To Study the Impact of Supplier Integration on Customers Satisfaction

Master's Thesis, 2019

31 Pages

Dr. Mohammad Asim (Author)


Table of contents


1.1 Introduction
1.2 Background
1.3 Problem Statement
1.4 Research Question
1.5 Research Objective
1.6 Contribution

2.1 Literature Review
2.1.1 Supplier Integration
2.1.2 Consumer Performance
2.1.3 Manufacturing Flexibility
2.2 Gaps in Literature

3.1 Methodology:
3.2. Research technique
3.2.1. Time Series
3.3 Research Questions
3.4 Hypothesis Development
3.5 Structured Tools:
3.6 Target Audience:
3.7 Limitations:

Results and Discussions
4.1 Descriptive Analysis
4.2 Summary
4.3 Summary of Methodology:
4.4 Summary of Findings
4.5 Implications of the study
4.6 Limitations of the study
4.7 Future study Prospects



Supply chain processes and their integration is a subject that has recently been studied a lot in terms of figuring out how these processes effect the organization in the long run. The usages of proper supply chain processes have shown a great deal of effect on the organizations production. In this research I have chosen to focus on the how supplier integration in the supply chain processes of an organization can affect the organization performance in terms of consumer’s integration. It has been seen through the study of previous literature from the studies conducted on similar topics that an organizations performance has a huge impact on the firm’s consumer performance. Consumer performance is measured by how many consumers are interested in purchasing from the organization and whether consumers are satisfied with their purchases from the organization. In terms of supplier integration it has been seen from previous researches that by allowing a supplier to take over the production or a apart of the production of the organization the organization is free to now look into other aspects of the firm thus adding more value to the organization by increasing not only its production but also its performance. For this research a quantitative approach has been taken in order to justify the findings in proper quantifiable terms, this methodology allows us to look into how many people believe the stance that we are taking for our research and how many chose to take a different route this can also help us in testing our hypothesis as to whether or not our chosen variables actually work well with one another or they don’t. Looking at the results that were collected through the usage of SPSS it has been proven that our independent variables (supplier integration and consumer performance) do have an impact on one another as well as a significant impact on our dependent variable (firm’s performance). By looking at the results it has been concluded that yes if there is an addition of a supplier to a firm’s performance may it be in terms of production or even raw material production has been shown to have a positive impact on the firms productivity and performance, which in term adds to the consumer performance of the firm by letting the firm focus on their processes while outsourcing some out to a supplier.

KEYWORDS: Supplier Integration, Customer Satisfaction, Manufacturing Flexibility, service capabilities.

1.1 Introduction

The impact of supply chain process and their integrations have been thoroughly studied in literature but the relationship between the integration of supply chain processes and the integration of customers that influence their product influences is not studied thoroughly in literature. It has been seen in the literature that exists that yes supply chain processes and the customer’s integration has a positive effect on the new products performance (Danese, Supplier integration and company performance: A configurational view., 2013). It has also been seen that supplier integration has positive impact on customer performance through the usage of mediating roles in the manufacturing flexibility (Basarir &. S., 2009). Consumer satisfaction has a major impact on the performance of a product in the market in the scenario of supply chain the supplier is the major link between the market and the producers the better the supplier the better a product can reach the market and sell out to the end consumer. Supply chain as a whole is not just a mechanism it is the back bone of any project as it allows you to assembly line the whole project and also to create a link between the supplier and the end consumers. In this era of globalization everything is rushed and everyone wants their needs met in a matter of minutes or by a click of a button so this puts a burden on the suppliers and the product producer and this is turn has to make them work faster in order to compete with the other product producers so for this reason customer integration is being looked into in order to reduce cost of production for the organization/firm (Basarir &. S., 2009). For this reason most companies are looking into their supply chain strategies and in some case firms are outsouring their production and using supplirs to cut down the production planning and pridcuts costs inccur (Ralston C. &., 2015)

1.2 Background

With technological advances consumers are getting really aware of the world around them and this is opening new markets to the eyes of the consumers so the consumers now have the ability to make better and faster purchase decisions if the consumers now have the ability to purchase products from the comfort of their homes why would they go out and purchase products, in case of this problem the product producers now have to either produce and get their products to the markets really fast or they can get their suppliers involved and get their products pushed out when the market seems fit for the product. The integration of a supplier allows the ease to the product producers cause now they don’t have to overlook both the supplying side and the production side having a good supplier cuts the problem of both by half because having a good supplier intells that the producers now have to focus on just the production and not do both production and supplying at the same time. Supplier integration is needed in order to cut down the cost of production for the firm and in most cases there is a lack of supplier integration which costs the firms production because these days planning for production is overlooked and this can cause the production of the company to slow or even in some cases causes the production to slow down giving room to competitors (Ralston C. &., 2015)

1.3 Problem Statement

To study the effects of supplier integration on a firms production and its customer satisfaction, how the phenomena of adding a supplier can help to change the firms production thus adding to the customers satisfaction from the firm.

1.4 Research Question

The research questions selected for this research have been selected on the basis of the research that is going to be conducted in order to cover all the variables discussed both in the research model and the research title. The following are the questions selected.

RQ1 What is the impact of consumer satisfaction on a firm’s production?
RQ2 What is the impact of supplier integration on firm’s production and performance?
RQ3 What is the relationship of supplier’s integration on a firm’s performance on customer satisfaction?

1.5 Research Objective

The research objectives for the research are as follows.

RO1 To examine the impact of firms production on customer satisfaction.
RO2 To ascertain the relationship between suppliers integration on a firms performance.

1.6 Contribution

The idea behind the whole research is to include the supplier in our production in order to cut down the production cost, the outsourcing of the production to a supplier can help the organization to cut down on not only the production cost but also to take off the burden of having to plan production and supplying the product out. By supplier integration we can increase the customer satisfaction because the production would be covered by a supplier the firm can focus on their marketing and sales planning which can help in gathering the consumer’s interest in the product and making it available in the market. This research can help the organizations in understanding the impact that supplier integration can have on a firms production and supply chain procedures does the suppliers integration impact it positively or does it work against it.

2.1 Literature Review

The literature review involves the study of literature that already exist done by research on the particular topic that we are conducting our research on, a literature review helps set up a pathway for where the research is heading as it sets up a premise on the basis of previous research done by research on similar topic and their findings are analyzed and studied in order to set up a border line for our research. The following are the variables set up for the research with the added mediating variables, these mediating variables can help us to set up our research with the help of “helping” variables that do effect the impact of the variables on the dependent variables, these are all the variables independent and mediating that can help the research move further in the right direction.

2.1.1 Supplier Integration

Supplier integration is deemed as a key managerial strategy for increasing buyer’s performance. We need to find a configuration between supplier’s integration and supply chain management of firms (Basarir & Salma, 2009). Supplier integration and fast supply network structure practices markedly have a positive effect on buyer’s performance and their buying decisions (Goh & Eldridge, 2015). In certain conditions both internal and external integration has been seen to have a positive impact on not only the firm’s performance but also the consumer’s performance in regards to the firms produced product (Lau & Yam, 2010). Supply chain integrations has been seen as being positively reactive to the firm’s responsiveness, internal and external integration has a positive response and a positive reaction to the firm’s responsiveness and also the consumer’s performance (Gimenez, 2012). Consumer decisions and performance in regards to a product plays a very vital role in the firms success, the production planning is done in order to gain a market share in the market and overcome the competition and gain a competitive edge in the market (Wiengarten & McIvor, 2016). Supplier integration allows us to outsource work to a supplier that can cut down on our production cost leaving us to settle other issues that need handling, outsourcing production work to suppliers relieves the firm from the duty of having to look into both the production planning g and other plans (Wiengarten & McIvor, 2016). While the beneficial impacts of the supplier integration and consumer integration have been studied and put forward widely but the study of these factors linking to the producing firms innovation is not studied while a company is integrating suppliers they have room to innovate and create more products.

2.1.2 Consumer Performance

Consumer integration has a positive impact on a firm’s production, but in this day and age there is rush between competitors competing to gain a market share and regain as many customers as they can in order to keep competing in this competitive era. A consumers decision to purchase a product plays a very vital role in the company’s production and their sales, a consumers decision to purchase not only helps a form in gaining a market share but it also helps them to settle themselves in to the mindset of a consumer (He, 2014)In order to keep the consumers happy a company needs to be constantly in the eyes of the consumer and for doing so they would have to keep their production and their sales in order otherwise one bad move can result in the company losing the consumers attention to their competitors (Flynn, 2010). How supplier integration can effect a buyer’s decision and their performance is a very important field to be studied as it helps a firm in understanding and deciding whether a firm’s decision to outsource their production is even a good idea or is it a nonprofit one for the firm (Vanpoucke, 2014). The dispersion and recognition innovations in information technology infiltrate over a social system which certainly affects customer gratification and support customer service excellence.Customer service delivery is significant for small and medium enterprises (Zhu, et al., 2013). The excellence of that service will either improve or damage customer devotion. Businesses which demonstrates to be receptive to customer queries, criticisms, or other desires can gain a clear competitive edge. Managing business involves leading, preparation, organizing, monitoring and governing all the actions and people involves to achieve objectives (Buntin, Burke, Hoaglin, & Blumenthal, 2011). Modifications in customer demands, globalization and shifting technology require companies to center their efforts in refining competitiveness to accomplish customer satisfaction (Aliyu, Rosmain, & Takala, 2014). ICT has enabled the virtual workplaces and also support better communications and partnership across virtual teams. Innovative communications tools such as integrated Web, audio and video conferencing allow workers to share information and connect with each other across geographic and cultural limits, using a single interface. Like large businesses, small businesses also need software applications for productivity, process automation, internal and external collaboration (Piotrowicz & Cuthbertson, 2014). Developments in technology have reestablished service delivery in present years, with a remarkable influence both on self-service choices and on service support. Nowadays, customers can select between varieties of technological alternatives to perform services for themselves (Bauer, Thielke, Katon, Unützer, & Areán, 2014). On the same time, companies use technologies at numerous phases in the service delivery procedure and in-service support processes for improving the quality and output of their service offering. These advances are altering the method service firms and clients interact and have unlocked new study issues within services marketing.

Consumer loyalty plays a very huge role for a firms business because it allows the firm to have people who are satisfied with their service and are willing to recommend them to others as a source of service. As a source to gain customer loyalty firms must focus on bettering its customer service departments to better cater to the customers in regards to their queries, feedback and their issues in regards to the products or the services offered by the firm (Ul-Hameed, 2019).

2.1.3 Manufacturing Flexibility

The study of manufacturing flexibility acts as a mediating variable helps to study the supplier integration and consumer performance as it is would help us to study the factors in a new light. Manufacturing flexibility acts as an important factor to the firm’s production as outsourcing the production to a supplier would help cut down costs that can incur for the firm in the long run. These costs can help the firm in keeping up with the working of the firm as it can now invest more in the working of the firm in terms of the planning in the areas of marketing and sales and help recruit more people that can add to the sales force (He, 2014).

Manufacturing flexibility has also been seen as a viable option in terms of production when the production costs of a product outweighs the total cost of the product, the usage of a supplier can help cut down on the cost of the machinery used and the electricity usage for the production of the product and for a fraction of the cost the supplier can help us in producing the product which can in turn be sold under the firms name in the market (Flynn, 2010).

Company production management is the combination of supply chain functions that involves internal and external transportation, management of fleet, materials, orders, designs, inventory control, demand and supply planning, third party management and others. (Galindo, 2016)

It is basically the management of flow of goods, services, energy, information and resources from one place to another. It also deals with the inter connection between information, packaging, inventory, warehousing and others. (Gen, Cheng, & Lin, 2008).

The relationship between resources and logistic service capabilities are worth studying as it allows us to study the relationship between how our resources are supposed to be utilized in a manner that is both productive and easily manageable as well as how supplier integration can help this phenomena, sometimes outsourcing the raw material from a supplier cuts down on the costs and helps to manage production better (Setia, 2013).

Some of the most prominent businesses have invested in resources to analyses information systems. There are different options for businesses to select from including IS, ERP and software applications (Shaoying, 2012). The optimal results of information integration are to improve the processes and overall performance of a firm. Through integration and information sharing, companies have been able to enhance their operational strategic performance. By sharing information such as demand, capacity and inventory information with the major suppliers and customers, companies have been capable to shorten order fulfillment cycles, reduce inventory levels, enhance coordination and demand forecasting (Oliveira & Martins, 2011). Opportunities offered by information technologies is a solution which can facilitate information integration and contribute better processes and logistic systems. Businesses use electronic data interchange and ERP to offer business managers the information they require for decision making. Information integration can also occur with partners using cloud service where software as a service (saas) or platform as a service (pass). From the viewpoint of logistics, information systems help in eliminating uncertainty, inventory reduction and responsiveness to customer requests.

2.2 Gaps in Literature

The study of the gaps in research can help a researcher in forming and implementing strategies that can help the research to flow better and yield positive results for the research. In case of this research the gaps in the research can help us to identify the factors that have not been studied formerly or those who have not yielded a positive result in the past and how these factors can now be implemented to the research with what variables acting against them to create a positive and viable research that would be beneficial for both the research and others who would use it in the future.

Gaps in literature in case of this research lies in the study of both the significant factors, the supplier integration and consumer performance, both individually have been studied but together there exists a gap in the research because most researchers focus on the supplier integration as whole looking into buyers performance as a mediating variable as it basically looks into the supplier integration and how it can positively impact and increase a firms creativity but looking into the consumers performance can also add to the research as it allows us to quantify the success of the firm by adding the supplier integration into the equation, consumer performance can help quantify the research as it would allow us to justify our market share in the current market and set up a numeric value to study how the supplier integration has effected the firms production and sales. The study of both factors combined can help us to better understand and better work with the given research and combined them to form viable results and also to produce a research that can help highlight the problems that can be resolved by working on both factors together and not just looking at them as a mediating factor for one or the other.

Another gap that exists is the fact that research in this particular subject has not been done in the country of origin as most countries have their own workings and their own standings in terms of firms, the study of the subject in the country of origin can help us to identify where there exists problems and how these problems can be resolved and how we can look into ending these issues.

3.1 Methodology:

Methodology is defined as a system of methods that are used to explain or justify a study. Methodology compromises of theoretical and analysis and principles for a particular body of knowledge. In methodology we discuss the different research methods that can be used in order to justify our findings and to further our research, in order for a research to work it should have a sound research design and methodology helps us to map out our research design in order to further the research. In research there are two types of research methodologies

3.2. Research technique

For this study we will be focusing on the quantitative technique as our project is focused on the broader spectrum of research so the gathering of a population that is individually targeted is hard, so for this research we will focus on a small group of audience consisting of business owners and supply chain manager who we will question on the basis of the ideas that we have to put forward and analyze their answers in order to justify our findings.

3.2.1. Time Series

For the research we are going to be focusing on the data gathering technique by taking a group of expert people who have been a part of the supply chain industry for a period of time, who have the knowledge in regards to the supply chain procedures and policies. We will get them to fill out the questionnaire and gather the information and run it on SPSS to gather the results in terms of how the variables are related to one another and their effects on one another, this will help us to determine whether or not we have a sound framework for the research and our variables work well with one another.

The whole research would be conducted over a period of 6 months from the starting to the conclusion in order to include any changes that might have occurred since the time of the focus group to the submission of this research. During these 6 months the research would be properly done by studying the responses of the participants in the focus group the 2 week study is set up in order to study if there is any change in the opinions of the participants.

Timeline of the research is set up as follows.

Data collection Timeline

Abbildung in dieser Leseprobe nicht enthalten

Looking at the above formed timelines we can clearly see that we have divided our research into two different time lines the first one that is concluded over a period of 4 months consists of the gathering and analyzing of the data to form a proper literature review and a sound methodology for the research. The methodology would help us set up a research framework of where we are going to be leading the research now and how we are going to be testing out our theories and in what order are we going to be setting the research forward and driving it towards an end point. This is the theoretical part of the research where we are gathering the data in order to turn it into meaningful information that would help us in furthering the research.


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To Study the Impact of Supplier Integration on Customers Satisfaction
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Dr. Mohammad Asim (Author)Arslan Mehmood (Author), 2019, To Study the Impact of Supplier Integration on Customers Satisfaction, Munich, GRIN Verlag,


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