Leveraging supply integration, mass customization and manufacturing flexibility capabilities and the contingency of innovation orientation

Abstract

Purpose This paper aims to examine the relationship between supply integration and firm performance by first, investigating the mediating effects of manufacturing flexibility and mass customization; and second, exploring the moderating role of innovation orientation on the link between internal capabilities and performance. Design/methodology/approach Resource orchestration and contingency theories are used to address the mediating and moderating effects. A cross-sectional data set on 242 Swedish manufacturers is used to test for the hypotheses using structural equation modeling. Findings The findings provide support for the mediating roles of manufacturing flexibility and mass customization in the relationship between supply integration and firm performance. However, the results point to contrasting contingent effects of innovation orientation. While innovation orientation positively moderates the association between mass customization and firm performance, it shows a negative impact on the link between flexibility and performance. Research limitations/implications The study contributes to the literature on the integrative activities with upstream supply chain actors. Specifically, the authors highlight how specific capability configurations comprising of supply integration, manufacturing flexibility and mass customization lead to firm performance. Moreover, the authors provide insights on the contingency role of innovation, especially if firms consider flexibility or customization capabilities. Originality/value While the individual impacts of flexibility and customization on performance have been addressed previously, there is a paucity of research on how these two capabilities are integrated with supply integration. Moreover, there is little known regarding the role of innovation orientation on these integrated relationships.