Process Integration, Demand Uncertainty, and Firm Performance in Supply Chains

Process integration has become increasingly important in supply chains. Several studies have addressed its effect on firms performance. However,many factors such as uncertainty can moderate the effect of process integration on firm s performance. In this study, we empirically examined themoderating effect of demand uncertainty. We developed a series of hypotheses regarding the moderating effect of demand uncertainty on therelationship between process integration and firms operational and financial performance. Examining process integration allows us to have an integrated approach to all parties in the supply chain instead of separating the relationship with suppliers from that with customers. Study sample consists of firms active in automotive parts and steel industries in Iran. In total, 76 firms completed the survey. Hierarchical regression analysis was used to test the hypotheses. Industry type was considered as a control variable. Research findings showed that process integration had a positive effect on operational performance. Furthermore, in the face of high demand uncertainty, process integration improved operational performance

Keywords:

process integration , demand uncertainty , performance