Antecedents and Enablers of Supply Chain Agility and its Effect on Performance:

A Dynamic Capabilities Perspective

Constantin Blome1
Assistant Professor for Sourcing in Emerging Markets
EBS Business School
Soehnleinstr. 8, 65201 Wiesbaden, Germany
Phone: +49 611 36018 800; Fax: +49 611 36018 802
E-mail: constantin.blome@ebs.edu

Tobias Schoenherr
Assistant Professor of Supply Chain Management, Lilly Teaching Fellow
Department of Supply Chain Management, The Eli Broad Graduate School of Management
N370 North Business Complex, Michigan State University, East Lansing, MI 48824, USA
Phone: +1 517 432 6437, Fax: +1 517 432 1112
E-mail: Schoenherr@bus.msu.edu

Daniel Rexhausen
Doctoral Student
EBS Business School
Soehnleinstr. 8, 65201 Wiesbaden, Germany
Phone: +49 611 36018 800; Fax: +49 611 36018 802
E-mail: daniel.rexhausen@ebs.edu

Citation:
Blome, Constantin, Tobias Schoenherr, and Daniel Rexhausen. “Antecedents and Enablers of
Supply Chain Agility and its Effect on Performance.” International Journal of Production
Research, Vol. 51, No. 4, February 2013, pp. 1295-1318.

1
Corresponding author
 Antecedents and Enablers of Supply Chain Agility and its Effect on Performance:

A Dynamic Capabilities Perspective

Abstract

This paper investigates the fundamental building blocks of supply chain agility, which are

conceptualized as supply- and demand-side competence. While the former is conceptualized as

production and supply management related activities, the latter is conceptualized as distribution

and demand management related activities. The model further assesses the influence of supply

chain agility on operational performance, as well as its mediating role in the relationship between

supply- and demand-side competence and performance. Within this framework, process

compliance, i.e. how well supply chain management processes are internally executed by the

firm’s employees, is viewed as an enabler (moderator) on the relationship between supply chain

competencies and supply chain agility. Theoretical substantiation is provided by the resource-

based view of the firm augmented with the dynamic capabilities perspective. The model is tested

with data from 121 supply chain management professionals. Implications for both academic

theory development, and supply chain and production management practice are provided.

Keywords: supply chain agility; supply-side competence; demand-side competence; process

compliance; operational performance; resource-based view of the firm; dynamic capabilities;

survey

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1. Introduction

In an environment where the only constant is change, supply chain agility has become a source

not only for competitive differentiation, but in some instances also for the long-term

sustainability of an organization (Lee 2004). As such, firms need to constantly scan the

environment to react and adapt not only to changing customer needs and transforming supply

environments, but also to the ever-present potential of supply chain disruptions (e.g., Wagner

and Silveira-Camargos 2011). Within this context, supply chain agility can be defined as a firm’s

ability, in conjunction with its key suppliers and customers, to quickly and effectively react to

changes in its environment (cf. Braunscheidel and Suresh 2009). Inherent in this

conceptualization is also the firm’s flexibility and its ability to rapidly and successfully

reconfigure key resources in an attempt to remain competitive.

Due to the practical relevance and importance of supply chain agility (e.g., Collin and

Lorenzin 2006, Lee 2004), further scientific investigation has been called for (e.g.,

Braunscheidel and Suresh 2009, Collin and Lorenzin 2006). While the benefits of supply chain

agility have generally been recognized, research is still void in terms of the antecedents of supply

chain agility (Swafford et al. 2006), as well as the contextual influences that may facilitate or

hamper its creation. Given that the importance of agility is constantly rising in today’s dynamic

environment (e.g., Ismail et al. 2007), the investigation of how such capability can be built is of

utmost criticality. Against this background, the objective of this study is to contribute to

academic theory development and practical guidance in the realm of production research in two

specific ways.

First, we consider what we believe to be two fundamental building blocks of supply chain

agility: supply-side competence and demand-side competence. While the former is defined as a

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firm’s proficiency in managing its upstream (supply-related) activities (e.g., supplier and

production management), the latter is defined as the firm’s ability to effectively manage

downstream (demand-related) aspects (e.g., demand and distribution management). Both aspects

have become of critical importance due to a firm’s increasing reliance on supply chain partners,

heightened supply chain vulnerability, and the rising power of customers (Choi and Krause

2006). However, their importance in contributing to supply chain agility has never been

demonstrated. Basing our arguments on the resource-based view of the firm augmented with the

dynamic capabilities perspective, we theorize and test the criticality of both competencies for a

firm’s supply chain agility.

We further forward the idea of supply chain agility representing a dynamic capability

able to positively influence the operational performance of the firm. Within our context we

define operational performance as a firm’s competitive position in terms of supply chain cost,

customer service (delivering the right quality and right quantity at the right time), service level

performance (on-time-in-full deliveries), and supply chain flexibility (Beamon 1999,

Gunasekaran et al. 2001, Ho et al. 2002). The contention of supply chain agility influencing

operational performance rests in the notion that a firm’s ability to dynamically and effectively

match its resources to market changes should also aid its efforts to maintain a competitive

position. In addition, to determine the central role of supply chain agility, we assess its

significance in mediating the relationship between supply- and demand-side competence and

performance.

And second, we consider the contingency of process compliance as moderating the

relationship between supply- and demand-side competence and supply chain agility. Within our

context, process compliance is defined as the perfect execution and adherence to specified supply

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chain related processes (e.g., production and distribution management processes). Our rationale

for this influence is based on the understanding that appropriate infrastructure needs to be acted

upon, in order for the competencies to be most effective in influencing supply chain agility. As

such, drawing on process-oriented literature and information processing theory, we expect the

relationships to be strengthened in the presence of high process compliance.

2. Theoretical foundation

2.1 Supply chain agility

The concept of agility has experienced increasing attention in production and supply chain

management research due to its importance for managerial practice. The context in which the

idea has received most consideration to date is that of manufacturing, in which agility was seen

as an emerging competitive weapon (Kasarda and Rondinelli 1998), a requirement for world

class manufacturing performance (Nagel and Bhargava 1994), and as a new paradigm in

manufacturing (Sharifi and Zhang 2001). For example, Narasimhan et al. (2006) combine agility

with leanness, Ismail et al. (2007) consider agility as a building block for mass customization,

and Ismail et al. (2011) investigate the role of agile strategic capabilities in achieving resilience

in manufacturing-based small companies.

One of the first scholars to consider agility within the supply chain management context

was Fisher (1997), with subsequent works further stressing supply chain agility as a business-

wide capability, enabling the firm to respond to changing market environments (Braunscheidel

and Suresh 2009, Lee 2004, Swafford et al. 2006). As such, agility is characterized by flexibility

and speed/responsiveness, and spans organizational structures, processes, information systems

and mindsets (Christopher and Towill 2001, Shaw et al. 2005). Supply chain agility thus extends

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beyond a single firm and involves alignment with major customers and suppliers (Braunscheidel

and Suresh 2009). Recent work includes the studies by Swafford et al. (2006) and Braunscheidel

and Suresh (2009). While the former investigates the relationship between flexibility and supply

chain agility, the latter examines the link between integration and supply chain agility. The

authors of both studies stress the importance of research in supply chain agility, and note the

limited amount of scientific evidence pertaining to its study. In the present research we follow

their call for further investigation, and seek to contribute to the important concept of supply

chain agility within the context of supply chain management. We build on and augment extant

research on supply chain agility, an illustration of which is presented in Table 1. While we focus

in the review in Table 1 on empirical research, we also note the significant work that has been

done on the modeling side, for example by Vinodh et al. (2011), who provide decision support

for the evaluation of agility in the supply chain using fuzzy association rules mining, and Vinodh

et al. (2010) who designed an agility index measurement using a multi-grade fuzzy approach.

--- Insert Table 1 here ---

2.2 The resource-based view of the firm and the dynamic capabilities perspective

To theoretically develop our arguments we rely on the resource-based view of the firm (RBV)

augmented with the dynamic capabilities perspective. The basic premise of the RBV is that firms

should be analyzed based on their resources; if resources can be characterized as valuable, rare,

inimitable and non-substitutable, they can be classified as capabilities enabling a firm’s

competitive advantage (Barney 1991, Day 1994, Wernerfelt 1984). The RBV has received

considerable attention by scholars in business management, as illustrated by recent review

articles (Armstrong and Shimizu 2007, Newbert 2007). While mostly researchers in strategic and

general management have utilized the RBV, its popularity has also been increasing in the field of

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production and supply chain management research (e.g., Allred et al. 2011, Chen et al. 2009,

Hollos et al. in press, Reuter et al. 2010). For example, Hsu et al. (2011) utilize the RBV to

establish the link between entrepreneurial supply chain management (SCM) competence, SCM

strategies and firm performance, and Yeung et al. (2007) investigate organizational learning,

innovativeness, and organizational performance from an RBV-perspective.

Initial research utilizing the RBV perspective focused on the heterogeneity of resources

(e.g., Barney 1991, Wernerfelt 1984), with ensuing studies concentrating on their configuration

(e.g., Eisenhardt and Martin 2000, Teece 2007). As such, mere possession of heterogeneous

resources may not be enough to affect competitive disparity; rather, how these resources are

developed, configured and exploited can make a distinction leading to competitive differentiation

(Allred et al. 2011). This realization led to the evolution of the dynamic capabilities concept

(Teece 2007).

Dynamic capabilities refer to “the firm’s ability to integrate, build, and reconfigure

internal and external competencies to address rapidly changing environments” (Teece 1997,

516), and consist of “difficult-to-replicate enterprise capabilities required to adapt to changing

customer and technological opportunities” (Teece 2007, 1319-1320). They can, for example, be

specific processes or routines that combine, transform or renew resources into new competencies

as markets evolve (Eisenhardt and Martin 2000). As such, dynamic capabilities are built over

time rather than bought in the market (Makadok 2001), and are not only determined by a firm’s

tangible and intangible resource base at a given point in time, but also by the decisions it has

made throughout its past (Ambrosini et al. 2009, Eisenhardt and Martin 2000). Effective

dynamic capabilities contribute to a firm’s competitive advantage by enabling a series of

temporary advantages, which allow a firm to stay ahead of competitors and maintain a

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competitive advantage (Eisenhardt and Martin 2000, Teece 2007). Within this context, superior

performance requires “the creation of new products and processes and the implementation of

new organizational forms and business models” (Teece 2007, 1346). As such, the possession of

dynamic capabilities, enabling for example the speedy reconfiguration of a firm’s supply chain,

promises to hold great potential, especially in today’s dynamic and fast-changing environment

(Ambrosini and Bowman 2009). We view supply chain agility as constituting such a new

concept able to generate competitive advantage.

3. Hypothesis development

Utilizing these theoretical foundations, and building on related extant research summarized in

Table 1, we commence with the formal development of our research model. In a first set of

hypotheses we link supply- and demand-side competence to supply chain agility, and then

postulate its effect on operational performance. This is followed by our hypothesis that supply

chain agility serves as a mediator in this relationship. We conclude this section with the

development of the moderating hypothesis suggesting process compliance as enhancing the link

between supply- and demand-side competence and supply chain agility. This research model is

graphically presented in Figure 1.

--- Insert Figure 1 here ---

3.1 Linking supply- and demand-side competence to supply chain agility

We consider both supply- and demand-side competence as key assets enabling the enhancement

of supply chain agility, an important capability able to lead to competitive differentiation.

Consistent with strategic management literature, we conceptually and empirically differentiate

between capabilities and competencies, and view capabilities (i.e. supply chain agility) as having

evolved from competencies (i.e. supply- and demand-side competence) (Braunscheidel and

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Suresh 2009, Prahalad and Hamel 1990, Teece 2007, Zhang et al. 2002). Competencies have

also been said to be internally focused, while capabilities rather focus on the external

environment. Specifically, competencies were described as expertise present at distinct points in

the value chain, whereas capabilities were described to be more broad, externally visible, and

spanning the entire supply chain (Zhang et al. 2002). Based on this differentiation, we consider

supply- and demand-side proficiencies as (internal) competencies, whereas supply chain agility

is viewed as a central, broader capability that encompasses both supply- and demand-side

competence. As such, supply- and demand-side competence serve as the foundation for the

capability of supply chain agility.

Both aspects, supply- and demand-side competence, have become of critical importance

in today’s dynamic environment (e.g., Chen et al. 2004, Gonzalez-Benito 2007, Yeung 2008)

due to a firm’s increasing reliance on supply chain partners and the rising power of customers

(Choi and Krause 2006). Specifically, fuelled by the trend of focusing on their core competencies

and outsourcing most other activities, as well as the frequent objective of supply base

optimization, firms have increasingly become reliant on their supply base (Choi and Krause

2006, Handfield et al. 2004). This complexity is enhanced by many supply chains spanning

multiple countries or even continents, inadvertently making them and the associated logistical

aspects more prone for the potential of disruptions (Lee 2004). Most recently this was evidenced

by the earthquake and subsequent tsunami that hit Japan in March 2011; besides the

incomprehensible human tragedy, this disaster also entailed significant supply chain disruptions,

with plants relying on parts from Japan being forced to shut down (BBC 2011).

In addition to this increased complexity on the supply-side, customers have also become

more demanding (Nguyen et al. 2007, Shen et al. 2009). Product lifecycles have become shorter,

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clock-speed has become faster, and the repercussions of disenchanting a customer have become

more severe. As such, dissatisfied customers have the ability to reach a wider audience much

more quickly via social media applications, and make their disappointments known (Kietzmann

et al. 2011). A comprehensive catalog of drivers enhancing the importance of agility is provided

in Vinodh et al. (in press), which provides further motivation for our study. Overall, these

supply- and demand-side realities inherent in today’s markets advocate a firm to develop

capabilities enabling an effective and efficient response to such changes. While prior research

suggested this agility to be built by physical infrastructure (e.g., Shaw et al. 2005), we focus on

the more intangible aspect of supply- and demand-side competence.

We therefore suggest that both supply- and demand-side competence are needed in order

to best respond to the dynamic and constantly changing environment, enabling the creation of a

dynamic capability under the RBV. Specifically, with these competencies in place, a firm should

be better able to react to developments in the market. Competencies are able to be combined in a

dynamic fashion so as to most effectively respond to changes. This is in line with the RBV and

statements by Day (1994, 38), who notes that capabilities are “complex bundles of skills and

accumulated knowledge, exercised through organizational processes, that enable firms to make

use of their assets ... and ... function[s] like a key success factor.” He also describes capabilities

as “the glue that brings ... assets together and enables them to be deployed advantageously” (Day

1994, 38). Together, this establishes supply chain agility as a dynamic capability, subsuming the

antecedents of supply- and demand-side competence, and leads to our first set of hypotheses.

H1a: Supply-side competence positively influences the supply chain agility of the
firm.

H1b: Demand-side competence positively influences the supply chain agility of

the firm.

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3.2 Linking supply chain agility to operational performance

We positioned supply chain agility as a dynamic capability enabling the effective match of

resources to market changes. This capability should aid a firm’s efforts to seize opportunities or

neutralize threats from turbulent environments (van Hoek et al. 2001), ultimately leading to the

achievement or maintenance of a competitive position (Eisenhardt and Martin 2000, Teece

1997). More specifically, organizational capabilities can engender sustainable competitive

advantage in so far as (1) they are not tradable in strategic factor markets, (2) they take a long

time to develop, are historically-based and path-dependent, and (3) they entail socially complex

relationships with other organizational resources (Barney 1991). We believe supply chain agility

as possessing these characteristics and representing a distinctive resource base (cf. Allred et al.

2011). Specifically, a firm’s supply chain agility is likely unique; based on the firm’s specific

supply- and demand-side competencies, the agility has likely evolved over an extended period of

time, and also likely involves links to both upward and downward supply chain entities (with

which agility can be achieved). This would constitute agility as a strategic resource under the

RBV, and thus competitive advantage should be evidenced in our context by greater levels of

operational performance.

Furthermore, considering such turbulent times as we have recently witnessed, agility

should enable firms to react more effectively to supply chain disruptions emanating from this

environment. While disruptions limited in time, breadth and scope may be buffered by safety

stock, disruptions broader in scope may result in production stops that could be avoided by an

agile supply chain, ultimately contributing to optimized supply chain costs. The importance of

such capability is emphasized, since supply chain disruptions have been shown to represent a

major cost factor for most firms (Hendricks and Singhal 2005). In addition, while supply chain

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agility may be able to contribute to performance by a more effective response to external supply

disruptions, agility may also be able to provide significant benefits for the internal workings of

the firm. For example, change orders or design modifications, as a response to internal directives,

can be more effectively accomplished. Recently, Vinodh et al. (in press) provided a

comprehensive catalog of the benefits of manufacturing agility, being able to yield a variety of

performance outcomes, including greater cost, quality and delivery performance. Having

developed our arguments along similar lines, we hypothesize the positive impact of supply chain

agility on operational performance:

H2: Supply chain agility positively influences the operational performance of the
firm.

3.3 The mediating effect of supply chain agility

Integrating the RBV with the dynamic capabilities perspective, we suggest that supply- and

demand-side competencies are the assets or resources needed to build the capability of supply

chain agility. This goes back to the notion that it is not sufficient any more to possess

heterogeneous resources, but that it also matters on how they are configured and utilized (Barney

1991, Eisenhardt and Martin 2000, Teece 1997). In addition, this is further substantiated by the

fact that supply chain agility can be considered as a higher-order capability “derived from

integrating lower-order capabilities and resources” (Vickery et al. 2010, p. 7027). These higher-

order capabilities provide resources that are even more difficult to imitate than lower-order

competencies (Grant 1996). Within the context of the present study, we thus suggest that while

competencies related to the supply- and demand-side are able to influence performance directly,

a more powerful model would entail the mediation of this relationship by supply chain agility.

Support for this contention provide related studies. For example, Vickery et al. (2010) tested the

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mediating role of agility in the relationship between antecedents (supply chain information

technology and supply chain organizational initiatives) and firm performance. Similarly, agility

was posited as a mediator in Swafford et al. (2008), linking the effect of information technology

integration to competitive business performance.

In addition, since almost every industry, including the manufacturing and retail sectors

among others, is confronted with dynamic environments and unforeseen changes, supply chain

competencies alone may not be able to yield best operational performance. As such, we suggest

that this capability has to be built, with supply- and demand-side competence serving as its

building blocks; in other words, only when these competencies are transformed into capabilities

are they able to most effectively contribute to the operational success of the firm (cf. Swafford et

al. 2008, Vickery et al. 2010). We suggest that supply chain agility is the capability that enables

supply chain competencies to adapt to the changing environment and ultimately lead to elevated

performance (cf. Swafford et al. 2006).

While supply- and demand-side competence are both considered as substantial for the

success in supply chain management, the mediating effect of supply chain agility may further

differ in magnitude across the two mediation models; in other words, supply chain agility may be

more advantageous for one competence than for the other, in terms of translating its benefits into

operational performance. Specifically, we suggest that even though firms are becoming

increasingly aware of upstream supply chain disruptions, the customer or demand side plays a

major role for a firm’s profitability (since it is the final customer that makes the purchase, and to

whom the firm has to cater). As an illustrative example serves the automotive industry, which

has been suffering from decreased customer demand due to the financial crisis; insolvencies and

bankruptcies were a direct outcome (Blome and Schoenherr 2011). Since demand-side

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competence of the firm is associated with the customer side, based on logical reasoning, it is

sensible to suggest that this competence is, per se, better prepared to contribute to supply chain

agility; operational performance can thus be improved as the demand side is often considered as

the decisive bottleneck. As such, supply chain agility, as a dynamic capability, should mediate

the relationship between demand-side competence and operational performance to a greater

degree than it mediates the relationship between supply-side competence and operational

performance. Considering these thoughts, we suggest the following set of hypotheses.

H3a: Supply chain agility mediates the effect of supply-side competence on the
operational performance of the firm.

H3b: Supply chain agility mediates the effect of demand-side competence on the
operational performance of the firm.

H3c: Supply chain agility mediates the effect of demand-side competence on

operational performance to a greater degree than the effect of supply-side
competence on operational performance.

3.4 The moderating effect of process compliance

In a last set of hypotheses we consider the importance of process infrastructure and the

appropriate adherence to it by the firm’s employees. This is in line with Collin and Lorenzin

(1996, 418), who note that “supply chain agility does not just happen.” The underlying notion is

here that it is not the mere existence of competencies that is beneficial, they also need to have the

right infrastructure and foundation in order to be able to be most effective. Process compliance

assesses how well supply chain management processes are internally executed by the firm’s

employees. The processes implemented are presumed to be effective and valid, and to represent

optimized approaches for dealing with supply, production, demand and distribution aspects of

the firm’s supply chain operations; complying with established processes should thus enhance

the transformation of supply- and demand-side competence into supply chain agility.

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 From a theoretical perspective, we view process compliance as the vehicle, foundation or

infrastructure with which supply- and demand-side competence is most effectively developed

and deployed into supply chain agility. As such, augmenting the RBV with the dynamic

capabilities perspective, process compliance is considered as providing structure and guidance in

transforming static resources (supply- and demand-side competence) into supply chain agility.

Related process-oriented literature provides support. As such, well-defined and controlled

processes are considered essential for improving supply chain capabilities and performance of a

firm (Gunaeskaran et al. 2004); this was illustrated on both the demand (Croxton et al. 2002) and

the supply side (Gonzalez-Benito 2007). For example, Bendoly and Schoenherr (2005)

demonstrated in their study not only the positive product benefits of having implemented an ERP

system, they also illustrated the significant impact of process benefits, derived from the ERP

implementation, on firm performance.

Process compliance can be beneficial in a variety of instances. For example, in case of

unforeseen changes (e.g., a supply chain disruption), process compliance may enable faster

reactions. As such, instead of being distracted by the management of the existing processes

(which may already be running well) in such a constrained situation, the firm can focus directly

on how to respond to the disruption and institute the necessary changes. Within this context,

process compliance can free up resources that can be better used for the establishment of supply

chain agility and its utilization to respond to supply chain disruptions.

The beneficial moderating impact of process compliance can also be seen from an

information processing-theoretic perspective (Galbraith 1973, Thompson 1967, Tushman and

Nadler 1978). Within our context, information processing theory can explain organizational

behavior “in terms of information that must be gathered, interpreted, synthesized, and

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coordinated in the context of decision making” (Burns and Wholey 1993, p. 110). Since such

behavior is generally constrained by bounded rationality, managers typically apply logical rules,

procedures, organizational structures, and other strategies for information processing (Galbraith

1973, cf. Schoenherr and Swink in press). This is exactly where our process compliance

construct taps into this domain. As such, process compliance provides the linkages by which

supply- and demand-competence can be most effectively internally absorbed and by which the

benefits can be most directly realized. In this vein, parallels can be drawn to the concept of

absorptive capacity. Within this framework, process compliance can be viewed as a means to

effectively absorb (recognize, evaluate, assimilate, and apply) aspects of supply- and demand-

side competence for an enhanced impact on supply chain agility (cf. Cohen and Levinthal 1990).

A firm with greater process compliance should thus be better able to utilize its competencies for

greater agility, because through established rules, systems, procedures, and cross-functional

relations, company employees can more easily and effectively share and access the information

(Schoenherr and Swink in press). Along similar lines, complying with processes can also yield a

greater sense of “shared meaning” (Hult et al. 2004) and better internal coordination (Hillebrand

and Biemans 2003). In addition, with greater process compliance, relevant information can be

channeled most effectively and efficiently to the most appropriate internal constituents, where

opportunities are more likely to be recognized, and a deeper meaning can be generated (Swink et

al. 2007). Information technologies, such as enterprise resource planning systems, which foster

greater process compliance, provide again cases in point (Bendoly and Schoenherr 2005). Even

though it also has been shown that overly rigid or outdated process might make firms more

constrained (Gilbert 2005), we view process compliance as an important enabler for the

15
development of supply chain agility from both supply- and demand-side competence, based on

our above theoretical arguments. More formally:

H4a: Process compliance moderates the relationship between supply-side

competence and supply chain agility, with the relationship being enhanced under
greater levels of process compliance.

H4b: Process compliance moderates the relationship between demand-side

competence and supply chain agility, with the relationship being enhanced under
greater levels of process compliance.

4. Methodology

4.1 Data collection

Data were collected via a large-scale mail survey targeting multi-national firms located in

Germany. Addresses were obtained from the membership database of the Bundesvereinigung

Logistik (BVL), which is Germany’s leading association for supply chain management, and one

of Europe’s largest professional associations in this area. Specifically, utilizing the International

Standard Industrial Classification of All Economic Activities (ISIC) codes, we included firms

that fell between codes 15 and 52. These categories include firms involved in the manufacturing

of consumer products, chemical products, machinery, pharmaceutical and healthcare products,

high-tech, electronic and other electrical equipment and automotive products. We purposefully

included these industries with the expectation of them possessing advanced competencies in

demand and supply chain practices, and them being situated in a dynamic environment

(interactions with managers preceding this study were suggestive of this aspect). Within this set

we further selected high-level managers with supply chain responsibility as key informants. We

aimed for these high-level respondents since knowledge about both supply- and demand-side

competence, as well as overall operational performance, was required for the completion of the

16
questionnaire. Based on our preceding interactions with supply chain managers, we felt that this

was the most promising approach.

Guidelines from Dillman’s (2000) tailored design method were followed in the

administration of the survey in order to maximize response rate. All mailings, including a

personalized cover letter and the questionnaire, were sent via first-class postal mail. In an attempt

to make the participation as convenient as possible, potential respondents were offered several

options for completing the survey, including the provision of their responses via an online

questionnaire (the link to it was provided in the cover letter). After three weeks, personalized

reminder e-mails were sent to all individuals that had not yet responded. If still no response was

received, a further contact was made via telephone within six to eight weeks after the initial

mailing.

Of the 817 surveys mailed, 136 were returned due to address errors or due to the

contacted individual no longer being with the firm and/or in the targeted function (supply chain

management). A total of 121 complete and useable responses were received, yielding an

effective response rate of 17.8%. This response rate is comparable to other research within the

field of supply chain management (e.g., Van der Vaart and Van Donk 2008, Wagner 2010). The

unit of analysis is the firm. Most respondents were either on the level of director (37.2%),

department head (24.0%) or vice president (15.7%). The majority of the firms came from the

manufacturing sector (71.2%). Firms were generally large, with 39.8% reporting an annual

revenue for 2008 of €1 billion or more, 33.3% a revenue between €250 million and €1 billion,

and 29.9% a revenue of below €250 million.

17
4.2 Construct measures

The five theoretical constructs of our research model constitute latent variables requiring indirect

measurement. As such, following the paradigm for creating effective measures forwarded by

Churchill (1970), we commenced by the domain specification of each construct and by the

collection of relevant measurement items from related literature. However, rather than blindly

applying previously utilized measurement items, we used them as a starting point, and developed

them further based on the feedback of an expert panel of practitioners. The expert panel knew the

scope and purpose of our study, and as such was able to tailor the measurement items with their

feedback to fit exactly the content domain, and how they would understand each measurement

item, to most accurately measure the underlying construct. As such, commencing with

established measurement items, we utilized a grounded approach to develop the items to be as

accurate as possible, given our study context. This rigorous approach to develop the final items

provides for a very high level of face and content validity, also increasing the practical relevance

and applicability of our research. Following the feedback of the expert panel, we specifically had

to accommodate changes in the supply chain agility construct, which practitioners critiqued to be

too complicated and having limited face validity. Using a grounded approach, the measures for

supply chain agility were thus deductively and inductively developed with the help of

practitioners. Once the set of measures had been finalized, the complete survey instrument

underwent additional pre-testing for content validity. Specifically, five researchers and 22

practitioners, all having had extended experience in the domain of supply chain management,

were asked to critique the measurement items for the underlying constructs, resulting in slight

modifications related to structure, clarity, and expression.

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 We conceptualized supply- and demand-side competence similar to the Supply Chain

Operations Reference (SCOR) model (Bolstroff 2002). As such, Supply-Side Competence is

operationalized by indicators capturing whether supply and production management delivers the

desired performance and meets the operational business needs (Chen et al. 2009, Lockamy and

McCormack 2004). Indicators underlying the construct Demand-Side Competence capture

whether demand and distribution management delivers the desired performance and meets the

operational business needs (Morash et al. 1997, Morash and Clinton 1998). The construct Supply

Chain Agility is measured by indicators assessing the firm’s adaptability to changing market and

customer developments, and by items measuring its supply, production and demand flexibility

(Narasimhan et al. 2006, Swafford et al. 2006). Process Compliance measures whether the

processes of demand management, supply management, production management, and

distribution management are executed and followed diligently by the firm (Chen et al. 2009,

Lockamy and McCormack 2004). A five-point rating scale ranging from “strongly agree”

(value=1) to “strongly disagree” (value=5) was used to assess the respondents’ degree of

agreement with these measurement items.

Operational Performance is operationalized by items indicating a firm’s competitive

position in terms of supply chain cost, customer service (delivering the right quality and right

quantity at the right time), service level performance (on-time-and-in-full deliveries), and supply

chain flexibility (Beamon 1999, Gunasekaran et al. 2001, Ho et al. 2002). Similar to prior

research, respondents were asked to evaluate their performance relative to that of their

competitors (Van der Vaart and Van Donk 2008); a five-point scale ranging from “much worse”

(value=1) to “much better” (value=5) was utilized. Based on the preceding validation with

practitioners, who were also introduced to the general objectives and context of the research,

19
these construct measures were deemed to accurately represent the underlying constructs we

aimed to capture.

5. Data analysis and results

Partial least squares (PLS) was applied to test our research model, which is a common approach

in production and supply chain management (Vinodh and Joy in press, Wagner 2010). PLS is

considered appropriate (and thus preferred over traditional covariance-based techniques) for the

following reasons: (1) PLS delivers valid results for small sample sizes (Braunscheidel and

Suresh 2009, Chin et al. 2003); (2) the estimates of the individual path coefficients are more

conservative than in covariance-based techniques (Bagozzi and Yi 1988, Chin 1998, Hulland

1999); and (3) non-normal data can be accommodated (Chin 1998, Chin and Newsted 1999).

Since PLS does not provide an overall model fit index commonly reported in traditional

covariance-based techniques, we sought sufficiently high R2 values, construct reliability, and

significant path coefficients to demonstrate the meaningfulness of our model (Chin 1998,

Hulland 1999). These issues will be addressed in the ensuing sections.

5.1 Validity and reliability

Convergent validity and uni-dimensionality of the constructs were established using the item

loading and their significance. Additionally, the composite reliability (CR) and average variance

extracted (AVE) values exceeded the thresholds of 0.70 and 0.50, respectively (Chin 1998,

Fornell and Larcker 1981). All tests for discriminant validity were similarly supportive.

Specifically, the square roots of the AVEs for the latent constructs were found to be greater than

their corresponding correlations (Chin 1998, Fornell and Larcker 1981). This finding was further

confirmed by a comparison of the items’ cross-loadings (Chin 1998).

20
 We assessed the reliability of our measurement model by using (1) the internal

consistency method estimated by Cronbach’s α, and (2) the composite reliability based on

Fornell and Larcker (1981). The Cronbach’s α values range from 0.754 to 0.790, and as such are

above the required minimum of 0.7. The CR values, ranging from 0.839 to 0.864, also exceed the

suggested minimum of 0.7. These results demonstrate the reliability and validity of the

measurement model. The descriptive statistics, item loadings, Cronbach’s α, composite

reliability, and AVE for the constructs are presented in Table 2, with the inter-construct

correlations and their corresponding values for the square-root of the AVE presented in Table 3.

--- Insert Tables 2 and 3 here ---

5.2 Non-response bias and common method variance

We assessed non-response bias by testing whether early and late responses differ significantly on

a range of variables, with late respondents serving as a proxy for non-respondents (Armstrong

and Overton 1977). As such, we split the final sample into two groups based on the dates the

responses were received. Mann-Whitney U-Tests did not reveal any statistically significant

differences between the two groups (p > 0.05) across demographic variables and the indicators

for our constructs, suggesting non-response bias not being a significant concern.

We further tested for common method variance. As suggested by Harman (1967), we

employed an exploratory factor analysis of all survey items. This assessment revealed seven

factors with Eigenvalues greater than 1.0 that accounted for 69.6% of the variance, with the first

factor accounting for only 33.1% of the explained variance. Since no general factor emerged that

accounted for the majority of the covariance, we conclude that common method bias is not a

serious issue among our data. In a further test we pursued the PLS measurement analysis

recommended by Podsakoff et al. (2003). As such, we integrated a methods factor in the

analysis, which however did not influence the results significantly. The average variance

21
explained by the methods factor was only 0.30 in relation to the overall variance explained of

0.62, providing additional evidence that common method bias is not of serious concern among

our data.

5.3 Hypotheses tests

Having established the soundness of our measures, we proceeded with the test of the

hypothesized relationships. The PLS algorithm suggested that 37% of the variance in supply

chain agility is explained by supply- and demand-side competence (R2 = 0.37), and that 19% of

the variance in operational performance is explained by supply chain agility (R2 = 0.19). These

values are quite substantial (Chin 1998), especially considering that we related only two

determinants out of several other potential influencers on supply chain agility, and only one on

operational performance.

The significance of the relationships among the latent variables was assessed using the

associated t-statistics, which were obtained via the PLS bootstrapping algorithm. While Henseler

and Fassott (2010) recommend a minimum of 500 samples to decrease the effects of possible

random sampling errors, we utilized 2,000 data sets, at which point it became obvious that

adding further data sets made only a marginal difference. The results support our hypothesized

relationships between supply-side competence and supply chain agility (H1a: β = 0.336; p <

0.01) and between demand-side competence and supply chain agility (H1b: β = 0.239; p < 0.05).

Support was also provided for the path from supply chain agility to operational performance (H2:

β = 0.432; p < 0.001) (Table 4).

--- Insert Table 4 here ---

The mediating effect of supply chain agility, as postulated in our compound of H3, was

tested using the Sobel (1982) test. This approach involved the testing of two different models for

22
each of the two hypothesized mediating effects (H3a and H3b). In each case, the first model

(Model 1) included the paths between the supply- and demand-side competence and supply chain

agility. In addition to the paths in Model 1, Model 2 included the paths from the predictor (the

competence variable) to operational performance, as well as the path from supply chain agility to

operational performance. The test statistic1 for the mediating effect of supply chain agility shows

that supply chain agility significantly mediates the relationship between supply-side competence

and operational performance (2.810; p < 0.01) as well as the relationship demand-side

competence and operational performance (2.491; p < 0.05) (Table 5). This result provides

support for H3a and H3b. Moreover, the indirect effect of supply-side competence (β = 0.145;

p < 0.01) was found to positively influence operational performance to a greater degree than the

indirect effect of demand-side competence on operational performance (β = 0.103; p < 0.05).

In order to determine whether supply chain agility is a partial or a full mediator,

additional tests were conducted (Chin et al. 2003, Subramani 2004). In comparison to the full

mediation model, the partially mediated model included a direct path between supply-side

competence (demand-side competence) and operational performance. Given that these two

models were nested, the contribution of the direct path was examined by comparing the change

in R2 values between the models. The pseudo F test2 for the change in R2 was found to be

statistically significant at p < 0.01 for the demand-side competence model (Table 6) (Chin et al.

2003). This result indicates that the relationship between demand-side competence and

1
The standardized coefficients provided by PLS were converted to unstandardized coefficients by multiplying the
standardized coefficients by the standard deviation of the dependent variable (Y) and dividing them by the standard
deviation of the independent variable (X). Please refer to Table 5 for the standardized coefficients (Std. Beta),
standard deviation of the dependent variable (Y), standard deviation of the independent variable (X), and the
standard error.
2
The pseudo F test is similar to that employed to test nested models in stepwise linear regression. The f2 statistic is
computed based on the differences in R2. The f2 value is calculated by dividing (R2partial – R2full) by (1 – R2fpartial). The
pseudo F statistic is calculated by multiplying f2 by (n – k – 1), with a=1 and (n – k) degrees of freedom where n is
the sample size and k is the number of independent constructs in the model.

23
operational performance is only partially mediated by supply chain agility. In the case of supply-

side competence, the pseudo F test was not found to be statistically significant, indicating that

full mediation is present (Chin et al. 2003, Subramani 2004). This finding is contrary to our

expectation postulated in H3c; as such, the mediation by supply chain agility was stronger in the

relationship between supply-side competence and operational performance (we expected a

stronger mediation effect in the relationship between demand-side competence and operational

performance).

And lastly, as indicated by the significant interaction terms reported in Table 6, process

compliance is moderating the effect of supply-side competence (H4a: β = 0.234; p < 0.05) and

demand-side competence (H4b: β = 0.230; p < 0.01) on supply chain agility, providing support

for our fourth set of hypotheses.

--- Insert Tables 5 and 6 here ---

6. Discussion and implications

This study sought to advance research in supply chain management by a focused investigation of

supply chain agility. The model considered antecedents (supply- and demand-side competence)

of supply chain agility, its influence on operational performance, and the moderating effect of

process compliance. From a practical viewpoint, the study demonstrated the benefits of supply-

and demand-side competence for supply chain agility. In particular, our data suggest that supply-

and demand-side competence can be transformed via supply chain agility into superior

performance.

Our findings contribute to past research by suggesting that the dynamic capabilities

extension of the RBV better explains performance effects than focusing on competencies alone.

In order to stay competitive, firms have to react to the changing environment, and supply chain

24
agility is a vehicle to do so. Overall, we showcased supply chain agility as a complex capability

that can most effectively be achieved when the right antecedents and enablers are in place. More

specific implications follow.

First, we offered theoretical rationales and empirical evidence suggestive of the

differentiation between competencies (i.e. supply- and demand-side competence) and capabilities

(i.e. supply chain agility), with the latter emanating from the former. As such, borrowing from

literature in strategic management, we conceptually and empirically differentiate between

capabilities and competencies, and view capabilities as having evolved from competencies

(Braunscheidel and Suresh, 2009, Prahalad and Hamel 1990, Teece 2007, Zhang et al. 2002).

Against this background, we conceptualized supply- and demand-side competence as internal

aspects, with supply chain agility representing a dynamic capability able to respond to and effect

the external environment. As such, with these competencies in place, a firm should be better able

to react to developments in the market (Day 1994). This is also in line with RBV-based

arguments, according to which competencies can serve as a resource to develop capabilities.

Our contentions of supply- and demand-side competence representing fundamental

building blocks of supply chain agility were confirmed, as suggested by the statistically

significant path coefficients linking competencies to capability in our research model (βsupply-side =

0.336, psupply-side < 0.01; βdemand-side = 0.239, pdemand-side < 0.05). This finding emphasizes the dual

importance of both aspects in supply chain management research. As such, by extension, our

study calls attention to the notion of supply chain integration to be conducted with both

customers and suppliers; a one-sided engagement may not yield best results (Frohlich and

Westbrook 2001). A complete strategy for supply chain management should thus entail both

aspects. Our result is also in line with earlier findings suggesting competencies being critical for

25
the success of firms (e.g., Chen et al. 2004, Gonzalez-Benito 2007, Yeung 2008). We thus

provide additional evidence for the specific competencies related to the supply- and demand-

side, capturing the holistic nature of the SCOR model and its implication of making balanced

investments in both competencies.

Second, our research positioned supply chain agility as a central component of a firm’s

competitive strategy, especially within such turbulent times as of today. Specifically, supply

chain agility was confirmed to positively influence operational performance, suggesting supply

chain agility to be a valuable capability under the RBV in our “age of temporary advantage”

(Fine 1997). Supply chain agility provides increased reactivity that can yield additional rents due

to the exploitation of this valuable capability. Supply chain agility is therefore of practical

importance to supply chain management, something to be fostered, and a resource to fall back to

in order to quickly and effectively respond to dynamic changes, both on the supply and demand

side, in today’s ever-changing marketplace.

Third, we confirmed the central role of supply chain agility in transforming supply- and

demand-side competence into operational performance. While both relationships (supply-side

competence  supply chain agility  operational performance, and demand-side competence

 supply chain agility  operational performance) were mediated, a greater (full) mediation

effect was detected in the model emanating from supply-side competence. This is contrary to our

expectation, and indicative of supply chain agility playing a greater role for the transformation of

supply-side competence into operational performance. As a possible explanation may serve the

fact that we measured operational performance compared to the firm’s competitors, rendering it a

relative performance measure. As such, the influence of supply-side competence via supply

chain agility on operational performance is able to lead to greater competitive disparity than the

26
influence of demand-side competence. This greater relative competitive value of supply-side

competence may be explained by the increasing significance of the supply side, driven by

continued outsourcing of critical firm functions, the objective of zero inventories, and global

suppliers. These developments propagate the complexity and vulnerability of the supply side.

However, once these aspects are managed well, as evidenced by supply-side competence and its

manifestation in supply chain agility, this can provide the basis for creating an enhanced relative

competitive advantage. In contrast, while demand-side competence is also valuable, its

contribution to relative operational performance via supply chain agility may not be as great,

since firms may have been focusing on optimizing the customer dimension for a longer time.

Firms thus have become proficient in responding to customer changes, rendering the influence of

demand-side competence via supply chain agility as a lower value proposition, not able to create

too much of a competitive disparity any more (most firms are likely to be on par with their

competitors on this dimension).

And fourth, we confirmed process compliance as an important infrastructural element

serving as a conduit for competence on supply chain agility. This calls attention for practicing

managers in production and supply chain management to ensure their processes are well-

developed, in line with the expectations, and directly supporting overall firm strategy. This

further underlines the concept of supply chain management as a process. Regular process

mapping exercises should thus be conducted to assess the quality of procedures and workflows,

in order to have the most streamlined and effective infrastructure to affect supply chain agility.

With these results we further confirmed process compliance as a valuable resource under the

RBV, able to offer guidance and structure, enabling supply- and demand-side competence to

reach their greatest potential in affecting supply chain agility. From an information processing-

27
theoretic perspective, we also highlighted the foundational structure that process compliance can

provide, in order to most effectively utilize the resource of supply- and demand-competence in

generating supply chain agility. As such, process compliance guides behavior and can be viewed

as a means to effectively absorb (recognize, evaluate, assimilate, and apply) aspects of supply-

and demand-side competence for an enhanced impact on supply chain agility.

Before concluding, we would like to touch on a related stream of research for which we

have offered some insight: the “exploitation versus exploration debate” in production research

(e.g., Tamayo-Torres et al. in press). While exploitation refers to a firm’s aim to create the most

effective and efficient processes possible, minimizing waste and enhancing productivity,

exploration refers to a firm’s objective to constantly be on the search for new and innovative

ways of achieving and exceeding one’s goals. These two dimensions, and how they are used in

production research, go back to the seminal work of March (1991), who introduced the

distinction between these two gestalts of organizational behavior (cf. Lavie et al. 2010). Within

the realm of production research, the practices of total quality management and lean initiatives

have often been associated with exploitation, while the practice of innovation has frequently

been associated with exploration (e.g., Benner and Tushman 2003, Prajogo and Sohal 2006).

There has traditionally been a tension between exploitation and exploration, which suggested

these two approaches to be incompatible. Taken in our context, this would mean that process

compliance could result in increased rigidity, hindering the dynamic application of supply- and

demand-side competence for the benefit of supply chain agility. As such, one could argue that

the moderating influence of process compliance should be in the opposite direction, i.e. that

greater process compliance lessens the impact of the competencies on supply chain agility.

28
 However, what has been viewed as tension in earlier studies, has evolved into the view

that both aspects can be accomplished at the same time (Lavie et al. 2010). This is also what our

study purports. While we did not measure exploitation and exploration explicitly, we offered

support for the harmonious unison of these two dimensions. As such, process compliance,

favoring exploitation, can foster an environment of continuous improvement, structure,

consistency, efficiency, and guidance (Benner and Tushman 2003). This offers important

infrastructure for the efficient transformation of inputs into outputs. However, at the same time, a

balance can be struck in that aspects of exploration are possible in this environment as well (e.g.,

Lavie et al. 2010, Prajogo and Sohal 2006, Tamayo-Torres et al. in press). In this view, process

compliance can provide the infrastructure and foundation, which is however not as rigid so as to

prevent adaptation from occurring. As demonstrated in our theoretical development of H4 and its

ensuing empirical support, process compliance moderated the relationship between competencies

and supply chain agility in a positive way. As such, our work provides support for the notion that

exploitation and exploration do not have to be seen as alternatives, but can function in unison.

7. Conclusion and future research directions

While past research has highlighted the key role of supply chain agility for achieving competitive

advantage, relatively little research has focused on the antecedents of supply chain agility. We

addressed this gap, and studied the importance of supply chain specific precursors. We provided

a finer-grained understanding of the role of supply chain agility as a dynamic capability, and

highlighted its mediating effect in the relationship between supply chain competencies and

operational performance. As such, we provided insight to an issue that had not been addressed in

extant supply chain management research. Moreover, we offered evidence suggestive of the

moderating effect of process compliance on the relationship between supply- and demand-

29
competence and supply chain agility, contributing also to the exploitation-exploration debate.

Overall, by increasing our understanding of emerging models of supply chain agility, its role as a

dynamic capability, its antecedents, its performance implications, and its performance enhancers,

this study makes worthwhile contributions to production and supply chain management

literature, as delineated above.

While our research was able to provide some intriguing insight into the role of supply

chain agility from a dynamic capabilities perspective, limitations exist. Specifically, we assumed

that the processes queried in the survey were effective and valid, and represented the best

approaches on completing the tasks. This characteristic was assumed, rather than formally tested,

due to the unavailability of data. We feel however confident that our sample represented

proficient and high-performing firms. This was achieved based on the specific choice to

collaborate with the German supply chain association in general, and then also specifically by

our careful selection of potential respondents. The membership in the professional supply chain

management association may possibly be indicative of the firm’s more proactive approach to

supply chain strategy. Further confirmation was provided by the above-average values on a set of

questions in the survey that assessed the firm’s perceived overall supply chain performance.

A further limitation pertains to the contextual administration of the survey in Germany.

While we expect similar results to hold true in countries of similar development and

industrialization, we cannot ascertain this fact. In addition, we relied on a single respondent to

obtain insight about the firm’s supply chain, which is a common limitation in related research

(e.g., Braunscheidel and Suresh 2009, Swafford et al. 2006); a more ideal approach would have

been a dyadic or even triadic survey design.

30
 Additional avenues for future research exist. Besides working to overcome above

limitations, research can be extended by the incorporation of secondary data to analyze overall

firm effects, as we only focused on operational performance that was assessed via perceptual

measures. However, the measurement of supply chain agility solely by objective data may be a

hurdle, since appropriate data that capture the underlying notion of agility must be available.

Extending the seminal work of Lee (2004) provides further research potential, as interaction

effects of agility, adaptability and alignment on corporate performance have not been

investigated in empirical research. It is hoped that the present work provides motivation and

impetus for the further investigation of the important domain of supply chain agility.

31
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TABLES AND FIGURES

Table 1: Illustrative literature review of empirical supply chain agility (SCA) research

Study Primary Study aim Focus Independent/ SCA Construct Theory Contribution
methodology Dependent Variables
Agarwal et al. Interpretive Examining interrelation- SCA IV: customer satisfaction, n.a. n.a. The research shows that SCA depends on
(2007) structural ships of the variables quality improvement, cost customer satisfaction, quality improvement,
modeling influencing SCA minimization, delivery cost minimization, delivery speed, new
speed, new product product introduction, service level
introduction, service level improvement, and lead-time reduction
improvement, and lead-time
reduction; DV: SCA
Aitken et al. Conceptual and Development of SCA Antecedents IV: Principles, programs n.a. None The research establishes a comprehensive SCA
(2002) case study enabling concept of SCA and action variables; DV: enabling concept based on the levels of
SCA principles, programs and actions.
Bottani (2010) Survey Investigation of profile of Antecedents n.a. n.a. None The research provides a taxonomy on SCA
SCA and its enablers of SCA based on factor analysis.
Braunscheidel Survey Explanation of cultural Antecedents IV: market orientation, Joint planning, None The research shows that market and learning
and Suresh aspects and organizational of SCA learning orientation, demand response, orientation affect internal and external
(2009) practices on SCA internal integration, external visibility, customer integration as well as external flexibility which
integration, external responsiveness affect altogether SCA.
flexibility; DV: SCA
Charles et al. Review, Definition of SCA and SCA n.a. n.a. None The research provides a method of
(2010) case study, and development of a model assessing supply chain agility also
symbolic to evaluate SCA appropriate for humanitarian sectors.
modeling
Christopher Conceptual Development of a supply Definition + n.a. Virtual, market None The research provides a better understanding
(2000) chain agility concept antecedents sensitive, process of supply chain agility construct and how it is
of SCA integration, network different from lean and which dimensions
based represent supply chain agility.
Collin and Single case Exploring effect of Antecedent n.a. n.a. None The research provides an analysis of different
Lorenzen study demand planning on SCA of SCA planning and forecasting concepts on SCA by
(2006) investigating the Nokia Networks showing that
supply chain agility needs continuous
planning.
Giachetti et al. Conceptual Development of Analysis of n.a. n.a. Relational The research provides a comprehensive
(2003) measurement framework different measure- analysis of existing agility measurement
for agility agility ment methods.
measure- theory
ments
Goldsby et al. Simulation Understanding lean and SCA n.a. n.a. None The research shows that lean, agile, and leagile
(2006) agile and leagile supply supply chain strategies can outperform the
chain strategies and their other strategies based on contingencies.
trade-offs
 Study Primary Study aim Focus Independent/ SCA Construct Theory Contribution
methodology Dependent Variables
Ismail et al. Conceptual Development of SCA Antecedents IV: Market, contingencies, n.a. None The research combines supply chain
(2007) model based on supply of SCA market and product design and design for supply chains to
chain design and the strategy, supply chain enable SCA.
design for supply chains classification, power and
relationship, supply chain
strategy; DV: SCA
Jain et al. Fuzzy intelligent Modeling agility by a SCA IV: Integration, change, Flexibility, None The research provides a comprehensive
(2008) agent-based dynamic agility level competence, partnership, profitability, quality, measurement system for SCA.
approach index through fuzzy welfare; innovation, pro-
intelligent agents DV: Agility activity, speed of
response, cost,
robustness
Khan K and Survey Exploration of effects of Antecedents IV: strategic supplier Agility in demand None The research shows the significant effect
Pillania (2008) strategic sourcing SCA of SCA partnership, sourcing management and of strategic sourcing on SCA and firm
and performance flexibility, supplier distribution, agility performance.
evaluation, trust in members in manufacturing
of supply chain; DV: SCA and customization
Kisperska- Survey Exploring agile Antecedents n.a. n.a. None The research identifies four clusters of
Moron and capabilities of Polish of SCA agile firms in a Polish context.
Swierczek firms
(2009)
Li et al. (2008) Conceptual and Development of a n.a. n.a. n.a. Knowledge The research provides a theory-driven,
literature review theoretical model to based view, comprehensive framework for SCA.
analyze links of SCA and dynamic
competitiveness capabilities,
social
learning
theory
Lin et al. Multi-criteria Development of fuzzy Antecedents IV: collaborative relation- Responsiveness, Fuzzy set The research provides an agility index
(2006) decision-making agility index of SCA ships, process integration, competency, theory which has been tested positively in a
model with information integration, flexibility, quickness Taiwanese context for efficacy.
fuzzy logic customer/ marketing
sensitivity; DV: SCA
Mason et al. Conceptual Understanding Antecedents n.a. n.a. None The research develops a conceptual
(2002) outsourcing effect on of SCA model to understand impact of
SCA outsourcing on SCA
Mason-Jones Multiple case Introducing the leagile SCA n.a. n.a. None The research provides details on how
et al. (2000) study paradigm to match supply firms combine leanness and agility in
chains and marketplace different marketplaces.
Narasimhan et Survey Understanding leanness SCA n.a n.a. None The research demonstrates that he
al. (2006) and agility relationships pursuit of agility might presume
leanness, but the pursuit of leanness
might not presume agility
Yusuf et al. Survey Investigating SCA Antecedents n.a. n.a. None The research shows how diverse supply
(2004) capabilities and and chain capabilities are related to each
competitive objectives outcomes other and competitive priorities.

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 Study Primary Study aim Focus Independent/ SCA Construct Theory Contribution
methodology Dependent Variables
Prater et al. Conceptual and Developing a SCA SCA IV: external vulnerability, n.a. None The research shows the close relation of
(2001) multiple case concept which combines sourcing flexibility&speed, agility and uncertainty and the necessity
study uncertainty and agility manufacturing flexibility& to manage these jointly.
speed, delivery flexibility&
speed; DV: SCA
Shaw et al. Multiple case Exploring key asset Antecedents n.a. n.a. None The research adapts the SCA concept to
(2005) study capabilities for agility in of SCA process industry.
process industry
Swafford et al. Survey Explanation of effect of Antecedents IV: Procurement/sourcing SCA is measured by RBV The research shows that SCA is directly
(2006) supply chain process of SCA flexibility, manufacturing 10 items related to affected by manufacturing and
flexibilities on SCA and flexibility, distribution/ capacity and service procurement process flexibility and
development of logistics flexibility; DV: related items only indirectly affected by logistics
measurement model SCA process flexibility.
Swafford et al. Survey Investigating the effect of Antecedents, IV: information technology Eight speed related None The research found a domino effect
(2008) supply chain flexibility performance integration, supply chain items. among IT integration, supply chain
and IT integration on SCA flexibility; DV: SCA, flexibility, supply chain agility, and
business performance competitive business performance.
van Hoek et Conceptual Development of an SCA SCA n.a. Customer sensitivity, None The research provides insights which
al. (2001) audit virtual integration, methods and tools can help fostering
process integration, SCA.
network integration,
measurement
Vickery et al. Survey Investigating the impact IV: supply chain IT, supply New product Theory of The research shows that IT and
(2010) of supply chain IT and chain organizational introduction time, resource organizational initiatives have a
supply chain initiatives; DV: Agility, manufacturing lead complementar complementary effect on agility.
organizational initiatives firm performance time, delivery speed, ities
on SCA modification
flexibility,
responsiveness to
customers
White et al. Single case Explanation of how Antecedents n.a. SCA measured by None The research suggests that information
(2005) study information systems of SCA time taken to respond technology and systems might help to
enable SCA to a customer order increase SCA.
Wu and Multi-criteria Development of supplier Supplier n.a. n.a. Dempster– The research formulates practical
Barnes (2010) decision-making selection criteria for SCA selection for Shafer theory supplier selection criteria for selecting
model SCA SCA enabling suppliers.
Xu et al. Conceptual Development of a system Antecedents n.a. n.a. None The research develops a practice
(2003) for enhancing supply of SCA oriented methodology to increase agility
chain agility through through exception handling routines.
exception handling
Naylor et al. Conceptual and Understanding leanness SCA n.a. n.a. None The research suggests that total supply
(1999) single case study and agility relationships chain strategy must consider market
knowledge and decoupling point to
achieve agility.

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Table 2: Means, standard deviations, standardised loadings, Cronbach’s alphas and
composite reliability values

Table 3: Correlations and Average Variance Extracted

Construct SSC DSC SCA PC OP

Supply-Side Competence (SSC) 0.784
Demand-Side Competence (DSC) 0.577 0.754
Supply Chain Agility (SCA) 0.452 0.454 0.729
Process Compliance (PC) 0.644 0.645 0.375 0.761
Operational Performance (OP) 0.355 0.470 0.432 0.377 0.778
The square-root of the construct’s AVE is printed on the diagonal (in bold).
The off-diagonal numbers represent the Pearson’s correlations between the constructs.

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Table 4: Hypotheses test results

ON …
EFFECT OF … Supply Chain Agility Operational Performance
Direct T-Statistic Direct Indirect T-Statistic
Supply-Side Competence 0.336** 3.080 - 0.145** 3.131
Demand-Side Competence 0.239* 2.358 - 0.103* 2.047
Supply Chain Agility - - - 0.432*** 6.310
Process Compliance -0.099ns 0.868 - -0.043ns 0.833
Supply-Side Competence x
0.234* 3.095 0.101* - 2.498
Process Compliance
Demand-Side Competence x
0.230* 2.837 - 0.099ns 0.992
Process Compliance
ns
p≥0.05; * p<0.05; **p<0.01; ***p<0.001

Table 5: Mediation analysis using the Sobel test

Notes: DSC=demand-side competence; SSC=supply-side competence; SCA=supply chain agility; OP=operational

performance

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Table 6: Full and partial mediation analysis using nested model comparison

Notes: DSC=demand-side competence; SSC=supply-side competence; SCA=supply chain agility; OP=operational

performance
a
The hypothesized model (Model 1) shown above is the completely mediated model that does not include any direct
path between the predictor DSC or SSC and outcome (OP) variables. Model 2 includes the direct path between DSC
or SSC and OP (which is the same as Model 2 in Table 5).

Figure 1: Research framework

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