Business Process Management Journal

Supply logistics integration in the Saudi food industry

Ahmed Attia,
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Management Journal, Vol. 24 Issue: 4, pp.1007-1022, https://doi.org/10.1108/BPMJ-01-2017-0016
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Supply
Supply logistics integration in the logistics
Saudi food industry integration
Ahmed Attia
Business Management Department, Faculty of Commerce,
Damanhour University, Damanhour, Egypt and
1007
Operations and Information Management Department,
Received 26 January 2017
Effat College of Business, Effat University, Jeddah, Saudi Arabia Revised 5 June 2017
25 September 2017
16 January 2018
Abstract Accepted 27 January 2018
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Purpose – The purpose of this paper is to examine the effect of supply logistics integration (SLI) on inbound
supply performance (ISP) and competitive performance (CP) in firms, in addition to examining the effect of
ISP on CP.
Design/methodology/approach – To demonstrate the effect of SLI on ISP and CP, different techniques
such as factor analysis, correlation analysis, and structural equation modeling were used to verify the validity
of the proposed conceptual model and to test the suggested hypotheses. This was accomplished by using data
collected from 192 companies in the Saudi food industry (representing a response rate of 75.6 percent).
Findings – According to the study’s findings, ISP is positively affected by SLI. Moreover, CP is directly
affected by SLI and ISP.
Research limitations/implications – Due to the specific nature of the sample, the findings of the current
research are applicable only to the food industry.
Originality/value – The current research introduced a conceptual model, which has been tested and verified
in the Saudi food industry. The findings recommend that both SLI as well as ISP will contribute to improving
the CP. In addition, SLI will improve the ISP.
Keywords Saudi food industry, Competitive performance, Inbound supply performance,
Supply logistics integration
Paper type Research paper

1. Introduction
International competition has increased dramatically in the previous two decades, forcing
companies to improve their internal processes and integrate their suppliers as part of their
supply chains. The role of suppliers is potentially vital in companies achieving their
operations’ priorities and helping them to maintain a competitive advantage.
A huge number of multinational companies use global strategies to secure the smooth flow
of raw materials, components, and labor from different and low-cost countries (Ballou, 2004;
Bowersox, 2010), aiming to gain competitive advantages and secure supply sources through
considered selection of supplies and negotiating lower piece prices (Waters, 2011). Supply
chains are no longer simply used to ensure that the right product is delivered to the right
place; they have now become a principal strategic means to improve company performance, as
shown in Table I (Hult et al., 2004). The effect of supply chains – as a major tool for managing
the internal and external operations of the company – on company performance has been
tested by several researchers, but still needs further exploration (Attia, 2015).
A large number of studies have focused only on how performance may be affected by the
external processes of the supply chain, ignoring the effect of the supply chain’s internal
processes (Chen and Paulraj, 2004). The resource-based theory (RBT) supports the idea of
integrating internal and external supply chain resources to improve performance (Dyer and
Singh, 1998; Lavie, 2006; Arya and Lin, 2007). The current research focuses on testing the
Business Process Management
improvement of supply chain performance through internal and external integration of the Journal
supply chain activities. This study contributes to the research stream on logistics integration by Vol. 24 No. 4, 2018
pp. 1007-1022
investigating the relationships between logistics integration and performance (inbound supply © Emerald Publishing Limited
1463-7154
performance (ISP) and competitive performance (CP)). In addition, the lack of studies about the DOI 10.1108/BPMJ-01-2017-0016
 BPMJ effect of logistics integration in the gulf region increases the level of importance of the current
24,4 study. This paper seeks to advance previous studies by integrating inbound, internal, and
outbound activities as a set of value chain activities in creating maximum values for customers.

2. Theory and hypothesis development

In this part, the relevant literature has been reviewed to establish the relationships between
1008 supply logistics integration (SLI), ISP, and CP, in addition to deriving hypotheses
concerning their relationships.

2.1 Supply chain theory

Tables I and II summarize how different theoretical management approaches help to
demonstrate the differences between traditional supply chain management and the best
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value supply chain.

The common belief among the researchers is that SLI has both strategic and operational
importance, and helps in improving the firm’s performance (Pagell, 2004; Fabbe-Costes and
Jahre, 2008; Vaart and Donk, 2008; Yeung et al., 2009). Many studies have identified a
positive impact of the integration across the supply chain on the firm performance
(Vaart and Donk, 2008; Flynn et al., 2010) whilst others have identified the positive impact
of integration on supply chain performance not the firm performance (Frohlich and
Westbrook, 2001; Chen et al., 2007; Flynn et al., 2010).
The main benefits of the supply chain integration are cost reduction, and added value for
all the supply chain members (Lee, 2000). According to Yeung et al. 2009, the main goal of
supply chain integration is to merge all partners’ resources and perspectives into the firm’s
value propositions, which will help all supply chain members in improving their
performance. According to the resource-based view, SLI is not easy to duplicate as it
involves special investments in the relationship and standardized procedures between the
supply chain members (Chen et al., 2009; Koufteros et al., 2010).
On the other hand, several studies doubted the positive effect of the SLI on performance
(Cousins and Menguc, 2006; Flynn et al., 2010; Danese and Romano, 2011). According to
Flynn et al. (2010), the external integration with the suppliers did not help in improving the
operational and business performance, also Bask and Juga (2001) support the idea of the
positive effect of the limited integration compared to the intensive integration in some areas.
Danese and Romano (2011) studied the impact of customer integration and supplier

Issue Best value supply chain Traditional supply chain

View of supply The chains are viewed as a strategic Supply chain is only a supporting activity
chain management weapon for the overall strategy, focused on moving
the products
Agility Strong proactive and responsiveness of the Slight ability to react to environmental
supply chain to environmental changes changes
Adaptability Maintains a limited combination of Predominantly limited to single supply
multiple supply chains to ensure effective chains or a large number of chains
and efficient distribution
Alignment The interests of chain members are Supply chain members are forced to choose
synchronized (or interests are their own interests when they conflict with
synergistically developed) the chain’s interests
Table I. Competitive Maximizes the value by achieving the four Concentrates on achieving one competitive
Best value supply priorities competitive priorities: speed, quality, cost, priority only
chain vs traditional and flexibility
supply chain Source: Adapted from Ketchen and Hult (2007)
 Theoretical
Supply
approach Best value supply chain Traditional supply chain logistics
integration
Transaction cost “Make or buy” decisions rely on the total costs, “Make or buy” decisions rely only on
economics in addition to the trivial role of short-term cost transaction costs
in the context of trusting relationships
Agency theory To minimize the opportunism of the supply Lack of trust because of opportunism,
chain members and to align their interests, with the main focus on short-term costs 1009
reward structures and cultural
competitiveness advantages are used
Resource Chain members are aware of the importance of Each member concentrates on making the
dependence mutual dependence for creating toleration and others dependent on them, rather than the
theory trust opposite
Institutional The industry’s best practices are used as The industry’s best practices are heavily
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theory guidelines for the supply chain management
activities
Game theory Self-benefiting behavior is kept at a minimum
level, because of mutual dependence and trust
between members
Network theory Supply chain performance relies on creating a
mix of strong and weak ties, which helps to
satisfy the needs of the supply chain
Social capital To improve performance and create a shared
theory sense of making, a set of shared goals, values,
and experiences has been used
Strategic choice All the strategic decisions target the supply
chain and there is openness to new strategies
from outside the firm
Resource-based The main assumption is the existence of
view/knowledge- unique resources within the supply chains,
based view which can be used as matchless competitive
weapons
Source: Adapted from Ketchen and Hult (2007)
used to manage the supply chain
management activities
Some members concentrate on achieving
their own benefits on account of the chain
Creating a mix of strong and weak ties
occurs according to needs, not influenced
by strategic direction
The sense-making and performance are
controlled by the firm-level goals, values,
and experiences
All the strategic decisions target the firm,
which hinders the company from using
different generic strategies Table II.
Different management
The main assumption is the existence of
theory approaches to
unique resources within the firm, and the distinguishing best
supply chains are used as supporting value supply chains
tools for using these resources and traditional supply
chain management

integration on efficiency, the results of the study did not support the positive effect of the
customer integration on efficiency. However, the supplier integration plays a role of
moderator between customer integration and efficiency.
According to Das et al. (2006), the integration with the supplier is very costly and does
not necessarily improve performance. Also, Cousins and Menguc (2006) raised the issue of
high cost for the integration and integration sometimes will not help in improving the
supplier performance. Power (2005) pointed out to the disagreement in previous studies
about the expected benefits of integration. Hence, the effect of SLI on performance
represents a gap in extant literature. The current study is a step ahead to fill such a gap.
Table III shows a summary of previous studies of supply chain integration.

2.2 SLI and CP

SLI could be considered as the extent to which there is a seamless and close coordination
between the inbound inter-organizational processes for the smooth flow of information and
materials. The RBT shows that there are differences regarding firm performance according
to the degree of logistics integration (Barney, 1991; Peteraf, 1993; Acedo et al., 2006).
Creating inimitable integration for all logistics processes requires coordinating the activities
and a high flow of information between suppliers and buyers, which will lead to gaining
additional competitive advantages (Barratt and Oke, 2007; Prajogo et al., 2016).
 BPMJ Level of Supply Underpinning
24,4 Author Chain Integration Theory Research Approach Key Findings

Frohlich and Supplier integration None Survey of The higher the integration with
Westbrook Customer manufacturing both supplier and customer, the
(2001) integration companies higher the performance
Rosenzweig Supply chain Information Survey of several Supply chain integration
1010 et al. (2003) integration (in processing manufacturing intensity leads directly to
general) Knowledge- sectors improved business performance
based view
Transaction cost
Pagell (2004) Internal integration None Multiple-case study Internal integration is a complex
of various phenomenon driven by a number
industries of factors including the internal
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structure, culture, reward systems

and the amount of formal and
informal communication across
the functions
Gimenez and Logistics None Survey of FMCG Dyadic integration of logistics
Ventura production, manufacturing marketing did not improve
(2005) Logistics marketing companies operational performance.
External customer However, performance between
logistics and production was
improved in the presence of
customer integration
Cousins and Supplier integration Socialization Survey of various Supply chain integration
Menguc theory manufacturing and improved supplier’s
(2006) service companies communication. However, it did
not support supplier’s
performance
Das et al. Supplier integration Resource-based Survey of Supplier integration does not
(2006) view, manufacturing necessarily improve performance
Transaction cost companies in
Institutional various sectors
isomorphism
Rai et al. Supply chain None Survey Information technology
(2006) integration (in capabilities improve supply
general) chain integration and supports
information integration and
physical integration
Deveraj et al. Supplier integration Relational view Survey of various Customer integration did not
(2007) Customer Resource-based industries improve operational performance
integration view but supplier integration
improved performance
Flynn et al. Internal integration Configuration Survey of several Customer integration and
(2010) Supplier integration theory industries internal integration supported
Customer Contingency performance. However, supplier
integration theory integration did not support
performance
Koufteros Internal integration None Survey of Internal integration is important
et al. (2010) Supplier integration automotive for both supplier and customer
Customer industry producers integration. Customer
integration of parts and integration influences market
components success. Supplier integration
Table III. influences operational
A summary of performance
previous studies
of supply
chain integration (continued )
 Level of Supply Underpinning
Supply
Author Chain Integration Theory Research Approach Key Findings logistics
integration
Wong et al. Internal integration Information Survey of Under the environmental
(2011) Supplier integration processing manufacturers in uncertainty, the relationships
Customer Contingency the automotive between supplier/customer
integration theory industry integration, and delivery
and flexibility performance, 1011
and those between
internal integration, and
product quality and production
cost are high
Zhao et al. Internal integration None Survey of several Internal integration impacts
(2011) Supplier integration manufacturing both supplier and customer
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Customer companies integration. Commitment to

integration customers/suppliers is
important for achieving
customer integration/supplier
integration
Basnet and Internal integration None Survey of large Line managers are able to
Wisner manufacturing improve functional integration
(2012) firms by fostering a positive
attitude toward other
departments. Integration is
enhanced by making
departments jointly
accountable for achieving
company goals
Gimenez Customer None Survey of Supply chain integration
et al. (2012) integration manufacturers in increases performance only if
several industries supply complexity is high
Schoenherr Internal integration Relational view Survey of various Internal integration supported
and Swink Supplier integration Resource-based industries external integration. Both
(2012) Customer view supplier and customer
integration Information integration are important for
processing improved supply chain
integration
Zhang and Supplier integration Resource Survey of Both supplier and customer
Huo (2013) Customer dependence manufacturers in integration improve financial
integration Resource-based several industries performance. Trust and
view dependence combined together
Transaction cost influence supply chain
integration
Baofeng Process integration Resource-based Survey of Internal integration is the most
et al. (2014) Product integration view manufacturers in important type of SCI and leads
Internal integration Transaction cost China to both operational and financial
economics performance, whereas process
and product integration can
only enhance operational and
financial performance,
respectively
Zhao et al. Internal integration Resource-based Survey of All the three types of integration
(2015) Supplier integration view manufacturers in contributed to the financial
Customer Transaction cost China performance
integration economics

(continued ) Table III.

 BPMJ Level of Supply Underpinning
24,4 Author Chain Integration Theory Research Approach Key Findings

Kang and Internal integration Resource-based Survey of Both internal and supplier
Moon (2016) Supplier integration view manufacturers in integration improve supply
several chain performance
Kumar et al. Internal integration None Survey of The four types of integration
1012 (2017) Supplier integration manufacturers in support the supply chain
Customer UK food industry performance
integration
Information
Table III. integration
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The RBT helps to identify the link between logistics integration and performance, drawing
attention to the importance of owning valuable, rare, not substitutable, and difficult to
duplicate resources in gaining competitive advantages in performance (Barney, 1991;
Peteraf, 1993; Acedo et al., 2006). Moreover, the relational view of RBT argues that in
addition to being generated by ownership of valuable, rare, not substitutable, and difficult to
imitate resources, competitive advantages also result from integrating the company’s
resources with the supplier’s resources (Dyer and Singh, 1998; Arya and Lin, 2007).
Several studies have been conducted which support the positive effect of logistics
integration on performance. In addition, the improvement in CP favors not only the buyer
but also the supplier (Paulraj and Chen, 2007; Vaart and Donk, 2008). SLI helps companies to
attain a constant production process, through a seamless connection, and without
boundaries, in activities between the buyer and the supplier (Stock et al., 1998, 2000;
Frohlich and Westbrook, 2001).
Improving product quality, reducing response time and cost, and improving operational
efficiencies are the most favorable benefits for any company; SLI has been reported by
several studies as the main element in achieving such benefits not only for the buyer but
also for the supplier (De Toni and Nassimbeni, 1999; Paulraj and Chen, 2007; Vaart and
Donk, 2008). Accordingly, the first hypothesis proposed is as follows:
H1. SLI has a statistically significant positive relationship with CP.

2.3 Logistics integration and ISP

According to Porter (1985), there are two main groups of activities for any company.
The first group is the primary activities, which deal directly with creating and delivering the
product or the service. The primary activities are comprised of outbound logistics, inbound
logistics, operations, marketing and sales, and service. The second group is the support
activities, which are linked directly to the primary activities by helping to improve their
effectiveness and efficiency. The support activities are comprised of research and
development, procurement, infrastructure, and human resource management.
Inbound logistics refer to the extent to which the internal processes are working
smoothly and in close coordination with one another; in other words, it refer to the SLI.
The value chain perspective highlights the role of each external and internal activities in
adding value to the company’s products or services. Logistics integration ensures that
having the required materials of the right quality and quantity at the right time will lead to
improvements in both the ISP and the outbound CP (Porter, 1985; Huemer, 2006).
Logistics integration requires creating long-term relationships with suppliers, which will
guarantee the smooth flow of high quality materials, thereby helping to enhance the
inbound operational performance. However, only a limited number of applied research
 studies have tested the conceptual relationship between SLI and ISP (Eltantawy et al., 2009). Supply
In the same direction of research, Shin et al. (2000) found a strong and positive effect of logistics
effective supply management on supplier performance in terms of on-time delivery, cost, integration
and quality. Moreover, Tan et al. (1998) stressed the mediating effect of supplier
performance upon the relationship between management of the supply chain and the
company’s performance. However, the effect of SLI on ISP has not been empirically
investigated. Accordingly, the second hypothesis is proposed as follows: 1013
H2. SLI has a statistically significant positive relationship with ISP.

2.4 ISP and CP

Several previous studies have suggested the effect of ISP on CP (Dedhia, 1990; Sakakibara
et al., 1993; Droge et al., 2004). For example, the study of Pagell and Sheu (2001)
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demonstrated that the on-time delivery of raw materials and parts has a significantly
positive effect on the delivery time for the end customers. In general, the performance of the
supplier has a positive and significant effect on the buyer’s performance (Vonderembse and
Tracey, 1999; Shin et al., 2000). In recent years, the importance of the supply chain has
increased due to the effects of supplier performance and material cost on the buyer’s CP
(Talluri and Sarkis, 2002). Accordingly, the third hypothesis is proposed as follows:
H3. ISP has a statistically significant positive relationship with CP.

3. Research model
As shown in Figure 1, the hypothesized research model suggests the impact of SLI on ISP,
and CP, in addition to the effect of the inbound supply chain performance on CP. To test the
validity of the hypothesized research model, the structural equations modeling technique
has been chosen.

4. Methodology
The research model and hypotheses were tested in the food industry in the Kingdom of
Saudi Arabia, which comprises a total of 732 working companies, according to data
published by the Ministry of Commerce and Investment (2016) (http://mci.gov.sa/
MediaCenter/Reports/Statistics/Pages/stat-075.aspx).
Krejcie and Morgan (1970) developed a table for determining the sample size; by using
their table, it was determined that this study’s sample size would be 254. Around 59 percent of
the food companies that are large and well-established are located in five cities (see Table IV).
The researcher, therefore, concentrated on collecting data from companies based in these five

H1
Supply logistics integration Competitive performance

H2 H3
Figure 1.
Inbound supply performance Research model

City Jeddah Riyadh Dammam Al-Kharj Al-Ahsa Other cities Total Table IV.
The geographical
No. of companies 149 146 59 37 36 305 732 distribution of the
Percentage 20.36 19.95 8.06 5.05 4.92 41.67 100 Saudi food companies
 BPMJ cities, successfully collecting valid surveys from 192 companies, representing a response rate
24,4 of 75.6 percent (see Tables V and VI).
The food industry in Saudi Arabia is one of the kingdom’s leading industries, as it is ranked
second in terms of job numbers, accounting for 15 percent of local employment in 2015.
In addition, it is ranked fourth in terms of investment, accounting for 5.2 percent of total
investment in the Kingdom of Saudi Arabia (Ministry of Commerce and Investment, 2016).
1014 A questionnaire was prepared to test the research model and hypotheses (see Appendix).
To collect the data, the questionnaire was posted by mails and e-mails to 254 companies in
the five main industrial cities in Saudi ( Jeddah, Riyadh, Dammam, Al-Kharj, and Al-Ahsa), the
companies have been selected randomly. The questionnaire was addressed to the logistics
managers. The research questionnaire consisted of four sections, which included the
background of the company, the structural factors of SLI, ISP, and CP questions. A seven-point
Likert scale was employed with a score of 1, indicating “strongly disagree,” and 7, representing
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“strongly agree,” to extract the different attitudes of respondents. In terms of company size,
43.75 percent of respondents reported that their total number of employees exceeded 200 people.

5. Results
5.1 Scale validity and reliability
The quality of the research outputs depends mainly on the variables’ measures; to ensure
the achievement of quality outputs all measures must show predictive, convergent and
discriminant validity, in addition to reliability (Garver and Mentzer, 1999). Moreover, the
measurement model must suit the data relatively well (Koufteros, 1999). Convergent validity
is measured by the normed fit index (NFI) coefficient; if the NFI coefficient value is greater
than 0.9, there is strong convergent validity for the measures (Ahire et al., 1996). The NFI
coefficient value was found to be above 0.9 for all of the variables in the research model;
accordingly, the variables measures show a strong convergent validity (Table VII).
The correlation coefficient is used to measure the discriminant validity; if the correlation
coefficient value between any two variables equals either 1 or −1 or is very close either, there is
poor discriminant validity (Kenny, 2012). Table IX demonstrates that the range of correlation
values of the model is between 0.462 and 0.584, indicating high discriminant validity.

City Response number Response rate (%)

Jeddah 95 49.48
Riyadh 67 34.9
Dammam 12 6.25
Table V. Al-Kharj 8 4.17
Summary of the Al-Ahsa 10 5.21
response rate Total 192 100

Demographic information No. of respondent

Firm size – number of employees less than 51 13

51-200 95
201-500 79
501-1,000 5
Annual gross sales in US$ less than $1,000,001 9
$1,000,001-$5,000,000 115
Table VI. $5,000,001-$10,000,000 64
Respondent profile $10,000,001 and above 4
 Predictive validity is the other aspect of the correlation relationship; with a correlation between Supply
all the variables, there is predictive validity (Ahire et al., 1996; Garver and Mentzer, 1999). logistics
Accordingly, a correlation matrix was constructed between all of the research variables. integration
Table IX shows that correlations exist between all of the study variables, confirming the
existence of predictive validity for the study measures. Moreover, Cronbach’s α has been used
to measure the reliability of the variables: if the α exceeds 0.9 for all the variables, this indicates
sufficient reliability (Garver and Mentzer, 1999). Table VIII shows that the α figures for all of 1015
the current study variables are above 0.9, thereby confirming sufficient reliability.
A confirmatory analysis has been used to evaluate the fit between the measurement
model and the collected data. As shown in Table X, the results of the confirmatory analysis
for the study’s three variables were as follows: RMSEA ¼ 0.094; χ2 ¼ 2.275; SRMR ¼ 0.072;
NFI ¼ 0.916; NNFI ¼ 0.908; IFI ¼ 0.939; CFI ¼ 0.936.
For SLI, a factor analysis was conducted using the five items utilized to measure the
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variable. The standardized coefficients for all the items are at least 0.872. The ISP construct
was initially represented by four items. The factor analysis indicated that all the items of
ISP had standardized coefficients of at least 0.843. In addition, the factor analysis for the five
items used to measure CP indicated that all of these items had standardized coefficients of at
least 0.853. According to Kline (1998) and Koufteros (1999) and the previous results, there is
good fit between the measurement model and the data.

5.2 Correlation analysis

To measure the strength and direction of a linear relationship between the different variables
of a conceptual model, correlation analysis could be used. Here, the 99 percent confidence level
produced through the correlation analysis results shows a significant positive relationship
between all the research model variables (Table IX). It was found that there are significant
positive relationships both between SLI and ISP and between SLI and CP. Moreover, there is
also a significant positive relationship between ISP and competitive performance (Table X).

Scale RMSEA NFI NNFI CFI GFI SRMR Relative χ2

Supply logistics integration 0.087 0.930 0.911 0.892 0.860 0.641 2.927 Table VII.
Inbound supply performance 0.086 0.916 0.892 0.872 0.847 0.631 2.883 Scale validity and
Competitive performance 0.085 0.915 0.892 0.872 0.847 0.630 2.880 reliability results

Scale Cronbach’s α Construct reliability Variance extracted

Supply logistics integration 0.951 0.970 0.853 Table VIII.

Inbound supply performance 0.921 0.931 0.833 Reliability
Competitive performance 0.953 0.882 0.784 assessment results

Supply logistics Inbound supply Competitive

Scale integration performance performance

Supply logistics integration 1

Inbound supply performance 0.462* 1
Competitive performance 0.584* 0.478* 1 Table IX.
Note: *Correlation is significant at 0.01 levels (two-tailed) Correlation results
 BPMJ Construct/measures t-value Standardized coefficients
24,4
Supply logistics integration
SLI1 13.661 0.931
SLI2 12.377 0.902
SLI3 12.005 0.882
SLI4 12.711 0.911
1016 SLI5 11.652 0.872
Inbound supply performance
ISP1 10.986 0.843
ISP2 13.220 0.921
ISP3 13.632 0.931
ISP4 11.417 0.862
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Competitive performance
CP1 12.632 0.911
CP2 12.417 0.902
CP3 13.083 0.921
Table X. CP4 11.094 0.853
Confirmatory CP5 12.524 0.911
analysis results Notes: RMSEA ¼ 0.094; χ2 ¼ 2.275; SRMR ¼ 0.072; NFI ¼ 0.916; NNFI ¼ 0.908; IFI ¼ 0.939; CFI ¼ 0.936

5.3 Structural relationship model

One of the acceptance standards for a conceptual model is the χ2, which should be over 2 for
the validity of the model to be accepted. In addition, the CFI and NNFI values should also be
over 0.9 for the model to be accepted (Garver and Mentzer, 1999). The χ2 for the suggested
study model is 2.75. In addition, the CFI and the NNFI values are 0.936 and 0.908,
respectively; accordingly, the suggested research model has been accepted. Moreover, the
model standardized coefficient is a major indicator for the validity of the model, which
tests the strength of the effect of the independent variable on the dependent variable.
Correspondingly, there will be significant effect for the independent variable on the
dependent variable, if the coefficient value is greater than 0.5.
According to the previously mentioned results for the current study and the model
standardized coefficients shown in Figure 2, the study’s three hypotheses were accepted.
The relationship between SLI and CP was statistically significant (0.559 at p o0.01).
In addition, the relationship between SLI and ISP was also statistically significant (0.5193 at
p o0.01). Moreover, a statistically significant relationship between ISP and CP was found
(0.529 at p o0.01).

6. Discussion and conclusions

The current hypothesized research model suggests the positive effect on the supply chain of
integrating all of the supply logistics activities through the streamlined flow of materials

Supply logistics integration 0.559** (5.4) Competitive performance

0.5193** (5.106)
Figure 2. 0.529** (5.24)
Structural relationship
model with Inbound supply performance
standardized
coefficients
and (t-value) Notes: RMSEA = 0.094;  2 = 2.275; SRMR = 0.072; NFI = 0.916; NNFI = 0.908;
IFI = 0.939; CFI = 0.936. *t >1.96 or p <0.05; **t >2.51 or p <0.01
 and information, both internally and externally. Furthermore, such integration helps to Supply
enhance the internal and external performance (ISP and CP). The findings of the present logistics
study support the effect of SLI on both ISP and CP, in addition to the positive relationship integration
between ISP and CP.
The findings of the current research both contribute to academic knowledge and present
managerial implications. From the academic perspective, the findings contribute to the
understanding of supply chain and logistics in different ways. First, this research has 1017
empirically demonstrated the relationship between SLI and both ISP (the internal process
and performance) and CP (the external performance).
The main belief in the literature is that SLI positively affects the performance without
clear understanding and explanation of processes and activities within this relationship
(Vonderembse and Tracey, 1999; Li et al., 2006; Lawson et al., 2009). Nevertheless, the
current study highlighted the role of inbound supply activities in mediating the relationship
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between SLI and CP.

Second, the research supports analyzing the supply chain from a value chain perspective.
The SLI affects the CP through different inbound activities, which means both efficient internal
and external supply chain management activities are needed to gain competitive advantages.
Third, the study demonstrated that a well-established relationship with suppliers will
help to improve both ISP and CP, which in turn supports the relational view of RBT.
In addition to the previous, the relevance of the national context in studying supply chain
integration has been raised by recent literature (e.g. Flynn et al., 2010; Zhao et al., 2011;
Schoenherr and Swink, 2012; Liu et al., 2013). Hence, this paper filled a gap in literature
through understanding the supply chain integration phenomenon in the food industry from
the perspective of one of the gulf countries.
Regarding managerial implications, managers should be aware of the importance of
integrating logistics activities and its effect on CP. A great effort should be made to achieve
effective and efficient integration with suppliers, to thereby gain the privileges of such
integration in the market. In addition, a great attention should be given to the inbound
supply chain activities to reduce different types of costs such as inventory cost, material
cost, and supplier rejection cost to be able to help the company in gaining more competitive
advantages in the market.

7. Limitations and further research

The current study has four principal limitations, all of which present opportunities for
future research. First, the current study focused only upon the Saudi food industry;
therefore, there is a need to conduct a similar study that hypothesized relationships between
the variables in different Saudi industrial sectors, and in different developed and developing
countries. Second, the impact of other internal practices and factors on the hypothesized
model need to be considered and tested in different industries and countries. Third, there is a
need to collect data from more respondents within the Saudi food industry (the present
study collected data from only 192 respondents from a total of 732 companies in this
industry) to generate more representative results ( Jasti and Kodali, 2014). Finally, it would
be useful to repeat the study’s methodology by collecting data from multiple supply chain
partners, rather than only from the buyer or the focal firm.

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Appendix. Variables measures contained in the research questionnaire

For each of the categories explored in this questionnaire, a seven-point Likert scale was used, in which
1 represents “strongly disagree” and 7 “strongly agree.”

Supply logistics integration

The surveyed managers were asked to evaluate the integration of their logistics activities with their
key suppliers. The items used in the questionnaire were as follows:
(1) Our logistics integration is characterized by excellent distribution, transportation, and/or
warehousing facilities.
(2) We have a seamless integration of logistics activities with our suppliers.
(3) Our logistics activities are well integrated with suppliers’ logistics activities.
(4) The inbound and outbound distribution of goods with our suppliers is well integrated.
(5) Inter-organizational logistic activities are closely coordinated.
 BPMJ Inbound supply performance
24,4 The surveyed managers were asked to evaluate their company’s inbound supply performance.
The items used in the questionnaire were as follows:
(1) We have reduced our inventory carrying costs.
(2) We have reduced incoming material costs.

1022 (3) We have reduced supplier rejection rate.

(4) We have reduced the percentage of late or wrong supplier deliveries.

Competitive performance
The surveyed managers were asked to evaluate their company’s business performance in comparison
to the closest competitor in the market. The items used in the questionnaire were as follows:
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(1) Performance of the final products.

(2) Delivery speed.
(3) Volume or capacity flexibility.
(4) Product variety degree.
(5) Production costs.
Source: These measures have been adapted from Prajogo et al. (2016).

Corresponding author
Ahmed Attia can be contacted at: ahattia@effatuniversity.edu.sa

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