Influence of Supply Chain Agility on Profitability
Evidence from Pakistan
Keywords:
Agility, Speed, Response Flexibility, Competences, Structural equation modeling (SEM), Supply chain Management (SCM), Pakistan
Abstract
Purpose – This study aims to explore the influence of factors associated with the supply chain agility (SCA) on the profitability of the textile industry. After reviewing the available theoretical foundations in the relevant field, the influencing factors were found including SPD, responsiveness, competence and flexibility to impact on organizational profitability.
Research Design & Methodology – The study utilized quantitative design by using an adapted questionnaire (having 30 items and 5 constructs including Responsiveness (RSP), Speed (SPD), Flexibility (FLEX), Competence (COMP), and Profitability ( PROF) to collect data from the target population. The gathered data was then analyzed by employing regression test on Smart PLS.
Findings- The results suggested a negative and significant relationship between speed and profitability. This means that speedy processes actually decrease profitability. Moreover, this study found a positive and moderate effect of flexibility on profitability. Others two i.e. competence and responsiveness doesn’t seems to have a significant effect of profitability
Implications – The study implies that speed is negatively effecting the production of textile industry. Therefore textile companies should focus more on quality of production.
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References
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Liao, Y., Hong, P., & Rao, S. S. (2010). Supply management, supply flexibility and performance outcomes: an empirical investigation of manufacturing firms. Journal of Supply Chain Management, 46(3), 6-22.
Lin, C. T., Chiu, H., & Chu, P. Y. (2006). Agility index in the supply chain. International Journal of production economics, 100(2), 285-299.
Lummus, R. R., & Vokurka, R. J. (1999). Defining supply chain management: a historical perspective and practical guidelines. Industrial Management & Data Systems, 99(1), 11-17 Lin, C. T., Chiu, H., & Chu, P. Y. (2006). Agility index in the supply chain. International Journal of production economics, 100(2), 285-299.
Maskell, B. (2001). The age of agile manufacturing. Supply Chain Management: An International Journal, 6(1), 5-11.
McNally, R. C., Akdeniz, M. B., & Calantone, R. J. (2011). New product development processes and new product profitability: Exploring the mediating role of speed to market and product quality. Journal of Product Innovation Management, 28(s1), 63-77.
Oloruntoba, R., & Kovács, G. (2015). A commentary on agility in humanitarian aid supply chains. Supply Chain Management: An International Journal, 20(6), 708–716.
Prater, E., Biehl, M., & Smith, M. A. (2001). International supply chain agility-Tradeoffs between flexibility and uncertainty. International journal of operations & production management, 21(5/6), 823-839
Sangari, M. S., Razmi, J., & Zolfaghari, S. (2015). Developing a practical evaluation framework for identifying critical factors to achieve supply chain agility. Measurement, 62, 205-214.
Shrout, P. E., & Bolger, N. (2002). Mediation in experimental and nonexperimental studies: new procedures and recommendations. Psychological methods, 7(4), 422.
Swafford, P. M., Ghosh, S., & Murthy, N. (2006). The antecedents of supply chain agility of a firm: scale development and model testing. Journal of Operations Management, 24(2), 170-188.
Swafford, P. M., Ghosh, S., & Murthy, N. (2008). Achieving supply chain agility through IT integration and flexibility. International Journal of Production Economics, 116(2), 288-297.
Tang, C., & Tomlin, B. (2008). The power of flexibility for mitigating supply chain risks. International journal of production economics, 116(1), 12-27.
Um, J., Lyons, A., Lam, H. K., Cheng, T. C. E., & Dominguez-Pery, C. (2017). Product variety management and supply chain performance: A capability perspective on their relationships and competitiveness implications. International Journal of Production Economics, 187, 15-26.
Valmohammadi, Ch. (2013), “Investigating supply chain management practices in Iranian manufacturing organizations”, Operations and Supply Chain Management: An International Journal, Vol. 6 No.1. pp.36-42.
Verma, A., & Seth, N. (2011). A conceptual framework for supply chain competitiveness. International Journal of Human and Social Sciences, 6(1), 5-10.
Vokurka, R. J., Zank, G. M., & Lund III, C. M. (2002). Improving competitiveness through supply chain management: a cumulative improvement approach. Competitiveness Review: An International Business Journal, 12(1), 14-25.
Yusuf, Y. Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N. M., & Cang, S. (2014). A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics, 147, 531-543.
Ali, M., & Habib, M. M. (2012). Supply chain management of textile industry: A case study on Bangladesh. Int. J Sup. Chain. Mgt Vol, 1(2), 35.
Arzu Akyuz, G., & Erman Erkan, T. (2010). Supply chain performance measurement: a literature review. International journal of production research, 48(17), 5137-5155.
Ayub, A., Arzu, F., Iftekhar, H., & Hafeez, S. (2014). Entrepreneurial Call for Strategic Agility in Fast-Paced Business Environment. Acta Universitatis Danubius. Œconomica, 10(3).
Bhardwaj, V., & Fairhurst, A. (2010). Fast fashion: response to changes in the fashion industry. The international review of retail, distribution and consumer research, 20(1), 165-173.
Chiang, C. Y., Kocabasoglu-Hillmer, C., & Suresh, N. (2012). An empirical investigation of the impact of strategic sourcing and flexibility on the firm's supply chain agility. International Journal of Operations & Production Management, 32(1), 49-78.
Christopher, M., Lowson, R., & Peck, H. (2004). Creating agile supply chains in the fashion industry. International Journal of Retail & Distribution Management, 32(8), 367-376.
Čiarnienė, R., & Vienažindienė, M. (2014). Agility and responsiveness managing fashion supply chain. Procedia-Social and Behavioral Sciences, 150, 1012-1019.Conboy, K. (2009). Agility from first principles: Reconstructing the concept of agility in information systems development. Information systems research, 20(3), 329-354.
Conboy, K. (2009). Agility from first principles: Reconstructing the concept of agility in information systems development. Information systems research, 20(3), 329-354.
Ferdows, K., & De Meyer, A. (1990). Lasting improvements in manufacturing performance: in search of a new theory. Journal of Operations management, 9(2), 168-184.
George, D. (81). Mallery. 2003. SPSS for Windows step by step: A simple Guide and reference 11.0 Update.
Gligor, D. M., & Holcomb, M. C. (2012). Antecedents and consequences of supply chain agility: establishing the link to firm performance. Journal of Business Logistics, 33(4), 295-308.
Gligor, D. M., Esmark, C. L., & Holcomb, M. C. (2015). Performance outcomes of supply chain agility: when should you be agile?. Journal of Operations Management, 33, 71-82.
Gunasekaran, A., Lai, K. H., & Cheng, T. E. (2008). Responsive supply chain: A competitive strategy in a networked economy. Omega, 36(4), 549-564.Giachetti, R. E., Martinez, L. D., Sáenz, O. A., & Chen, C. S. (2003). Analysis of the structural measures of flexibility and agility using a measurement theoretical framework. International journal of production economics, 86(1), 47-62.
Hair Jr, J. F., Matthews, L. M., Matthews, R. L., & Sarstedt, M. (2017). PLS-SEM or CB-SEM: updated guidelines on which method to use. International Journal of Multivariate Data Analysis, 1(2), 107-123.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, 19(2), 139-152.
Hayes, A. F., & Preacher, K. J. (2013). Conditional process modeling: Using structural equation modeling to examine contingent causal processes.
Hussain, D., Figueiredo, M., & Ferreira, F. (2009, November). SWOT analysis of Pakistan textile supply chain. In Proceedings of IX. Congreso Galego de Estatística e Investigación de Operacións (pp. 12-14).
Hwang, H. J., & Seruga, J. (2011). An intelligent supply chain management system to enhance collaboration in textile industry. International Journal of u-and e-Service, Science and Technology, 4(4), 47-62.
Ikeda, K., Marshall, A., & Zaharchuk, D. (2019). Agility, skills and cybersecurity: critical drivers of competitiveness in times of economic uncertainty. Strategy & Leadership. doi:10.1108/sl-02-2019-0032
Iqbal, T., Huq, F., & Bhutta, M. K. S. (2018). Agile manufacturing relationship building with TQM, JIT, and firm performance: An exploratory study in apparel export industry of Pakistan. International Journal of Production Economics, 203, 24-37.Khan K, A., & Pillania, R. K. (2008). Strategic sourcing for supply chain agility and firms' performance: A study of Indian manufacturing sector. Management Decision, 46(10), 1508-1530.
Ismail, H. S., & Sharifi, H. (2006). A balanced approach to building agile supply chains. International Journal of Physical Distribution & Logistics Management, 36(6), 431-444.
Jermsittiparsert, K., Sutduean, J., Sriyakul, T., & Khumboon, R. (2019). The role of customer responsiveness in improving the external performance of an agile supply chain. Polish journal of management studies, 19(2).
Knight, G. A., & Cavusgil, S. T. (2004). Innovation, organizational capabilities, and the born-global firm. Journal of international business studies, 35(2), 124-141.
Liao, Y., Hong, P., & Rao, S. S. (2010). Supply management, supply flexibility and performance outcomes: an empirical investigation of manufacturing firms. Journal of Supply Chain Management, 46(3), 6-22.
Lin, C. T., Chiu, H., & Chu, P. Y. (2006). Agility index in the supply chain. International Journal of production economics, 100(2), 285-299.
Lummus, R. R., & Vokurka, R. J. (1999). Defining supply chain management: a historical perspective and practical guidelines. Industrial Management & Data Systems, 99(1), 11-17 Lin, C. T., Chiu, H., & Chu, P. Y. (2006). Agility index in the supply chain. International Journal of production economics, 100(2), 285-299.
Maskell, B. (2001). The age of agile manufacturing. Supply Chain Management: An International Journal, 6(1), 5-11.
McNally, R. C., Akdeniz, M. B., & Calantone, R. J. (2011). New product development processes and new product profitability: Exploring the mediating role of speed to market and product quality. Journal of Product Innovation Management, 28(s1), 63-77.
Oloruntoba, R., & Kovács, G. (2015). A commentary on agility in humanitarian aid supply chains. Supply Chain Management: An International Journal, 20(6), 708–716.
Prater, E., Biehl, M., & Smith, M. A. (2001). International supply chain agility-Tradeoffs between flexibility and uncertainty. International journal of operations & production management, 21(5/6), 823-839
Sangari, M. S., Razmi, J., & Zolfaghari, S. (2015). Developing a practical evaluation framework for identifying critical factors to achieve supply chain agility. Measurement, 62, 205-214.
Shrout, P. E., & Bolger, N. (2002). Mediation in experimental and nonexperimental studies: new procedures and recommendations. Psychological methods, 7(4), 422.
Swafford, P. M., Ghosh, S., & Murthy, N. (2006). The antecedents of supply chain agility of a firm: scale development and model testing. Journal of Operations Management, 24(2), 170-188.
Swafford, P. M., Ghosh, S., & Murthy, N. (2008). Achieving supply chain agility through IT integration and flexibility. International Journal of Production Economics, 116(2), 288-297.
Tang, C., & Tomlin, B. (2008). The power of flexibility for mitigating supply chain risks. International journal of production economics, 116(1), 12-27.
Um, J., Lyons, A., Lam, H. K., Cheng, T. C. E., & Dominguez-Pery, C. (2017). Product variety management and supply chain performance: A capability perspective on their relationships and competitiveness implications. International Journal of Production Economics, 187, 15-26.
Valmohammadi, Ch. (2013), “Investigating supply chain management practices in Iranian manufacturing organizations”, Operations and Supply Chain Management: An International Journal, Vol. 6 No.1. pp.36-42.
Verma, A., & Seth, N. (2011). A conceptual framework for supply chain competitiveness. International Journal of Human and Social Sciences, 6(1), 5-10.
Vokurka, R. J., Zank, G. M., & Lund III, C. M. (2002). Improving competitiveness through supply chain management: a cumulative improvement approach. Competitiveness Review: An International Business Journal, 12(1), 14-25.
Yusuf, Y. Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N. M., & Cang, S. (2014). A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics, 147, 531-543.
Published
2025-12-12
How to Cite
Ali, H., & Siddiqui, D. (2025). Influence of Supply Chain Agility on Profitability. Journal of Quantitative Methods, 8(2). Retrieved from https://ojs.umt.edu.pk/index.php/jqm/article/view/123
Section
Articles
Copyright (c) 2024 Hyder Ali, Danish Ahmed Siddiqui
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