Logistics-production, logistics-marketing and external integration: Their impact on performance

Headnote

Abstract

Purpose - This paper examines the logistics-production and logistics-marketing interfaces and their relation with the external integration. The study also investigates the causal impact of these internal and external relationships on the company's logistical performance.

Design/methodology/approach - An empirical study was conducted in the Spanish FMCG sector and the theoretical model was subjected to analysis using SEM.

Findings - The generic results derived from this study are: Internal and external integration influence each other. Integration in the logistics-marketing interface does not lead to reductions in costs, stock-outs and lead-times, while the integration achieved in the logistics-production interface does improve these performance measures, if there is no external integration. The external collaboration among supply chain members does always contribute to improving firms' logistical performance.

Research/limitations/implications - The study has some limitations: other important members of the grocery supply chain (such as retailers, TPL, etc.) have not been considered and the effect of inter-firm co-ordination has only been analyzed from the perspective of the provider (as most studies do). Further research on the logistics-marketing impact on performance should be carried out and other important supply chain members should be considered.

Practical implications - The study contributes to the existing literature by showing that the impact on performance of internal integration depends on the functional areas that are being integrated and the level of external integration.

Originality/value - It is believed that this paper will be insightful to researchers and managers in the SCM field. For researchers, this paper has provided new lines of research. And, for managers, this paper has shown that there is a positive relationship between firms' logistical performance and SCM.

Keywords Distribution management, Organizational structures, Supply chain management, Fast moving consumer goods

Paper type Research paper

Introduction

Supply Chain Management (SCM) is "an integrative philosophy to manage the total flow of a channel from the earliest supplier of raw materials to the ultimate customer, and beyond, including the disposal process" (Cooper et al., 1997). SCM involves integration across organisations (internal or interorganizational integration) and throughout the supply chain (external or interorganizational integration).

Interest in supply chain management (SCM) has steadily increased since the 1990s, when firms saw the benefits that could be derived from its implementation. In the literature, we can find...