The mediating effect of operational capabilities on operational performance.
| Autor | Domenek, Antonio Carlos |
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Introduction
Companies operating in a supply chain offer greater added value to their customers, with products of higher quality and lower cost, in addition to improving the performance of the company and the chain in the long term (Qrunfleh & Tarafdar, 2013).
The capital goods industry has always experienced technological changes, which led to integration in supply chains, to face international competition for providing low-cost and quality products and services to customers (Puga & Castro, 2018).
Companies have increasingly acknowledged that collaborative management practices in supply chains are essential to improve their strategies and meet their partners' performance (Wu & Chiu, 2018). Nevertheless, Narayanan, Narasimhan and Schoenherr (2015) argue that collaborative management has practical implications in establishing the right level between collaboration and performance, since it is a non-linear relationship.
Other studies indicate that many collaborations in the supply chain fail due to a corporate culture incompatible with the complexities involved (Zhang& Cao, 2018). Indeed, there is not a single combination of market, product or partner characteristics that drive the supply chain, but different combinations that can lead to collaborative management (Ellran & Cooper, 2014).
One of them is to use operational capabilities as a mediating factor or intermediation strategy in the relationship between collaborative management and operational performance. Swink, Narasimhan and Wang (2007), when testing the mediating effect of operational capabilities on the relationship between four types of integration activities and business performance, found that each type of integration activity had unique benefits and disadvantages.
Therefore, as the studies show, the relationship between the constructs of collaborative supply chain management, operational capabilities and operational performance is not evident. Given these gaps and uncertainties, this study aimed to answer the following question: do operational capabilities mediate the relationship between collaborative supply chain management and operational performance in Brazilian companies of the capital goods industry? We chose this sector because of its relevance in productive investments, knowledge transfer and diffusion of technical progress for its users.
We structured the article as follows. After this introduction, Section 2presents the theoretical framework and the hypotheses for estimating the theoretical and empirical model. Section 3 explains the methodology, Section 4, the results and discussion, and Section 5, the conclusions and suggestions for further research.
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Theoretical framework and hypotheses
To examine the mediating effect of operational capabilities, we considered the basic causal chain involved in mediation (Baron & Kenny, 1986), shown in Figure 1.
Baron and Kenny's approach (1986) was adjusted byIacobucci, Saldanha and Deng (2007), according to the assumption that there is some mediation of operational capabilities when the hypotheses of both paths [collaborative supply chain management [right arrow] operational capabilities] and [operational capabilities [right arrow] operational performance] are significant, i.e. H2 and H3 are not rejected. However, if either one is not significant, there is no mediation, and the analysis should end. To test and categorize the mediating effect of operational capabilities (if partial or total), we used the variance accounted for (VAF) test, because it is stronger (Hair, Hult, Ringle & Sarstedt, 2014) than the Sobel test (Baron & Kenny, 1986).
Figure 1 shows the theoretical support for testing the statistical significance of H1, H2 and H3, detailed below.
2.1 The influence of collaborative supply chain management on operational performance The supply chain is a process that takes into consideration all companies involved, in both directions, upstream and downstream, from the first raw material supplier to the final consumer (Sukati, Hamid, Baharun & Yusoff, 2012). Supply chain management comprises a set ofmethods and techniques to improve the integration and management of all indicators in the chain, such as transportation, inventories and costs (Moyano-Fuentes, Bruque-Camara & Maqueira-Marin, 2019).
Among the possible strategies, collaborative management practices stand out in companies of the supply chain, which are based on interdependence and collaboration between them (Ellran & Cooper, 2014).
Collaborative supply chain management can be defined as a process of joint responsibility for decision-making among chain partners (Soosay & Hyland, 2015); the basic assumptions are forming partnerships, investing in resources and sharing information, rewards and responsibilities (Cao & Zhang, 2011).
The ability to plan and carry out tasks together with partners in the supply chain has enabled companies to integrate operations more efficiently (Soosay & Hyland, 2015). However, a multi-case survey conducted by Fawcett, McCarter, Fawcett, Webb and Magnan (2015) in the USA and Europe, with 15 companies, showed that the sociological and structural elements of resistance led to the failure of collaborative management initiatives.
For a collaborative supply chain management to effectively contribute to improve operational performance, companies must seek some factors (Wu, Melnyk & Swink, 2012), such as a mutual understanding of the goals of the companies participating in the chain, and their commitment to search solutions for common problems. The main focus of collaborative supply chain management is sharing information and similar values for achieving similar goals among the partners (Cao & Zhang, 2011); the exchange of information must be open and reciprocal (Vanpoucke, Vereecke & Muylle, 2017).
A study with 189 executives from different firms in Thailand found that "secure sharing of information" was the most important factor in fostering collaboration (Panahifar, Byrne, Salam & Heavey, 2018). Thus, we formulated H1:
H1. Collaborative supply chain management positively affects operational performance.
2.2 The influence of collaborative supply chain management on operational capabilities Operational capabilities mean quality, flexibility and delivery, which a company needs to compete strategically (Vanpoucke etal, 2017). They comprise distinct factors in operations' strategy (Wu etal, 2012) and integrate a set of a company's skills (Teece, 2019; Zhang, Pawar, Shah & Mehta, 2013), to improve the outputs through a more efficient use of its productive capacities, technologies and material flow (Zhang et al, 2013). They provide superior operational performance regarding its competitors (Ojha, Gianiodis & Manuj, 2013).
Collaboration must prioritize a long-term relationship among the companies participating in the chain and focus on increasing each company's operational capabilities (Wong & Wong, 2011). Integration between companies and suppliers improves operational capabilities (Abdallah, Obeidat & Aqqad, 2014) and is critical for achieving an impressive performance (Wu & Chiu, 2018). A systematic review conducted by Soosay and Hyland (2015) showed that dynamic capabilities are one of the organizational theories that support collaboration, which allows a company to access, change and leverage supply chain resources to respond to the evolution of a competitive environment.
Regarding quality, operational capabilities can be measured by the supply of better products and services (Nand, Singh, & Bhattacharya, 2014), by the production process, which ensures that the equipment and services follow customers' requirements, and by the manufacture of equipment whose performance exceeds customers' expectations (Avella, Vazquez-Bustelo & Fernandez, 2011). In a collaborative supply chain, sharing knowledge and experience contributes to develop a mutual understanding of the circumstances that affect companies and helps developing core capabilities to address common challenges (Herczeg, Akkerman & Hauschild, 2018).
For delivery-related operational capabilities, what stands out are the service performance indicators for all delivery terms agreed in purchase orders and contracts (Nand et al., 2014). As for the specification flexibility, technical changes in the product during its production (Qrunfleh & Tarafdar, 2013), to adjust its delivery to customer's needs (Nand et al., 2014) and for the supply flexibility, the ability to meet unexpected changes in supply (Malhotra & Mackelprang, 2012). Therefore, we developed H2:
H2. Collaborative supply chain management positively affects operational capabilities.
2.3 The influence of operational capabilities on operational performance The activities carried out in a supply chain relate directly to operational performance (Prajogo, Huo & Han, 2012). Performance improvement is one of the most important goals for implementing a collaborative supply chain management (Ou, Liu, Hung & Yen, 2010).
Therefore, the concepts of competitive advantage and improvement in performance regarding competitors are crucial (Danese & Romano, 2011). Additionally, the collaboration itself can be a strategic resource or a capability that is unique, valuable and hard to replicate, thereby providing a competitive advantage (Fawcett et al., 2015).
Operational capabilities represent how companies can achieve a better performance (Ralston, Grawe & Daugherty, 2013). They comprise improvement in the operational performance, in terms of more efficient production processes and productivity standards higher than market standards (Cao & Zhang, 2011); the search for reducing stops due to unforeseen production reprogramming (Lee, Kim, Hong & Lee, 2010); and reducing the total cost of logistics, with inventories, storage and transportation (Fawcett et al., 2015).
Another important issue is the possibility of increasing the supply chain resilience, through operational capabilities arising from underlying and...
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