Customer-supplier integration forms in the air-conditioning industry

Integration between customers and suppliers is one of the important concepts in supply chain management. Both in theoretical and empirical contributions, it is shown that integrative practices improve supplier relations performance. By analyzing 9 case studies of customer-supplier relationships in the Italian high precision air conditioning industry, this article investigates what suppliers and customers do in order to integrate their operations across the supply chain. It articulates customer-supplier integration (CSI) practices into four areas: three specific business processes – new product development, logistics, and pricing – and the more general customer-supplier knowledge transfer. It also develops four theoretical propositions derived from a framework that identifies four CSI forms contingent on two variables – the value impact of goods purchased from each supplier and the degree of purchasing goods customization. The propositions define how each of the four CSI forms is characterized by a different mix of integration practices in each of the four business processes. The article shows how this framework advances the understanding of integration as the basis of effective supplier relations. It also suggests some guidelines to design and implement effective CSI initiatives.