Chain or Shackles: Understanding What Drives Supply-Chain Performance

Abstract

We relate an array of factors that embody current practice and thinking in supply-chain management with supply-chain performance. We measured supply-chain performance using a set of variables that capture the impact of supply-chain management on systemwide revenues and costs. We classified supply chains based on the products they support as inherently functional or inherently innovative. They differ in practices used and thinking. High performers among innovative-product supply chains use practices that enhance revenues more than high performers among functional product supply chains. They are more likely to engage in supply-chain management to enhance revenues. Finally, we found that the practices and reasons for engaging in supply-chain management that distinguish high performers from low performers are different for functional-and innovative-product supply chains.