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Supply chain
Effect of supply chain technology performance
internalization and e-procurement
on supply chain performance
Durgesh Pattanayak
Tata Steel Ltd, Mumbai, India, and
Received 3 April 2019
Plavini Punyatoya Revised 19 August 2019
Accepted 23 September 2019
Department of Marketing, Xavier Institute of Management, Bhubaneswar, India

Abstract
Purpose – The purpose of this paper is to examine how e-procurement (EP) and supply chain technology
internalization (SCTI) influence supply chain performance (SCP) through supply chain integration (SCI).
Design/methodology/approach – This research analyzed 214 survey responses from project managers
who have prior experience in the field of supply chain management. Structural equation modeling was used to
analyze the data.
Findings – The results show that EP and SCTI positively influence SCI and SCP. The effects of EP and SCTI
on SCP are found to be mediated by SCI in the context for the construction industry.
Research limitations/implications – Future studies should focus on quantitative measures of SCP like
budget overrun, supply chain efficiency and project success. Further research can be done through the
exploration of moderating interactions of the proposed model.
Practical implications – First, the study highlights the importance of SCTI. Supply chain managers should
first focus on effective utilization of different technologies used to support supply chain. Second, the research
gives the guidelines to the supply chain managers and project managers about the benefits of EP. They
should focus on proper implementation of EP in their organizations.
Originality/value – This paper contributes to the literature by proposing and testing the influences of EP
and SCTI on SCI. This allows a strategic viewpoint when implementing SCTI, EP systems and SCI, intended
to improve SCP.
Keywords Construction industry, Supply chain integration, Supply chain performance, E-procurement,
Supply chain technology internalization
Paper type Research paper

1. Introduction
Construction industry has suffered considerable loss due to conflicts, cost overruns and claims
by vendor. The reasons are mainly caused by supply delays and disruptions due to the lack of
precise information (Mahamid et al., 2012), and poor communication between project actors
and project phrases (Hussain et al., 2018). Hence, to achieve lasting cost reductions, supply
chain processes in the construction industry need to be restructured. The relationship among
participants in a construction project is complex. The parties operate simultaneously and
collaborate within groups of networks. The performances of participants are strongly
interdependent. Poor performance of one party affects the whole supply chain of project
(Segerstedt and Olofsson, 2010). The lack of coordination between construction supply chain
parties is one of the key reasons for poor performance (Eriksson, 2010). Aloini et al. (2012), in
their research, found that implementation of supply chain management (SCM) is problematic
in the construction industry. They found the measure problems are misuse of technology,
inadequate coordination and lack of integration. Past studies highlighted the fact that the
application of SCM in construction industry still lags behind the manufacturing industry
(Bankvall et al., 2010; Aloini et al., 2012).
Skitmore and Smyth (2009) argued that if the construction industry is to successfully Business Process Management
Journal
replicate the SCM practices of the manufacturing sector; this will call for “careful © Emerald Publishing Limited
1463-7154
translation.” SCM is especially challenging in project-based supply chains due to: the DOI 10.1108/BPMJ-04-2019-0150
BPMJ discontinuous demand for projects; the uniqueness of each project in technical and financial
terms; the complexity of each project in terms of a high number of specialized but
interdependent suppliers and their activities; and uncertain demand requirements and
production conditions (Eriksson and Pesämaa, 2013). High numbers of specialized and
interdependent suppliers make the project more difficult in terms supply chain integration
(SCI) (Eriksson and Pesämaa, 2013). Information and applications are loosely distributed
among participants with a wide range of hardware and software capabilities in construction
industry. There is a lack of trust among supply chain partners due to temporary nature of
construction projects. So the supply chain partners are often unwilling to share information.
In this case a supply chain information system which includes demand planning,
distribution planning, scheduling, inventory and transportation management can increase
the transparency and information dissemination (Ganguly and Rai, 2018). Information
technology (IT) has a crucial role in improving SCM. Hence, a secure, modular and flexible
system that can aggregate scattered information and share that information across
applications is highly desirable (Cheng et al., 2010).
Construction industry environment is characterized by moderate to very high
uncertainty. In this scenario, an information mechanism which improves information
visibility helps to contribute in the supply chain performances (SCPs). A socio-technical
system (STS) views highlights that companies can improve their effectiveness by joint
considerations of the social and technical system. Technologies play a pivotal role in
improving supply chain challenges or opportunities by information dissemination (Autry
et al., 2010). In this environment, SCI is mainly limited to clients and main contractors rather
than extending down the chain to sub-contractor and suppliers (Briscoe and Dainty, 2005).
Previous studies highlighted the fact that SCI is vital for the SCPs (Lii and Kuo, 2016). SCI, in
terms of supplier and customer integration, facilitates technical innovation (Ayoub et al.,
2017). Hence, there is an opportunity for the complete integration of processes throughout
the delivery chain of the construction supply chain. In this study, we consider the SCI as a
social aspect and supply chain technology internalization (SCTI) as a technical aspect.
Hence, it is argued that SCTI and SCI will improve the effectiveness of supply chain which is
the main contributor for SCP in construction industry.
The resource-based view (RBV ) highlights the importance of resources on firm
performance (Wernerfelt, 1984). Resources are important for organization for competitive
and sustainable competitive advantages. In this study, e-procurement (EP) is advocated as
important resource for construction industry for competitive advantage. In the construction
industry around 75 percent of time spent by a purchase department relates to lower value-
added activities like requisition, supplier selection, purchase order and material receipt
processing. Consequently, less than 25 percent is spent on crucial longer term activities such
as sourcing strategies and supplier partnering (Govan, 2001). EP uses the platform of
internet to improve the effectiveness and efficiency of the supply end of the supply chain.
However, a few studies were conducted on EP in construction organizations.
Major challenges for construction industries are ineffective use of technology, lack of
coordination and communications between participants, price-based selection of contractor/
supplier and lack of customer supplier focus. Hence, taking consideration of both RBV and
STS view it is argued that internalization of supply chain technology, EP and SCI is
inevitable for the success of the construction industry. This research will help to address the
paucity of work which has addressed the issue of the technology utilization, improvement of
transparency and speed of procurement by introduction of EP. Researchers arguably try to
improve the strategic partnership, coordination and trust to build the complete SCI which is
challenging in the construction industries. Finally, to improve the efficiency and
effectiveness of the supply chain in the construction industries, the study analyzed the effect
of SCTI, EP and SCI on SCPs.
2. Theoretical background and hypothesis development Supply chain
In this study, researchers have focused on two theories – STS and RBV – which are beneficial performance
for SCPs. The STS view is based on two foundations of social and technical aspects (Griffith
and Dougherty, 2001). In the social aspects, the focus is more on relationships and in technical
aspects focus is in technologies. Thus, social and technical aspects combine together to
improve productivity and performance. Previous researchers have extended the STS view to
inter-organizational contexts and applied it to understand supply chain systems (Huo et al.,
2016). Researchers argued that utilization of technology is requisite for supply chain success.
Its role is more vital for the complex supply chain situations like in the construction industries.
It is evident from the previous literatures that researchers focus on ERP, integrated IT system
as part of the technical aspect of the STS view (Autry et al., 2010; Huo et al., 2016). There are a
lot of technologies available to support the supply chain system. Still, the performance of
supply chain is not adequate. The main reason is internalization of technologies for
performance of supply chain. Hence, the current paper posits that SCTI is an important
technical aspect. Social aspects of supply chain refer to relationship among the players in the
supply chain. In the complex supply chain of construction industry where contractor,
sub- contractor, supplier, sub-supplier, client, consultants exist, social integration among all
these actors is important for the success of supply chain. Therefore, SCI is argued as the social
aspect of the construction supply chain.
RBV explained that sustained competitive advantage stem from internal resources that
are valuable, rare, inimitable and non-substitutable (Barney, 1991). Carter et al. (2017)
advocated for resource as a competitive advantage for RBV. EP within IT infrastructure can
become uniform across the firms. For this reason, the relational extension of RBV provides
the proper theoretical lenses to defend the value of EP for the organization’s competitive
position. For the construction industry, the relationship among the actors of vast chain is
crucial for the competitive advantage. Past research in SCM has shown that supplier
evaluation, and selection practices or supplier quality management, helps explain variations
in firm performance (Zimmermann and Foerstl, 2014). The adoption of EP in construction
improves efficiency of the tender process as well as the financial management of
construction processes producing substantial monetary and time savings (Eadie et al., 2010).
Hence, this research considered EP as important resource for the construction industries.
All the study constructs are discussed next.

2.1 Supply chain technology internalization

Internalization is the effective and consistent use of a technological innovation over time by its
users. Supply chains’ adoption of technologies may not provide adequate results unless these
technologies are internalized in daily operations. Internalization is the effective and consistent
use of a technological innovation over time by its users. Technology internalization is the
effective and consistent use of a technology over time (Forman and Lippert, 2005). SCTI refers
to the extent to which a company implements and internalizes a variety of technologies in its
daily activities to facilitate SCM (Autry et al., 2010). It is the efficient use of different
technologies used in the organization. Technologies create value creation to the organization
based on their proper implementation (Huo et al., 2016). Internalizing supply chain technology
with internal operational processes guarantees the efficient use of different technologies (Huo
et al., 2016). If improperly understood or implemented, supply chain technology can create
more harm than good (Stank et al., 2011).
For efficient and effective management of supply chain, various types of SCM
technologies exist (Kosansky and Schaefer, 2009). These include barcoding which is mainly
used in operational level to warehouse management systems, transportation management
systems which are basically used in logistics/supply chain functionality. Finally, there are
strategic level technologies and systems designed to address ongoing, long-term supply
BPMJ chain process integration and planning, and inter firm relationships (i.e. Collaborative
Planning Forecasting and Replenishment, visibility oriented technology programs, etc.).
There is a growing number of construction related products combining SCM functions, for
example, SAP software has SAP for Engineering, Construction and Operations that is being
brought to market.

2.2 E-procurement
EP is defined as business to business purchasing practice that utilize electronic commerce to
identify potential source of supply, to purchase goods and services, to transfer payment and
to interact with suppliers (Pearcy and Giunipero, 2008). Electronic procurement system
focus on four functions: e-sourcing, e-negotiation, e-design and e-valuation (Presutti, 2003).
EP helps to increase collaboration between suppliers and buyers, reduce personal
requirements, reduce transaction cost, receive more bids from wide range of potential
bidders, improve coordination, shorter procurement cycle, points of clarification during
tender period, improve audit trail and greater transparency (Naoum and Egbu, 2016).
Attractive collaboration between buyer and seller positively affects both innovation and
cost performance in organization (Patrucco et al., 2019).
A successful EP initiative is often more attributable to the procurement aspects than it is
to the electronic aspects (Gabbard, 2001). This research focus on the aspects of relational
exchange, information enrichment and joint learning are three basic strategies when
enterprises can implement in EP systems with an expectation of their having an impact on
SCP (Chang et al., 2013). In the construction industry, EP can bring close collaboration
between the designer, contractor and supplier. Information regarding any design changes
can immediately transferred to all the stakeholders since each one’s action has impact on the
other’s performance. Similar case arises when any changes in schedule of the project is
closely monitored by suppliers. Otherwise, managing inventory of materials will be
challenging due to space constraints in the execution site. Procurement enables organization
to create an intelligent master supply chain eco system (Bienhaus and Haddud, 2018). Hasim
et al. (2013), in their study of 120 construction firms found, significant contribution of EP in
operational and tactical areas. But it is yet to achieve its full potential. Baladhandayutham
and Venkatesh (2012), in their research, highlighted that EP helps in improving quality,
processing time and cost savings.

2.3 Supply chain integration

SCI is defined as the degree to which an organization strategically collaborates with its
supply chain partners and collaboratively manages intra- and inter-organizational
processes (Flynn et al., 2010). SCI has four key components: information integration,
synchronized planning, operational coordination and strategic partnership (Cao and Zhang,
2011). SCI should consider contractor, sub-contractor, vendor, sub-vendor and client for the
construction sector. All the parties/players are directly involved and work closely with each
other across the product life cycle in the integrated supply chains. The adoptable
requirements for the construction SCI are cross-functional coordination, strategic alliance,
compatible communication, frequent contacts.
SCI is a process of interaction and collaboration across firms that incorporate customers
and suppliers into a cohesive supply network (Huang et al., 2014). SCI helps reduce cost,
improve responsiveness to changes, better information flow, facilitates coordination, increase
service level and facilitate decision making. A low integration of supply chain causes
increased inventory cost, lowered product quality and long procurement process, which may
jeopardize main organization and all its supply chain partners (Seo et al., 2014). The major
challenged faced by the construction industries for SCI is a lack of long-term strategic
partnership (Briscoe and Dainty, 2005), trust (Graham and Hardaker, 1998) and closer
working relationship with suppliers (Harland et al., 1999). Egan (1998) suggested that the Supply chain
construction industry needs to integrate its processes and products to ensure that better value performance
can be delivered to the client. This approach involves clients, designers, main contractors and
sub-contractors working together as a unified team. Integrated coordination of all processes
and operations is essential for a successful SCM within the construction industry.

2.4 Supply chain performance

SCP refers to both tangible (e.g. cost, quality) and intangible (e.g. capacity utilization,
resource utilization) results through effective use of SCM (Presutti, 2003). Panayides and
Lun (2009) identified on-time delivery, reduced lead time, responsiveness, cost reduction,
conformance to specifications, process improvements and time-to-markets as constituents of
SCP. As per Khan et al. (2009), supply chain-driven organizational performance is separated
into resource performance, output performance and flexibility performance. Resource
performance is value added in terms of achieving efficiency; output performance is value
added in terms of a firm’s ability to provide high levels of customer service; and flexibility
performance is value added in terms of a firm’s ability to respond to changes. Wibowo and
Sholeh (2015), in their research on road construction project, identified perfect order
fulfillment, lead time, product flexibility, inventory days of supply and SCM cost as
indicators of SCP.
In the project-based organization, measuring SCP is challenging due to involvement of
many actors and potential uncertainties in the supply chain. Due to above complexity in the
project environment, measures of SCP significantly differs from manufacturing and service
industries (Wickramatillake et al. 2007). Project-based management is frequently associated
with the management of complexity and, therefore, it affects the project objectives
of time, cost and quality (Baccarini, 1996). These three factors have been used widely as
basic criteria of project success (Chan and Chan, 2004). In this study, the researchers
have considered project cost, project quality, project time and client satisfaction as the
measurement of construction SCPs.

3. Hypothesis development
3.1 Supply chain technology internalization and supply chain integration
SCTI integrates technologies in all operational processes and gathers data from these
processes. SCTI helps to improve supply chain visibility and avoids information delays
and distortions which enhance SCI. Technology internalization provides efficient, timely
and transparent business information (Cagliano et al., 2003). Information integration is the
foundation of broader SCI. For companies to coordinate their material, information and
financial flows, they must have access to information reflecting their true supply chain
picture at all times.
Hadaya and Pellerin (2010) suggested that information technologies help the
construction industry by linking main contractors with their sub-contractors and
suppliers. It helps the industry by reducing the response time. Supply chain technologies are
considered as success factors of business performance because SCM requires operational
coordination between/among supply chain partners (Sanders, 2005). The construction
industries face technical challenges to integrate wide range of hardware platforms and
software applications for their own operations and with their supply chain partners.
An endless number of contractors, sub-contractors, supply vendor and sub-vendor working
concurrently at different locations using heterogeneous technologies and producing
information at different levels of abstraction and details in the construction industry (Froese
et al., 1997). The full potential of IT is yet to achieve in the construction industry (Hadaya
and Pellerin, 2010).
BPMJ Zeng and Pathak (2003) argued that advancement and implementation of IT facilitates
coordination of activities and process between supply chain members. As a dynamic
system, SCTI can choose and integrate with those partner supply chains that best suit its
needs of organization. This dynamic integration transforms the supply chain to an adaptive
network, which helps the company achieve both internal and external SCI. Technology
improves collaboration by fast and efficient access to information and data sharing.
Hence, it is argued that:
H1. A positive association exists between the construction firm’s SCTI and SCI.

3.2 E-procurement and supply chain integration

Internet is an effective means for SCI and information sharing. In the construction industry,
through the EP client, contractor and supplier can collaborate with each other. In addition,
cooperation between the client, contractor, sub-contractor and all its partners can potentially
be enhanced by EP. EP improves the transparency and facilitates the flow of information in
the system. Cheng et al. (2010) defined that EP increases responsiveness to orders, offers
product standardization and enhances inventory management information with its
suppliers which helps SCI in a construction organizations. In the construction industry,
there are uncertain demand requirements, unique production conditions, and there exists
complexity of each project in terms of a high number of specialized but interdependent
suppliers and their activities. Client/contractor often prefers competitive tendering to
execute every new project to the lowest possible cost which is the result of disjoint supply
chains (Eriksson, 2015). EP plays a crucial role to bridge the above gap and facilitates SCI.
Gunasekaran and Ngai (2008) stated that EP system plays a vital role in SCI. Hence, this
research reasoned that:
H2. A positive association exists between the construction firm’s EP and SCI.

3.3 E-procurement and supply chain performance

The emergence of EP in the last few years is creating a higher profile for supply management,
and boosting its visibility to top management (Presutti, 2003). The adoption of EP in
construction improves efficiency of the tender process as well as the financial management of
construction processes producing substantial monetary and time savings (Eadie et al., 2010).
Adoption of e-business technologies influences organizational performance both directly and
indirectly through intra- and inter-organizational collaborations (Sanders, 2007). Procurement
increases the partner relationship and information sharing (Chang et al., 2013). EP helps
information enrichment and joint learning. It facilitates relational exchange within and outside
of the enterprise, which helps SCP. EP is a strategic function for SCM and can contribute
significantly to SCP (Presutti, 2003). EP system brings transparency in the supply chain, and
effectiveness in operation processes. Hence, it plays a pivotal role for improving SCP
(Puschmann and Alt, 2005). EP positively impacts the buyer–supplier relationship, and
improves the quality of information flows (Vaidyanathan and Devaraj, 2008). In the
construction industry, cost saving is one of the major parameter of project success. EP helps in
overall cost saving in purchasing process and facilitates supply chain transparency in terms
of product specifications, price, contract details and quicker decision to problems through real-
time information (Toktaş-Palut et al., 2014). In the construction industry, EP helps to maintain
accurate product related information, better management of product inventory and
disseminating up to date product/ service information which ultimately improves SCP. Hence,
it is proposed that:
H3. A positive association exists between construction firm’s EP and SCP.
3.4 Supply chain technology internalization and supply chain performance Supply chain
Technology internalization improves efficient applications of IT and information sharing performance
which affect the inter-organizational activities and processes relevant to flow of products,
services and information of complex system of SCM. Supply chains are often complex
systems of inter-reliant activities and processes associated with the flow of products,
services and information from the original supplier of raw materials to the final consumer
(Handfield and Nichols, 1999). As per Forman and Lippert (2005), technology internalization
means a good understanding of the role of the technology, and it provides improved
visibility to the entire supply chain. SCTI helps to increase inter-organizational trust. It
helps in information sharing which is essential for construction organization. SCTI
improves organization sharing capability which impacts the effectiveness of a supply chain.
Richey et al. (2012) found that technology has significant impact on SCP. Technology
supports SCP by cost reduction, improved visibility, speedy decision making and solves
issues related to logistics management. Hence, it is proposed that:
H4. A positive association exists between SCTI and SCP.

3.5 Supply chain integration and supply chain performance

SCI is characterized by both inter-organizational information flows and rich informal
information sharing mechanisms that help supply chain members to cope with uncertainty
(Flynn et al., 2016). Previous researchers posited that there exists positive relationship
between supply chain collaboration and SCP (Ramanathan et al., 2011). Integration supports
external processes and activities by sharing accurate supply and demand information with
suppliers and customers, which is essential for the construction industry. Vendor-managed
inventories and production information play a pivotal role in improving performance of
supply chain (Devaraj et al., 2007). One of the bigger challenges in the construction industry
is storage utilization. Proper coordination and right information flow based on actual
progress on site help project managers to plan their materials requirement at the right time.
This will reduce improper utilization of storage and enhance SCP. Past studies support a
correlation between SCI and SCP in other industries (Frohlich and Westbrook, 2001;
Seo et al., 2014). Hence, it is argued that:
H5. A positive association exists between construction firm’s SCI and SCP.

4. Methodology
4.1 Measures
To validate the research model with data, a survey questionnaire was developed with
measurement items abstracted from the previous literature. The questionnaire contains a
number of existing valid instruments that were adapted to this study. All measurement
items are modified to fit the SCM context for the construction industry (Appendix). SCTI
was measured by eight items and was adapted from Huo et al. (2016), Rai et al. (2006) and
Autry et al. (2010). The respondents were asked to indicate how their IT system can be
seamlessly connected with those of supply chain partners. EP was adapted from Chang et al.
(2013) and measured by five items. The respondents were asked to indicate how their
companies use electronic system to gather information at the procurement request stage.
SCI was adapted from Chang et al. (2013), Flynn et al. (2010) and Huo et al. (2014). It was
measured by six items. The respondents were asked to give their opinion about strategic
alliances between their organization, contractor, vendor and sub-vendor. SCP was measured
by four items, which were adapted from Hult et al. (2007). The respondents were also asked
to indicate how well their company manages costs for the project. A seven-point Likert scale
was used to capture the data. The proposed research model is shown in Figure 1.
BPMJ H3
EP

H2
H5 SCP
SCI

H1
H4

SCTI

Figure 1.
Proposed research
model Notes: SCTI, supply chain technology internalization; EP, E-procurement; SCI, supply
chain integration; SCP, supply chain performance

The questionnaire was validated in a two-step process. Before conducting the survey, as
an effort to ascertain the content validity of the survey questionnaire, a draft survey was
pre-tested by both academicians (i.e. three operation management professor) and
practitioners (i.e. two senior project managers from the construction company and one
senior vice-president from a project management consultancy company). The participants
were requested to evaluate the survey questionnaire on its wording, clarity and relevancy
of the subject (Pattanayak et al., 2017). To ensure reliability and content validity, we then
performed a pilot study with a different group of 30 project managers, supply chain
managers and purchasing managers working in construction project. The results of the
pilot study proposed that reliability was good enough to avoid the need to drop any
measurement items.

4.2 Sample
Data for the main study were collected by the first author using self-administered
questionnaire. Respondents were project managers, supply chain manager, procurement
managers and consultants of different construction projects in India. All these respondents
were in executive positions in their company and were familiar with the constructs in the
study. By using the survey method, the external validity of the research was enhanced and
results would be helpful from managerial perspective. Purpose sampling was used in this
research because the first author has prior experience and knowledge in the field of
construction projects. Respondents participated voluntarily without receiving any
compensation. From the 274 respondents approached, 233 agreed to fill the survey.
Finally, we had 214 valid responses. The respondents had an average of eight years of
project management experience. The average age of a project team member was between 36
and 45 years: 88 percent were male and 65 percent held a graduate degree or higher.

4.3 Common method variance

Data for the variables were collected using a single instrument and at the same time. Data
were also collected from a single informant. So there was concerned that common method
variance (CMV ) might bias the study findings (Malhotra et al., 2017). To avoid the potential
for CMV effects, we used some procedural remedies. We reduced ambiguity in the scale Supply chain
items by undertaking a pretest; provided clear explanations of the constructs being performance
measured in the questionnaire, and ensured protection of respondent anonymity. We also
used a statistical technique to address the CMV issue. Harman’s single-factor test using
exploratory factor analysis (EFA) showed that no single factor dominated the total variance
(o50 percent), indicating a lack of common method bias (Podsakoff et al., 2003).

5. Results and analysis

Structural equation modeling (SEM) using AMOS software was used to test the hypotheses.
First the measurement model of constructs was tested for reliability and validity
dimensions. Next, the hypothesized causal relationships were estimated using the structural
path model.

5.1 Measurement model

First, an EFA with principal component analysis method was conducted separately for
SCTI, EP, SCI and SCP using SPSS. Items were retained with a minimum factor loading of
0.5, indicating strong convergent validity of the theoretical constructs (Hair et al., 2009).
All the items seemed loaded properly on respective variables and retained for future
analysis. The percentage of variance extracted ranged from 56.51 to 75.77 for all the factors.
The values were found above 50 percent, which showed good reliability of the
measurements (Hair et al., 2009). The results of EFA are summarized in Table I. To establish
if the items measuring each construct were sufficiently correlated and met the criteria of
reliability and validity, the Kaiser–Meyer–Olkin measure and Bartlett’s test for sampling
adequacy conducted gave satisfactory results (KMO ¼ 0.927, χ2 ¼ 5,434.153, df ¼ 378).
Reliability was checked using Cronbach’s α (see Table II) and all the values were found to be
above the acceptable threshold of 0.70 (Hair et al., 2009). This indicated that the constructs
were internally consistent.
Confirmatory factor analysis (CFA) was used to verify the unidimensionality of each
construct by using convergent validity, and discriminant validity of the measurement
model. CFA was conducted using the maximum likelihood approach. We used the CFA
goodness-of-fit indices to investigate the measurement model’s goodness-of-fit. According to
Bagozzi and Yi (1988), the recommended value of χ2/df should be less than 3 for an

Number of Percentage of Range of factor

Variables Mean SD items variance extracted loadings (EFA) Table I.
Mean, standard
Supply chain technology internalization 4.51 0.790 8 60.214 0.724–0.839 deviation and
E-procurement 4.337 0.898 5 56.511 0.679–0.863 exploratory factor
Supply chain integration 4.698 1.03 6 66.874 0.580–0.879 analysis of the
Supply chain performance 4.881 1.12 4 75.779 0.846–0.898 study variables

CFA Construct
Cronbach’s Standardized reliability Average variance
Variables α loadings (CR) extracted (AVE) Table II.
CFA standardized
Supply chain technology internalization 0.904 0.654–0.831 0.905 0.545 loadings, reliability
E-procurement 0.805 0.547–0.874 0.808 0.721 and convergent
Supply chain integration 0.896 0.5–0.873 0.901 0.610 validity analysis of
Supply chain performance 0.893 0.799–0.855 0.894 0.679 the constructs
BPMJ acceptable model. Comparative fit index (CFI) and Tucker–Lewis index (TLI) value of
0.90 or more suggests good model fit (Hair et al., 2009). TLI shows how effective the model is
compared to a null model (Dion, 2008). A root mean square error of approximation (RMSEA)
value of 0.08 or less is recommended to get a good fit (Hair et al., 2009). Though the
recommended value for normed fit index (NFI) is 0.9 (Hair et al., 2009), for a complex model,
an NFI value of 0.8 is accepted by previous researchers (Blesa and Bigne, 2005). The results
showed χ2/df ¼ 1.345, CFI ¼ 0.975, TLI ¼ 0.969, NFI ¼ 0.911, RMSEA ¼ 0.039, which were
within an acceptable limit. The fit statistics showed that the model fits the data well. The
values of the indices showed that the measurement model used in this research met all the fit
criteria.
To access convergent validity, CFA standardized factor loadings (λ), average variance
extracted (AVE) and construct reliability (CR) are used. As shown in Table II, the λ values
were equal to or above threshold value of 0.5 and hence, showed the evidence of reliability.
AVE provides information about the proportion of variance of the items that is explained by
the construct. AVE values were equal to or above a threshold value of 0.5 (Bagozzi and Yi,
1988) and CR values were above the benchmark of 0.7 (Fornell and Larcker, 1981). This
proficiently indicated convergent validity and internal reliability for constructs. To satisfy
the requirement of the discriminant validity, the square root of a construct’s AVE must be
equal to or greater than the correlations between the construct and the other constructs in
the model (Fornell and Larcker, 1981), and the results satisfied the criteria. The correlation
matrix is given in Table III. Hair et al. (2009) proposed that the r-value between each pair of
independent variables in the correlation should not exceed 0.90. Otherwise, it may be
suspected to exhibit multicolinearity. It was confirmed from Table III that multicolinearity
did not significantly exist among various constructs in the measurement model.

5.2 Structural model

To validate the structural model, SEM with maximum likelihood estimation procedure was
adopted. The results of overall fit measures of the full model in SEM indicated that the fit of
the model was reasonably acceptable ( χ2/df ¼ 1.981, RMSEA ¼ 0.066, CFI ¼ 0.929,
NFI ¼ 0.869, TLI ¼ 0.913). All the model fit indices exceeded their respective common
acceptance level (Bagozzi and Yi, 1988; Hair et al., 2009).
The findings for H1 (standardized coefficient ¼ 0.465, po 0.001) implied that SCTI is
positively related to SCI. This result is consistent with the previous study by Huo et al.
(2016), in which the researchers found that SCTI has positive association with both external
and internal supply chain information integration. H2, predicting a positive association
between EP and SCI, was supported (standardized coefficient ¼ 0.500, p o 0.0001).
This result is supported by the findings of Chang et al. (2013), who researched on large
corporations in Taiwan including electronics, metal, textile and computer industries. H3,
predicting a positive association between EP and SCP, was supported (standardized
coefficient ¼ 0.652, p o0.001). EP improves transparency in procurement process and helps

Constructs SCTI EP SCI SCP

SCTI 0.738
EP 0.683 0.841
SCI 0.631 0.643 0.781
Table III.
Correlation matrix and SCP 0.728 0.805 0.737 0.824
discriminant validity Notes: SCTI, supply chain technology internalization; EP, E-procurement; SCI, supply chain integration;
analysis of the SCP, supply chain performance The numbers in the diagonals are square root of AVE. All the correlation
constructs values are significant at p o 0.01
to reduce the cost of procurement. It helps to improve information visibility in the supply Supply chain
chain, which ultimately leads to SCP. Presutti (2003) has clearly mentioned that effective EP performance
strategy can improve traditional purchasing process and positively affect performance of
the industry’s supply chain system. H4, proposing a positive relation between SCTI and
SCP, was supported (standardized coefficient ¼ 0.541, p o0.0001). Finally, the findings
revealed a positive association between SCI and SCP (standardized coefficient ¼ 0.177,
p o0.010). This result is consistent with the findings of previous researchers (Chang et al.,
2013). The results of the full model are shown in Table IV.

5.3 Testing the mediation effects

To test the mediating effect, this research followed the methodology used by Punyatoya
(2019). Researchers compared two alternative models with the baseline model. A rival model
(Model 1) was built to check the direct effect of SCTI and EP on SCPs. In the rival model, SCI
would not act as a mediator, rather it is similar to other antecedents. In the second model
(Model 2), investigation was carried out for complete mediation effect. In this model, it
is hypothesized that SCTI and EP have a direct and positive effect on SCI and SCP is
influenced by SCI. Model statistics is provided in Table V. SEM was carried out. As
expected, the partial mediated model appears to fit the data best. It was observed that NFI,
TLI and CFI values were less than the approved limit of 0.9. Hence, both the alternative
models did not satisfy the model fit criteria.

6. Discussion
This study establishes a conceptual model to examine the relationship between SCTI, EP and
SCI in a construction project prospective to improve SCP. The study highlights the fact that
by only using different type of supply chain technologies, a construction organization may not
get the desired level of SCP. The important part missing from the previous literatures is
internalization of different supply chain technologies. This enables the collaborations of
different supply chain partners. For integrating different supply chain partners, technology
plays an important role by facilitating the information integration and information visibility.
Integration of different supply chain technologies improves real-time integration of
information among supply chain members. It establishes a frequent interaction among the
supply chain partners and helps to improve the SCP. Result of H1 and H4 showed that SCTI
has a significant influence on SCI and SCP. A per Presutti (2003), the impact of internet
technology on traditional purchasing process is pervasive. Soojung et al. (2019) researched on

Hypothesis Hypothesized path Proposed effect Standardized coefficients p-value Results

H1 SCTI → SCI + 0.465 0.001 Supported

H2 EP → SCI + 0.500 0.001 Supported
H3 EP → SCP + 0.652 0.001 Supported Table IV.
H4 SCTI → SCP + 0.541 0.001 Supported Structural model
H5 SCI → SCP + 0.177 0.010 Supported estimates

Model specifications χ2/df CFI NFI TLI

Baseline model 1.981 0.929 0.869 0.913 Table V.

Model 1 2.611 0.883 0.826 0.858 Comparison of the
Model 2 (full mediation model) 2.646 0.881 0.823 0.855 structural models
BPMJ manufacturing firms and also found that IT-driven supply chain capabilities improve firm
performance. Our result showed that even in the construction sector, SCTI plays a vital role in
improving the construction firm’s SCP.
Implementation of EP is particularly challenging in a construction industry (Eadie et al.,
2010). Since, in the construction industry, multiple stakeholders are involved in the
construction process, EP helps the coordination of supply chain, reduction in procurement
cost and brings the close partnership among client, contractor, sub-contractor and supplier.
It improves the transparency in the system and bridge the gap of unstructured relations
among the supply chain partners. The result revealed that SCI can be improved through EP
system. This research also empirically confirms that there is strong and positive
relationship between EP and SCP. The result supports the finding of previous researchers
that SCI is the processes through which EP contributes to SCP of Taiwanese enterprises
(Chang et al., 2013). This established the fact that implementation of EP systems in the
construction industry is a necessary condition to improve SCP. EP increases productivity in
the construction cycle while empowering construction stakeholders to closely monitor the
procurement process (Oyediran and Akintola, 2011). Our data clearly showed that the EP
implementation has a significant influence on the construction firm’s SCP.
Finally, this study fills the gap in supply chain, project management and operations
management literature by investigating the integrated model of SCTI, SCI and EP on SCP.
This study proved that all the three constructs identified for this study, i.e. SCTI, SCI and
EP, will play an important role in improving the construction SCP.

7. Managerial implications
In practice, supply chain managers and project managers have a limited understanding of
SCTI, SCI and EP. This study addresses the issue and provides significant practical
guidelines. First, the study highlights the importance of SCTI. Supply chain managers
should first focus on effective utilization of different technology used to support supply
chain. The organization IT system should be well connected with the supply chain partners.
Top management of construction industries should focus on implementing and internalizing
different supply chain technologies. The study further gives a direction to the supply chain
managers that SCP cannot be achieved through use of different technologies rather
internalization of the technologies is the important part. The supply chain technology
integration may make the construction sector competitive performances sustainable. Thus,
results of this research reveal important practitioner implications for IT-enabled SCI. These
practices will improve the information flow and advance the integration across different
departments, vendors/sub-vendors within the construction firm and among supply chain
members. In addition, SCTI helps to improve SCI and SCP. Supply chain managers need to
invest their time in SCTI rather than acquisition of latest technology.
Second, the study highlights the importance of EP and how it helps to improve SCPs.
Project manager and supply chain manager should focus on implementing EP in their
organization. EP facilitates most appropriate vendor selection, online negotiation, etc. In a
construction project, cost is one the leading indicator for project success. This research
guides the project managers about effective implementation of technology and EP to
reduce the overall cost of a project. In addition, SCI with different partners helps to
improve the information flow and its visibility of the construction supply chain, and leads
to ultimate SCP. This study shows that SCTI and EP have partial mediation effect on SCI
to improve SCP.
Finally, this study prepared a guideline for project industries having a vast network of
interdependent suppliers, and contractors to manage the complex supply chain by
information exchange through proper internalization of supply chain technologies in the
organization. Project manager should not consider procurement as a cost reduction
activity; rather, the focus of EP should be on building a long-term relationship with Supply chain
supplier by incorporating transparency, real-time information exchange and joint learning performance
in the system.

8. Conclusion
Throughout the world, efficiency and productivity of the construction industry has been
declining. This study identifies factors that are responsible for improving SCP for the
construction industry. The study is conducted to understand the effect of SCTI and EP on
SCP. A distinctive feature of the work is its empiricism. Most of the prior studies are case
study-based research, and this is first ever research which empirically identifies the
measures of SCP for the construction sector.
This study contributes to advance existing literature by exploring the relationship
among SCTI, EP, and SCI. Based on the researcher’s knowledge, this is the first paper which
introduced SCTI for the construction sector. In addition, this study explored the mediation
effect of SCI between SCTI, EP and SCP. The study revealed that EP and SCI are responsible
for improving the SCP in the construction sector. EP is considered an important resource,
based on RBV theory, which brings transparency in the system particularly for the
construction sector. It is helpful to bridge the gap between discrepancy in scope change,
miscommunication and design change aspects.

9. Limitations and future research directions

As with any empirical study, the current research has some limitations, which opens the
door for future work and study refinement. First, the results are based on perceptions of
SCPs. Future studies should focus on quantitative measures of SCP like budget overrun,
supply chain efficiency and project success. Moreover, the researchers believe that more
case studies based research need to be done to assess project success from multiple sources,
such as project managers, team members, contractors, vendors and other stakeholders.
Second, further research can be done through the exploration of moderating interactions of
the proposed model. This will help to better understand the causal relationship between
SCTI to SCP. Third, findings also suggest that these future research studies should be
undertaken while controlling for cultural norms because this study was done in a
developing country. This geographical limitation prevents the generalization to the
international construction industry. Finally, the empirical test done for the proposed model
is in construction sector, and further research should be carried out in other sectors like
manufacturing, and services to enhance the generalization of the findings.

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Appendix

Supply chain technology internalization (adapted from Huo et al. (2016), Rai et al.
(2006) and Autry et al. (2010))
• SCT1: close linkage between our supply chain technologies, operations strategy and performance.
• SCT2: top management support in supply chain technologies.
• SCT3: organization involvement in implementing supply chain technologies.
• SCT4: department wise allocation of employee to monitor progress and improvement in supply
chain technologies.
• SCT5: involvement of supply chain partners for using supply chain technologies.
• SCT6: support of supply chain technologies for day-day activities.
• SCT7: business experiments are conducted/encouraged to evaluate potential improvements by
supply chain technologies.
• SCT8: IT system seamlessly connected with those of supply chain partners.

E-procurement (adapted from Chang et al. (2013))

• EP1: electronic system to gather information at the procurement request stage and any changes
during execution stage.
• EP2: design of the purchase requirement or the standardized purchasing norm between the
organization and the supplier communicated or negotiated via the internet.
BPMJ • EP3: electronic information system for selecting suitable supplier/vendor and for identifying
the vendor for long-term relationship based on past business analysis.
• EP4: E-negotiation and reverse auctions encouraged with the supplier.
• EP5: database about procurement, rate analysis and past purchasing information stored in
electronic form.

Supply chain performance (adapted from Hult et al. (2007))

• SP1: cost of the project.
• SP2: on-time project completion.
• SP3: client satisfaction.
• SP4: quality of construction.

Supply chain integration (adapted from Chang et al. (2013), Flynn et al. (2010) and
Huo et al. (2014))
• SCI1: cross-functional coordination and integration of events within the company.
• SCI2: strategy alliances for high level of information exchange among contractor, supplier and
sub-contractor.
• SCI3: real-time data integration among all internal functions.
• SCI4: integration of activities from vendor, sub-vendor, contractor and sub-contractor, designer
and client across the supply chain.
• SCI5: frequent contact with supply chain members.
• SCI6: sharing of real-time project progress with all the partners of supply chain.

About the authors

Durgesh Pattanayak is working with Tata Steel Limited, India. He is a Fellow of National Institute of
Industrial Engineering (NITIE), Mumbai, India. He holds an MTech Degree at the IIT (ISM), Dhanbad,
and a BTech Degree at the Biju Patnaik University of Technology, India. His current research
interests include project management, service operations management, total quality management and
supply chain. He has published in different reputed international journals. He has also received
distinguished researcher award at an international conference. Durgesh Pattanayak is the corresponding
author and can be contacted at: durgesh.pattanayak@gmail.com
Plavini Punyatoya is Associate Professor of Marketing at the Xavier Institute of Management,
Xavier University, Bhubaneswar, India. Her current research interests include innovation, online
commerce, new product branding, supply chain management and tourism management. She has
published in Journal of Brand Management, Marketing Intelligence and Planning, Journal of
International Consumer Marketing, Global Business Review, International Journal of Quality &
Reliability Management, and International Journal of Business Excellence. She has also received the Best
Paper awards at various international conferences.

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