Assessment of the mediating effects of external integration on manufactury firms operational performance

Abstract

Purpose: The purpose of this study was to assess the direct effect of supply chain integration on operational performance and the mediating effects of external integration on the relationship between internal integration and operational performance among manufacturing firms.

Design/methodology/approach: Quantitative survey research design was adopted. A total of thirty (30) manufacturing firms were sampled using cluster sampling. The data was collected using questionnaires from 317 employees in the procurement, account and administration units of the 30 manufacturing firms. Structural Equation Modeling was used to analyze the direct and mediation relationships.

Findings:  The results showed that the relationship between internal integration and operational performance was significantly mediated by external integration. It was established that operational performance could only be achieved when manufacturing firms’ managers pay critical attention to internal and external integration. A Significant positive relationship also exists between supplier integration and operational performance as well as customer integration and operational performance.

Originality/value: The unique contribution of the current study is the assessment of the mediating effect of external integration constructs (customer integration and supplier integration) as the mediating variable on internal integration and operational performance.