An empirical investigation of the impact of strategic sourcing and flexibility on firm's supply chain agility

Abstract

PurposeThe purpose of this paper is to investigate two potentially key drivers of a firm's supply chain agility, namely strategic sourcing and firm's strategic flexibility. Despite some theoretical and conceptual works suggesting that some elements of these two constructs may relate to agility, this has not yet been assessed together empirically. This study aims to address this gap in the literature.Design/methodology/approachThis study involves an empirical investigation of a theory‐based model based on the competence‐capability framework, and a dynamic capabilities theoretical perspective, where the internal competencies of strategic sourcing and firm's strategic flexibility relate to the dynamic capability of the firm's supply chain agility. This investigation also includes the testing of a possible mediation effect of firm's strategic flexibility on the relationship between strategic sourcing and the firm's supply chain agility. The model is tested utilizing data from 144 US manufacturing firms via partial least square methodology.FindingsThe results of the empirical study indicated that both strategic sourcing and firm's strategic flexibility were significantly related to the firm's supply chain agility. In addition, while a full mediation effect was not found on the part of strategic flexibility, there was evidence for partial mediation.Research limitations/implicationsGiven that the data are from specific US industries, the generalizability of current findings to other industries or countries may require additional investigation.Originality/valueGiven the attention paid to agility in terms of its importance to responding to business uncertainty, and more recently, as an important capability in managing supply chain disruption risks, this paper investigates how strategic sourcing and flexibility can contribute to agility.