Superior performance through supply chain fit: a synthesis

Abstract

Purpose – The purpose of this paper is to examine how the moderating effect of uncertainty impacts the relationship of operational responsiveness and firm performance. Research on the relationship of supply chain fit and firm performance is discussed in isolation in different streams of research – such as in studies on responsiveness, agility, flexibility, efficiency and lean – without promptly recognising cross-stream contributions. This, at worst, prevents theory development. Therefore, the authors build a synthesis of literature from these streams. Grounded in the synthesis, a well-positioned empirical study that uses best research practices of past studies on the phenomenon is presented. Design/methodology/approach – A cross-sectional survey sample of 875 Russian manufacturing firms was analysed with hierarchical regression. Findings – The findings show that operational responsiveness leads to superior organisational performance if the relationship is moderated by uncertainty and supply chain responsiveness. Additionally, a direct relationship between operational responsiveness and operational performance was found. These results imply that efficiency is a precursor to responsiveness. Originality/value – This paper contributes to the unification of practice–performance studies on lean, agility, flexibility, efficiency and responsiveness into a single stream of research: supply chain fit. The empirical results support contingency theory in the context of supply chain design. This paper also contributes by shedding light on supply chain dynamics of an under-researched national context. For managers, this paper offers concrete advice on decision-making regarding supply chain strategy trade-offs.

In pursuit of supply chain fit

“…They challenged Fisher's proposition that a particular match leads to superior performance, and argued that there is no empirical evidence to support the notion of purely market-responsive or physically efficient supply chain strategies. Hallavo (2015) claimed that supply chain efficiency is not an alternative strategy to responsiveness, but rather a precursor. The findings of Qi et al (2011) confirmed the contention that organisations do not take decisions on supply chain strategy as an 'either-or' choice.…”

“…The cumulative evidence in the supply chain literature suggests that fit is positively related to a firm's operational performance (Stock et al, 2000;Hallavo, 2015) and financial performance (Wagner et al, 2012;Hallavo, 2015, Gligor 2017). Yet, the literature has provided mixed findings on the dichotomy of responsiveness versus efficiency, where the notion of designing purely responsive or cost-efficient supply chains was not supported in the findings of some studies (c.f.…”

“…Yet, the literature has provided mixed findings on the dichotomy of responsiveness versus efficiency, where the notion of designing purely responsive or cost-efficient supply chains was not supported in the findings of some studies (c.f. Selldin and Olhager, 2007;Hallavo 2015). Furthermore, recent research has pointed to a potential trade-off between the resources needed to achieve fit versus the expected benefits (Gligor, 2017).…”

“…For example, Qi et al (2011) validated the moderating effects of demand, supply and technological uncertainty on the relationship between competitive and supply chain strategy, and firm performance. Hallavo (2015) investigated product demand, supply and technological uncertainty and their impact on organisational and operational performance. Wagner et al (2012) investigated supply and demand uncertainty and extended the work of Fisher (1997) by introducing the notion of positive and negative misfit to reflect different degrees of the 'match'.…”

Can Lean and Agile organisations within the UK automotive supply chain be distinguished based upon contextual factors?

“…Essentially, the decoupling point refers to the point in a SC at which order-driven and forecast-driven orders meet (Hoekstra & Romme, 1992 Although the literature asserts that Automotive Supply Chains (ASCs) are lean, there are contingencies in the ASC that may influence the degree to which a firm is lean as opposed to agile. For example, Original Equipment Manufacturers (OEMs) are undoubtedly key players within the ASC, as they control the design, quantity required and the costs of components (Hallavo, 2015). Furthermore, OEMs will typically encourage, or even require, their closest suppliers to also implement lean production, as this will enable them to achieve their desired operational performance (Morris et al, 2004).…”