Brandon-Jones Et Al-2014-Journal of Supply Chain Management

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A CONTINGENT RESOURCE-BASED PERSPECTIVE OF

SUPPLY CHAIN RESILIENCE AND ROBUSTNESS


EMMA BRANDON-JONES
University of Manchester

BRIAN SQUIRE
University of Bath

CHAD W. AUTRY
University of Tennessee

KENNETH J. PETERSEN
University of Tennessee

Understanding supply chain resilience and robustness is increasingly


important for supply chain managers. This is due to the growing complex-
ity of contemporary supply chains and the subsequent increased probabil-
ity of experiencing a disruption. Few studies within the risk management
literature have empirically disentangled the concepts of resilience and
robustness or explored their antecedents. This study utilizes a contingent
resource-based view perspective to understand the relationship between
specific resources (information sharing and connectivity), capabilities (vis-
ibility), and performance in terms of supply chain resilience and robust-
ness. In addition, it utilizes supply base complexity as a moderating
factor. Survey data collected from 264 UK manufacturing plants suggest
that supply chain connectivity and information sharing resources lead to
a supply chain visibility capability which enhances resilience and robust-
ness. Of the four dimensions of complexity, only scale is found to have a
strong moderating effect on this relationship, while geographic disper-
sion, differentiation, and delivery complexity do not have contingent
effects. This study highlights theoretical and managerial implications for
approaches to resilience and robustness.

Keywords: risk management; supply chain resilience; supply chain robustness;


resource-based view; supply management; buyer/supplier relationships; survey
methods; regression analysis; factor analysis

INTRODUCTION coupling, increased complexities, reduced inventory


Supply chain risk management remains a key mana- levels, and ever-greater geographic dispersion have
gerial challenge that affects the performance of organi- reduced costs in supply chains, but have also created
zations (Altay & Ramirez, 2010; Hendricks & Singhal, greater vulnerabilities (Bode, Wagner, Petersen &
2005b). Despite increased attention from academia Ellram, 2011).
and industry, the frequency and impact of disruptions As a result, many organizations, including Boeing,
remains stubbornly high. In part, this may be ascribed Cisco, Coca-Cola, and Proctor and Gamble (www.
to rises in events, such as natural disasters, that are scrlc.com), are working with organizations across their
outside of managerial control (Guha-Sapir, Vos, Below supply chains to create resilience and robustness. We
& Ponserre, 2012), but is also due to changes in the define supply chain resilience as the ability of a supply
design of supply chains. Characteristics such as tighter chain to return to normal operating performance, within

July 2014 55
Journal of Supply Chain Management

an acceptable period of time, after being disturbed (cf. (Sirmon, Hitt, Ireland & Gilbert, 2011), also suggests
Christopher & Peck, 2004) and supply chain robust- that there are contingencies that impact the effective-
ness as the ability of the supply chain to maintain its func- ness or outcomes of the bundling process. Environ-
tion despite internal or external disruptions (cf. Kitano, mental factors such as dynamism can change the
2004). For example, Toyota was able to resume pro- effect of capabilities on competitive outcomes
duction at 29 plants just 3–4 days after the Kobe (Sirmon et al., 2007). Our study is consistent with
earthquake of 1995 (Fujimoto, 2011), while Li and this logic and examines the contingent effects of sup-
Fung were able to continue to supply their customers ply base complexity on the outcomes of visibility.
in the midst of the Indonesian currency crisis when Because supply chains are increasingly complex
many of their competitors had to halt production (Blackhurst, Craighead, Elkins & Handfield, 2005),
(Tang, 2006b). The former is an example of a resilient we argue that visibility will see maximum returns to
supply chain and the second an example of a robust resilience and robustness when supply bases are com-
supply chain. plex. Supply chains that are relatively localized and
This study applies the contingent resource-based small may be able to rely on personal and informal
view (RBV; Brush & Artz, 1999) to help our under- communication mechanisms to manage risks. How-
standing of how and when organizations can create ever, where supply chains grow, becoming complex
supply chain resilience and robustness. The RBV and globalized, the ability to understand inventory
argues that organizations may achieve competitive and demand reduces some of the uncertainty associ-
advantage through the bundling of resources to create ated with longer pipelines and allows organizations
capabilities (Barney, 1991), while the contingent RBV to quickly and accurately reroute product flows if
suggests that this is dependent on certain conditions. disruptions occur.
In this study, visibility is considered to be a key capa- This study offers three main contributions to the lit-
bility in reducing supply chain risk (Christopher & erature. First, building on research by Barratt and Oke
Lee, 2004), yet surprisingly, broad empirical evidence (2007) and Wieland and Wallenburg (2013), we
for its effects appear largely absent from the literature. investigate the benefits of visibility on reducing risk
Visibility is such an important antecedent to risk (Rao & Goldsby, 2009). Blackhurst et al. (2005) dem-
reduction, not only because its presence helps organi- onstrate the significant impact visibility can have for
zations proactively track products and identify poten- disruption recovery, yet empirical survey evidence is
tial disruptions, but also because its absence can broadly absent (Rao & Goldsby, 2009). Second, we
create new risks. This is exemplified by what Christo- extend the RBV analysis of supply chain visibility
pher and Lee (2004) term the “risk spiral” and is (Barratt & Oke, 2007), to add the contingent effects
associated with the accumulation of buffer stock and of supply base complexity, specifically answering calls
the creation of long pipelines. We examine two critical within the field of supply chain risk management
resources in the development of supply chain visibil- (Blackhurst et al., 2005). Finally, we address calls for
ity: supply chain connectivity and information shar- more theory application in the field of supply chain
ing, where connectivity relates to the technological risk management (SCRM; Manuj & Mentzer, 2008).
infrastructure through which information is conveyed SCRM is a nascent field (Sodhi, Son & Tang, 2012),
to supply chain partners (Zhu & Kraemer, 2002) and and therefore in line with the principles of methodo-
information sharing relates to the nature, speed, and logical fit (Edmondson & Mcmanus, 2007), has
quality of the information being conveyed (Cao & broadly focused on exploratory, atheoretical analysis
Zhang, 2011). of concepts. We leverage a contingent RBV to
Our model is explicitly predicated on the notion of show how visibility as a capability (cf. Barratt & Oke,
resource bundling, whereby resources which are pos- 2007) influences resilience and robustness and more-
sessed by the organization, in this case supply chain over how this effect is dependent on supply base
connectivity and information sharing, are integrated complexity.
to create capabilities, in this case supply chain visibil- The remainder of the paper is structured as follows.
ity. While the majority of the RBV literature examines First, we introduce our theoretical perspective and
resources and capabilities associated with creating review the literature on the contingent RBV. We then
value and/or competitive advantage, risk management present our literature review of supply chain resil-
is primarily a value protection activity (Paape & ience, robustness, and visibility before detailing our
Spekle, 2012). Therefore, we suggest that visibility is a hypothesis development. Next, we describe our meth-
specific capability that allows the organization to odology and measures before presenting our findings.
mitigate threats in their supply chain to safeguard Finally, we discuss these findings in the context of
organizational performance. empirical and theoretical contributions, managerial
Recent theorizing within resource management implications, limitations, and suggestions for future
(Sirmon, Hitt & Ireland, 2007), or orchestration research.

56 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

THEORETICAL FRAMING Ravichandran and Lertwongsatien (2005) examine the


effect that information systems resources and capabili-
The Need for a Contingent Resource-Based View ties have on organizational performance. They find
The RBV asserts that an organization can achieve that information systems capabilities are necessary in
competitive advantage by creating bundles of strategic order for an organization to utilize information tech-
resources and/or capabilities (Barney, 1991; Hoopes, nology effectively and that information systems capa-
Madsen & Walker, 2003; Rumelt, 1984). Purchasing bilities rely on technological, human, and relational
and supply chain management have been identified as resources. Hitt, Bierman, Shimizu, and Kochhar
having the potential to generate competitive advan- (2001) identify that the capability to leverage human
tage (Barney, 2012; Priem & Swink, 2012), so long as capital resources may lead to improved performance;
the resources or capabilities have the attributes of however, the resource of human capital alone and its
being valuable, rare, inimitable, and nonsubstitutable interplay with the previously outlined capability do
(Barney, 1991). Although antagonists of the RBV criti- not enhance performance as they may increase costs.
cize the lack of clarity between terms such as resources Zhu and Kraemer (2002) find some evidence support-
and capabilities, these are increasingly differentiated ing the fact that the interplay between IT infrastruc-
within the extant literature. Resources have been cate- ture (as a resource) and e-commerce capability may
gorized as physical capital, human capital, and organi- lead to increased performance. They suggest that capa-
zational capital (Barney, 1991) and have been bilities need to be developed in order to exploit exist-
extended to include financial capital, technological ing resources.
capital, and reputational capital (Grant, 1991). They Despite the prevalence of the RBV within the extant
may be tangible, such as infrastructure, or intangible, literature, it has been argued that the theory suffers
such as information or knowledge sharing (Gr€ obler & from “context insensitivity” (Ling-yee, 2007, p. 360).
Gr€ubner, 2006). Resources are “something a firm pos- This suggests that it is unable to identify the condi-
sesses or has access to, not what a firm is able to do” tions in which resources or capabilities may be
(Gr€obler & Gr€ubner, 2006, p. 460). As such, they may most valuable (Ling-yee, 2007). Contingency theory
not provide value on their own but instead need to addresses this notion of contingent conditions and
be processed or utilized in bundles in order to drive argues that internal and external conditions will influ-
performance (Newbert, 2007). Bundling refers to the ence how to manage an organization or supply chain
integration of resources to allow capability develop- (Gr€otsch, Blome, and Schleper 2013) and subse-
ment (Sirmon, Gove & Hitt, 2008). This bundling quently may affect the resources or capabilities
process is necessary in order “to exploit opportunities needed to drive performance under diverse condi-
and/or mitigate threats” (p. 922) in a specific context tions. Contingency theory suggests that organizations
if organizations are to achieve or maintain competi- must adapt depending on the environmental condi-
tive advantage (Sirmon et al., 2008). tions in which they exist (Donaldson, 2001). A con-
Organizational capabilities are defined as a higher- tingent RBV has been suggested by scholars as it
order construct which relies on the bundling of helps to address the somewhat static nature of the
resources (Wu, Yeniyurt, Kim & Cavusgil, 2006). RBV. The development of this is useful to evaluate
When resources are combined and utilized together, the extent to which different organizational resources
they create capabilities (Grant, 1991). The bundling or capabilities may provide value (Arag on-Correa &
of resources is necessary to create unique capabilities Sharma, 2003), to further enhance the usefulness of
which create value (Sirmon et al., 2007, 2008) and the theory (Brush & Artz, 1999), and to identify con-
are potentially superior to those of competitors (Lu, ditions which affect the utility of different resources
Zhou, Bruton, & Li 2010). These capabilities must be or capabilities. Contingencies have been identified as
those identified as necessary for the organization critical in the realization of competitive advantage
(Hitt, 2011), therefore they are dependent on the created by resources and capabilities, especially in
environmental conditions in which the organization relation to selection and deployment (Sirmon & Hitt,
exists. The existence and utilization of capabilities 2009). Contingency factors such as national context
may help to explain how organizations achieve or sus- and culture, firm size, strategic context, and other
tain competitive advantage (Wu et al., 2006). Com- organizational variables have been considered within
petitive advantage created by capabilities will be more the operations and supply chain management litera-
deeply embedded within the organization’s manage- ture (Sousa & Voss, 2008). Contingency research is
ment and processes and therefore more likely to be highlighted as necessary for the development of oper-
sustainable than competitive advantage created purely ations and supply chain management (Sousa & Voss,
by resources (Brush & Artz, 1999). 2008); however to date, contingent perspectives on
Resources and capabilities have been explored the RBV are underdeveloped in the literature.
together in a limited number of studies. For example,

July 2014 57
Journal of Supply Chain Management

LITERATURE REVIEW AND HYPOTHESIS to disruptions, and recover from them by maintaining
continuity of operations at the desired level of con-
DEVELOPMENT
nectedness and control over structure and function.”
Supply Chain Resilience and Robustness Although this definition has some similarities to that
From the RBV perspective, supply chain resilience used in this study, we argue that resilience is an out-
and robustness can be understood as performance put measure which is dependent on capabilities such
outcomes (see Figure 1). As supply chain disruptions as visibility. In addition, we argue that “maintaining
may have severe and long-term economic impacts continuity” relates more to robustness than resilience.
(Hendricks & Singhal, 2005a,b), resilience and robust- However, various definitions exist in the literature due
ness may be created to mitigate threats to organiza- to its nascent stage (Blackhurst et al., 2011), and the
tional performance. A core concern of this paper is to concept of resilience requires further empirical
theoretically and empirically distinguish supply chain research (Bhamra, Dani & Burnard, 2011).
resilience from supply chain robustness. While prior Supply chain robustness is defined as the ability of
research has, on occasion, conflated the two terms, the supply chain to maintain its function despite internal
used them interchangeably (Christopher & Peck, or external disruptions (cf. Kitano, 2004). Definitions of
2004), and/or switched the causal logic, their concep- robustness focus on the ability to continue with oper-
tual meaning is actually distinct. Supply chain resil- ations (Stonebraker, Goldhar & Nassos, 2009) while
ience is defined as the ability of a system to return to resisting the impact of supply chain disruptions. It has
its original state, within an acceptable period of time, been argued that supply chain robustness has yet to
after being disturbed. This definition is consistent with be clearly defined in the supply chain risk literature
previous research such as that of Sheffi (2005) and and remains misunderstood (Vlajic, van Lokven,
Christopher and Peck (2004). Resilience implies that Haijema & van der Vorst, 2012). In addition, further
the disruption has a negative impact on the system work, for example developing scales, is required
but that it is able to recover to its original state. (Natarajarathinam, Capar & Narayanan, 2009).
Increased resilience within the supply chain is Robustness is frequently misunderstood to be a static
deemed to be positive (Blackhurst, Dunn & Craig- concept, implying that a system and its operations
head, 2011), and extant research details strategies to remain unchanged in the face of perturbations. In
build resiliency (e.g., Manuj & Mentzer, 2008). Pono- fact, robust systems often require change at the
marov and Holcomb (2009, p131) define supply structural or component level to maintain functional-
chain resilience as “the adaptive capability of the sup- ity (Kitano, 2004). For example, many electronic firms
ply chain to prepare for unexpected events, respond qualify a second supplier and assign a small

FIGURE 1
Hypothesized Relationships

Resources Capability Performance

Supply Chain Supply Chain


H2 H4
Connectivity Resilience

H1 Visibility

Supply Chain H3 H5 Supply Chain


Information Sharing Robustness
H6a

H6b

Contingencies – Supply base complexity

Geographic Scale Differentiat Delivery


Dispersion Complexity ion Complexity

58 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

proportion (circa 5% per annum) of spend. Qualify- The Impact of Connectivity on Information
ing and maintaining a second supplier might increase Sharing
direct and indirect costs but provides responsive According to RBV logic, resources may need to be
switching in the event of a disruption. This “fail safe combined and utilized together in order to create
mechanism” means that components of the system capabilities (Grant, 1991). Both supply chain connec-
can adapt in response to specific perturbations while tivity and information sharing can be positioned as
maintaining overall operating performance. resources (see Figure 1), which may lead to a visibility
capability through the bundling of these resources
Supply Chain Visibility (Sirmon et al., 2007). Bundling resources obtained
Prior research has conceptualized supply chain visi- from suppliers has been identified as being complex
bility as a capability (Barratt & Oke, 2007; J€ uttner & (Hitt, 2011); although the resources of connectivity
Maklan, 2011) which may reduce the negative impacts and information sharing may be defined as boundary
of a supply chain disruption (Christopher & Lee, spanning, they still reside within the control of the
2004). Within the RBV, capabilities are understood to focal organization. Information sharing can be catego-
influence performance (see Figure 1) or lead to sus- rized as organizational capital, a resource which
tained competitive advantage (Newbert, 2007; Wu focuses on the flow of information (Premkumar &
et al., 2006). The concept of supply chain visibility has King, 1994). Its utility is dependent on its quality
been largely under-refined within the extant literature (Zhou & Benton, 2007). However, the quality, accessi-
and a consistent definition is still absent (Francis, bility, accuracy, and relevance of the information
2008). At times, there has been a lack of distinction (Cao & Zhang, 2011) are reliant on effective delivery.
between information sharing and visibility (Barratt & Therefore, the intangible nature of information shar-
Oke, 2007). While information sharing is predomi- ing can be seen to be dependent on tangible IT infra-
nantly concerned with the quality and relevance of structure or support technology, otherwise referred to
information provided (Cao & Zhang, 2011), visibility as supply chain connectivity (Fawcett, Osterhaus,
is concerned with the information flow in terms of Magnan, Brau & McCarter, 2007). Connectivity is an
inventory and demand levels within the supply chain at example of a technological resource, which enables
a given time (Braunscheidel & Suresh, 2009) and the effective sharing of the information (Barratt &
enables supply chains to be more transparent (Christo- Oke, 2007) and compatible systems reduce risk
pher & Lee, 2004). Information sharing is therefore (Zsidisin, 2003). In addition, supply chain connectiv-
regarded as an intangible internal resource, while sup- ity facilitates more successful decision-making and
ply chain visibility is seen as a broader capability improved coordination (Fawcett, Wallin, Allred &
whereby material and information flows are captured. Magnan, 2009). Therefore,
In order to share information, organizations have
H1: Supply chain connectivity has a positive
focused on the creation of linkages across the supply
impact on information sharing.
chain to enhance the visibility of their supply chain
operations (Mabert & Venkataramanan, 1998). The
use of these external linkages may improve both visi- The Impacts of Connectivity and Information
bility and supply chain performance, for example Sharing on Visibility
through reducing the negative effect of demand distor- According to the RBV, strategic resources and/or
tions (Lee, So & Tang, 2000), allowing organizations capabilities may lead to competitive advantage
to be more agile (Christopher, 2000), creating strate- (Barney, 1991) and resources may be tangible or
gic value (Wei & Wang, 2010), and improving opera- intangible (Gr€ obler & Gr€ubner, 2006). The bundling
tional efficiency and planning (Caridi, Crippa, Perego, of resources may lead to capability development
Sianesi & Tumino, 2010). Barratt and Oke (2007) (Grant, 1991). Supply chain connectivity relates to the
suggest that the relationship between information tangible resources necessary to share information
sharing and performance is mediated by visibility and through a supply chain such as information systems.
that operational performance can be enhanced Connectivity might also be referred to as an organiza-
through increased visibility. In addition, supply chain tion’s IT infrastructure which is perceived as an impor-
visibility may help to mitigate supply chain risk tant business resource (Zhu & Kraemer, 2002). It may
through improved confidence, reduced interventions, be defined as a resource and seen to facilitate the
and improved decision-making (Christopher & Lee, development of capabilities within the supply chain
2004) as well as enhancing resilience (J€ uttner & (Wu et al., 2006). Connectivity refers to an organiza-
Maklan, 2011). However, the relationship between tion’s ability to gather and share information
supply chain visibility, and both supply chain resil- (Fawcett, Wallin, Allred, Fawcett & Magnan, 2011)
ience and robustness, has not yet been empirically through the use of information and communication
explored through survey data. technologies (ICTs). However, while technology may

July 2014 59
Journal of Supply Chain Management

provide the platform for supply chain visibility, infor- of a supply chain disruption (Christopher & Lee,
mation sharing is by no means guaranteed (Fawcett 2004) and therefore lead to enhanced robustness and/
et al., 2011). The utility of supply chain connectivity or resilience (J€
uttner & Maklan, 2011).
is dependent on the nature and quality of information Kleindorfer and Saad (2005) suggest that it is a
shared. The existence of supply chain connectivity requirement of the risk management process of supply
allows organizations within a supply chain to share chains to have system-wide visibility of vulnerabilities.
information (Fawcett et al., 2011) and is therefore a If managers are able to identify possible threats or
prerequisite for the successful development of a sources of disruption, they can start to develop busi-
supply chain visibility capability. Therefore, ness continuity plans and scenarios that should help
speed up recovery in the event of a disruption. For
H2: Supply chain connectivity has a positive
example, joint continuity planning ensured that a
impact on supply chain visibility.
buying organization was prioritized in the event of a
Information sharing relates to intangible resources big supplier closing down capacity (J€ uttner & Maklan,
concerning the nature of information shared. Informa- 2011), therefore increasing the speed of recovery.
tion itself may be seen as a resource (Barney, 1991) Tang (2006a,b) suggests that increased visibility
and should be timely, full, correct, pertinent, and con- would enable parties in the supply chain to generate a
fidential (Cao & Zhang, 2011). The sharing of appro- common demand forecast that, if combined with a
priate and timely information between supply chain proportional restoration rule, could aid the efficient
actors may lead to improved visibility (Christopher & return to normal inventory levels in the event of a dis-
Lee, 2004), especially strategies which relate to infor- ruption. In this case, visibility is reducing the resource
mation sharing regarding inventory and demand lev- intensity required for recovery. Thus,
els across the supply chain (Tang, 2006a,b). When
H4: Supply chain visibility has a positive impact
information sharing is successful, it may lead to visi-
on supply chain resilience.
bility and more open exchange between supply chain
actors. A supply chain visibility capability also promotes
While supply chain connectivity provides the tangi- robustness. System-wide visibility allows organizations
ble resource which allows the real-time seamless inter- to identify a broad range of bottlenecks and other
action of actors across the supply chain through the potential risks and therefore take mitigating action
use of ICTs (Fawcett et al., 2007), information sharing before a disruption occurs. For example, visibility of
provides the intangible resources regarding the nature the system allowed a retailer to divert inventory to a
of information and appropriate and timely sharing. different port in advance of the strike at the Port of
The bundling of these resources may lead to the Los Angeles (Craighead, Blackhurst, Rungtusanatham
development of a capability (Sirmon et al., 2007) that & Handfield, 2007). More recently, we have also seen
of supply chain visibility (Christopher & Lee, 2004; moves to develop cross-industry collaborations to
see Figure 1). Therefore, identify broad systems risks that can only be identi-
fied when organizations share information and create
H3: Information sharing has a positive impact on
visibility of inventory data. For example, Toyota, Jag-
supply chain visibility.
uar Land Rover, and Aston Martin are collaborating to
create visibility of their supply chains: “We were never
The Impact of Visibility on Supply Chain going to do this alone. . .But collaborations really ben-
Resilience and Robustness efit the automotive industry as a whole” (David Wyer,
Developments in the RBV suggest that holding valu- Senior Purchasing Manager for Aston Martin cited in
able and rare resources is a necessary but not suffi- Jones, 2013). Visibility allows organizations to iden-
cient condition to achieve competitive advantage tify and prepare for a broad range and amplitude of
(Hitt, 2011). Additionally, resources must be bundled risks.
into capabilities required by the organization and Similarly, visibility of demand information may also
these capabilities must be effectively leveraged to cre- help to reduce exposure to specific risks, such as fore-
ate or protect value (Sirmon et al., 2008). Our study cast risk or the risk of distorted demand signals
is particularly interested in the notion of value protec- (Chopra & Sodhi, 2004; Lee, 2010). For example,
tion where the development of supply chain resilience visibility of the demand signal is critical to the
and robustness has clear implications for operating production scheduling and inventory control of Zara.
performance (Hendricks & Singhal, 2005a,b) and By sharing information between each store and the
shareholder wealth (Hendricks & Singhal, 2005a,b). headquarters on a daily basis, Zara can dynamically
We suggest that an improved supply chain visibility adjust the production schedule and therefore substan-
capability may reduce both the probability and impact tially reduce the probability of stockouts or excess

60 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

inventory (Ferdows, Lewis & Machuca, 2004). This vis- We argue that each dimension of complexity creates
ibility capability is of great value to the organization. greater uncertainty and therefore an additional oppor-
Thus, tunity for visibility to benefit managers. Localized,
small and undifferentiated networks are, by nature,
H5: Supply chain visibility has a positive impact
more robust and resilient to failure. However, the
on supply chain robustness.
uncertainties created by supply base complexity mean
that supply chain visibility will have a greater effect
The Moderating Role of Supply Base Complexity on reducing the probability of failure and improving
In a recent review of the RBV, Kraaijenbrink, the speed of response in more complex supply chains.
Spender and Groen (2010, p. 365) argue that “the Additional insights can be gained through visibility
moment we try to explain or predict the firm’s actual that allows managers to become aware of vulnerabili-
performance. . .the RBV turns out to be incomplete ties that were hidden through complex networks.
because it ignores the material contingencies of the Organizations often lack visibility past their tier 2 sup-
firm’s situation.” Our study responds to this challenge pliers and this proved to be problematic during the
to examine the contingent effect of supply base com- Japanese 2011 tsunami and earthquake where lack of
plexity on the relationships between supply chain visi- visibility alongside a just-in-time strategy of low
bility, resilience, and robustness (see Figure 1). inventory levels led to significant delays within the
Although enhanced supply chain visibility may lead automotive industry (Bunkley, 2011). Therefore,
to a reduced likelihood of experiencing, or suffering
H6a: Supply base complexity positively moderates
deleterious consequences as a result of, a supply chain
the relationship between visibility and supply
disruption, the contingent conditions under which the
chain resilience: the higher the complexity,
additional cost of improving visibility is worthwhile
the greater the beneficial effects of visibility
are less clear (Blackhurst et al., 2005). Given that
on resilience.
there is a broad portfolio of supply chain risk options
available to managers, including insurance products, H6b: Supply base complexity positively moderates
risk sharing contracts, developing flexibility, and so the relationship between visibility and supply
on, it is critical for managers to understand the condi- chain robustness: the higher the complexity,
tions under which improving visibility will provide a the greater the beneficial effects of visibility
strong return on investment. Within this study, we on robustness.
examine the effects of supply base complexity on the
Figure 1 illustrates our theoretical model. It summa-
relationship between supply chain visibility and sup-
rizes the relationships between the two resources
ply chain resilience and robustness.
(connectivity and information sharing), the capability
Supply base complexity relates to the number of
(visibility), the performance measures (resilience and
suppliers (scale complexity), delivery reliability of
robustness), and the contingencies (complexity).
suppliers (delivery complexity), differentiation
between suppliers, and geographic dispersion (Caridi
et al., 2010; Choi & Krause, 2006; Vachon & Klas- METHODOLOGY
sen, 2002). Complexity is increased as organizations
Sample and Data Collection
utilize a higher number of suppliers as there are
The unit of analysis employed in this study was at
additional relationships to manage, alongside addi-
the level of a manufacturing plant and its constituent
tional information and product flows to oversee
upstream suppliers. Prior research has indicated that
(Bozarth, Warsing, Flynn, & Flynn 2009). Delivery
this unit of analysis provides a detailed understanding
with longer lead-times creates complexity through
of how supply chain design affects performance (Bo-
the requirement of further data (Frank, Drezner,
zarth et al., 2009; c.f. Naor, Linderman & Schroeder,
Ryan & Simchi-Levi, 2000) and extended planning
2010). The target sample was composed of managers
times (Simangunsong, Hendry & Stevenson, 2012).
included in the Chartered Institute of Purchasing and
Differences between suppliers generate complexity
Supply (CIPS) database. We selected 1,200 potential
because managers must deal with a range of cul-
respondents by their job function (supply manager or
tural, practical, and technical differences (Choi &
equivalent), and industry codes reflecting mining,
Krause, 2006). Finally, when suppliers are geographi-
construction, or manufacturing (NAICS codes 11000,
cally dispersed, a number of issues arise which
15000, 16000, 17000, 19000, 20000, 21000, and
increase complexity: cultural and linguistic differ-
23000–39000). We selected supply managers as key
ences (Stringfellow, Teagarden & Nie, 2008); unpre-
respondents because we deemed them to be the most
dictable quality (Gray, Roth & Leiblein, 2011); and
knowledgeable about manufacturing plant supply
variable lead-times (Holweg, Reichhart & Hong,
chains and our related subjects of interest: supply
2011).

July 2014 61
Journal of Supply Chain Management

chain strategy, practices, resilience, and robustness, TABLE 1


and the performance of UK manufacturing plants.
Descriptive Statistics of Sample Frame
The hypotheses were tested with data collected from
a postal survey, which have previously been shown to Title Number Percentage
have higher response rates than internet-based surveys
(Shannon & Bradshaw, 2002). The survey construc- Annual sales revenue
tion and application processes followed Dillman’s Under £10 Million 38 14.5
total design method (2000). First, we phoned each £11–25 Million 48 18.4
contact to discuss the purpose of the survey and to £26–50 Million 40 15.2
invite participation. Next, we sent a copy of the cover £51–75 Million 23 8.6
letter and survey to each respondent three times over £76–100 Million 13 4.7
a number of months. We incentivized participation £101–250 Million 27 10.2
through the offer of a charitable donation to four £251–500 Million 23 8.6
national and international charities. Each respondent Over £501 Million 52 19.9
could select one of these charities. In addition, we Total 264 100
offered respondents the opportunity to receive an Number of employees
executive summary reporting our findings and includ- 0–50 31 11.7
ing implications for practice. A total of 264 usable 51–100 45 17.2
responses were received, representing an effective 101–200 50 18.8
response rate of 22%. We provide a profile of respon- 201–500 62 23.4
dents in Table 1. 501–1000 27 10.2
As is the case with all survey research, the poten- 1001+ 49 18.7
tial for biases exists in our study. We tested nonre- Total 264 100
sponse bias through a comparison of early Industry sector
respondents (questionnaires received in the first Oil and gas 14 5.3
2 weeks), late respondents (questionnaires received Food and beverage 17 6.4
in the third week or later), and nonrespondents (a Textiles & apparel 4 1.5
subsample of 25 nonrespondents was selected at Wood products 1 .4
random from the initial contact list; Armstrong & Paper products 7 2.7
Overton, 1977; Lambert & Harrington, 1990). There Chemical products 23 8.7
was no significant difference between early and late Rubber & plastic 8 3
respondents on any of the variables used. Similarly, products
there was no significant difference between respon- Basic & fabricated 26 9.8
dents and nonrespondents in terms of plant size or products
industry code. Machinery 48 18.2
Additionally, because we measured both the depen- Electrical and optical 51 19.3
dent and independent variables in our study with the equipment
same instrument, it was necessary to assess common Automotive & 37 14
method variance. First, Harman’s one-factor test was transport
employed (Podsakoff & Organ, 1986), whereby all Furniture 26 9.8
scale items were simultaneously entered into a princi- Total 264 100
pal component factor analysis with varimax rotation.
The results yielded eight factors explaining 70.46% of
the variance, with the first factor only accounting for Measures
13.51% of the total variance. These results suggest that Whenever possible, this study adopted established
no single factor structure emerged, nor did one factor scales from the literature (Malhotra & Grover, 1998).
account for the majority of the variance. Second, we This was feasible for measures of supply chain con-
ran a modified version of this test as suggested by nectivity, information sharing, supply chain visibility,
Malhotra, Kim, and Patil (2006). The fit indices indi- and geographic dispersion. We could not identify suit-
cated that a hypothesized model consisting of a single able measures of supply base complexity, robustness,
factor had very poor fit (v2(364) = 2010.105; compar- and resilience. Scale development procedures for these
ative fit index [CFI] = .64; incremental fit index constructs followed Churchill’s (1979) scale develop-
[IFI] = .64; GFI = .75 root mean square error of ment methodology including a comprehensive litera-
approximation [RMSEA] = .13), and we therefore ture review, followed by pretesting with managers and
conclude that common methods bias is not problem- academics in the field of supply chain management.
atic for our dataset. We made minor modifications to the wording of

62 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

items based on the feedback from pretests in order to Values ranged from 0 (where all suppliers are con-
improve scale performance. With the exception of a centrated in a single region) to 1 (where all suppliers
control variable examining environmental dynamism are spread equally across all four regions).
(see below), all scales were designed in 5-point Likert Supply Chain Resilience. As discussed in the litera-
format anchored as 1 = strongly disagree and ture review, resilience references the ability of a supply
5 = strongly agree. chain to bounce back from a disruption. The four
items (a = .87) were designed to examine restoration
EXOGENOUS VARIABLES of material flow and operating performance, recovery
of the supply chain, and the speed with which disrup-
Supply Chain Connectivity tions would be dealt with.
We measured connectivity using a scale developed Supply Chain Robustness. Robustness refers to the
by Fawcett et al. (2011). The three items (a = .80) ability of a supply chain to withstand disruption and
examine the extent to which information systems are continue operating. The four items (a = .91) examine
integrated within the firm and supply chain to satisfy whether normal operations would continue, the firm
communication needs. would be able to meet consumer demand, perfor-
mance would not deviate from targets, and the supply
Information Sharing chain could carry out regular functions.
We measured information sharing using a scale Statistical Controls. We included two statistical
developed by Cao and Zhang (2011). The five items controls that appeared to be germane to the study
(a = .77) assess the extent of relevant, timely, accu- focus, in order to avoid model misspecification. Plant
rate, and complete information sharing occurring size, measured by the total number of plant employ-
between the manufacturer and its suppliers. ees, was included as Wagner and Neshat (2011)
recently found that larger firms are more vulnerable
ENDOGENOUS VARIABLES to disruption. We also included a control for environ-
mental (industry) dynamism in order to level out the
Supply Chain Visibility effects of disruption across industry segments such
We measure visibility using a scale developed by that they became comparable. The environmental
Braunscheidel and Suresh (2009). The two items dynamism control variable took the form of a five-
(r = .65) examine the extent to which inventory and item, five-point Likert scale anchored as 1 = slow and
demand levels are visible throughout the supply 5 = rapid, with items reflecting industry rates of
chain. change for product/service introduction, operating
processes, customer tastes/preferences, and research
Supply Base Complexity and development.
Four measures of complexity were developed from
Bozarth et al. (2009), Choi and Krause (2006), and ANALYSES AND RESULTS
Caridi et al. (2010): (1) scale, (2) differentiation, (3)
delivery, and (4) geographic dispersion. Supply chains Measure Assessment
are more complex if they involve more players, the We conducted a confirmatory factor analysis (CFA)
players are dissimilar, lead-times are long and/or using AMOS 19.0 (see the results displayed in
unreliable, and the players are more geographically Table 2), in order to estimate the measurement
dispersed. As predicted, factor analysis revealed that properties of the multi-item constructs (i.e., all of
the six items reflecting the first three dimensions those included in the study with the exception of
formed distinct factors, termed scale (r = .67), similar- the geographic dispersion measure, which was calcu-
ity (r = .56), and reliability (r = .52). The final dimen- lated). All factor loadings were in excess of the com-
sion of complexity, geographic dispersion, was monly accepted .40 standard (Anderson & Gerbing
measured with a scale developed by Stock, Greis, and 1988), and the low normalized residuals and modi-
Kasarda (2000). Respondents were asked to specify fication indices observed (all <3.5) suggested no
the percentage of their plant’s suppliers located in the need to delete items to improve model fit. The mea-
following regions: Europe, Asia, North America, and surement model revealed a good fit of the model to
other. Dispersion was then calculated using the the data. We observed a chi-square value:
following formula: v2(367) = 654.18; Tucker–Lewis Index (TLI) = .91;
IFI = .92; CFI = .92; and RMSEA = .06, each sup-
DISP ¼ 1  ðjEurope%  25j þ jAsia%  25j
porting strong model fit.
þjN. America%  25j þ jOther%  25jÞ ð1Þ
A series of procedures were next used to assess con-
150 vergent and discriminant validity for the scales. In
support of convergent validity, we observed that all

July 2014 63
Journal of Supply Chain Management

TABLE 2
Confirmatory Factor Analysis

Constructa Loading t-Value


Supply chain connectivity (a = .80; CR = .84; AVE = .72)
SCC1 Current information systems satisfy supply chain communication requirements .790 —
SCC2 Information applications are highly integrated within the firm and supply chain .752 10.92
SCC3 Adequate information systems linkages exist with suppliers and customers .751 11.27
Information sharing (a = .77; CR = .79; AVE = .57)
INS1 Our firm exchanges relevant information with suppliers .821 —
INS2 Our firm exchanges timely information with suppliers .857 3.89
INS3 Our firm exchanges accurate information with suppliers .744 3.95
INS4 Our firm exchanges complete information with suppliers .661 4.00
INS5 Our firm exchanges confidential information with suppliers .559 3.99
Supply chain visibility (a = .79; CR = .81; AVE = .82)
VIS1 Inventory levels are visible throughout the supply chain .895 —
VIS2 Demand levels are visible throughout the supply chain .731 9.33
Supply chain resilience (a = .86; CR = .87; AVE = .72)
RES1 Material flow would be quickly restored .892 —
RES2 It would not take long to recover normal operating performance .779 11.86
RES3 The supply chain would easily recover to its original state .790 11.71
RES4 Disruptions would be dealt with quickly .706 13.06
Supply chain robustness (a = .90; CR = .91; AVE = .78)
ROB1 Operations would be able to continue .826 —
ROB2 We would still be able to meet customer demand .861 16.04
ROB3 Performance would not deviate significantly from targets .814 17.49
ROB4 The supply chain would still be able to carry out its regular functions .857 16.39
Environmental dynamism (a = .83; CR = .86; AVE = .60)
DYN1 Rate at which products and services become outdated .672 —
DYN2 Rate of introduction of new products and services .836 10.82
DYN3 Rate of introduction of new operating processes .661 9.17
DYN4 Rate of change in tastes and preferences of customers in the industry .671 9.26
DYN5 Rate of research and development (R&D) in the industry .688 9.44
Scale complexity (a = .79; CR = .80; AVE = .83)
CXSC1 This supply chain is very complex .685 —
CXSC2 This supply chain involves a lot of players .582 2.84
Differentiation (a = .73; CR = .73; AVE = .79)
DIF1 Suppliers in this supply chain are the same size .455 —
DIF2 Suppliers in this supply chain have the same level of technical capability .458 1.32
Delivery complexity (a = .68; CR = .70; AVE = .76)
CXDL1 We can depend on on-time delivery from suppliers in this supply chain .726 —
CXDL2 We can depend on short lead-times from suppliers in this supply chain .715 3.19
a
All constructs were scaled as 1 = strongly disagree and 7 = strongly agree, with the exception of environmental dynamism, which
was scaled as 1 = slow and 5 = rapid. The first item in each scale was fixed to a loading of 1.0 in the initial run to set the scale of
the construct.
Observed CFA fit statistics were: v2(367) = 654.18; TLI = .91; incremental fit index = .92; comparative fit index = .92; root mean
square error of approximation = .06.

factor loadings were significant (t > 2.0) with the Confidence intervals for construct intercorrelations
exception of the second differentiation item. Given were between zero and one, and all squared intercor-
this exception, we next assessed average variance relations were less than the AVE estimates for either
extracted for all constructs; in each case, the AVE value construct in a pairing, supporting discriminant valid-
was in excess of .50, supporting convergent validity. ity. Table 3 displays the descriptive statistics and
Discriminant validity was next assessed, via both con- bivariate intercorrelations for the constructs of interest
fidence interval evaluation and AVE comparisons. to the study.

64 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

Hypothesis Testing and Results ship implies that firms may be gaining visibility
The hypothesized relationships were tested using simply by virtue of establishing technological connec-
multiple regression analysis, with hierarchical modera- tions in the supply chain, regardless of the informa-
tion tests applied as necessary. All variables were tion content supplied through them. We also note
mean-centered to reduce the risk of multicollinearity that for our sample, the environmental dynamism
of the interaction terms (Aiken & West, 1991). We control has a significant positive impact on supply
tested for multicollinearity by calculating the variance chain visibility while plant size has no effect.
inflation factors (VIF) for each regression coefficient. H4 and H5 were tested using hierarchical multiple
VIF values ranged from 1.002 to 1.356, significantly moderated regression. Step 1 of Table 5 shows that
below the recommended threshold of 10 (Hair, Black, only one of the control variables, environmental
Babin, Anderson & Tatham, 2006). Tables 4–6 pro- dynamism, has a significant effect on supply chain
vide the results of the regression analyses. resilience (b = .241; p < .001). Step 2 includes the
Table 4 examines the hypothesized linkages between direct effects of supply chain visibility as well as the
resources and visibility as specified in H1–H3. direct effects of the moderator variables. In support
Addressing H1 first, we observe support (Table 4) for of H4, Table 5 indicates that visibility has a signifi-
the prediction that supply chain connectivity is posi- cant and positive effect on supply chain resilience
tively associated with supply chain information shar- (b = .169; p < .01), supporting previous qualitative
ing (b = .482; p < .001), consistent with the findings evidence of this relationship (J€ uttner & Maklan,
of Barratt and Oke (2007). The control variables, 2011). The model also indicates that differentiation
environmental dynamism and firm size, do not have (b = .131; p < .05) and delivery complexity
a significant effect in this model. We interpret these (b = .222; p < .001) have significant direct effects
observations as evidence that rapid change speed in with resilience. The results suggest that more differen-
the manufacturing industry is not meaningfully tiated supply bases that have more reliable suppliers
impeding information sharing via connectivity and with shorter lead-times are more resilient to disrup-
that firm size plays little role in the connectivity–infor- tions. While the result for delivery complexity is to
mation sharing relationship. be expected, the negative effect of differentiation is
Next addressing H2 and H3, we find support surprising (Choi & Krause, 2006) and might indicate
(Table 4) for both supply chain connectivity that there is a portfolio effect of engaging a broad
(b = .298; p < .001) and information sharing range of suppliers in terms of size and technical
(b = .297; p < .001), as predictors of visibility, and capability.
observe that, together with the control variables, they Step 3 adds the interaction effects to our model. In
explain a significant portion of the variance in visibil- partial support of H6a, the full model suggests that
ity (R2 = .320). Barratt and Oke (2007) did not assess only scale complexity has a significant interaction
a direct connectivity–visibility relationship, but rather, effect, where the impact of visibility on resilience is
only linked connectivity to visibility through informa- stronger for higher levels of scale complexity
tion sharing. Our observation of the direct relation- (b = .266; p < .001). On the other hand, the moderat-

TABLE 3
Descriptive Statistics and Intercorrelations of Constructs

Construct Mean SD 1 2 3 4 5 6 7 8 9
1 SC connectivity 2.93 .90 1.00
2 Info. sharing 3.70 .67 .502 1.00
3 SC visibility 3.05 1.02 .478 .473 1.00
4 SC resilience 3.20 .82 .300 .251 .261 1.00
5 SC robustness 2.96 .83 .179 .129 .225 .586 1.00
6 Env. dynamism 2.66 .76 .204 .182 .257 .284 .216 1.00
7 Plant size (log) n/a n/a .113 .073 .056 .003 .021 .054 1.00
8 Scale 3.63 .91 .037 .062 .046 .139 .006 .017 .255 1.00
complexity
9 Differentiation 1.81 .78 .116 .009 .066 .082 .153 .069 .118 .117 1.00
10 Delivery 2.96 .87 .248 .309 .232 .293 .159 .078 .034 .171 .054
complexity
Italicized correlation coefficients are significant at p < .05.

July 2014 65
Journal of Supply Chain Management

TABLE 4
Regression Results for Visibility and Supply Chain Information Sharing

DV = SC Information
Sharing DV = SC Visibility
Variables B t-Value B t-Value
Controls
Environmental dynamism .085 1.551 .143* 4.366
Plant size .023 .429 .009 1.178
Main effects
Supply chain connectivity .482** 8.777 .298** 4.969
Information sharing .297** 4.986
Model summary
R2 .259 .320
Adj R2 .251 .310
Model F 30.346 30.503
Significance at *p < .01, **p < .001; coefficients are standardized.

ing effects for the other dimensions of complexity p < .001), than when scale complexity was low
(geographic dispersion, differentiation, and delivery) (b = .102, n.s.). Similarly, in support of H6b, we
have no significant effect. found that visibility was more positively related to
We approached the relationship between visibility robustness when scale complexity was high (b = .293;
and supply chain robustness similarly in H5. Step 1 p < .01), than when scale complexity was low
again finds that environmental dynamism is a signifi- (b = .033, n.s.).
cant predictor of supply chain robustness (b = .216; Finally, given the logical structure of our theorized
p < .001). Step 2 indicates that supply chain visibility model, it was desirable to undertake an exploratory
has a significant positive effect on robustness assessment of whether supply chain visibility serves as
(b = .168; p < .01), thus supporting H5. We also note a full or partial mediator linking supply chain connec-
the significant negative effect of differentiation tivity and/or supply chain information sharing to the
(b = .187; p < .001). Step 3 adds the interaction resilience and robustness performance outcomes. We
terms and shows that only scale complexity has a sig- did so following the prescriptions of Zhao, Lynch,
nificant interaction effect, where the impact of visibil- and Chen (2010), who provided an updated proce-
ity on robustness is stronger for higher levels of scale dure versus the traditionally employed Baron and
complexity (b = .192; p < .01). None of the other Kenny (1986) mediation testing procedure. This
dimensions of complexity have an interaction effect, assessment led to evidence of partial (indirect plus
providing only partial support for H6b. direct) mediation in each of the four cases under
To further analyze the significant interaction effects, examination. Specifically, the direct path coefficients
the relationships were plotted using values of one for each of the four pairings of antecedent and out-
standard deviation above the mean to represent high come variables were significant and same sign as the
levels of “scale complexity” and one standard devia- AB terms for the indirect paths, with all 95% confi-
tion below the mean to represent low levels of “scale dence intervals excluding zero. Although scarce theo-
complexity” (Cohen & Cohen, 1983). We hypothe- retical rationale for this assessment has been
sized that visibility may have a more significant posi- developed as yet in the literature, these exploratory
tive effect on resilience and robustness when tests motivate future studies that would parse out the
complexity is high. Figures 2a and b confirm our differential effects of resources versus the visibility
hypothesis and show that visibility has little effect capability when predicting resilience and robustness.
when scale complexity is low but a positive effect
when scale complexity is high. Furthermore, we tested DISCUSSION
the simple slopes of high scale complexity (one
standard deviation above the mean) and low scale Empirical and Theoretical Implications
complexity (one standard deviation below the mean; The RBV is concerned with the bundling of strategic
Lam, Huang & Snape, 2007). In support of H6a, we resources and/or capabilities (Barney, 1991) to create
found that visibility was more positively related to and protect competitive advantage. From this perspec-
resilience when scale complexity was high (b = .346; tive, information sharing and connectivity may be

66 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

TABLE 5
Hierarchical Moderated Regression Results for Supply Chain Resilience

Main Effects
Control Model Model Full Model
Variables B t-Value B t-Value B t-Value
Controls
Environmental dynamism .285*** 4.794 .241*** 4.146 .259*** 4.569
Plant size .013 .212 .039 .665 .067 .255
Main effects
Visibility .169** 2.829 .153** 2.615
Geographic dispersion .071 1.177 .046 .787
Scale complexity .111 1.841 .130* 2.205
Differentiation .131* 2.321 .137* 2.205
Delivery complexity .222*** 3.818 .222*** 3.838
Interaction effects
Visibility 9 geographic dispersion .087 1.502
Visibility 9 scale complexity .266*** 4.460
Visibility 9 differentiation .006 .112
Visibility 9 delivery complexity .091 1.586
Model summary
R2 .081 .207 .267
Adj R2 .074 .185 .235
Model F 11.492*** 9.539*** 8.331***
DR2 .126 .060**
DF 8.130*** 5.138***
Significance at *p < .05, **p < .01, ***p < .001; coefficients are standardized.

seen as complementary resources which may be bun- factor analysis where they emerge as distinct con-
dled in order to lead to a visibility capability (cf. structs. This is one of the first studies to empirically
Sirmon et al., 2007). Arguably, the tangible resource disentangle these concepts which are often conflated
of supply chain connectivity might be more valuable in the extant literature. Resilience relates to the con-
in conjunction with the intangible resource of infor- cept of an organization being able to rapidly bounce
mation sharing. Although we find that both connec- back from the effects of a disruption, while robustness
tivity and information sharing lead to visibility, refers to an organization’s ability to maintain func-
connectivity may also lead directly to information tionality despite disruption.
sharing (Barratt & Oke, 2007), suggesting an interplay Second, this study provides empirical evidence that
between these resources. When combined or bundled, supply chain visibility acts as an antecedent to both
resources may lead to capabilities (Grant, 1991; Sir- supply chain resilience and robustness (see Figure 1).
mon et al., 2007), which are often more greatly This is one of the first studies utilizing survey data to
embedded within an organization and provide supe- test such hypothesized relationships. Resilience may
rior value (Brush & Artz, 1999). Consequently, capa- be enhanced because organizations better understand
bilities may be leveraged to exploit opportunities or demand and inventory levels and can therefore
mitigate threats (Sirmon et al., 2008), but their out- develop continuity plans which allow them to
comes are contingent upon the specific context. We respond more rapidly to disruptions (J€ uttner & Mak-
examine the value protection effects of supply chain lan, 2011). In addition, visibility can encourage more
visibility on supply chain resilience and robustness efficient knowledge sharing to reduce the resources
under the contingent conditions of varying levels of required to respond. Robustness may be augmented
supply base complexity. by the early identification of delays or disruptions
Our study makes a number of important contribu- from bottlenecks to large labor strikes (Craighead
tions to the extant literature. First, this paper demon- et al., 2007) enabling organizations to deal with a
strates that resilience and robustness are discrete variety of types and magnitudes of events before they
concepts (Christopher & Peck, 2004), as shown in the cause any material disruption to the organization.

July 2014 67
Journal of Supply Chain Management

TABLE 6
Hierarchical Moderated Regression Results for Supply Chain Robustness

Main Effects
Control Model Model Full Model
Variables B t-Value B t-Value B t-Value
Controls
Environmental dynamism .216*** 3.567 .175** 2.856 .188** 3.110
Plant size .012 .193 .041 1.653 .017 .278
Main effects
Visibility .168** 2.675 .162** 2.585
Geographic dispersion .002 .034 .019 .308
Scale complexity .003 .050 .016 .260
Differentiation .187** 3.151 .184** 3.071
Delivery complexity .114† 1.868 .112 1.816
Interaction effects
Visibility 9 geographic dispersion .039 .635
Visibility 9 scale complexity .192** 3.014
Visibility 9 differentiation .060 .986
Visibility 9 delivery complexity .094 1.542
Model summary
R2 .047 .123 .161
Adj R2 .040 .100 .124
Model F 6.437 5.152*** 4.393
DR2 .076 .037
DF 4.467*** 2.810*
Significance at *p < .05, **p < .01, ***p < .001, †p < .10; coefficients are standardized.

Third, although the existence of a supply chain visi- dimensions of supply base complexity—geographic
bility capability may drive performance in terms of dispersion, delivery, and differentiation—a noncontin-
resilience and robustness, the effect is contingent gent effect is identified. Supply chain visibility
upon certain aspects of supply base complexity (see positively impacts supply chain resilience and robust-
Figure 1); and the use of a contingent RBV perspective ness regardless of the geographic dispersion or con-
allows us to understand how and when investments centration of suppliers; regardless of the reliability
in a supply chain visibility capability are valuable and lead-time length of suppliers; and regardless of
(Arag on-Correa & Sharma, 2003). As investments in the level of differentiation or similarity of suppliers.
visibility may be costly, we identify the conditions This demonstrates the importance of supply chain vis-
under which investments are worthwhile in delivering ibility as a capability to reduce the impact of supply
improved resilience or robustness. We find that the chain disruptions.
four dimensions of complexity in this study—scale,
geographic dispersion, delivery, and differentiation— Managerial Implications
have different contingency effects on the relationship This study offers a number of useful implications for
between supply chain visibility and both resilience supply chain and procurement managers. First, our
and robustness. In this study, we identify scale, in findings demonstrate that investments in visibility
terms of the number of suppliers, as the strongest capabilities may generate differential value depending
aspect of supply complexity in moderating the rela- on key contextual factors. For organizations operating
tionship between supply visibility and both resilience within simple supply chains (for example, ones that
and robustness. As an organization has to manage a have few suppliers), the marginal benefits of increased
greater number of suppliers, relationships will most supply chain resilience or robustness may be out-
likely become more transactional in nature, therefore weighed by the significant investments required. Con-
visibility capabilities can allow organizations to better versely, for organizations operating in complex supply
understand the inherent strengths and weaknesses in chains (i.e., ones typified by large numbers of suppli-
the system and thereby create greater supply chain ers), we find that investments in supply visibility capa-
resilience and robustness. However, for the other bilities create resilience and robustness and therefore

68 Volume 50, Number 3


A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

which the postinvestment supply chain will operate.


FIGURE 2 Some managers may feel it is more suitable to invest
(a) Interaction Effects of Visibility and Scale Complex- heavily in withstanding disruptions and therefore mak-
ity on Supply Chain Resilience. (b) Interaction Effects
ing their supply chains more robust to disruptions.
of Visibility and Scale Complexity on Supply Chain
Others may instead focus on ensuring that if and when
Robustness
a disruption occurs, their organization is able to
5
recover quickly and with minimal disruption, therefore
A
making their supply chains more resilient. Trade-offs
between these different investments may be influenced
4 by performance objectives, where robustness may sup-
SC Resilience

port supply chains that rely heavily on dependability,


whereas resilience may be more suited to organizations
3 Low Scale
Complexity
that compete on speed and flexibility.

Limitations and Directions for Future Research


2
High Scale
The limitations and potential areas for future
Complexity research are outlined below. As is common with
1
cross-sectional survey design, this study was con-
Low SC Visibility High SC Visibility strained by the use of single respondents. While our
5 approach provides strong insights into both the direct
B
and contingent effects of visibility, future research
may examine the development of visibility as a capa-
4 bility and how it depends on critical resources and
SC Robustness

contingent conditions. Due to the nature of the survey


respondents, we could not test for a further measure
3 Low Scale
Complexity of complexity (supplier–supplier relationships) as this
would rely on network data (Choi & Krause, 2006).
However, this would be a worthwhile approach for
2
High Scale
future research.
Complexity
In addition, future research could examine other
1
resources or capabilities which might enhance
Low SC Visibility High SC Visibility resilience or robustness. For example, the impact of
flexibility, adaptability, or intra-organizational man-
agement capabilities (Pettit, Fiksel & Croxton, 2010)
could be explored. Furthermore, survey research could
examine the effect of the four capabilities explored in
typically represent a good return on (the often high) J€
uttner and Maklan’s (2011) case research—visibility,
investment. For those organizations that operate collaboration, velocity, and flexibility—on both resil-
between these two extremes, moderate investment in ience and robustness. Future studies could also extend
supply chain visibility may be most appropriate, with our model to include further theoretical lenses. In par-
the focus of such investments influenced by which facet ticular, we suggest that extensions of the resource-
of complexity is most prevalent in their supply chains. based view, such as the relational and knowledge-
This contingent perspective allows more effective deci- based views, may provide further insights into the
sion-making regarding levels of risk management antecedents of resilience and robustness.
investment depending on the contexts within which Finally, where supply complexity is utilized as a con-
organizations operate. However, as we find the other tingent factor within this research, other factors which
dimensions of supply base complexity to have noncon- might moderate the relationship between visibility
tingent effects, supply chain managers can invest in a and resilience and robustness could be examined in
visibility capability regardless of the geographic spread future research.
of suppliers, the reliability and lead-times of suppliers,
and the differentiation of suppliers in the knowledge
that visibility will enhance resilience and robustness. REFERENCES
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A Contingent Resource-Based Perspective of Supply Chain Resilience and Robustness

chain capabilities and firm performance: A (United Kingdom). His research is concerned broadly
resource-based view. Industrial Marketing Manage- with the design and management of operations and
ment, 35 (4), 493–504. supply chains for resilience, innovation, and sustain-
Zhao, X., Lynch, J. G., Jr, & Chen, Q. (2010). Recon- ability. Increasingly, Dr. Squire has become interested
sidering baron and kenny: Myths and truths in using multiple methods across multiple units of
about mediation analysis. Journal of Consumer
analysis. His research has been published in a wide
Research, 37 (2), 197–206.
range of journals that include the British Journal of
Zhou, H., & Benton, W. C., Jr (2007). Supply chain
practice and information sharing. Journal of Opera- Management, Production & Operations Management, and
tions Management, 25 (6), 1348–1365. the International Journal of Operations and Production
Zhu, K., & Kraemer, K. L. (2002). E-commerce metrics Management.
for net-enhanced organisations: Assessing the
value of e-commerce to firm performance in the Chad W. Autry (Ph.D., University of Oklahoma) is
manufacturing sector. Information Systems Research, the Taylor Associate Professor of Supply Chain Man-
13, 275–295. agement at the University of Tennessee in Knoxville,
Zsidisin, G. A. (2003). Managerial perceptions of sup- Tennessee. His research focuses on relational, techno-
ply risk. Journal of Supply Chain Management, 39 logical, and process connectivity in the supply chain.
(1), 14.
In particular, he is exploring multiple forms of con-
nectivity occurring simultaneously, as well as the
impacts of connectivity on innovation, process
improvements, and financial outcomes. The current
article is the 50th peer-reviewed paper accepted for
Emma Brandon-Jones (Ph.D., University of Bath) is publication authored or coauthored by Dr. Autry. He
a lecturer in operations and supply management at serves as a Co-Editor-in-Chief for the Journal of Supply
Manchester Business School at the University of Man- Chain Management.
chester in Manchester, England (United Kingdom).
Her research interests include supply chain risk man- Kenneth J. Petersen (Ph.D., Michigan State Univer-
agement, sustainable operations and supply chain sity) is the John H. “Red” Dove Professor of Supply
management, and the emergence of new trends in Chain Management at the University of Tennessee in
outsourcing such as on-shoring and re-shoring. One Knoxville, Tennessee. He has wide-ranging research
of her current projects investigates the factors influenc- interests within the field of supply chain management
ing recovery from supply chain disruptions; a second and its related disciplines. His work has been pub-
project explores shareholder reactions to on-shoring lished in, among other outlets, the Academy of Man-
announcements. Dr. Brandon-Jones’ work has been agement Journal, Decision Sciences, the Journal of
published in the International Journal of Operations and Operations Management, the California Management
Production Management. Review, the Journal of Product Innovation Management,
and the Journal of Business Research. Dr. Petersen serves
Brian Squire (Ph.D., University of Bath) is a profes- as an Associate Editor for the Journal of Business Logis-
sor of operations management at the School of Man- tics, the Journal of Operations Management, and the
agement at the University of Bath in Bath, England Journal of Supply Chain Management.

July 2014 73

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