A Virtual Integration Theory of Improved Supply-Chain Performance

Organizing and maintaining a competent and flexible supply chain is a major challenge to manufacturers in today's increasingly competitive and uncertain environments. Virtual integration represents the substitution of ownership with partnership by integrating a set of suppliers through information technology (IT) for tighter supply-chain collaboration. From the systems and control perspectives, this study develops a theory of virtual integration with an empirical model to examine the role that virtual integration plays in facilitating manufacturers to achieve greater manufacturing flexibility and comparative cost advantage. Based on a survey of Taiwanese manufacturing firms, our results show that environmental uncertainty tends to motivate manufacturers to increase their manufacturing flexibility, with both virtual integration and supplier responsiveness playing a vital enabling role. The results demonstrate the importance of supplier responsiveness for manufacturers to gain manufacturing flexibility and comparative cost advantage in supply-chain operations. Environmental uncertainty, thus, might first appear as a threat to a manufacturer, but with the help of IT and more responsive suppliers, such a threat could be transformed into a competitive edge, as reflected in the manufacturer's higher levels of manufacturing flexibility and comparative cost advantage.

• 저널Journal of Management Information Systems · 23(2) · 41–64
• 토픽Quality and Supply Management · Management Information Systems
• DOI10.2753/mis0742-1222230203
• 저자Eric T.G. Wang, Jeffrey C. F. Tai, Hsiao-Lan Wei