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2. Agenda Introduction
Trust
Relationship Commitment
Supply Chain Integration
Relationship Between Trust & Relationship Commitment
Relationship Between Relationship Commitment & Integration
Relationship Between Integration & Performance
Q & A
3. Supply Chain Integration A Paradigm Shift to Supply Chain Integration
Supply chain integration (SCI) has advocated by increased number of supply chain researchers.
SCI is viewed as a managerial approach to achieve greater collaboration among supply chain partners in order to deliver values and competitiveness (e.g. Lee, Padmanabhan & Whang 1997; Christopher 1998; Bowersox, Closs and Stank, 1999; Easton & Zhang 2002; Simatupang, Wright & Sridharan, 2002; Burt, Dobler & Starling; 2003).
4. Supply Chain Integration Two Salient Factors for Integrations
Trust and Relationship Commitment (e.g. Luhmann, 1979; Hill, 1990; Heidi and John, 1990; Dion et al., 1992; Morgan and Hunt, 1994; Zaheer and Venkatranman, 1995; Ghoshal and Moran 1996; Jantrania and Wilson 1996; Kumar, 1996; Dyer, 1997; Monczka et al. 1998; Spekman et al., 1998; Zaheer et al., 1998; Handfield and Bechtel, 2002)
5. Research Gaps & Our Contributions Gaps
An in-depth examination of prior studies indicates the scattered and disjointed nature of the overall body of this content-related literature.
Moreover, these salient features captured in the vast body of content-related literature are not cohesive or interwoven into some fragmented frameworks.
Our Contributions:
Review of 400 content-related articles
Demonstrate a framework that structure relationships amongst key variables in supply chain integration
6. Proposed Conceptual Framework
7. Proposed Conceptual Framework
8. Trust Competence Trust
Refers to the technical and managerial expertise that the trustee is capable of performing and will perform their roles as expected (Cook and Wall 1980; Barber, 1983; Sako, 1992).
Contractual Trust
Refers to an expectation that a trustee can be relied upon to maintain the ethical standard and carry out a verbal or written promise (Sako, 1992; Boersma et al., 2003)
Calculative Trust
Refers to a trustor’s expectation that the trustee’s costs of cheating or engaging in opportunistic behavior are greater than the benefits of such actions (Doney and Cannon 1997).
Affective Trust
Refers to the mutual expectations of open commitment to one another, and the commitment is regarded as a willingness to do more than is formally expected (Sako, 1992).
9. Proposed Conceptual Framework
10. Relationship Commitment Affective Commitment
can be defined as one party’s identification with and emotional attachment to the goals and values of another party, and willingness to secure the relationship (Morgan and Hunt, 1994; Wetzels, 1998).
Affective commitment is based on a generalized sense of liking (Konovsky and Cropanzano, 1991), loyalty and belongingness(Porter et al., 1974; Jaros et al., 1993) towards the exchange partner and an enduring desire to continue a relationship for enjoyment (Buchanan, 1974).
Calculative Commitment
can be viewed as one party’s identification with the benefits and costs of the relational exchange, and willingness of maintaining the relationship for satisfying his needs (Geyskens et al, 1996).
11. Proposed Conceptual Framework
12. Supply Chain Integration
13. Strategic Integration
14. Relationship Integration
15. Customer Integration
16. Supplier Integration
17. Information Integration
18. Measurement Integration Scapens
(1998),
Holmberg
(2000)
19. Proposed Conceptual Framework
20. Trust and Relationship Commitment As documented in extant literature (e.g. Morgan and Hunt, 1994; Moore, 1998), trust and relationship commitment are salient and inter-related elements in structuring the inter-organizational interactions.
However, as our review progressed, there exist conflicting evidences involving the directionality of the association between them. A major stream (e.g. Morgan and Hunt, 1994; Moore, 1998; Ruyter et al., 2001) supported for the “trust to commitment” migration path based on the assumptions that the existence of trust reduces the perception of risk associated with opportunistic behavior (Moore, 1998) and thus increases the exchange partners’ confidence in the effectiveness of future relational exchange, motivating the exchange partners to commit in the relationship.
21. Proposed Conceptual Framework
22. Relationship Commitment & Integration With relationship commitment, supply chain partners become integrated into their key customers’ business processes and more tied to established goals (Morgan and Hunt, 1994; Chen and Paulaj, 2004).
Prahinski and Benton (2004) developed and empirically tested a model that explained how suppliers perceive the buying firm’s supplier evaluation communication process and its impact on suppliers’ performance. The results indicated that buyer-seller relationship influences supplier commitment, which eventually yields better supplier’s performance. Unless the supplier is committed to the buying firm, the supplier evaluation communication process doesn’t ensure better supplier performance. Furthermore, it has been suggested that the buying firms should increase their efforts on cooperation and commitment in order to augment the supplier’s commitment.
23. Proposed Conceptual Framework
24. Integration and Performance Stank, Keller and Closs (2001) developed and tested an instrument for measuring supply chain integration competences as well as determining their relative importance to developing logistics distinctiveness. Customer and internal integrations are considered the most important differentiators of overall firm performance.
yet it failed to substantiate the supply chain competencies constructs with literature and test the causal relationships among the competences. Therefore, it is difficult to assess whether these six competences as a cohesive whole represent the concept of “supply chain integration” effectively.
the regression results related to relationship, measurement, and supplier integration indicated significant negative associations with certain individual performance measures
the paper concluded that all the six competences are significant for supply chain excellence based on the unsubstantiated premises that some competencies are qualifiers and that the remaining ones (customer and internal integrations) are differentiators.
25. Frohlich and Westbrook (2001) examined the simultaneous effects of five different supplier and customer integration strategies (or arcs of integration) on a broad array of operations performance outcomes based on a global sample of 322 manufacturers. The findings demonstrated that supply chain companies with the widest degree of the arcs of integration achieve the highest level of performance improvement involving the customer service, on-time delivery, delivery lead time, productivity, quality, and cost, in addition to the market share and profitability.
their findings provide an empirical support in the literature for the linkage between supply chain integration and performance; however, it failed to examine the specific form of the integration-performance relationship.
another weakest link in this survey study is that integrative activities used to investigate the simultaneous effects of arcs of integration are quite simplistic, and neither evidence nor reviewed literature has been demonstrated to substantiate the argument.
supply chain integrations does much more than customer and supplier integrations, therefore, the proposed arc of integration may direct the improvement efforts of the executives to the widest arc of integration without examining different “building blocks” (such as internal integration, relationship integration and measurement integration) of supply chain integration in the first place.
26. Conclusion and Future Research Supply chain integration highlight the importance of strategic collaboration. Though strategic collaboration is an important concept, it doesn’t equal supply chain integration in supply chain context. Further investigations should be carried out to identify the varying characteristics, key drivers and associated forms of these two.
By further understanding the tenets of strategic collaboration, researchers may establish some relational theories for supply chain integration. Besides, as our review illustrated, supply chain integration encompasses the six integrative areas. However, a rarity of research exists to explain the paradigm of these six levels of integration. Therefore, future researchers should illustrate the migration paths with sound implementation frameworks.
27. Conclusion and Future Research Second, the varying dimensions of trust and relationship commitment may trigger important research opportunities in the supply chain field. As depicted in the study, trust can be exhibited in both calculative and affective perspectives, as does the commitment.
The combination of multiple perspectives will provide important insights in developing some empirical models involving trust, relationship commitment and integration. Does more complicated relationship exist? It is imperative for researchers to tackle such a big proposition.
28. Conclusion and Future Research Finally, as our review illustrated, most authors only tested the association between integration and operation performance, while in practicality, business executives will primarily concern about the financial performance. It is therefore imperative for supply chain researchers to evaluate the implications of integrative practices on financial performance by both objective and perceptual measures, as well as in causal and longitudinal studies.
31. Appendix: SCI & Performance Performance
32. Performance
33. Performance
34. A Revised Review Framework: Trust, Relationship Commitment and Process Integration
