This meta-analysis explored the links between supply chain complexity and firm performance.
102 independent samples from 123 studies were examined.
Key findings:
· While supply chain complexity is generally detrimental to firm performance, it isn’t always
· Hence, supply chain complexity “can be both dysfunctional and strategic”
· It negatively impacted operational performance, primarily in terms of cost and delivery
· This effect was more pronounced for upstream complexity, whereas for downstream complexity the detrimental effect was only found for dynamic complexity
· “Thus, firms have more difficulty coping with external sources of complexity than internal complexity”
· Despite the negative effects, supply chain complexity could also have positive effects on both innovation and financial performance
· Significant effects were found only for downstream complexity
· They suggest that “firms may need to absorb the negative operational consequences of [supply chain complexity] to deploy more sophisticated business strategies”
· They argue that “Supply chain managers should be conscious of the detrimental operational performance effects of [supply chain complexity] and implement systems that extend their operational control beyond the focal firm’s boundaries”
· Finally, “Supply chain complexity is considered one of the most pressing issues for contemporary supply chains”
As always, several limitations were present.
Ref: Akın Ateş M, Suurmond R, Luzzini D, Krause D. Order from chaos: A meta-analysis of supply chain complexity and firm performance. J Supply Chain Manag. 2022;58:3–30.
Study link: https://doi.org/10.1111/jscm.12264
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