Investigation on the Effect of Supply Chain Integration on Pakistan Retail Industry's Performance

Abstract

In the current competitive environment firms are not only working on managing their internal affairs but also they are working on identification of other relevant factors out of the organization in order to have appropriate reaction while facing them. Supply Chain Management (SCM) has been primarily concerned with the integration of processes and activities both within and between organizations. The concept of Supply Chain Integration (SCI) is based on documented evidence that suggests that much of the waste throughout businesses is a consequence of fragmented supply chain configurations. However, there is also evidence to suggest that the achievement of higher levels of intra and inter-firm integration leads to better and improved performance. The main objective of this study is to investigate the impact of supply chain integration on performance. This study conceptualizes and develops three dimensions of SCI i.e. supplier integration, internal integration, customer integration and tests the relationship between SCI and performance. Although financial performance has been used as a key factor to measure business performance, however, numerous studies have pinpointed the limitations of financial performance which may not adequately describe firm’s performance. Whereas in operational performance factors like flexibility, speed, quality, costs and competitive advantage are used to measure business performance. In this study operational performance is examined through service quality and competitive advantage, which shows other factors to measure performance of a business. In Pakistan being a developing country, retail industry can help our economy to grow further as it has much potential but the industry is not as mature as it should be. This is due to lack of effective integration between all the participants of supply chain which leads to poor performance. For this purpose quantitative research was conducted in retail firms of Islamabad and Rawalpindi with the sample size of 200. The results so obtained and compiled show that supply chain integration has positive and direct influence over performance.