The Effect of Information Enabled Logistics Integration on Operational Performance of an FMCG Manufacturing Firm in Karachi: The Mediating Role of Supply Chain Risk Management
![](https://jar.bwo-researches.com/public/journals/1/cover_issue_10_en_US.jpg)
Abstract
Researchers and industry professionals agree that well-integrated supply chain partners are essential to high-performing supply chains. Material and information flow are the two main directions in these partnerships. Information integration and logistics integration have been the subject of distinct studies in the past but seldom considered together. This study investigates how Information, technology, and logistics integration affect the operational efficiency of a manufacturing firm in Pakistan with the influence of Supply chain risk management. A quantitative approach has been used to analyze data from over 36 fast-moving consumer goods (FMCG) companies in Karachi demonstrating that logistics integration has a significant impact on operational performance. Risk management enables a firm to tackle uncertainties and increase performance in the ever-changing corporate environment. In addition to bridging the gap between logistics integration and operational performance, supply chain risk management is recognized as a crucial component of every successful supply chain. Information and supply chain integration have indirect effects on operational effectiveness. This research examines how advances in IT have altered supply chain risk management and, ultimately, the outcomes of operations. Managers and business owners can use this study's findings to inform their decision-making. This research identifies the positive impact of IT implementation in logistics integration to improve operational performance and minimize risks. These findings will help future researchers to consider logistics as a separate entity from a supply chain when determining the performance of a firm.
Keywords
Logistics integration, , Information technology, Information sharing, Risk management, Supply Chain Integration
References
- Alam, A., K. Bagchi, P., Kim, B., Mitra, S., & Seabra, F. (2014). The mediating effect of logistics integration on supply chain performance: A multi-country study. The International Journal of Logistics Management, 25(3), 553–580. https://doi.org/10.1108/IJLM-05-2013-0050
- Bode, C., & Wagner, S. M. (2015). Structural drivers of upstream supply chain complexity and the frequency of supply chain disruptions. Journal of Operations Management, 36(1), 215–228. https://doi.org/10.1016/j.jom.2014.12.004
- Cagliano, R., Caniato, F., & Spina, G. (2006). The linkage between supply chain integration and manufacturing improvement programmes. International Journal of Operations & Production Management, 26(3), 282–299. https://doi.org/10.1108/01443570610646201
- Carr, A. S., & Kaynak, H. (2007). Communication methods, information sharing, supplier development, and performance: An empirical study of their relationships. International Journal of Operations & Production Management, 27(4), 346–370. https://doi.org/10.1108/01443570710736958
- Chae, B., Yen, H. R., & Sheu, C. (2005). Information Technology and Supply Chain Collaboration: Moderating Effects of Existing Relationships Between Partners. IEEE Transactions on Engineering Management, 52(4), 440–448. https://doi.org/10.1109/TEM.2005.856570
- Chen, J., Sohal, A. S., & Prajogo, D. I. (2013). Supply chain operational risk mitigation: A collaborative approach. International Journal of Production Research, 51(7), 2186–2199. https://doi.org/10.1080/00207543.2012.727490
- Danese, P., Romano, P., & Formentini, M. (2013). The impact of supply chain integration on responsiveness: The moderating effect of using an international supplier network. Transportation Research Part E: Logistics and Transportation Review, 49(1), 125–140. https://doi.org/10.1016/j.tre.2012.08.002
- Dellana, S., Kros, J. F., Falasca, M., & Rowe, W. J. (2019). Risk management integration and supply chain performance in ISO 9001-certified and non-certified firms. International Journal of Productivity and Performance Management, 69(6), 1205–1225. https://doi.org/10.1108/IJPPM-12-2018-0454
- Devaraj, S., Krajewski, L., & Wei, J. C. (2007). Impact of eBusiness technologies on operational performance: The role of production information integration in the supply chain. Journal of Operations Management, 25(6), 1199–1216. https://doi.org/10.1016/j.jom.2007.01.002
- Disney, S. M., & Towill, D. R. (2003). The effect of vendor managed inventory (VMI) dynamics on the Bullwhip Effect in supply chains. International Journal of Production Economics, 85(2), 199–215. https://doi.org/10.1016/S0925-5273(03)00110-5
- Durach, C. F., Wieland, A., & Machuca, J. A. D. (2015). Antecedents and dimensions of supply chain robustness: A systematic literature review. International Journal of Physical Distribution & Logistics Management, 45(1/2), 118–137. https://doi.org/10.1108/IJPDLM-05-2013-0133
- Fabbe‐Costes, N., & Jahre, M. (2008). Supply chain integration and performance: A review of the evidence. The International Journal of Logistics Management, 19(2), 130–154. https://doi.org/10.1108/09574090810895933
- Fan, H., Li, G., Sun, H., & Cheng, T. C. E. (2017a). An information processing perspective on supply chain risk management: Antecedents, mechanism, and consequences. International Journal of Production Economics, 185, 63–75. https://doi.org/10.1016/j.ijpe.2016.11.015
- Fan, H., Li, G., Sun, H., & Cheng, T. C. E. (2017b). An information processing perspective on supply chain risk management: Antecedents, mechanism, and consequences. International Journal of Production Economics, 185, 63–75. https://doi.org/10.1016/j.ijpe.2016.11.015
- Fawcett, S. E., Osterhaus, P., Magnan, G. M., Brau, J. C., & McCarter, M. W. (2007). Information sharing and supply chain performance: The role of connectivity and willingness. Supply Chain Management: An International Journal, 12(5), 358–368. https://doi.org/10.1108/13598540710776935
- Fornell, C., & Larcker, D. F. (1981). Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics. Journal of Marketing Research, 18(3), 382. https://doi.org/10.2307/3150980
- Frohlich, M. T. (2002). e-Integration in the Supply Chain: Barriers and Performance. Decision Sciences, 33(4), 537–556. https://doi.org/10.1111/j.1540-5915.2002.tb01655.x
- Frohlich, M. T., & Westbrook, R. (2001). Arcs of integration: An international study of supply chain strategies. Journal of Operations Management, 19(2), 185–200. https://doi.org/10.1016/S0272-6963(00)00055-3
- Fugate, B. S., Mentzer, J. T., & Stank, T. P. (2010). LOGISTICS PERFORMANCE: EFFICIENCY, EFFECTIVENESS, AND DIFFERENTIATION. Journal of Business Logistics, 31(1), 43–62. https://doi.org/10.1002/j.2158-1592.2010.tb00127.x
- Geary, S., Disney, S. M., & Towill, D. R. (2006). On bullwhip in supply chains—Historical review, present practice and expected future impact. International Journal of Production Economics, 101(1), 2–18. https://doi.org/10.1016/j.ijpe.2005.05.009
- Ghadge, A., Dani, S., & Kalawsky, R. (2012). Supply chain risk management: Present and future scope. The International Journal of Logistics Management, 23(3), 313–339. https://doi.org/10.1108/09574091211289200
- Gold, A. H., Malhotra, A., & Segars, A. H. (2001). Knowledge Management: An Organizational Capabilities Perspective. Journal of Management Information Systems, 18(1), 185–214. https://doi.org/10.1080/07421222.2001.11045669
- Golgeci, I., & Y. Ponomarov, S. (2013). Does firm innovativeness enable effective responses to supply chain disruptions? An empirical study. Supply Chain Management: An International Journal, 18(6), 604–617. https://doi.org/10.1108/SCM-10-2012-0331
- Gunasekaran, A., & Ngai, E. W. T. (2004). Information systems in supply chain integration and management. European Journal of Operational Research, 159(2), 269–295. https://doi.org/10.1016/j.ejor.2003.08.016
- Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a Silver Bullet. Journal of Marketing Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/MTP1069-6679190202
- Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
- Holweg, M., Disney, S., Holmström, J., & Småros, J. (2005). Supply Chain Collaboration: European Management Journal, 23(2), 170–181. https://doi.org/10.1016/j.emj.2005.02.008
- Hu, L., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55. https://doi.org/10.1080/10705519909540118
- Huang, S. H., Uppal, M., & Shi, J. (2002). A product driven approach to manufacturing supply chain selection. Supply Chain Management: An International Journal, 7(4), 189–199. https://doi.org/10.1108/13598540210438935
- Jüttner, U. (2005). Supply chain risk management: Understanding the business requirements from a practitioner perspective. The International Journal of Logistics Management, 16(1), 120–141. https://doi.org/10.1108/09574090510617385
- Kache, F., & Seuring, S. (2014). Linking collaboration and integration to risk and performance in supply chains via a review of literature reviews. Supply Chain Management: An International Journal, 19(5/6), 664–682. https://doi.org/10.1108/SCM-12-2013-0478
- Kauppi, K., Longoni, A., Caniato, F., & Kuula, M. (2016). Managing country disruption risks and improving operational performance: Risk management along integrated supply chains. International Journal of Production Economics, 182, 484–495. https://doi.org/10.1016/j.ijpe.2016.10.006
- La Londe, B. J., & Masters, J. M. (1994). Emerging Logistics Strategies: Blueprints for the Next Century. International Journal of Physical Distribution & Logistics Management, 24(7), 35–47. https://doi.org/10.1108/09600039410070975
- Liu, J., Zhang, S., Wang, Y., & Cao, J. (2002). A case study of an inter-enterprise workflow-supported supply chain management system. Operational Research, 2(1), 17–34. https://doi.org/10.1007/BF02940119
- Lohmöller, J.-B. (1989). Latent Variable Path Modeling with Partial Least Squares. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-52512-4
- Manuj, I., Esper, T. L., & Stank, T. P. (2014). Supply Chain Risk Management Approaches Under Different Conditions of Risk. Journal of Business Logistics, 35(3), 241–258. https://doi.org/10.1111/jbl.12051
- Mason, C. H., & Perreault, W. D. (1991). Collinearity, Power, and Interpretation of Multiple Regression Analysis. Journal of Marketing Research, 28(3), 268. https://doi.org/10.2307/3172863
- Matopoulos, A., Vlachopoulou, M., Manthou, V., & Manos, B. (2007). A conceptual framework for supply chain collaboration: Empirical evidence from the agri‐food industry. Supply Chain Management: An International Journal, 12(3), 177–186. https://doi.org/10.1108/13598540710742491
- Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). DEFINING SUPPLY CHAIN MANAGEMENT. Journal of Business Logistics, 22(2), 1–25. https://doi.org/10.1002/j.2158-1592.2001.tb00001.x
- Munir, M., Jajja, M. S. S., Chatha, K. A., & Farooq, S. (2020). Supply chain risk management and operational performance: The enabling role of supply chain integration. International Journal of Production Economics, 227, 107667. https://doi.org/10.1016/j.ijpe.2020.107667
- Narasimhan, R., & Kim, S. W. (2001). INFORMATION SYSTEM UTILIZATION STRATEGY FOR SUPPLY CHAIN INTEGRATION. Journal of Business Logistics, 22(2), 51–75. https://doi.org/10.1002/j.2158-1592.2001.tb00003.x
- Narasimhan, R., & Nair, A. (2005). The antecedent role of quality, information sharing and supply chain proximity on strategic alliance formation and performance. International Journal of Production Economics, 96(3), 301–313. https://doi.org/10.1016/j.ijpe.2003.06.004
- Nooteboom, B. (1992). Information technology, transaction costs and the decision to “make or buy.” Technology Analysis & Strategic Management, 4(4), 339–350. https://doi.org/10.1080/09537329208524105
- Pagell, M. (2004). Understanding the factors that enable and inhibit the integration of operations, purchasing and logistics. Journal of Operations Management, 22(5), 459–487. https://doi.org/10.1016/j.jom.2004.05.008
- Prajogo, D., & Olhager, J. (2012). Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration. International Journal of Production Economics, 135(1), 514–522. https://doi.org/10.1016/j.ijpe.2011.09.001
- Ritchie, B., & Brindley, C. (2007). Supply chain risk management and performance: A guiding framework for future development. International Journal of Operations & Production Management, 27(3), 303–322. https://doi.org/10.1108/01443570710725563
- Scholten, K., Sharkey Scott, P., & Fynes, B. (2014). Mitigation processes – antecedents for building supply chain resilience. Supply Chain Management: An International Journal, 19(2), 211–228. https://doi.org/10.1108/SCM-06-2013-0191
- Schonberger, R. J. (2007). Japanese production management: An evolution-With mixed success. Journal of Operations Management, 25(2), 403–419. https://doi.org/10.1016/j.jom.2006.04.003
- Seidmann, A., & Sundararajan, A. (1997). The effects of task and information asymmetry on business process redesign. International Journal of Production Economics, 50(2–3), 117–128. https://doi.org/10.1016/S0925-5273(97)00037-6
- Sezen, B. (2008). Relative effects of design, integration and information sharing on supply chain performance. Supply Chain Management: An International Journal, 13(3), 233–240. https://doi.org/10.1108/13598540810871271
- Soliman, F., & Youssef, M. (2001). The impact of some recent developments in e‐business on the management of next generation manufacturing. International Journal of Operations & Production Management, 21(5/6), 538–564. https://doi.org/10.1108/01443570110390327
- Stock, G. N., Greis, N. P., & Kasarda, J. D. (2000). Enterprise logistics and supply chain structure: The role of fit. Journal of Operations Management, 18(5), 531–547. https://doi.org/10.1016/S0272-6963(00)00035-8
- Thun, J.-H., & Hoenig, D. (2011). An empirical analysis of supply chain risk management in the German automotive industry. International Journal of Production Economics, 131(1), 242–249. https://doi.org/10.1016/j.ijpe.2009.10.010
- Wieland, A., & Marcus Wallenburg, C. (2012). Dealing with supply chain risks: Linking risk management practices and strategies to performance. International Journal of Physical Distribution & Logistics Management, 42(10), 887–905. https://doi.org/10.1108/09600031211281411
- Yu, Z., Yan, H., & Edwin Cheng, T. C. (2001). Benefits of information sharing with supply chain partnerships. Industrial Management & Data Systems, 101(3), 114–121. https://doi.org/10.1108/02635570110386625
- Zhou, H., & Benton, W. C. (2007). Supply chain practice and information sharing. Journal of Operations Management, 25(6), 1348–1365. https://doi.org/10.1016/j.jom.2007.01.009