Does Increasing Supply Chain Flexibility Contribute to the Enhancement of a Firm's Sustainability Performance

Abstract

The study empirically examines whether increased supply chain (SC) flexibility correlates with improvements in an SC's ability to address a firm's sustainability performance (SP). In addition, we investigate how SC visibility impacts a firm's SP by way of enhancing SC agility in the model. SC flexibility plays a vital role in SC operations to achieve sustainability. However, there is a limited understanding of the effects of SC flexibility on SP. The study explores the moderating roles of SC flexibility and environmental uncertainty in the connections between SC visibility, SC agility, and SP within the research framework. We use the partial least squares structural equation modeling technique to validate both the measurement and structural models. Besides, the mediation analysis, moderation analysis, and multigroup analysis are employed to test the various effects in the model. The results indicate the positive and significant relationships among SC visibility, SC agility, and the organization's SP in the model. The significant moderating effects of SC flexibility on the relationships among SC visibility, SC agility, and the organization's SP are identified in this study. Our findings show that increasing SC flexibility could potentially pose challenges. We argue that increasing SC flexibility cannot always help an organization's SP, furthermore, firms with high SC flexibility may perform worse than firms with low SC flexibility in terms of a firm's SP. The study provides valuable insight into sustainable SC management and contingency management post-COVID-19 pandemic, especially drawing attention to SC flexibility.