Examining the Relationship Between Supply Chain Integration, Innovation Speed and Supply Chain Performance Under Demand Uncertainty

Abstract

Under demand uncertainty, supply chain network has to face disruptions in product systems of endogenous factors due to the time needed to adapt to stock production and feedback decisions along the chain of customer demand. This study aims to examine the effects of internal integration and external integration (including supplier integration and customer integration) on innovation speed with the moderation of demand uncertainty. Moreover, this study explores the relationship between supply chain integration, innovation speed and supply chain performance. Our results indicate that internal integration and external integration are positively associated with innovation speed. On the other hand, demand uncertainty moderates the positive relationship between internal integration and innovation speed as well as the relationship between supplier integration and innovation speed. This study provides a more nuanced understanding about the effect of three dimensions of supply chain integration on innovation speed and supply chain performance. More importantly, this study explains the mechanism of using supply chain integration to mitigate the effect of demand uncertainty and complements previous research on innovation.