A presentation on research paper, "the impact of supply chain risk on supply chain integration and company performance: a global investigation"

1. Li Zhao, Baofeng Huo, Linyan Sun and Xiande Zhao
Paper presentation by:
Muhammad Khurram Shabbir

2. Risk makes supply chains more complicated and more
time sensitive than ever before, and therefore companies
within a supply chain need to strategically cooperate with
their key suppliers and customers to survive, compete,
and prosper (Bowersox et al.,1999; Frohlich
andWestbrook, 2001; Zhao et al., 2008; Flynn et al.,
2010).

3. Continued….
 Supply chain integration (SCI) is advocated as the key to
creating value in supply chain management (SCM)
(Horvath, 2001).
 The purpose of this study is to empirically explore the
relationships among supply chain risks (SCRs), supply
chain integration (SCI), and company performance in a
global context.

4. In this study, the researchers attempt to answer two
important research questions relating to SCI:
 Are SCRs related to SCI?
 How does SCI influence company performance?
Research questions

5. How this study contributes to the
literature
This study contributes to the literature in three aspects.
 First, this study is one of the first to empirically
investigate the impact of SCRs (SDR and DVR) on SCI.
 Second, this study examines the impacts of three SCI
dimensions (internal, supplier, and customer integration)
on a richer amount of performance measures (schedule
attainment, customer satisfaction, and competitive
performance).

6. Third, this study explores the relationships among SCRs,
SCI, and performance in a global context, using data
collected in high performance manufacturing (HPM)
companies in both developing (e.g. China) and developed
countries (e.g. USA., Australia).
Continued….

7. Theories used in the study
Transaction cost theory
Absorptive capacity theory
Resource based theory
Social network theory

8. Conceptual model
Figure 1 Conceptual model

9. Research methodology
Sampling pool
The data used in this study were a part of the third-round HPM project dataset,
which was conducted in 2005 by a team of researchers in USA., Asia, Australia,
and Europe (Huang et al., 2008). The data for this study were collected from
317 manufacturing plants in ten countries.

10. Company profiles: non-standardized
mean results by country and industry

11. Measurement development
In the study all the measurement developments were met, this includes i.e.
content validity, Unidimensionality, reliabity and consruct validity.

12. Analysis
The structural model was built on a measurement model using the maximum
likelihood estimation (MLE)method (Anderson and Gerbing, 1988; Joreskog and
Sorbom, 1993).
The goodness of fit indices were Chi square =2158.57 with d.f = 1064, RMSEA=
0.057, NNFI = 0.95, CFI = 0:95, and standardized RMR = 0.070,which are
better than the threshold values suggested by Hu et al. (1992). Therefore, our
model is acceptable.

13. Factor analysis of SCI

14. Factor analysis of performance

15. Reliability tests and discriminant
validity

16. Correlation matrix

17. Statistically significant paths
for SCI model

18. Results of hypothesis tests

19. Conclusion
 This study reveals that: supply and demand risks are barriers for firms to
implement SCI.
 SDR has a strong negative impact on supplier, internal, and customer
integration,
 DVR is negatively related to customer integration.
 SDR is more important than DVR in influencing SCI
 Supplier integration is the most critical factor to improve schedule
attainment, though internal and customer integration are also significantly
related to schedule attainment.
 Competitive performance can be improved by both internal and customer
integration,
 As to the improvement of customer satisfaction, customer integration is the
most important factor
 These results provide guidelines for managers to improve their different
types of performance by selectively implementing different types of SCI.

20. Future Research
 Future research should investigate the relationships between other
dimensions of SCRs and SCI.

21. Thank You