Industry dynamism, SC risk management strategies and manufacturing plant performance

Abstract

Purpose

According to extant Supply Chain Risk Management (SCRM) literature, manufacturing firms must align their choice of SC bridging or buffering strategies with their operating environment to achieve high plant performance and minimize SC disruption impacts. However, very few empirical studies have examined the relative performance of these strategies in dynamic industry environments. This study aims to address this research gap. This study also seeks to supplement the limited empirical research that has examined the empirical relationships between a firm’s Supply Base Complexity (SBC), the likelihood of SC disruptions, and plant performance.

Design/methodology/approach

This study uses data from a cross-sectional survey of 202 manufacturing firms in India. The data is analyzed, and the study hypotheses are tested using PLS path modeling and SPSS PROCESS Macro.

Findings

The study shows that increased SBC leads to an increased frequency of SC disruptions with a negative impact on plant performance. The study also finds that the firm’s implementation of SC bridging or buffering strategies effectively moderates this performance impact. However, the study results do not support the hypothesis that industry dynamism moderates the relative effectiveness of SC bridging or buffering strategies in mitigating the negative impact of SC disruptions.

Originality/value

The study adds to the limited empirical research examining the SC disruption risk associated with SBC and the resulting performance impact. It addresses a gap in extant research by evaluating the efficacy of SC bridging and buffering strategies in mitigating this performance impact in dynamic industry environments.