The Effect of Supply Chain Integration on the Performance of Smes Operating in The Food Industry

Morvai, Róbert – Szegedi, Zoltán

Keywords: cooperation, integration strategy, measurement of integration, profitability, factor-analysis

Several scientific papers deal with the operation of food supply chains, many studies aim to measure the strength of supply chain integration, and we can also find articles that focus on the relationship between the small- and medium-sized enterprises (SME) sector and supply chain management. The topic of the present study is located in the intersection of the above-mentioned scientific fields, filling the void by examining the relationship between supply chain partnerships of SMEs and their performance.
One of the new scientific results of this study is that we developed a supply chain integration index (by the application of variables measured in the research questionnaire), by which the strength of cooperation of each company with its supply chain partners can be measured. As the variables included in the index are not sector-specific, their objective is to measure the degree of integration in general. Nevertheless, they can also be applied in other sectors. By the development of a supply chain integration (SCI) indicator, we have classified the examined SMEs into four groups on the basis of their integration strategy. Using the indicator we showed that a higher degree of supply chain integration is accompanied by higher profitability for small and medium-sized companies (we have illustrated this relationship by the application of two different statistical methods). In addition, our examination also shows that trust (on both the supplier and the customer sides), as one of the most important soft factors of integration, plays a significant role in company performance.