Effect of Supply Chain Coordination on Performance

Abstract

Research on supply chain management (SCM) focuses on “what” factors of a supply chain enable firms to achieve high performance. It examines the effect of two strategically important pillars: supply chain relationships or capabilities. However their isolated investigation leads to a limited understanding of “how” they can be combined to increase firm performance. In this study we argue that beyond their direct effects the relational and the capability-based determinants of a supply chain have a network of indirect relationships that concurrently and differentially affect firm performance. Building on the relational and resource-based views we develop a serial-mediation model examining the mediating effects of trust in supply chain and collaborative advantage (i.e. relational determinants), and supply chain agility and coordinated supply chain (i.e. capability-based determinants) of SCM. Through the use of hierarchical linear regression analysis we show that trust, agility and collaboration act as serial mediators that carry the indirect effect of coordination to firm performance.