Editor’s note: A recent article in ASCM’s Journal of Operations Management identifies the combinations of supply chain integration and big data analytics capabilities that help enable supply chains resilience. The paper explores how organizations can better coordinate their supply chains and use data effectively to become stronger and more adaptable in the face of disruptions. The following is a summary of the original research.
The globalized nature of modern supply chains exposes companies to a wide range of risks, from natural disasters and political instability to pandemics and labor crises. This research paper investigates how firms can develop resilience to prepare for, respond to and recover from disruption by examining the interplay between different capabilities. It argues that achieving resilience depends on more than strengthening individual capabilities, but also orchestrating them effectively.
Earlier research on supply chain resilience often focused on the independent effects of specific capabilities. This study challenges this view by showing that no single capability alone is sufficient. The research team, drawing on resource orchestration theory, argues that businesses must create constructive collaboration by combining these capabilities. For example, while big data analytics can offer valuable insights, these insights are useless if the firm lacks the information integration within its supply chain to access the necessary data. Conversely, information alone doesn't guarantee effective response to disruptions; companies also need the ability to analyze and use the information through big data analytics capabilities. This is a significant finding because it highlights the flexibility businesses have in building resilience.
The research also differentiates between proactive and reactive resilience strategies. Proactive resilience focuses on building robustness within the supply chain to minimize the impact of disruptions. This might involve diversifying suppliers, building safety stock or investing in scenario planning. Reactive resilience focuses on the ability to recover quickly after a disruption occurs. This might involve having flexible production processes, strong communication channels with partners, or established contingency plans. The study finds that both strategies benefit from a distinct configuration of capabilities.
Key elements of supply chain integration
The study notes three key integration elements:
- Information integration refers to the ability to share high-quality information with supply chain partners, including real-time data on inventory levels, demand fluctuations, and potential disruptions.
- Operational integration focuses on coordinating logistics activities across the supply chain to ensure smooth material flow and efficient response to disruptions.
- Relational integration involves building strong and collaborative relationships with supply chain partners, fostering trust and a culture of risk-sharing.
In addition, the following big data analytics dimensions are critical to leveraging data for better decision-making related to supply chain operations:
- Big data technical skill refers to the expertise of the workforce in handling big data technologies and tools for data analysis.
- Big data managerial skill focuses on the ability of managers to translate data insights into actionable strategies and integrate them into various aspects of supply chain operations like finance, marketing, and manufacturing.
- Data-driven decision culture captures the organizational commitment to using data for decision-making. It reflects a culture that values continuous improvement and adaptation based on data analysis.
Key findings
The analysis revealed several critical findings regarding the configurations of capabilities that lead to high levels of supply chain resilience. As previously noted, combined capabilities drive resilience. Neither strong supply chain integration nor advanced big data analytics capabilities alone guarantee success. Companies need to develop both sets of capabilities in constructive interaction. This allows for effective information sharing (through integration) and the use of data insights (through big data analytics) to make informed decisions and respond to disruptions.
Second, information integration is crucial. High-quality information sharing across the supply chain emerged as a critical factor for both proactive and reactive resilience strategies. This highlights the importance of investing in information technology systems that facilitate real-time data exchange with partners and building a culture of open communication.
Interestingly, the research also found that achieving high proactive and reactive supply chain resilience may require slightly different configurations of capabilities. For proactive resilience, a combination of strong information and operational integration alongside big data managerial skills appears most effective. This allows for effective scenario planning, risk identification, and robust supply chain design. In contrast, achieving high reactive resilience seems to benefit more from strong relational integration with partners, along with big data technical skills and a data-driven decision culture. This configuration facilitates rapid response and recovery during disruptions through collaboration with partners and the ability to leverage data for real-time decision-making.
Lastly, the paper underscores the concept of equifinality — the property of allowing or having the same effect or result from different events — in supply chain resilience. Companies can achieve high levels of resilience even if they lack a specific capability, if they effectively use their existing strengths. For instance, strong relational integration can potentially substitute for a lack of big data technical skills, as collaboration with partners having those skills can bridge the gap.
Overall, the research emphasizes the importance of a holistic approach to resilience. By understanding how different capabilities interact and can be configured, supply chain organizations can develop more robust and adaptable supply chains that are better equipped to handle the ever-present risk of disruptions.
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Learn more about the Journal of Operations Management and the authors of the original research: Yisa Jiang, School of Management at the Harbin Institute of Technology; Taiwen Feng, School of Economics and Management at the Harbin Institute of Technology; and Yufei Huang, Trinity Business School, Trinity College Dublin.
