Investigating supplier-induced complexity in supply chains

Abstract

Purpose The purpose of this paper is to understand and measure empirically the objective and perceived dimensions of supplier-induced complexity in supply chains. Design/methodology/approach An equal-weight, complementary mixed-method approach is used to investigate supplier-induced complexity and understand its impact on outcomes. Initial qualitative research and extant literature review allowed the identification of supplier characteristics that add complexity to supply chains and development of four research hypotheses. Subsequently, quantitative analysis was used for testing the hypotheses. Findings The results suggest that supplier-induced complexity is related to adverse outcomes, and both perceived and objective dimensions of complexity are valuable in understanding and measuring supplier-induced complexity. Research limitations/implications This study employs a mixed-method approach to establish and test relationships among perceived and objective supplier-induced complexity, and their outcomes. The unit of analysis is the first-tier suppliers of one farm equipment manufacturing firm. This limits the generalizability of the results to similar industrial manufacturing firms. Practical implications This paper presents an approach to identify suppliers that add the highest levels of complexity to a supply chain and, thus, require closer monitoring. Specific supplier characteristics are identified for individual suppliers. Developing specific complexity-related measures helps better identify critical suppliers compared to traditional approaches (e.g. ABC analysis). Originality/value This paper contributes to supply chain management literature by comprehensively exploring supplier-induced complexity, incorporating the often-ignored perceived complexity dimension, and providing a managerially useful framework.