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

• Author: Brian Squire,Chad W. Autry,Emma Brandon‐Jones,Kenneth J. Petersen
• Published date: 01 July 2014
• Date: 01 July 2014
• DOI: http://doi.org/10.1111/jscm.12050

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

Supply chain risk management remains a key mana-

gerial challenge that affects the performance of organi-

zations (Altay & Ramirez, 2010; Hendricks & Singhal,

2005b). Despite increased attention from academia

and industry, the frequency and impact of disruptions

remains stubbornly high. In part, this may be ascribed

to rises in events, such as natural disasters, that are

outside of managerial control (Guha-Sapir, Vos, Below

& Ponserre, 2012), but is also due to changes in the

design of supply chains. Characteristics such as tighter

coupling, increased complexities, reduced inventory

levels, and ever-greater geographic dispersion have

reduced costs in supply chains, but have also created

greater vulnerabilities (Bode, Wagner, Petersen &

Ellram, 2011).

As a result, many organizations, including Boeing,

Cisco, Coca-Cola, and Proctor and Gamble (www.

scrlc.com), are working with organizations across their

supply chains to create resilience and robustness. We

define supply chain resilience as the ability of a supply

chain to return to normal operating performance,within

July 2014 55

an acceptable period of time,after being disturbed (cf.

Christopher & Peck, 2004) and supply chain robust-

ness as the ability of the supply chain to maintain its func-

tion despite internal or external disruptions (cf. Kitano,

2004). For example, Toyota was able to resume pro-

duction at 29 plants just 3–4 days after the Kobe

earthquake of 1995 (Fujimoto, 2011), while Li and

Fung were able to continue to supply their customers

in the midst of the Indonesian currency crisis when

many of their competitors had to halt production

(Tang, 2006b). The former is an example of a resilient

supply chain and the second an example of a robust

supply chain.

This study applies the contingent resource-based

view (RBV; Brush & Artz, 1999) to help our under-

standing of how and when organizations can create

supply chain resilience and robustness. The RBV

argues that organizations may achieve competitive

advantage through the bundling of resources to create

capabilities (Barney, 1991), while the contingent RBV

suggests that this is dependent on certain conditions.

In this study, visibility is considered to be a key capa-

bility in reducing supply chain risk (Christopher &

Lee, 2004), yet surprisingly, broad empirical evidence

for its effects appear largely absent from the literature.

Visibility is such an important antecedent to risk

reduction, not only because its presence helps organi-

zations proactively track products and identify poten-

tial disruptions, but also because its absence can

create new risks. This is exemplified by what Christo-

pher and Lee (2004) term the “risk spiral” and is

associated with the accumulation of buffer stock and

the creation of long pipelines. We examine two critical

resources in the development of supply chain visibil-

ity: supply chain connectivity and information shar-

ing, where connectivity relates to the technological

infrastructure through which information is conveyed

to supply chain partners (Zhu & Kraemer, 2002) and

information sharing relates to the nature, speed, and

quality of the information being conveyed (Cao &

Zhang, 2011).

Our model is explicitly predicated on the notion of

resource bundling, whereby resources which are pos-

sessed by the organization, in this case supply chain

connectivity and information sharing, are integrated

to create capabilities, in this case supply chain visibil-

ity. While the majority of the RBV literature examines

resources and capabilities associated with creating

value and/or competitive advantage, risk management

is primarily a value protection activity (Paape &

Spekl

e, 2012). Therefore, we suggest that visibility is a

specific capability that allows the organization to

mitigate threats in their supply chain to safeguard

organizational performance.

Recent theorizing within resource management

(Sirmon, Hitt & Ireland, 2007), or orchestration

(Sirmon, Hitt, Ireland & Gilbert, 2011), also suggests

that there are contingencies that impact the effective-

ness or outcomes of the bundling process. Environ-

mental factors such as dynamism can change the

effect of capabilities on competitive outcomes

(Sirmon et al., 2007). Our study is consistent with

this logic and examines the contingent effects of sup-

ply base complexity on the outcomes of visibility.

Because supply chains are increasingly complex

(Blackhurst, Craighead, Elkins & Handfield, 2005),

we argue that visibility will see maximum returns to

resilience and robustness when supply bases are com-

plex. Supply chains that are relatively localized and

small may be able to rely on personal and informal

communication mechanisms to manage risks. How-

ever, where supply chains grow, becoming complex

and globalized, the ability to understand inventory

and demand reduces some of the uncertainty associ-

ated with longer pipelines and allows organizations

to quickly and accurately reroute product flows if

disruptions occur.

This study offers three main contributions to the lit-

erature. First, building on research by Barratt and Oke

(2007) and Wieland and Wallenburg (2013), we

investigate the benefits of visibility on reducing risk

(Rao & Goldsby, 2009). Blackhurst et al. (2005) dem-

onstrate the significant impact visibility can have for

disruption recovery, yet empirical survey evidence is

broadly absent (Rao & Goldsby, 2009). Second, we

extend the RBV analysis of supply chain visibility

(Barratt & Oke, 2007), to add the contingent effects

of supply base complexity, specifically answering calls

within the field of supply chain risk management

(Blackhurst et al., 2005). Finally, we address calls for

more theory application in the field of supply chain

risk management (SCRM; Manuj & Mentzer, 2008).

SCRM is a nascent field (Sodhi, Son & Tang, 2012),

and therefore in line with the principles of methodo-

logical fit (Edmondson & Mcmanus, 2007), has

broadly focused on exploratory, atheoretical analysis

of concepts. We leverage a contingent RBV to

show how visibility as a capability (cf. Barratt & Oke,

2007) influences resilience and robustness and more-

over how this effect is dependent on supply base

complexity.

The remainder of the paper is structured as follows.

First, we introduce our theoretical perspective and

review the literature on the contingent RBV. We then

present our literature review of supply chain resil-

ience, robustness, and visibility before detailing our

hypothesis development. Next, we describe our meth-

odology and measures before presenting our findings.

Finally, we discuss these findings in the context of

empirical and theoretical contributions, managerial

implications, limitations, and suggestions for future

research.

Volume 50, Number 3

Journal of Supply Chain Management

56