The impact of information integration on financial performance: A knowledge-based view

It has been reported that integrated internal and external information systems among supply chain partners can strengthen their relationship and improve their operational performance. However, the manufacturers may be more interested to know how and how much such information integrations will affect their financial performance. This study surveys 220 demand-driven manufacturers who adopted mass customization strategy to explore the joint effects of internal and external information integration on their financial performance. The data collected are analyzed by using structural equation modeling method. The findings suggest that strengthened relationship with suppliers will only improve suppliers' operational performance which will positively influence manufacturers' operational performance directly and financial performance indirectly. This study provides theoretical and empirical supports to explore the effects of supplier integration on a demand-driven manufacturer's financial performance from a knowledge-based view.