Importance of innovation and flexibility in configuring supply network sustainability

Abstract

Purpose The alignment of procurement strategy with overall business strategy is important for superior firm performance. It is also essential for firms’ purchasing structure to fit the purchasing strategy whether it is cost reduction; value analysis and/or improving delivery and increasing flexibility for achieving superior purchasing performance. The purpose of this paper is to scientifically examine the influence of organization culture (OC), green supplier development (GSD), supplier relationship management, flexibility and innovation on sustainability in supply network (SSN) under the moderation effect of institutional pressures and resources availability. Design/methodology/approach The study is grounded by integrating institutional theory (IT) and resource-based view (RBV) theory. The study empirically tests the conceptual model through survey data gathered from 175 respondents in the KwaZulu-Natal province of Southern Africa using structural equation modeling which is a multivariate data analysis technique that permits to simultaneously examine many relationships among manifest and latent variables. Findings It was found that OC plays a crucial role in shaping the workforce behavior and responsible for enhancing GSDs and building good relationship with suppliers which ultimately results into increased flexibility and innovativeness. Coercive pressures (CPs) play a moderating role between the causal relationship of innovation and SSN. Therefore, CPs have got the ability to amplify or reverse the effect between innovation and SSNs. Research limitations/implications The study suffers from few limitations. First, the study is restricted to one particular province in South Africa. Second, cross-sectional data were used for testing of model in the research study. Practical implications The findings are of great importance for both the researchers and supply chain practitioners. Supply chain practitioners may use this knowledge for benchmarking the supply network configuration process and continuously improve the process. The tested model actually shows the mechanism for enhancing SSNs. In today’s dynamic and uncertain business environment, all firms in the supply network aims to minimize risks and maximize profitability. The findings show that CPs play a moderating effect on the relationship between innovation and SSN. Whenever government authorities and institutions pressurize firms for minimizing pollution levels, we see a trend of increased innovations in the form of new product developments, usage of eco-friendly raw material and application of eco-friendly technology which ultimately minimizes the carbon footprint. Through such initiatives steel and engineering firms conform to the government norms and regulations. However, innovations are possible through collaboration with specialist suppliers and sub-suppliers by adopting a common standard across the supply network. Through this overall process of innovation, the focal firm and sub-suppliers linked in the network will benefit and ultimately achieve a competitive edge. Therefore, firms can experience multiple benefits in terms of lower development costs, lower project cycle completion time, improvement in design for re-manufacturability, low downtime, low supply risks, reduction of greenhouse gas emissions and, ultimately, sustainable development. Originality/value The study is unique from dual perspective – both in terms of scope and contribution to supply chain management literature. First, the study integrates flexibility and innovation to study the impact on SSNs. Second, it integrates both IT and RBV theory of firm to test the moderation effect and the findings further opens up window for future research.

Culture and green supply chain management (GSCM)

“…From the retrieved articles, we have captured papers using combined measurement items derived from ulterior frameworks (i.e. Hofstede et al , 1990) to measure organizational culture as done by Bag and Gupta (2018) to find that organizational culture is “leading to better development of green suppliers”. Baird et al (2017) used four of the organizational culture profile dimensions of O'Reilly et al (1991) (teamwork, innovation, outcome orientation, and attention to detail).…”

Supply Chain Management: some reflections to improve its influence in business strategy

“…Some essential areas for research that could clarify managers when and how could be more suitable for their companies to align the scm strategy with business strategy are still fragmented and uncompleted. According to Houé and Guimaraes (2017), "supply chain management is at the heart of business strategy," (p. 5) thereby the scm strategy should be taken into account when the organization outlines its business strategy (Akın-Ateş et al, 2018;Bag et al, 2018). On the other hand, how to operationalize these strategies, as well as scm practices and success factors for their implementation, is sometimes disconnected from the business strategy.…”

“…The supply chain is more than just a chain, it is a network, where not all members behave the same way, have the same needs, or share the same business strategies or culture. Consequently, organization culture plays a critical role in shaping the behavior of the sc through collaboration (Bag et al, 2018), and so understanding those characteristics will give rise to the construction of different segments, where different modes of action will be applied to conceive the scm strategy, shaping different supply chains strategies in a "dynamic alignment" (Gattorna, 2006). Therefore, through segmentation, firms with similar cultural conditions are regarded as risk-takers by fostering collaboration.…”

The adoption of environmentally sustainable supply chain management: Measuring the relative effectiveness of hard dimensions

“…Consequently, a strong association between the firm and its suppliers enhances its ability to implement innovative strategies to make its supply chain operations eco‐friendly (Dubey et al, 2017). Hence, we assume that for adoption of ESSCM by the organisation, supplier relationship management plays a key role (Bag, Gupta, & Telukdarie, 2018; Luthra et al, 2016).…”