An exploratory investigation of the effects of supply chain complexity on delivery performance

As just-in-time delivery has become increasingly commonplace and customer demands continue to tighten, the importance of fast, reliable delivery cannot be overstated. This is particularly true for firms competing internationally, where the complexity of the supply chain must be managed within a global network. To explore the linkage between supply chain complexity and delivery, a two-dimensional framework is proposed that conceptualizes the degree of complexity embedded in a supply chain along two major dimensions: (1) form of technology and (2) nature of information processing. Technology is characterized using a conventional operations strategy framework of structural and infrastructural elements. In contrast, information processing captures both the level of complicatedness and of uncertainty that exists in the supply chain. Collectively, these two dimensions create a two-by-two framework that defines supply chain complexity and provides a strong theoretical basis for linking different aspects of complexity to delivery performance. An exploratory empirical investigation using an international database focused on immediate upstream and downstream echelons of a supply chain at the firm level. Results show strong support for the linkages between delivery performance and both complicatedness of the product/process and uncertainty of the management systems. In contrast, little evidence was found that greater product variety and more complicated supply networks adversely affected performance. Thus, management initiatives to improve delivery performance are best focused on improving informational flows within the supply chain and leveraging new process technologies that offer flexibility to respond to uncertainty.