The performance impact of supply chain agility and supply chain adaptability: the moderating effect of product complexity

Even though research has suggested that supply chain agility and supply chain adaptability are distinct capabilities, little is known about their performance effects and about the contextual conditions under which they are effective. Based on a sample of 143 German firms, we empirically investigate the effects of supply chain agility and supply chain adaptability on cost performance and operational performance using hierarchical regression analysis. We ground our investigation in the dynamic capabilities view and contingency theory. We find that supply chain agility and supply chain adaptability positively affect both cost performance and operational performance. We further find evidence for a mediating role of supply chain agility in the links between supply chain adaptability and performance. Product complexity positively moderates the links between supply chain adaptability and cost performance, and supply chain adaptability and operational performance. The results contribute to the literature by offering a more nuanced understanding of the performance implications of supply chain agility and supply chain adaptability, thereby addressing the crucial question of why their benefits may or may not materialise under varying levels of product complexity.

[1]  V. Sambamurthy,et al.  Supply chain information technologies and organisational initiatives: complementary versus independent effects on agility and firm performance , 2010 .

[2]  Cecil Bozarth,et al.  The impact of supply chain complexity on manufacturing plant performance , 2009 .

[3]  M. Christopher,et al.  Developing Market Specific Supply Chain Strategies , 2002 .

[4]  L. V. Wassenhove,et al.  A model to define and assess the agility of supply chains: building on humanitarian experience , 2010 .

[5]  D. Ketchen,et al.  Information Processing, Knowledge Development, and Strategic Supply Chain Performance , 2004 .

[6]  Clyde W. Holsapple,et al.  A unified model of supply chain agility : the work-design perspective , 2008 .

[7]  Tobias Schoenherr,et al.  Enterprise Systems Complexity and its Antecedents: A Grounded-Theory Approach , 2010 .

[8]  Yoram Koren,et al.  Product variety and manufacturing complexity in assembly systems and supply chains , 2008 .

[9]  Henk W. Volberda,et al.  Contingency Fit, Institutional Fit, and Firm Performance: A Metafit Approach to Organization-Environment Relationships , 2012, Organ. Sci..

[10]  K. Tan,et al.  Supplier Selection and Assessment: Their Impact on Business Performance , 2002 .

[11]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[12]  David M. Gligor,et al.  Antecedents and Consequences of Supply Chain Agility: Establishing the Link to Firm Performance , 2012 .

[13]  R. Shankar,et al.  Modeling agility of supply chain , 2007 .

[14]  Christopher A. Voss,et al.  Contingency research in operations management practices , 2008 .

[15]  P. Bentler,et al.  Cutoff criteria for fit indexes in covariance structure analysis : Conventional criteria versus new alternatives , 1999 .

[16]  B. Avolio,et al.  . , 2005, The Leadership Quarterly.

[17]  M. Christopher,et al.  Understanding, Implementing and Exploiting Agility and Leanness , 2002 .

[18]  Eric Overby,et al.  Enterprise agility and the enabling role of information technology , 2006, Eur. J. Inf. Syst..

[19]  Raimar Richers.  The theory of economic development , 1961 .

[20]  James M. Sinkula,et al.  Learning Orientation, Market Orientation, and Innovation: Integrating and Extending Models of Organizational Performance , 1999 .

[21]  Cai-feng Li.  Agile Supply Chain: competing in volatile markets , 2009 .

[22]  L. A. Goodman.  On the Exact Variance of Products , 1960 .

[23]  Martin Christopher,et al.  “Supply Chain 2.0”: managing supply chains in the era of turbulence , 2011 .

[24]  L. Donaldson.  The Contingency Theory of Organizations , 2001 .

[25]  M. C. Holcomb,et al.  Understanding the role of logistics capabilities in achieving supply chain agility: a systematic literature review , 2012 .

[26]  Z. Zhang,et al.  A methodology for achieving agility in manufacturing organisations , 2000 .

[27]  D. A. Kenny,et al.  The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. , 1986, Journal of personality and social psychology.

[28]  V. Grover,et al.  An assessment of survey research in POM: from constructs to theory , 1998 .

[29]  K. Srinivasan,et al.  Broader product line: a necessity to achieve success? , 1990 .

[30]  S. S. Rao,et al.  SUPPLY MANAGEMENT, SUPPLY FLEXIBILITY AND PERFORMANCE OUTCOMES: AN EMPIRICAL INVESTIGATION OF MANUFACTURING FIRMS , 2010 .

[31]  Nagesh N. Murthy,et al.  Achieving supply chain agility through IT integration and flexibility , 2008 .

[32]  M. Sobel.  Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models , 1982 .

[33]  David J. Closs,et al.  The differential impact of product complexity, inventory level, and configuration capacity on unit and order fill rate performance , 2010 .

[34]  Kenneth W. Green,et al.  Triple‐A supply chain performance , 2012 .

[35]  C. Blome,et al.  The Impact of Knowledge Transfer and Complexity on Supply Chain Flexibility: A Knowledge-Based View , 2013 .

[36]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[37]  Jonathan D. Aronson,et al.  Modularity and Innovation , 2009 .

[38]  K. Möller,et al.  How Does Adaptability Drive Firm Innovativeness , 2004 .

[39]  M. Lindell,et al.  Accounting for common method variance in cross-sectional research designs. , 2001, The Journal of applied psychology.

[40]  Constantin Blome,et al.  Antecedents and enablers of supply chain agility and its effect on performance: a dynamic capabilities perspective , 2013 .

[41]  M. Swink,et al.  Product Portfolio Architectural Complexity and Operational Performance: Incorporating the Roles of Learning and Fixed Assets , 2011 .

[42]  Matthias Holweg,et al.  Theoretical perspectives on the coordination of supply chains , 2008 .

[43]  R. Shah,et al.  Relationships among information technology, inventory, and profitability: An investigation of level invariance using sector level data , 2007 .

[44]  Tobias Schoenherr,et al.  Revisiting the arcs of integration: Cross-validations and extensions , 2012 .

[45]  Pankaj C. Patel,et al.  The effect of environmental complexity and environmental dynamism on lean practices , 2013 .

[46]  W. P. Carey.  CONTINGENCY HYPOTHESES IN STRATEGIC MANAGEMENT RESEARCH : USE , DISUSE , OR MISUSE ? , 2011 .

[47]  K. Ulrich,et al.  Planning for Product Platforms , 1998 .

[48]  P. Chisnall.  Mail and Internet Surveys: The Tailored Design Method , 2007, Journal of Advertising Research.

[49]  F. Salvadora,et al.  Modularity , product variety , production volume , and component sourcing : theorizing beyond generic prescriptions , 2002 .

[50]  D. Teece.  Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance , 2007 .

[51]  P. Lawrence,et al.  Organization and Environment: Managing Differentiation and Integration , 1967 .

[52]  Hau L. Lee.  The triple-A supply chain. , 2004, Harvard business review.

[53]  David M. Gligor,et al.  A Multidisciplinary Approach to Supply Chain Agility: Conceptualization and Scale Development , 2013 .

[54]  J. Barney,et al.  IS THE RESOURCE-BASED " VIEW " A USEFUL PERSPECTIVE FOR STRATEGIC MANAGEMENT RESEARCH ? , 2001 .

[55]  G. Hult,et al.  Bridging organization theory and supply chain management: The case of best value supply chains , 2007 .

[56]  M. Hobday.  Product complexity, innovation and industrial organisation , 1998 .

[57]  H.L. Lee,et al.  Aligning Supply Chain Strategies with Product Uncertainties , 2002, IEEE Engineering Management Review.

[58]  Lukas Furst,et al.  Multivariate Data Analysis With Readings , 2016 .

[59]  Thomas Y. Choi,et al.  Supply networks and complex adaptive systems: Control versus emergence , 2001 .

[60]  A. Gunasekaran,et al.  Agile manufacturing: The drivers, concepts and attributes , 1999 .

[61]  Stephan Vachon,et al.  An exploratory investigation of the effects of supply chain complexity on delivery performance , 2002, IEEE Trans. Engineering Management.

[62]  Clyde W. Holsapple,et al.  Supply chain agility: scale development , 2009 .

[63]  Karl T. Ulrich,et al.  Component Sharing in the Management of Product Variety: a Study of Automotive Braking Systems , 1999 .

[64]  Kevin J. Dooley,et al.  Supplier innovativeness, organizational learning styles and manufacturer performance: An empirical assessment , 2010 .

[65]  M. Schiro.  Schiro, Michael Stephen, Curriculum Theory: Conflicting Visions and Enduring Concerns. Thousand Oaks, CA: Sage Publications, 2008. , 2008 .

[66]  Nagesh N. Murthy,et al.  The antecedents of supply chain agility of a firm: Scale development and model testing , 2006 .

[67]  K. B. Hendricks,et al.  An Empirical Analysis of the Effect of Supply Chain Disruptions on Long‐Run Stock Price Performance and Equity Risk of the Firm , 2005 .

[68]  James D. Thompson.  Organizations in Action , 1967 .

[69]  Michael J. Braunscheidel,et al.  The organizational antecedents of a firm’s supply chain agility for risk mitigation and response , 2009 .

[70]  M. Jacobs.  Complexity: Toward an empirical measure , 2013 .

[71]  A. Hargadon.  Organizations in Action:Social Science Bases of Administrative Theory (Book) , 2003 .

[72]  Catherine L. Wang,et al.  The development and validation of the organisational innovativeness construct using confirmatory factor analysis , 2004 .

[73]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[74]  Daniel A. Levinthal,et al.  Modularity and Innovation in Complex Systems , 2002, Manag. Sci..