SUPPLIER INTEGRATION AND FIRM PERFORMANCE IN THAI AUTOMOTIVE INDUSTRY: COMPARING PREDICTIVE MODELS
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Abstract
Supplier integration is an important strategic supplier management in the automotive industry to enhance supplier capabilities and achieve competitive advantage. Automotive firms integrate suppliers in operational processes which require compatible technologies, coordination and quality management methods to enhance supplier capabilities. This research studies the influences of the integration of suppliers which affect the performances of automotive firms by survey. Using Structural Equation Modeling and the PLS technique. The study compares two models with supplier development as a latent variable, exogenous or mediator variable. In the model with supplier development as mediator, the analysis shows that supplier integration has indirect positive effects on firm performances stronger than the other with R2adj. is slightly lower (.527<.532). Meanwhile supplier development has direct influences on performances of both automotive firms and their suppliers.
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