Logistics and supply chain process integration as a source of competitive advantage

Abstract

Purpose – The purpose of this paper is to investigate the effectiveness of logistics and supply chain integration on firm competitiveness in manufacturing firms. Design/methodology/approach – Utilizing the resource-based view of competitive advantage along with the transaction cost economics theory, the authors address the critical role of logistics and supply chain strategy as the driver of logistics and supply chain integration and firm competitiveness. Structural equation modeling is used to determine the effect of two sets of logistics and supply chain integration practices (logistics/supply chain information integration and logistics/supply chain process integration) along with logistics outsourcing decision practices (logistics investment decisions and private warehousing decisions) on firm competitiveness. Findings – The results indicate that logistics/supply chain strategy is the main driver of logistics and supply chain integration and logistics decisions. Furthermore, the findings suggest that logistics/supply chain process integration is the most significant predictor of firm's competitive position. Research limitations/implications – Further examination and testing of the proposed model across multiple contexts is necessary for validity of the findings. Originality/value – This is one of the first studies that provide an empirical analysis on the importance of different sources of integration (information and process) in logistics and supply chain and their impact on firm competitiveness.