th Press). New York: Palgrave Macmillan. google scholar
  • Wong, C.Y., Boon-ittb, S. & Wong, C.W.Y. (2011). “The contingency effects of environmental uncertainty on the relationship between supply chain integration and operational performance.” Journal of Operations Management. 29, 604–615. google scholar
  • Yeung, J. H. Y., W. Selen, M. Zhang, & B. Huo. 2009. The effects of trust and coercive power on supplier ıntegration. International Journal of Production Economics. 120(1), 66–78. google scholar
  • Zhao, L., B. Huo, L. Sun & X. Zhao. (2013). The ımpact of supply chain risk on supply chain ıntegration and company performance: A global ınvestigation. Supply Chain Management: An International Journal. 18(2), 115–131. google scholar
  • Zhang, M. & Hartley, J. (2018). Does guanxi influence product performance and customer loyalty? Journal of Asia Business Studies. 12(3), 233-252. google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Yıldız, B., & Çetindaş, A. (2020). The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance. Journal of Transportation and Logistics, 5(1), 13-28. https://doi.org/10.26650/JTL.2020.0002


AMA

Yıldız B, Çetindaş A. The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance. Journal of Transportation and Logistics. 2020;5(1):13-28. https://doi.org/10.26650/JTL.2020.0002


ABNT

Yıldız, B.; Çetindaş, A. The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance. Journal of Transportation and Logistics, [Publisher Location], v. 5, n. 1, p. 13-28, 2020.


Chicago: Author-Date Style

Yıldız, Bülent, and Ahmet Çetindaş. 2020. “The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance.” Journal of Transportation and Logistics 5, no. 1: 13-28. https://doi.org/10.26650/JTL.2020.0002


Chicago: Humanities Style

Yıldız, Bülent, and Ahmet Çetindaş. The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance.” Journal of Transportation and Logistics 5, no. 1 (Jul. 2022): 13-28. https://doi.org/10.26650/JTL.2020.0002


Harvard: Australian Style

Yıldız, B & Çetindaş, A 2020, 'The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance', Journal of Transportation and Logistics, vol. 5, no. 1, pp. 13-28, viewed 4 Jul. 2022, https://doi.org/10.26650/JTL.2020.0002


Harvard: Author-Date Style

Yıldız, B. and Çetindaş, A. (2020) ‘The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance’, Journal of Transportation and Logistics, 5(1), pp. 13-28. https://doi.org/10.26650/JTL.2020.0002 (4 Jul. 2022).


MLA

Yıldız, Bülent, and Ahmet Çetindaş. The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance.” Journal of Transportation and Logistics, vol. 5, no. 1, 2020, pp. 13-28. [Database Container], https://doi.org/10.26650/JTL.2020.0002


Vancouver

Yıldız B, Çetindaş A. The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance. Journal of Transportation and Logistics [Internet]. 4 Jul. 2022 [cited 4 Jul. 2022];5(1):13-28. Available from: https://doi.org/10.26650/JTL.2020.0002 doi: 10.26650/JTL.2020.0002


ISNAD

Yıldız, Bülent - Çetindaş, Ahmet. The Mediating Role of Product Performance on the Effect of Process Integration with Suppliers on Firm Performance”. Journal of Transportation and Logistics 5/1 (Jul. 2022): 13-28. https://doi.org/10.26650/JTL.2020.0002


Acknowlegment

English


TIMELINE


Submitted07.01.2020
Accepted29.04.2020
Published Online27.05.2020

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.