The moderating role of supply network structure on the customer integration-efficiency relationship

Purpose: To study whether a fast supply network structure interacts with Customer Integration (CI) by positively moderating the relationship between CI and efficiency performance. Design/methodology/approach: Two hypotheses are developed, incorporating dimensions of Customer Integration, Fast Supply Network Structure and Efficiency performance. The hypotheses are tested through a hierarchical regression analysis using data from a sample of 200 manufacturing plants. Findings: CI alone is not enough to guarantee cost reductions because a fast supply network structure acts as a moderator of the CI-efficiency relationship. The role of this moderator is twofold. On the one hand, it interacts with CI, strengthening the positive impact of CI on efficiency through a positive complementary effect. On the other hand, if the supply network structure is not intended to support fast lead times, the impact of CI on efficiency can be hindered and, in extreme cases, CI can even make efficiency worse. Practical implications: Efficiency maximization requires levering simultaneously on CI and the supply network structure, rather than investing and acting on CI only. Managers should carefully weigh up the supply network structural context before embracing a CI program, because adopting CI in a wrong context could amplify a series of problems (e.g. nervousness of plans) and offset CI benefits in terms of efficiency. Originality/value: This study provides an original contribution to the literature on the relationship between CI and efficiency by adopting a contingency perspective, namely assuming that the relationship between supply chain practices and performance is contingent upon how supply networks have been designed. Accordingly, this research questions the assumption that CI always improves efficiency, by analysing the complementary effect between CI and a fast supply network structure. This provides a number of original implications for the interpretation of the relationship between CI, supply network structure and efficiency.