Supply chain resilience : scale development and its performance impact under different business conditions and disruptions

Abstract

The clothing industry is situated in an ever-changing and highly volatile business environment. The need of this industry for risk management is crucial which can be done by developing resilience in the supply chain (SC). There are potential risks in carrying out any business activity, and these often disrupt business continuity and result in financial losses. To reduce the impact of disruptions, SC resilience is now an important quality for ensuring the sustainability of businesses. Although the topic of SC resilience and its impacts on firm performance are important, empirical research on SC resilience has been marked by the lack of theoretical constructs and validated measurement scales that concern the various practices towards SC resilience. SC resilience is considered to be the capacity of a firm to prepare for unexpected changes in the market, respond to unseen disruptions and events, and recover back to its original state after a disruption. Grounded in the value chain theory, this study conceptualizes SC resilience in a SC risk management context to develop a model that measures SC resilience practices, which is currently missing in the literature and therefore prevents the further development of SC resilience. The slack resources theory and practice-based view (PBV) are also used in this study to investigate the impact of SC resilience on business performance. In addition, as firms offer different products and service different markets, they are likely to experience different business conditions and disruptions that are beyond their control. Thus, it is important to investigate how environmental conditions in terms of environmental munificence, environmental dynamism and environmental complexity, and SC disruptions moderate business performance with SC resilience practices which are identified after conducting an extensive literature review. This study uses a multi-method research design with five phases to empirically validate the measurement and research models. In Phase 1 of the study, interviews are conducted as exploratory qualitative research to explore the significance of SC resilience and ensure that the identified practices from the literature are relevant to real life practices. In Phase 2, a content analysis is conducted to establish adequate measurement scales of SC resilience practices that reflect real-life cases. Further validation of the measurement scales and examination of the relationship between SC resilience and performance are conducted by carrying out Phases 3 to 5. Specifically, a mass survey is carried out in Phase 3 to empirically validate the measurement scales and test the relationship between SC resilience and business performance. In Phase 4, a decision analysis is carried out to determine the weight of the measurement items in building SC resilience. In Phase 5, a content analysis is conducted to gain in-depth understanding and provide contextual explanation of the results of Phases 1 to 4 in the study. The results confirm a multi-dimensional construct of SC resilience that is reflected through two complementary dimensions, namely primary- and support-oriented SC resilience practices, each of which comprises four sub-dimensions, with a total of 31 items. The items are further weighted based on the rough set theory and type-2 fuzzy sets. The findings provide insights into the business value of SC resilience under different environmental conditions and disruptions that are essentially beyond the control of firms in the clothing industry. The research findings also provide insights into why clothing firms might want to improve business performance by realizing SC resilience and how they might do so. The results serve as the means of advancing theories and practices of SC resilience, thus providing a useful reference for firms to evaluate their SC resilience efforts, and identify areas of improvement.