The effect of strategic supply chain management on the performance and orientation of the supply chain by analyzing the mediating role of resilience (A case study of the offshore sector of the oil industry)

Karimi, Fatemeh; Haghighat Monfared, Jalal; Keramati, Mohammadali

doi:10.22034/jbme.2023.367725.1040

The effect of strategic supply chain management on the performance and orientation of the supply chain by analyzing the mediating role of resilience (A case study of the offshore sector of the oil industry)

Document Type : Original Article (Quantified)

Authors

fatemeh karimi ¹

Jalal Haghighat Monfared ²

Mohammadali Keramati ³

¹ PhD student in industrial management.Department of Production and Operations Management, Faculty of Management and Economics, Science and Research Unit, Islamic Azad University, Tehran, Iran

² Assistant Professor, Department of Industrial Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran

³ Associate Professor, Department of Industrial Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran

https://doi.org/10.22034/jbme.2023.367725.1040

Abstract

Abstract
Due to the intense global competition and the negative impact of disturbances on the financial, operational and market performance of industries, attention has been paid to issues such as strategic management of the supply chain and its resilience; and the oil industry, with its complex structure and processes, has an impact on the global and regional economy is not an exception. The aim of the current research, by using the structural equation modeling method, is to investigate the impact of strategic supply chain management on the performance and direction of the chain by analyzing the mediating role of resilience (agility and strength components) in Iran's marine engineering and construction company active in the offshore sector. The statistical population of the research consists of all the employees of the company, which was determined by the Klein method and the N:q rule, and the number of sample people was determined to be 270; and by the purposeful sampling method, people familiar with the various aspects of the supply chain of the offshore industry with work experience more than for five years were elected. Survey data after collection were analyzed using SMART-PLS software. The results showed: 1- strategic supply chain management has a significant direct effect on the direction of the supply chain, 2- strategic supply chain management has a significant indirect effect on the direction of the supply chain (through the agility and strength of the chain), 3- Strategic supply chain management does not have a significant direct effect on supply chain performance, 4- Strategic supply chain management has a significant indirect effect on supply chain performance (through agility and chain strength), 5- Chain agility plays a significant mediating role in the relationship between strategic management of the supply chain and the performance and direction of the chain. 6- The strength of the chain has a significant mediating role in the relationship between the strategic management of the supply chain and the performance and orientation of the chain.
Extended Abstract
Introduction
Supply chain management is related to the organization of materials and information throughout the organization, using facilities, i.e. vendors, product manufacturing, and distribution channels (Bokrantz & Dul, 2022). This importance is actually considered as the backbone for creating foundations and infrastructures in societies and businesses. Nowadays, in the field of business, the conditions are constantly changing and governed by uncertainty, and the consequences can be different at the level of impact, frequency and their origin (internal or external) (Heckmann et al., 2015), so organizations focus their efforts on supply chain management. Foster & Gardner (2022) define a supply chain as "a set of functional activities (transportation, inventory control, etc.) that are repeated many times along the flow channel by which raw materials are transformed into finished products and value." and reach the consumer."
Today, one of the most important issues in the supply chain is resilience. In a research, Rehman et al, (2021) stated that having a safety valve such as resilience helps companies to reduce the risk of instability and improve the sustainability of the supply chain. Supply chain resilience has been widely discussed in the literature, and its effects have been studied on the smooth functioning of global supply chain management networks. However, several events such as terrorist, political and economic crises have threatened the supply chain of organizations all over the world, and today under the protection of the supply chain, the resilience of the supply chain is an evolving issue (Hohenstein et al., 2015).
Therefore, the current research aims to answer the question that in the offshore sector of the oil industry and in the engineering and construction company of marine facilities in Iran, what is the effect of strategic supply chain management on the performance and orientation of the supply chain with the mediator role of resilience?

Theoretical framework
The supply chain has been growing over time, so it is not surprising that the supply chain is always damaged from incidents and tensions such as unfavorable climatic conditions and transportation obstacles, machine breakdowns, etc., which threaten to destabilize the performance and endanger the operation and its efficiency. Unforeseen events increase with more dispersion of the chain, and risks such as strikes, global terrorism, war, natural disasters, epidemics, and non-acceptance by suppliers are among the things that can change the direction of the supply chain or cause a decrease in performance (Urrutia, 2018).
The development of resilience in the supply chain is considered as an effort in facing unexpected and uncertain developments (Aven, 2016). Some researchers consider the two factors of agility and strength as the main indicators of supply chain resilience (Alshahrani and Salam, 2022; Kazancoglu et al., 2022; Khan et al., 2022). Hohenstein et al, (2015) state that supply chains may be disrupted at some stages of their maturity, however, there should be a system to quickly extricate from disruptions without absorbing any side effects, which depends on the agility of the supply chain.
Khan et al, (2022) conducted research in the oil industry and quantified the mediating effect of flexibility in the supply chain. The results showed that the flexibility of the supply chain plays a positive mediating role between the capabilities of the supply chain and the performance of the supply chain. The results also showed that robust supply chains have a more positive effect on performance compared to agile supply chains.
Juan & Hung (2022) investigated the relationships between the five components of resilient supply chain (SCRES), including emergence, speed, flexibility, robustness, and cooperation; and their effects on supply chain performance under disruption (SCPUD) with a structural equation modeling approach. The results showed: 1- The cooperation component is an external driver of the resilient supply chain and has a direct impact on the emergence, speed, flexibility and strength of the disrupted supply chain. 2- The flexibility of the supply chain is the only component of the agility of the supply chain that directly affects Supply chain performance under disruption. 3- Supply chain flexibility is the only component of supply chain agility that has an indirect effect on supply chain performance under disruption. 4- The speed component has a direct effect and the emergence component has an indirect effect on supply chain flexibility. 5- The emergence component is one of the important elements of agility that has a positive effect on the speed and strength of the supply chain.
Methodology
The current research is applicable in terms of purpose, and descriptive and survey in terms of nature and research method. The statistical population of the research consists of all the employees of the company (N=1000), which was determined by Klein's method and the N:q rule, and the number of sample people was 270, and, people familiar with the various aspects of the supply chain of the offshore industry were selected with more than 5 years of work experience by the purposeful sampling method. Khan et al (2022) questionnaire was used to collect data related to research variables.
Discussion and Results
In order to investigate the hypothesis of the research, the modeling of structural equations, the method of structural equation modeling with the help of spss software was used to test the hypotheses from inferential statistics. Then PLS software was used to test the hypotheses or the conceptual model of the research, and the results showed that the strategic management of the supply chain has a positive and significant effect on both factors of resilience, i.e. agility and strength of the supply chain. The results of the current research also showed that the strategic management of the supply chain does not have a significant effect directly on the performance of the supply chain, but with the mediation of the agility of the chain, this effect becomes significant. In the results of the current research, it was also determined that the strategic management of the supply chain has a positive and significant effect on the performance of the supply chain both directly and indirectly through the mediation of chain strength. In the present research, results were also obtained showing that the strategic management of the supply chain directly and indirectly (with the mediation of agility and strength) has a positive and significant effect on the orientation of the supply chain.
Conclusion
The current research was conducted with the aim of the impact of strategic supply chain management on the performance and orientation of the supply chain with the mediating role of resilience (the study of the offshore sector of the oil industry). This finding is in line with researchers such as Um (2017) and El Baz& Ruel (2021) and Shamout (2019) and Tarafdar & Qrunfleh (2017) and Florescu et al, (2019) and Dhaigude & Kapoor (2017); The research of (Um, 2017) resulted that increasing the variety of products has a positive effect on the resilience and agility of the supply chain, which improves the performance of the supply chain. He stated that in order to reduce the cost of increasing product variety, it is possible to increase the agility of the supply chain and ultimately improve the performance of the supply chain by diversifying activities in the strategic management department. The results of his research on 363 British and South Korean manufacturing companies showed that the diversity of activities in the strategic management of the supply chain makes the chain more resilient and increases its performance.
According to the research results, it is suggested that in order to respond quickly to the needs of customers, more work should be done on the agility of the supply chain of this industry to be responsive in the tough conditions of the supply chain market. To increase performance, the role of agility in the supply chain of this industry should be emphasized more and always considered as an intermediate factor.

Keywords

strength

resilience

agility

supply chain

oil industry

offshore

20.1001.1.00000000.1401.2.3.2.1

Aday, S., & Aday, M. S. (2020). Impact of COVID-19 on the food supply chain. Food Quality and Safety, 4(4), 167-180.

Aityassine, F., Soumadi, M., Aldiabat, B., Al-Shorman, H., Akour, I., Alshurideh, M. and Al-Hawary, S. (2022). The effect of supply chain resilience on supply chain performance of chemical industrial companies. Uncertain Supply Chain Management, 10(4), 1271-1278.

Aityassine, F., Soumadi, M., Aldiabat, B., Al-Shorman, H., Akour, I., Alshurideh, M., & Al-Hawary, S. (2022). The effect of supply chain resilience on supply chain performance of chemical industrial companies. Uncertain Supply Chain Management, 10(4), 1271-1278.

Alshahrani, M. A., & Salam, M. A. (2022). The Role of Supply Chain Resilience on SMEs’ Performance: The Case of an Emerging Economy. Logistics, 6(3), 47.

Ambulkar, S., Ramaswami, S., Blackhurst, J., & Johnny Rungtusanatham, M. (2022). Supply chain disruption risk: an unintended consequence of product innovation. International Journal of Production Research, 1-20.

Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), 1-13.

Bokrantz, J., & Dul, J. (2022). Building and testing necessity theories in supply chain management. Journal of Supply Chain Management.

Brandon&Jones, E., Squire, B., Autry, C. W., & Petersen, K. J. (2014). A contingent resource&based perspective of supply chain resilience and robustness. Journal of Supply Chain Management, 50(3), 55-73.

Chan, F. T., Nayak, A., Raj, R., Chong, A. Y. L., & Manoj, T. (2014). An innovative supply chain performance measurement system incorporating research and development (R&D) and marketing policy. Computers & Industrial Engineering, 69, 64-70.

Chima, C. M. (2007). Supply-chain management issues in the oil and gas industry. Journal of Business & Economics Research (JBER), 5(6).

Cotte Urrutia, A. M. (2018). Cadenas de suministro resilientes.

de Vries, T. A., van der Vegt, G. S., Scholten, K., & van Donk, D. P. (2022). Heeding supply chain disruption warnings: When and how do cross & functional teams ensure firm robustness?. Journal of Supply Chain Management, 58(1), 31-50.

Dhaigude, A., & Kapoor, R. (2017). The mediation role of supply chain agility on supply chain orientation-supply chain performance link. Journal of Decision Systems, 26(3), 275-293.

El Baz, J., & Ruel, S. (2021). Can supply chain risk management practices mitigate the disruption impacts on supply chains’ resilience and robustness? Evidence from an empirical survey in a COVID-19 outbreak era. International Journal of Production Economics, 233, 107972.

Esper, T. L., Fugate, B. S., & Davis‐Sramek, B. (2007). Logistics learning capability: sustaining the competitive advantage gained through logistics leverage. Journal of Business Logistics, 28(2), 57-82.

Fan, Y., & Stevenson, M. (2018). A review of supply chain risk management: definition, theory, and research agenda. International Journal of Physical Distribution & Logistics Management.

Fayezi, S., Zutshi, A., & O'Loughlin, A. (2017). Understanding and development of supply chain agility and flexibility: a structured literature review. International journal of management reviews, 19(4), 379-407.

Felea, M., & Albăstroiu, I. (2013). Defining the concept of supply chain management and its relevance to romanian academics and practitioners. Amfiteatru Economic Journal, 15(33), 74-88.

Florescu, M. S., Ceptureanu, E. G., Cruceru, A. F., & Ceptureanu, S. I. (2019). Sustainable supply chain management strategy influence on supply chain management functions in the oil and gas distribution industry. Energies, 12(9), 1632.

Foster, S. T., & Gardner, J. W. (2022). Managing quality: Integrating the supply chain. John Wiley & Sons.

Gunasekaran, A., Patel, C., & McGaughey, R. E. (2004). A framework for supply chain performance measurement. International journal of production economics, 87(3), 333-347.

Heckmann, I., Comes, T., & Nickel, S. (2015). A critical review on supply chain risk–Definition, measure and modeling. Omega, 52, 119-132.

Hohenstein, N. O., Feisel, E., Hartmann, E., & Giunipero, L. (2015). Research on the phenomenon of supply chain resilience: a systematic review and paths for further investigation. International Journal of Physical Distribution & Logistics Management.

Jahani, M., Maqbal Baarz, AA. and Adel, Azar. (2016). Designing a supply chain resilience measurement model with structural equation modeling approach, Industrial Management Perspective, 25 (7): 114-91. (In Persian)

Juan, S.-J., Li, E.Y. and Hung, W.-H. (2022), "An integrated model of supply chain resilience and its impact on supply chain performance under disruption", The International Journal of Logistics Management, Vol. 33 No. 1, pp. 339-364. https://doi.org/10.1108/IJLM-03-2021-0174

Kamalahmadi, M., & Mellat-Parast, M. (2016). Developing a resilient supply chain through supplier flexibility and reliability assessment. International Journal of Production Research, 54(1), 302-321.

Kamalahmadi, M., & Parast, M. M. (2016). A review of the literature on the principles of enterprise and supply chain resilience: Major findings and directions for future research. International Journal of Production Economics, 171, 116-133.

Kamalahmadi, M., Shekarian, M. and Mellat Parast, M. (2022). The impact of flexibility and redundancy on improving supply chain resilience to disruptions. International Journal of Production Research, 60(6), 1992-2020.

Kazancoglu, I., Ozbiltekin-Pala, M., Mangla, S. K., Kazancoglu, Y., & Jabeen, F. (2022). Role of flexibility, agility and responsiveness for sustainable supply chain resilience during COVID-19. Journal of Cleaner Production, 132-431.

Khan, M. A., Ahmad, S. F., & Irshad, M. (2022). Quantifying the Mediating Effect of Resilience in Supply Chain: Empirical Evidence from Oil and Lubricant Industry. Journal of Development and Social Sciences, 3(2), 213-224.

Kline, R. B. (2015). Principles and practice of structural equation modeling. Guilford publications.

Knemeyer, A. M., Zinn, W., & Eroglu, C. (2009). Proactive planning for catastrophic events in supply chains. Journal of operations management, 27(2), 141-153.

Kwak, D. W., Seo, Y. J., & Mason, R. (2018). Investigating the relationship between supply chain innovation, risk management capabilities and competitive advantage in global supply chains. International Journal of Operations & Production Management.

La Londe, B. J. (1997). Supply chain management: myth or reality?. Supply Chain Management Review, 1(1), 6-7.

Li, Y., Li, H., & Tan, J. (2022). Technological catch-up and innovations of China's offshore oil and gas equipment-manufacturing industry: The role of the supply chain and government policy. Journal of Cleaner Production, 365, 132-681.

Luzzini, D., Caniato, F., & Spina, G. (2014). Designing vendor evaluation systems: An empirical analysis. Journal of Purchasing and Supply Management, 20(2), 113-129.

Maestrini, V., Luzzini, D., Maccarrone, P., & Caniato, F. (2017). Supply chain performance measurement systems: A systematic review and research agenda. International Journal of Production Economics, 183, 299-315.

Malmir, A. Rajabi Farjad, h. and Mirzaei, M. (2020). Investigating the impact of supply chain functions on supply chain performance with regard to the mediating role of production performance and sustainability performance. Andisheh Amad Journal, Volume 19, Number 73, Page 27-48. (in Persian)

Mastos, T. D., Nizamis, A., Terzi, S., Gkortzis, D., Papadopoulos, A., Tsagkalidis, N., ... & Tzovaras, D. (2021). Introducing an application of an industry 4.0 solution for circular supply chain management. Journal of Cleaner Production, 300, 126886.

Mukhsin, M., Taufik, H., Ridwan, A., & Suryanto, T. (2022). The mediation role of supply chain agility on supply chain orientation-supply chain performance link. Uncertain Supply Chain Management, 10(1), 197-204.

Oliver, R. K., & Webber, M. D. (1982). Supply-chain management: logistics catches up with strategy. Outlook, 5(1), 42-47.

Pedwell, K., Hartman, F. T., & Jergeas, G. F. (1996). Project capital cost risks and contracting strategies. AACE International Transactions, DRM31.

Pfohl, H. C., & Gomm, M. (2009). Supply chain finance: optimizing financial flows in supply chains. Logistics research, 1(3), 149-161.

Piprani, A. Z., Mohezar, S., & Jaafar, N. I. (2020). Supply chain integration and supply chain performance: The mediating role of supply chain resilience. International Journal of Supply Chain Management, 9(3), 58-73.

Piya S, Shamsuzzoha A, Khadem M. (2022). Analysis of supply chain resilience drivers in oil and gas industries during the COVID-19 pandemic using an integrated approach. Appl Soft Compute. 2022 May;121:108756. doi: 10.1016/j.asoc.2022.108756. Epub 2022 Mar 28. PMID: 35369123; PMCID: PMC8958777.

Ramanathan, U., Gunasekaran, A., & Subramanian, N. (2011). Supply chain collaboration performance metrics: a conceptual framework. Benchmarking: An international journal.

Rehman, A., Fahim, S. M., Irshad, M., & Hussain, M. (2021). Effect of multisensory branding on purchase intention at cafes in Pakistan. KASBIT Business Journal, 14(3), 101-119.

Shamout, M. D. (2019). Does supply chain analytics enhance supply chain innovation and robustness capability?. Organizacija, 52(2), 95-106.

Shukor, A. A. A., Newaz, M. S., Rahman, M. K., & Taha, A. Z. (2020). Supply chain integration and its impact on supply chain agility and organizational flexibility in manufacturing firms. International Journal of Emerging Markets.

Stanton, D. (2023). Supply chain management for dummies. John Wiley & Sons.

Tarafdar, M., & Qrunfleh, S. (2017). Agile supply chain strategy and supply chain performance: complementary roles of supply chain practices and information systems capability for agility. International Journal of Production Research, 55(4), 925-938.

Tavakoli-Dahaghani, M. R., Shahvardiani, Sh. and Mousapour, H. A. (2016). Investigating the relationship between sustainable supply chain management with environmental performance and financial performance, Journal of Business Research, 85 (22): 171-194. (In Persian)

Um, J. (2017). Improving supply chain flexibility and agility through variety management. The International Journal of Logistics Management.

Wieland, A. (2021). Dancing the supply chain: Toward transformative supply chain management. Journal of Supply Chain Management, 57(1), 58-73.

Yusuf, Y. Y., Musa, A., Dauda, M., El-Berishy, N., Kovvuri, D., & Abubakar, T. (2014). A study of the diffusion of agility and cluster competitiveness in the oil and gas supply chains. International Journal of Production Economics, 147, 498-513.

Zhao, S., & You, F. (2019). Resilient supply chain design and operations with decision & dependent uncertainty using a data & driven robust optimization approach. AIChE Journal, 65(3), 1006-1021.

Zuniga, R. A. V. (2022). Supply Chain Resilience in the Tobacco Industry in Honduras. International Journal of Innovation in Management, Economics and Social Sciences, 2(3), 103-119.