Performance, integration and dynamic capabilities in supply chains: an interpretive investigation of their relationships

What is it about?

Supply chain management has the potential to contribute to a sustainable competitive advantage. It can be argued that robust supply chain management is not just a weapon to win orders, but also an essential prerequisite for a firm’s survival in today’s business environment. However, little is known about how to manage supply chain performance given the multiplicity of internal and external stakeholders with multifarious business objectives, risks, agendas, and requirements. This requires a company to work with its supply and demand networks in a targeted and coordinated way if it is to increase productivity. If the degree of collaboration and integration is not clearly understood, this can hamper a firm’s efforts to prioritise its resources in driving productivity, resulting in suboptimal performance by the company and its key supply chain partners, as well as other stakeholders. Therefore, the importance to a firm of optimising supply chain management requires an urgent response. This research aimed to explore and provide an in-depth understanding of how the integration of targeted and coordinated collaborative partnerships impact supply chain performance, as well as to consider the dynamic capabilities of a firm to identify opportunities and threats and capitalise on them by making rapid internal changes and influencing external decisions. Using a systematic seven-step approach to investigate the relationships between the concepts, data and evidence were gathered from practitioners in three distinct supply chains in order to gain first-hand insights into their perspectives. The findings from this research revealed that supply chain performance management was not straightforward, as it involved consideration of how to integrate different stakeholders with conflicting performance objectives. A way forward was, however, identified. This required a special form of capability – dynamic capability – where firms were able to identify opportunities and risks within their supply and demand networks and reconfigure their resources and processes in line with their strengths and weaknesses, as well as those of their supply chain partners in order to respond to market conditions. However, it was found that the development of dynamic capabilities alone did not guarantee success; there needed to be a cyclical process between the three interwoven concepts. The use of dynamic capabilities as a management philosophy to understand key performance objectives and to configure integrated collaboration with selected supply chain partners is a continuous process that promotes responsive and efficient supply chains. This led to the development of two conceptual frameworks which provide insights for managers to improve performance, based not only on profit, but also on a positive impact on society and the environment.

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