Supply chain structures shaping portfolio of technologies: Exploring the impact of integration through the “dual arcs” framework

The purpose of this paper is to develop a better understanding of how the supply chain structure (i.e. degree of vertical integration) of a focal organization shapes the breadth of its portfolio of technologies.

In total, three case studies were conducted involving key players in the Australian mass grocery retail sector. Each had a distinct supply chain structure (i.e. totally vertically disintegrated, partially vertically integrated and totally vertically integrated). Each supply chain case study included manufacturers or suppliers, transport and logistics service providers, wholesalers/distributors, as well as the mass grocery retail organizations. Interviews with key personnel from these organizations and other relevant information informed the findings and conclusions.

The information technologies employed by the three focal case organizations and their extended trading partners varied in terms of level, type, complexity and sophistication. The authors highlight how the choice of supply chain technologies is affected by supply chain structure (extent of vertical integration). The authors found that disintegrated supply chain structures have a broader portfolio of technologies, whereas integrated supply chains have a narrow portfolio.

This study is confined to three organizations in the Australian mass grocery retail sector, so any extensions should be made with caution.

The framework presented in this study can guide organizations in assessing the appropriateness of their supply chain portfolios of technologies with the structure of their supply chains. For standard setting bodies, the findings of this study suggest that technologies need to be tailored to the requirements of the supply chains, with the level of vertical integration being one easy way to segment the supply chain types.

The study adapts and extends the “arcs of integration” framework. The propositions enhance the understanding of how supply chain structure, in the form of degree of vertical integration influences an organization’s supply chain portfolio of technologies.