An empirical study of the relationships among strategy, flexibility, and performance in the supply chain context

Purpose – The purpose of this research is to examine the relationships among strategy, flexibility, and performance in the supply chain context. Design/methodology/approach – The research is based on a quantitative approach using a questionnaire survey and personal interviews from a total of 175 small and medium‐sized Canadian manufacturing companies. The identified constructs have been utilized to test a theoretical model using the path analysis technique. Findings – First, the findings provide evidence of direct effects of strategy on flexibility and flexibility on performance. Second, innovative strategy firms must invest time and resources in developing new product and delivery flexibility; while customer‐oriented strategy firms are required to invest heavily in developing sourcing, product, and delivery flexibility and follower strategy firms need no investment in any specific type of flexibility. Third, results demonstrated that Canadian manufacturers must reconsider how they use information technology to enhance information systems flexibility and improve overall performance. Research limitations/implications – The measures of flexibility and strategy dimensions used to rate the supply chain organizations are a possible limitation of the research study. Practical implications – Managers need to think seriously about which type of flexibility they implement and that they should not increase all dimensions of flexibility in their power; some dimensions of flexibility may not significantly contribute to the overall performance. Considering that small and medium‐sized enterprises have limited resources, it is important for managers to carefully assess their strategic needs before getting involved in any flexibility program; otherwise the result can be competitively negative. Originality/value – No empirical study was found in the supply chain literature that specifically investigates the relationships among strategy, flexibility and performance in the supply chain context; the paper fills an important gap in the supply chain literature.