A Study of Strategic Supply Chain Practices and Operational Performance Under Uncertainty: A Contingency Theory Approach

Abstract

This study analyzes the moderating effects of supply chain uncertainty on the relationship between supply chain practices and operational performance. Additionally, the mediating effects of supply chain responsiveness between supply chain uncertainty and operational performance are also studied in this study. Strategic supplier partnerships, customer relationships, information sharing, and information quality are included in measuring supply chain practices. This study has included demand, supply, and manufacturing uncertainty for measuring supply chain uncertainty. In addition to that, cost, quality, and delivery performance are used to quantify the operational performance. A research framework was created consisting above mentioned constructs considering the contingency theory approach. A structured questionnaire was developed to collect the responses. The collected data were analyzed employing moderated regression analysis and structural equation modelling. The study's findings suggest a positive relationship between supply chain practices and operational performance. Additionally, supply chain uncertainty positively moderated between supply chain practices and operational performance. In other words, the supply chain uncertainty strengthens the relationship between supply chain practices and operational performance, i.e., higher the uncertainty stronger the relationship between supply chain practices and operational performance. Moreover, the mediating effects of supply chain responsiveness, between supply chain uncertainty and operational performance, are not statistically significant. However, the direction of results hints that the supply chain responsiveness acts as a mitigating strategy, i.e., diminish the effects of supply chain uncertainty on operational performance in the presence of supply chain responsiveness. The findings help managers make crucial decisions while crafting the supply chain strategies (here, supply chain responsiveness). Simultaneously, the comprehensive research framework enhances the role of contextual factors (here, supply chain uncertainty) in contingency theory literature. Overall, the presented research framework attempts to address the real-world concerns in supply chain management literature, thus bridging the gap between theory and practice.