Despite the importance of supply chains to firms, we know little about the intangible aspects of why some supply chains excel while others struggle. Building on the resource-based view, strategic choice theory, and configurational research, we suggest that the relative fit among strategy and eight knowledge elements is a key to achieving superior supply chain performance. Using data from 913 entities in supply chains, we conducted a profile deviation analysis by using ideal “knowledge profiles” for five strategy types as the benchmarks. Separate analyses were conducted based on the ideal profiles derived from qualitative, quantitative, and theoretical inputs. Overall, the results indicate that the strategy-knowledge fit is associated with chain performance. Our findings lend support to the notion that capitalizing on knowledge can create superior performance in supply chains, but only if the relative emphasis on various knowledge elements matches strategy.
Why some firms outperform others has long been a central question within the organizational literature (e.g., Hitt et al., 2004 and Vorhies and Morgan, 2005). Substantial inquiry has focused on knowledge (i.e., credible information and/or experience—Grant, 1996) as a means to achieve superior performance. Knowledge has been investigated under several monikers, including organizational learning, market orientation, and the knowledge creating company. Regardless of the terms used, the themes across this work are that knowledge can serve as an intangible strategic resource and, as such, is crucial to efforts to create value in a unique, inimitable, and non-transferable way (Wernerfelt, 1984 and Wernerfelt, 2005).
Although much attention has focused on understanding performance differences between firms, little is known about the intangibles associated with why some supply chains outperform others. A supply chain is a “network of facilities and activities that performs the functions of product development, procurement of material from suppliers, the movement of materials between facilities, the manufacturing of products, the distribution of finished goods to customers, and after-market support for sustainment” (Mabert and Venkataramanan, 1998, p. 538). The lack of attention to the link between knowledge (as an intangible resource) and supply chain outcomes is unfortunate because firm and chain outcomes are increasingly intertwined. Today, competition pits supply chains against each other in the competitive arena (Ketchen and Guinipero, 2004). Firms such as Wal-Mart, Toyota, and Dell have exploited supply chain management skills into dramatic competitive advantages and excellent performance. This highlights the value of ‘strategic supply chain management’—viewing supply chains not just as production and distribution mechanisms, but also as important competitive weapons (Hult et al., 2004). These firms’ success also suggests that increased scholarly attention to supply chain outcomes is needed.
Our study has at least four major limitations that should be taken into account when interpreting the findings. Each limitation serves as an avenue for future research. First, although we researched the literature extensively to identify theoretically sound knowledge elements pertaining to supply chains, future research may lead to the uncovering of additional critical knowledge elements, possibly leading to added conceptual refinement and extension. Second, our focus was on the “fit” between knowledge elements and strategy types; as such, we deliberately did not attempt to study the interrelationships among the eight knowledge elements. Future research should examine the optimal co-alignment, interrelationships, and path flow of the knowledge elements to deliver superior performance. Third, we opted to study logistics and supply management (purchasing) functions in supply chains given those functional areas’ prominence in the operations management literature. Future studies need to examine other functions important to supply chains (e.g., product development, innovation). Finally, we limited the scope of our study to manufacturing firms and order fulfillment processes. Broadening the study of knowledge elements to other firms and chain processes may lead to conceptual refinement and insights. Hopefully, our study can serve as the starting point for future research in this important area of inquiry.
