The efficacy of routing and flexibility on financial performance within an international manufacturing setting

Abstract

Purpose The purpose of this paper is to extend the developing body of knowledge on supply chain performance by addressing the impact of resource commitment (RC), product route efficiency (PRE), and manufacturing flexibility (MF) on a firm’s financial performance (FP) has a direct impact on supply chain operations. Design/methodology/approach Survey questionnaires were developed in conjunction with literature guidance. Exploratory and confirmatory factor analysis was used in conjunction with structural equation modeling to give a robust analysis of the problem setting. Findings Discoveries herein indicate that committing resources in itself is insufficient to adequately increase FP over the long term. However, the mediating variables of MF and PRE were found to significantly improve a firm’s bottom line. Originality/value Prior research has been somewhat lacking and inconsistent with regards to the nature of causal and mediating relationships found between RC, PRE, MF, and a firm’s financial performance. Given the increasing global nature of competition, understanding the relationships between potential factors that could positively impact a firm’s FP has a large potential direct impact and benefit on supply chain operations.