Quantifying the degree of supply chain leagility and assessing its impact on firm performance

Purpose: The purpose of this paper is to investigate the supply chain leagility proposing all supply chains are leagile with different magnitudes of leanness and agility. A new index, “Deviation from Leagility” (DFL), is introduced, aiming to optimise supply chain design and investigate the relationship between supply chain leagility and firm performance. Design/methodology/approach: The partial least squares (PLS) method was employed to analyse data collected from 299 Australian firms by administering a structured questionnaire. Findings: The results indicate that most companies adopt the leagile supply chain rather than the lean or pure agile design. Furthermore, better business performance is achievable when deviation from a balanced supply chain in which both aspects of leanness and agility are equally embedded is minimised. Research limitations/implications: The study is limited to a number of constraints that measure leagility; further research is needed to incorporate different aspects of agility. Practical implications: The findings of this study could provide a guideline for supply chain executives to improve their company’s performance by designing a more balanced leagile supply chain. Originality/value: This study is unique in its in-depth empirical investigation of modelling of leagile supply chain using a new index, and also addressing: first, the current mismatch between the well-known mutually exclusive strategies (lean/agile); and second, what has later been found when the proposed models were quantitatively tested.