Leveraging external supply chain integration for operational excellence: does internal integration matters in the pharmaceutical supply chains

Purpose This study aims to investigate the influence of external supply chain integration (SCI) dimensions on operational performance (OP) under varying conditions of internal integration. SCI is operationalized to include suppliers, customers, logistics and internal integration. This study argues that internal integration serves as a transformative mechanism through which the effect of the three dimensions of SCI can be leveraged to enhance OP. Design/methodology/approach The proposed model was validated using survey data from 340 cold pharmaceutical firms in the sub-Saharan African market. A structural equation model was used to analyze the data. Findings The findings reveal that all three dimensions of SCI (supplier, customer and logistics integration) significantly drive OP. In addition, the authors found that internal integration positively moderates customers, logistics integration and OP relationships. By contrast, the relationship between supplier integration and operational relationships is not significantly moderated by internal integration. In explaining the mixed conclusions surrounding the performance implications of SCI, this study sheds light on how managers in cold product firms can combine customer and logistics integration with a high level of internal integration to enhance OP via SCI. Originality/value This study is among the few attempts to provide an understanding of how the success of the three SCI dimensions of SCI depends on the level of internal integration. To the best of the authors’ knowledge, this study is the first to empirically examine the moderating role of internal integration in the relationship between the other dimensions of SCI and OP. Therefore, the findings advance the boarders’ knowledge by demonstrating that for firms to reap the full benefits of SCI, it is imperative to ensure effective collaboration, communication and coordination among the different departments and units of the firm.