Supply chain integration: exploring product and environmental contingencies

Purpose – This conceptual paper aims to examine the notion that supply chain integration is an extension and application of vertical integration theory. Design/methodology/approach – The paper initially defines a foundation in the supply chain and vertical integration literature, with particular attention to the seminal works of Harrigan in vertical integration and Hayes and Wheelwright in product life cycles. The paper then offers an assessment of the state of the supply chain integration literature. Subsequently, the stage of product/process life cycle and environmental variables such as complexity and munificence are examined in detail and are the basis for the theoretical model and propositions. Findings – This study argues that the stage of life cycle variables is associated with the various dimensions of supply chain integration, and that environmental complexity and munificence have significant moderating effects on the relationships. The paper posits that, for efficiency and success, a strategic fit must exist between environmental, strategic and operations variables, and that specific dimensions of integrative effort are appropriate for given situations. That fit would attenuate bullwhip inefficiencies, either of inventories and other mechanical decisions, or of the less tangible human and structural interaction. Originality/value – As such, this paper represents a cross‐functional and interdisciplinary approach to operations and strategic management theory by identifying and facilitating appropriate operations decisions pertaining to the contingencies of the supply chain.