Structural Modeling Based on Supply Chain Integration in Relation to Supply Chain Risk, Product Quality and Innovation Capability

Subject Areas : Industrial Management

Abolfazl Kazzazi ¹ , Amir Mohammad khani ²

1 - Professor, Department of Industrial Management,, Allameh Tabataba'i University, Tehran, Iran.
2 - Master's degree, Department of Industrial Management, Quality and Productivity, Allameh Tabataba'i University, Tehran, Iran

Received: 2022-08-23 Accepted : 2022-10-31 Published : 2024-03-20

Keywords: Uncertainty, product quality, Supply chain risk, Supply Chain Integrity, Product Innovation Capability,

Abstract :

This study aims to investigate the unique features of the food supply chain, examining the impact of food supply chain integration, consisting of internal integration, supplier and customer, the quality of food products and product innovation capability. Managers need to understand the importance of supplier and customer integration when responding to supply chain risk and company uncertainty. The data were collected from 168 managers active in the food industry in Tehran province. The partial least squares tool (SmartPLS 3.0) was used to analyze the data using Structural Equation Modeling (SEM) technique. The results show that there is a strong relationship between uncertainty and supply chain integration including customer, supplier and internal integration. The findings indicate that customer integration and supplier integration are critical factors in improving product quality in the food supply chain. The results can be related to the prominent role of customer relations and contact in the development of innovation capabilities in manufactured products, which has also been approved by some previous studies. Additionally, analyzing the various dimensions of supply chain integration separately revealed that internal integration is a capability factor for external integration. This study can help businesses in the food industry understand the value-creating roles of food supply chain integration and provide valuable guidance for them to decide how to meet the various challenges and manage food supply chain integration in order to improve product quality and product innovation capability.

 

Key Words: supply chain integrity, supply chain risk, product quality, product innovation capability, uncertainty

1. Introduction

In the dynamic landscape of the global food industry, the interplay between supply chain integration, risk management, product quality assurance, and innovation capability has become increasingly crucial. Tehran Province, as a significant hub in the food sector, stands at the forefront of these challenges and opportunities. This study delves into the intricate web of structural modeling, aiming to dissect the relationships among supply chain integration, supply chain risk, product quality, and innovation capability within the context of Tehran Province's food industry. By unraveling these interconnected factors, the research endeavors to provide valuable insights that can contribute to the resilience and competitiveness of the local food supply chain. As the industry grapples with complexities, understanding and optimizing these structural dynamics can pave the way for strategic advancements, fostering a robust and adaptable food ecosystem in Tehran Province.

2. Literature Review

A comprehensive literature review establishes the foundational framework for this study. Existing research highlights the significance of supply chain integration in enhancing operational efficiency and overall performance. Moreover, the literature underscores the critical role of product quality and innovation in ensuring sustained competitiveness. However, gaps exist in understanding how these elements interact within the specific context of Tehran's food industry,warranting an in-depth investigation.

3. Methodology

The purpose of this research is to investigate the relationships among supply chain integrity, uncertainty, supply chain risk, product quality, and innovation capability. Considering that our study focused on the effects of management linkages in SCM, respondents were required to be members of management teams and have specific knowledge of SCM. The sample size for the present research is based on the sample size calculator for structural equations in the SAMPLE POWER software. This software, with the power to write different scenarios for the sample size of the research, helps the researcher choose the best scenario for the sample size of the research test. In this method, the effect size for the research model test is 0.19, the second type error, or the power of the test, is equal to 0.80%, and finally, the first type error rate is 0.05 in order to achieve a confidence interval of 99%. The minimum sample size was determined to be 88 people. To fulfill the purpose of the present study, a questionnaire was distributed among 215 operational, middle, and senior managers as the representatives of the companies active in the field of food industry in Tehran province in a simple random manner. The number of returned completed questionnaires was covered by the Structural Equation Modeling (SEM) technique based on the Partial Least Squares (PLS) method. Considering the sample size and model characteristics, a PLS-SEM approach was considered suitable for this analysis (Hensler et al., 2016). Statistical data analysis was performed using Smart PLS 3 software (Ringle et al., 2015), and the bootstrapping technique was used to check the significance levels of the predicted relationships. In the first phase, the model was used to extract the first-order structures, and in the second phase, the structural model including the second-order structure was estimated (Hair et al., 2018).

4. Results

The preliminary results indicate a positive correlation between higher levels of customer integration and improved product quality. However, this integration creates new challenges as evidenced by increased supply chain risks. The statistical analyzes show no effect of supply chain risk on internal integrity. Interestingly, innovation emerges as a potential mitigating factor for supply chain risks, emphasizing its multifaceted role in shaping industry dynamics.

5. Discussion

The findings prompt a nuanced discussion on the implications for Tehran's food industry stakeholders. Strategies focusing on supply chain integration must be accompanied by robust risk management measures to ensure sustained product quality and innovation capability. The interplay between these factors introduces complexities that demand a holistic approach to strategic decision-making. Additionally, the study explores potential pathways for leveraging innovation to mitigate supply chain risks, presenting an avenue for strategic interventions.

In conclusion, this research contributes a deeper understanding of the structural relationships within Tehran Province's food supply chain. The positive correlation among integration, product quality, and innovation underscores the potential benefits of strategic decision-making. However, the study highlights the need for a balanced approach, recognizing the accompanying challenges of increased supply chain risks. As Tehran's food industry aims for resilience and growth, stakeholders can leverage these insights to formulate informed strategies that optimize the intricate interplay of integration, risk, quality, and innovation.

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