The aim of this study was to empirically examine the effect of supply chain integration on organizational performance and to identify the associated challenges that affect firms supply chain integration. Supply chain integration, in this study refers to the internal, external (both up and downstream) integration of firms in their value chain. The study found a significant positive relationship between supply chain integration construct and operational performance of firms. However, the relationship between internal integration and external integration found to be statistically insignificant with having very weak positive relationships. Beside these the associated challenges have been also identified. Note that, the conclusion obtained from this study may not be used to generalize to over all supply chain network performance since its focus is only from the manufacturers points of view.