Rethinking Supply Chain Configuration

The central objective of this thesis is to examine the impact of the contextual environment on supply chain configuration settings and decisions. Much has been learnt in prior research into the interplay within the supply chain triad: configuration, contextual environment, and performance. Yet, rapid changes in contextual environments have made the (re)configuration of supply chains a central issue. Research needs to investigate the impact of the contextual environments that are not thoroughly addressed in the literature on supply chain configuration and management. This research builds on the contingency theory concepts, proposing a greater supply chain performance could be attained through achieving a fit between the configuration settings, the internal and external contextual factors, and the strategy. The supply chain configuration is mostly addressed in prior literature in terms of individual functional units. In contrast, the present research investigates supply chain configuration holistically and, to that end, adopts an end-to-end perspective. This entails viewing the supply chain more broadly, as an extended enterprise of networked firms. Central to this proposition, supply chain configuration (and reconfiguration) is considered to involve three key elements: structural configuration elements, organisation and strategy, and performance management and measurement systems. The thesis comprises a cover essay pinned with a compilation of four studies. Three contextual environments are investigated: process and product innovation practices implementation, corporate organisational structure, and industrial projects. The thesis examines three dimensions: (1) (re)configuring the end-to-end supply chain; (2) the relationship between supply chain configuration and performance; and (3) identifying the organisational antecedents to achieving a supply chain structural and strategic fit. Conclusions are drawn from analysing empirical data on 28 firms located in Italy and Sweden. The data were collected along the supply chain: manufacturer, customer, supplier, and supplier’s supplier. The results indicate that although the contextual environment plays a role in shaping the operations and the supply chain strategy, the contextual environment is not reflected in the configuration decision making. It is found that supply chain structures evolve over time, rather than being systematically configured, and that economic performance is a significant factor in defining certain configuration settings. The analyses suggest that to maximise the tangible added-value of innovation iv implementation, the supply chain configuration should be close to the structural-strategic fit. The research identifies supply chain collaboration as a key strategy mitigating the shortcomings of misfit. The findings suggest that the highest performers have achieved a cost-service balance with a supply chain configuration characterised by close collaboration, and strong strategic partnerships between the supply chain members. However, since now most supply chains are globally spread, it becomes challenging to foster strategic partnerships as this would affect the configuration’s flexibility. Furthermore, the analyses reveal the roles of obscure elements, such as supply chain power structure, institutional pressures, and trust and interpersonal relationships, in determining the configuration settings. The thesis contributes to the supply chain management literature by proposing conceptual frameworks for addressing the supply chain structural and strategic fit (or to reduce the misfit). Moreover, the thesis offers a framework to link the performance management and measurement system with supply chain strategy. This contribution lays a foundation for a deeper understanding of the various ways to (re)configure the end-to-end supply chain. This research applies contingency theory to a horizontal units context (i.e., supply chain), and investigates the within and between relationships of supply chain members. The findings suggest an extension of contingency theory, through proposing that organisations should respond to two key attributes of the contextual environment: the magnitude (intensity) and the mix of the contextual factors. Furthermore, the adopted case-based research strategy helps mitigate the under-application of theory building approaches in contingency studies. In terms of managerial implications, the thesis addresses practitioners concerns regarding the design of an integrated supply chain that delivers differentiated value to the final customer. The syntheses presented here offer supply chain managers a fresh perspective, and a portfolio of possible configuration decision bundles, to draw feasible survival plans for lower performing firms and employing the configuration settings to achieve greater performance. These analyses assist practitioners in assessing the tangible impact of innovation implementation along the whole supply chain. It should be therefore possible for firms to build capabilities to (re)configure the supply chain, and to survive the competition in the face of a rapidly changing contextual environment.