Supply chain resilience: Conceptualization and scale development using dynamic capability theory

A growing number of researchers and practitioners have placed supply chain resilience (SCRE) at the forefront of their research agendas due to an increased susceptibility to disruptive events in global supply chains. However, empirical research in this area has been affected by the lack of a validated measurement model. In this context, drawing on dynamic capability theory, this research develops a measurement instrument for SCRE. This research conducts a qualitative field study, followed by a quantitative survey. Content analysis is used to explain various dimensions in the qualitative field study, and partial least squares (PLS)-based structural equation modelling (SEM) is used to analyse the data collected in the quantitative survey. The research is conducted with three rounds of data collection and analyses. The results show that SCRE is a multidimensional and hierarchical construct, which consists of three primary dimensions: proactive capability, reactive capability and supply chain design quality. These three primary dimensions are further operationalized through twelve sub-dimensions. The findings also affirm that the SCRE scale potentially better predicts supply chain operational vulnerability (OV) and supply chain performance (SCP) and conforms to the “technical” and “evolutionary” fitness criteria of dynamic capability theory. The implications of these findings are discussed in the context of theory and practice. Limitations and future avenues of research are also discussed.

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

[2]  P. Willroth,et al.  Modelling the economic vulnerability of households in the Phang-Nga Province (Thailand) to natural disasters , 2011 .

[3]  Germaine H. Saad,et al.  Managing Disruption Risks in Supply Chains , 2005 .

[4]  Chad W. Autry,et al.  A contingent resource-based perspective of supply chain resilience and robustness , 2014 .

[5]  H. Torstensson,et al.  Antecedents of organizational resilience in economic crises—an empirical study of Swedish textile and clothing SMEs , 2012 .

[6]  Steven B. Lyman,et al.  Supply chain management: a strategic perspective , 2002 .

[7]  Jennifer Blackhurst,et al.  The Severity of Supply Chain Disruptions: Design Characteristics and Mitigation Capabilities , 2007, Decis. Sci..

[8]  J. Scott Armstrong,et al.  Estimating nonresponse bias in mail surveys. , 1977 .

[9]  F. Bookstein,et al.  Two Structural Equation Models: LISREL and PLS Applied to Consumer Exit-Voice Theory: , 1982 .

[10]  M. Christopher,et al.  Building the Resilient Supply Chain , 2004 .

[11]  U. Bititci,et al.  Change process: a key enabler for building resilient SMEs , 2011 .

[12]  J. Jayaram,et al.  Supply Chain Management: A Strategic Perspective , 1997 .

[13]  Scott J. Grawe,et al.  Firm's resilience to supply chain disruptions: Scale development and empirical examination , 2015 .

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

[15]  E. Hartmann,et al.  Research on the phenomenon of supply chain resilience , 2015 .

[16]  G. Huber,et al.  Retrospective reports of strategic‐level managers: Guidelines for increasing their accuracy , 1985 .

[17]  Carl Marcus Wallenburg,et al.  Dealing with supply chain risks , 2012 .

[18]  Judith M. Whipple,et al.  Global supply chain design considerations: Mitigating product safety and security risks , 2011 .

[19]  Toni M. Whited,et al.  Endogeneity in Empirical Corporate Finance1 , 2013 .

[20]  R. Tibshirani,et al.  An introduction to the bootstrap , 1993 .

[21]  Aleda V. Roth,et al.  New service development competence in retail banking: Construct development and measurement validation , 2007 .

[22]  R. Brislin.  Back-Translation for Cross-Cultural Research , 1970 .

[23]  Mohammed Naim A. Dewan,et al.  Pacific Asia Conference on Information Systems ( PACIS ) 7-15-2012 Supply Chain Resilience To Mitigate Disruptions : A QFD Approach , 2013 .

[24]  Bridgette Sullivan-Taylor,et al.  Creating resilient SMEs: why one size might not fit all , 2011 .

[25]  M. Sarstedt,et al.  A new criterion for assessing discriminant validity in variance-based structural equation modeling , 2015 .

[26]  P. Daugherty,et al.  SUPPLY CHAIN PROCESS INTEGRATION: A THEORETICAL FRAMEWORK , 2009 .

[27]  Amy Z. Zeng,et al.  How many suppliers are best? A decision-analysis approach , 2004 .

[28]  Constance E. Helfat,et al.  Dynamic capabilities : understanding strategic change in organizations , 2007 .

[29]  Fabrizio Salvador,et al.  Looking Inside Glitch Mitigation Capability: The Effect of Intraorganizational Communication Channels , 2014, Decis. Sci..

[30]  Sophie Martin,et al.  The Cost of Restoration as a Way of Defining Resilience: a Viability Approach Applied to a Model of Lake Eutrophication , 2004 .

[31]  H. Günter,et al.  Measuring Supply Chain Performance: Current Research and Future Directions , 2006 .

[32]  Izak Benbasat,et al.  Development of an Instrument to Measure the Perceptions of Adopting an Information Technology Innovation , 1991, Inf. Syst. Res..

[33]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[34]  M. C. Holcomb,et al.  Understanding the concept of supply chain resilience , 2009 .

[35]  V. Daniel R. Guide,et al.  Notes from the Editors: Redefining some methodological criteria for the journal ☆ , 2015 .

[36]  E. Dalziell,et al.  Resilience, Vulnerability, and Adaptive Capacity: Implications for System Performance , 2004 .

[37]  J. Belden,et al.  Challenges in regulating pesticide mixtures , 2004 .

[38]  W. Zinn,et al.  Proactive planning for catastrophic events in supply chains , 2009 .

[39]  Carl Marcus Wallenburg,et al.  The influence of relational competencies on supply chain resilience: a relational view , 2013 .

[40]  S. Finney.  Nonnormal and categorical data in structural equation modeling , 2013 .

[41]  H. Walker,et al.  Risk in supply networks , 2003 .

[42]  K. Lai,et al.  Responsive supply chain : A competitive strategy in a networked economy , 2008 .

[43]  A. Gunasekaran,et al.  A framework for supply chain performance measurement , 2004 .

[44]  Y. Sheffi,et al.  A supply chain view of the resilient enterprise , 2005 .

[45]  Samuel H. Huang,et al.  Designing supply chains: Towards theory development , 2006 .

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

[47]  Stavros T. Ponis,et al.  Supply chain resilience: definition of concept and its formative elements , 2012 .

[48]  L. Välikangas.  The Resilient Organization: How Adaptive Cultures Thrive Even When Strategy Fails , 2010 .

[49]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[50]  Claudia Colicchia,et al.  Increasing supply chain resilience in a global sourcing context , 2010 .

[51]  R. Narasimhan,et al.  INFORMATION SYSTEM UTILIZATION STRATEGY FOR SUPPLY CHAIN INTEGRATION. , 2001 .

[52]  Giovanni Miragliotta,et al.  Complexity management and supply chain performance assessment. A field study and a conceptual framework , 2004 .

[53]  Aleda V. Roth,et al.  B2B seller competence: Construct development and measurement using a supply chain strategy lens , 2007 .

[54]  Scott B. MacKenzie,et al.  Construct Measurement and Validation Procedures in MIS and Behavioral Research: Integrating New and Existing Techniques , 2011, MIS Q..

[55]  Brian J. Sauser,et al.  A framework for investigation into extended enterprise resilience , 2010, Enterp. Inf. Syst..

[56]  Marko Sarstedt,et al.  PLS-SEM: Indeed a Silver Bullet , 2011 .

[57]  Constantin Blome,et al.  Antecedents of proactive supply chain risk management – a contingency theory perspective , 2012 .

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

[59]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[60]  C. S. Holling.  Resilience and Stability of Ecological Systems , 1973 .

[61]  M. Leiblein.  What Do Resource- and Capability-Based Theories Propose? , 2011 .

[62]  Binayak Sen,et al.  Growth of garment industry in Bangladesh : economic and social dimensions : proceedings of a National Seminar on Ready-made Garment Industry, held in Dhaka, Bangladesh, January 21-22, 2000 , 2001 .

[63]  Benjamin T. Hazen,et al.  A Trail Guide to Publishing Success: Tips on Writing Influential Conceptual, Qualitative, and Survey Research , 2014 .

[64]  Jennifer Blackhurst,et al.  Keep Your Friends Close? Supply Chain Design and Disruption Risk , 2015, Decis. Sci..

[65]  Brian Tomlin,et al.  On the Value of Mitigation and Contingency Strategies for Managing Supply Chain Disruption Risks , 2006, Manag. Sci..

[66]  K. Scholten,et al.  The role of collaboration in supply chain resilience , 2015 .

[67]  I. Mitroff,et al.  Preparing for evil. , 2003, Harvard business review.

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

[69]  L. Gunderson.  Ecological Resilience—In Theory and Application , 2000 .

[70]  Eric D. Vugrin,et al.  A resilience assessment framework for infrastructure and economic systems: Quantitative and qualitative resilience analysis of petrochemical supply chains to a hurricane , 2011 .

[71]  G. Micheli,et al.  Green supply chain practices and company performance: the case of 3PLs in Italy , 2012 .

[72]  Kevin B. Hendricks,et al.  The effect of supply chain glitches on shareholder wealth , 2003 .

[73]  Nathan S. Hartman,et al.  Method Variance and Marker Variables: A Review and Comprehensive CFA Marker Technique , 2010 .

[74]  Peter Alcott,et al.  Exploring the Crisis Readiness Perceptions of Hotel Managers in the UK , 2006 .

[75]  Samir Dani,et al.  Resilience: the concept, a literature review and future directions , 2011 .

[76]  Rudolf R. Sinkovics,et al.  The Use of Partial Least Squares Path Modeling in International Marketing , 2009 .

[77]  Thomas Y. Choi,et al.  The Supply Base and Its Complexity: Implications For Transaction Costs, Risks, Responsiveness, and Innovation , 2006 .

[78]  P. Dorfman,et al.  Leadership and Organizations: The GLOBE Study of 62 Societies , 2004 .

[79]  F. McFarlan,et al.  The information archipelago--plotting a course. , 1983, Harvard business review.

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

[81]  Yossi Sheffi,et al.  The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage , 2005 .

[82]  S. Geisser.  A predictive approach to the random effect model , 1974 .

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

[84]  Marc J. Epstein,et al.  Using a Balanced Scorecard to Implement Sustainability , 2001 .

[85]  Christopher S. Tang,et al.  The power of flexibility for mitigating supply chain risks , 2008 .

[86]  Christopher S. Tang.  Robust strategies for mitigating supply chain disruptions , 2006 .

[87]  David Woods,et al.  Resilience Engineering: Concepts and Precepts , 2006 .

[88]  Keely L. Croxton,et al.  ENSURING SUPPLY CHAIN RESILIENCE: DEVELOPMENT OF A CONCEPTUAL FRAMEWORK , 2010 .

[89]  Cheryl Burke Jarvis,et al.  A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research , 2003 .

[90]  Martin Wetzels,et al.  Hierarchical latent variable models in PLS-SEM: guidelines for using reflective-formative type models , 2012 .

[91]  Joseph Fiksel,et al.  Designing resilient, sustainable systems. , 2003, Environmental science & technology.

[92]  Robert D. Klassen,et al.  Socially Responsible Practices: An Exploratory Study on Scale Development using Stakeholder Theory , 2014, Decis. Sci..

[93]  E. Erdfelder,et al.  Statistical power analyses using G*Power 3.1: Tests for correlation and regression analyses , 2009, Behavior research methods.

[94]  U. Juettner,et al.  Supply chain resilience in the global financial crisis: an empirical study , 2011 .

[95]  Muhammad Azizul Islam,et al.  Motivations for an Organisation within a Developing Country to Report Social Responsibility Information: Evidence from Bangladesh , 2008 .

[96]  J. Fiksel.  Sustainability and Resilience: Toward a Systems Approach , 2006, IEEE Engineering Management Review.

[97]  Gaby Odekerken-Schröder,et al.  Using PLS path modeling for assessing hierarchial construct models: guidelines and impirical illustration , 2009 .

[98]  Andrew W. H. Ip,et al.  Measurement of resilience and its application to enterprise information systems , 2010, Enterp. Inf. Syst..

[99]  M. Stone.  Cross‐Validatory Choice and Assessment of Statistical Predictions , 1976 .

[100]  A. Rose.  DEFINING AND MEASURING ECONOMIC RESILIENCE TO DISASTERS , 2004 .

[101]  C. Samuel Craig,et al.  Collaborative and Iterative Translation: An Alternative Approach to Back Translation , 2007 .

[102]  Christian F. Durach,et al.  Antecedents and Dimensions of Supply Chain Robustness: A Systematic Literature Review , 2015 .

[103]  Jennifer Blackhurst,et al.  A model for inbound supply risk analysis , 2006, Comput. Ind..

[104]  Stephan M. Wagner,et al.  Structural drivers of upstream supply chain complexity and the frequency of supply chain disruptions , 2015 .

[105]  Robert J. Vokurka,et al.  Delphi study on supply chain flexibility , 2005 .

[106]  Marko Sarstedt,et al.  Partial least squares structural equation modeling (PLS-SEM): An emerging tool in business research , 2014 .

[107]  Hau L. Lee,et al.  Mitigating supply chain risk through improved confidence , 2004 .

[108]  Qingyu Zhang,et al.  Manufacturing flexibility: Defining and analyzing relationships among competence, capability, and customer satisfaction , 2003 .

[109]  Wynne W. Chin,et al.  Structural equation modeling analysis with small samples using partial least squares , 1999 .

[110]  Nuruzzaman,et al.  Lead time management in the garment sector of Bangladesh: an avenues for survival and growth , 2009 .

[111]  R. Handfield,et al.  An empirically derived agenda of critical research issues for managing supply-chain disruptions , 2005 .

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

[113]  Keely L. Croxton,et al.  Ensuring Supply Chain Resilience: Development and Implementation of an Assessment Tool , 2013 .

[114]  M. Quaddus,et al.  Supply chain risk management (SCRM): a case study on the automotive and electronic industries in Brazil , 2009 .

[115]  Shahriar Akter,et al.  Development and validation of an instrument to measure user perceived service quality of mHealth , 2013, Inf. Manag..

[116]  Jason Bennett Thatcher,et al.  Conceptualizing models using multidimensional constructs: a review and guidelines for their use , 2012, Eur. J. Inf. Syst..

[117]  Trevor S. Hale,et al.  Improving supply chain disaster preparedness: A decision process for secure site location , 2005 .

[118]  M. Quaddus,et al.  A multiple objective optimization based QFD approach for efficient resilient strategies to mitigate supply chain vulnerabilities: The case of garment industry of Bangladesh , 2015 .

[119]  Uta Jüttner.  Supply chain risk management: Understanding the business requirements from a practitioner perspective , 2005 .

[120]  Andreas Norrman,et al.  Ericsson’s Proactive Supply Chain Risk Management-approach After a Serious Supplier Accident , 2004 .