Investigating Supply-Side Flexibility to Support Sustainability Business Performance: Learning from Coffee Shops in Malang City

Abstract

An important dimension of value chain flexibility is supply-side flexibility, which refers to the range and ability to accommodate changes in production output related to internal operating efficiency. Meanwhile, flexibility in supply chain networks can help reduce supply chain risk when dealing with uncertainty. Therefore, supply-side flexibility is crucial in responding to consumer demand to improve business sustainability and competitiveness. This research aims to examine the impact of product efficiency, product complexity, and operational risk on supply-side flexibility (volume). A total of 56 respondents who are coffee shop business owners in Malang city have been used as samples for this research. Of course, the number of samples has been adjusted to the bare minimum of data requirements for research analysis, namely PLS-SEM approach. The findings show that product efficiency and product complexity have a significant direct effect on supply-side flexibility, whereas operation risk has no significant direct effect. Our findings contribute to the literature on supply chain management by filling gaps and assisting managers in making strategic decisions regarding flexibility that support business sustainability.

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