Inter-island Logistics and the Role of an Agile Supply Chain to Achieve Supply Chain Performance: Initial Findings

Abstract

Indonesia consists of 17,000 islands, and this geographical condition presents unique supply chain challenges. Limited research has been conducted to study the impact of inter-island logistics on agile and supply chain performance. Therefore, this research is a pioneering study that analyzes the correlation between these variables. In addition, this research investigates the relationship of ambidextrous, agile, and lean supply chains to supply chain performance while examining the moderating effect of inter-island logistics. A theoretical design was developed to study the above relationship. As an initial analysis, hypotheses were tested with data from 34 manufacturing firms in Indonesia, using SmartPLS with 500 bootstrap samples. This research contributes to the supply chain management literature in three ways. First, it found that an agile supply chain mediates ambidextrous and lean supply chains to improve supply chain performance. Second, inter-island logistics, however, negatively moderates the relationship between an agile supply chain and supply chain performance. Finally, it strengthens the conceptual definition of the relationship between ambidextrous, lean, agile supply chains and supply chain performance.