antecedents and outcomes of supply chain effectiveness

8/8/2019 Antecedents and Outcomes of Supply Chain Effectiveness

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JOURNAL OF MANAG ERIAL ISSUESVol. XX Number 2 Summer 2008: 161-177

Antecedents and Outcomes of Supply ChainEffectiveness: An Exploratoiy Investigation*

T. Russell CrookAssistant Professor of Mana gement

University of TennesseeLarry Giunipero

Professor and I.S.M. Professor of Supply Managem entFlorida State UniversityTaco H. Reus

Assistant Professor of Managem entFlorida Atlantic UniversityR o b e r t H a n d f i e l d

Bank of America Distinguished University ProfessorNorth Carolina State UniversitySusan K Williams

Assistant Professor of Manag ementNorthern Arizona UniversitySupply chains are groups of organ- 1998; Glisby and Holden , 2005). Thisizations that collectively process raw increased atten tion appears meritedmaterials into finished goods (Hult et for at least two reasons. First, pur-al, 2002). Such collaborative rela- chased inputs can accoun t for up totionships have garnered increased at- 75 pe rcen t of a firm's ope ratingtention in managem ent research over bud get (Quinn , 1997). And second,the last several years (e.g., Artz and firms that find ways to lower inpu tNorman, 2002; Cool and Henderson, costs or increase input quality gain


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162 ANTECEDENTS AND OUTCOMES OE SUPPLY CHAIN EEEECTIVENESSadvantages over com petitors (Barney,1991). One way that firms managereoccurring purchases is referred toas supply chain management (SCM),which is the integration and m anage-ment of supply chain organizationsand activities through cooperative in-ter-organizational relationships, ef-fective business processes, and highlevels of information sharing (Hand-field and Nichols, 2002).

The implementation of SCM canincrease communication and coop-eration among firms at successivestages of production. The benefits in-clude decreased costs through re-duced inventory and shorter ordertimes, improved quality through bet-ter product design, and enhanced in-novation through more diverse de-sign process inputs (Elmuti, 2002;Tan, 2002). The benefits of SCM canbe large; one estimate posits thatSCM can increase value and/or re-duce costs by up to 25 percent alonga chain (Hughes, 2005). Althoughthe re is growing consensus that effec-tive SCM decreases costs and en-hances value, scant attention hasbeen paid to the key antecedents ofsupply chain effectiveness and how ef-fective SCM shapes focal firms' per-formance. Thus, our central aim is toprovide greater clarification intosome key antecedents of supply chaineffectiveness, and to elaborate onhow supply chain effectiveness, inturn, shapes firm performance.

Over the last decade, the knowl-edge-based view (KBV) bas emergedas an important perspective inform-ing how firms leverage knowledge toattain higher performance (Acedo et

sharing and knowledge integration isa key source of sustained competitiveadvantage (Cohen and Levinthal,1990; Kogut and Zander, 1992). Con-ceptual and empirical KBV researchhas emphasized bo th interna l and ex-ternal knowledge sharing. While re-search on internal knowledge sharingaddresses the exploitation of existingknow-how, expertise, and best prac-tices within a firm 's network of organ-izational members (Szulanski, 1996),research on external knowledge shar-ing focuses on knowledge integrationacross firms (Lane and Lubatkin,1998). This latter stream of researchemphasizes several factors that facili-tate or impede knowledge sharing inthe con text of jo in t ventures (Inkpenand Dinur, 1998), franchise systems(Darr et al, 1995), and inter-organi-zational relationships in general(Dyer and Singh, 1998).

All organizations face the funda-mental decision to obtain productsand services through markets (buy)or hierarchies (make) (Williamson,1985). Hierarchies (making) en-hance predictability and assurance ofsupply but require large investmentsand thus limit flexibility. Alterna-tively, markets (buying) permit fiexi-bility and reduce investment, but in-crease uncertainty and the risk of asupplier acting opportunistically.Supply chains are inter-organiza-tional relationships that represent amiddle ground between markets andhierarchies (Ketchen and Giunipero,2004). Such relationships createunique knowledge-sharing contextsthat blur interna l and external knowl-edge sharing, and as such they form


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CROOK, GIUNIPERO, REUS, HANDFIELD AND WILLIAMS 163supply chains. Indeed, the role ofSCM skills and knowledge (e.g,, Giu-nipero and Pearcy, 2000) is critical in"obtaining the product at the rightcost in the right quantity with theright quality at the right time fromthe right source" (Sarkis andTalluri,2002: 18). Beyond the identificationand possession of skills and knowl-edge as key SCM resources, the KBValso asserts that it is critical to identifyactivities facilitating the transfer ofsuch resources.

Although the central focus of stra-tegic management research is identi-fying the determinants of firm per-formance (Rumelt et al., 1994),historically, most research has reliedon firm- and industry-level determi-nants (Rumelt, 1991). In the 1990s,strategy researchers focused more onthe performance implications of in-ter-organizational relationships, suchas alliances and joint ventures (Bar-ringer and Harrison, 2000). More re-cendy, researchers have tackled thequestion of whether supply chain par-ticipation can shape firm perform-ance (Hult et al, 2002, 2004). Yetthese studies have principally exam-ined how supply chain participationand SCM can reduce cycle times,which is the amount of time the pur-chasing process takes from start tofinish (e.g., Hult et al., 2002). Whileincreasing our awareness of the de-terminants of reduced cycle times,these studies offer limited insightsinto how supply chains shape otherdimensions of firm performance, aswell as identifying key enablers ofsupply chain effectiveness.Because of the increasing impor-

tive is thus to improve our under-standing of supply chains and how ef-fective SCM contributes to focal f irmperformance. Considering the nas-cent stage of this research stream, weused an inductive exploratory ap-proach by interviewing 46 experi-enced supply chain executives in fourfocus groups. The executives placedan extraordinary weight on knowl-edge-related topics, which led us totriangulate findings with extant re-search on the KBV, The focus groupfindings reveal the importance of sev-eral enab ling factors as well as impor-tant outcomes of SCM. Drawing onthese findings and extant research,we develop propositions and a testa-ble model oudining several antece-dents andoutcomes of effective SCM.This research should equip those in-terested in supply chains with severalpractical implications and offer guid-ance regarding how to improve sup-ply chain effectiveness.In the subsequent sections, we de-scribe the research method used forthis study and the characteristics ofour sample. Second, we report thekey findings from execudves regard-ing acdvities that enable effectiveSCM as well as the outcomes of effec-tive SCM. We blend these findingswith ex tant research to propose a test-able model. The final secdon oudine simplicadons, limitations, and futureresearch directions.

RESEARCH METHOD ANDSAMPLE

When a research area is enteringuncharted territory, the understand-


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164 ANTECEDENTS AND OUTCOMES OF SUPPLY CHAIN EFFECTIVENESSsupply chains is conceptual or relieson only two supply chain nodes (e.g.,supplier and customer), we used ex-ploratory methods to better under-stand the antecedents and outcomesof supply chain effectiveness. Morespecifically, we sought to understand(1) what constitutes supply chain ef-fectiveness, (2) how supply chain ef-fectiveness shapes firm performance(i.e., firm-level outcomes), and (3)what mechanisms enable chain m em-bers to collaborate and share knowl-edge more effectively (i.e., antece-dents or enablers).

To aid our efforts, we conductedsemi-structured focus group inter-views with 46 supply chain executivesin four cities across the United States.Although the nature of executives'employers is to be kept confidential,executives were employed in a widerange of industries, such as com puterhardware manufacturing, biotechnol-ogy, telecommunications, and air-lines, am ong others. Executives wereidentified via the Institute for SupplyManagement (ISM) and were inter-viewed by two of the study's co-au-thors. The interviewers approachedthe focus groups with two main ob-jectives: (1) to u nders tand key waysthat effective SCM helps firms com-pete in today's fast paced global econ-omy and (2) to identify key SCM skillsand enabling factors. In particular,the interviewers began the focusgroup sessions by making the follow-ing statement: "We would like to un-derstand the major changes andtrends that are occurring in the sup-ply chain environment today and inthe future, and what these changes

To better understand the antece-dents and outcomes, we content-an-alyzed the notes based on the ap-proach suggested by Miles andHube rm an (1984). Th e first step wasto analyze the text from the notes toidentify potentially important con-cepts (Suddaby, 2006). In particular,we culled the notes to identify con-cepts that respondents attached tosupply chain effectiveness. If, for ex-ample, 16 respondents highlightedthe importance of negotiation skillsto supply chain effectiveness, we re-corded that respondents highlightednegotiating skills 16 times. In short,the first step involved analyzing thetext to identify important concepts,and then recording the number oftimes a concept was discussed.

The second step was to classify con-cepts into latent variables (Isabella,1990). In particular , d istinct variablesbegan to emerge as our analysis un-folded. For example, many respon-dents asserted that communication(22) and computer skills and knowl-edge (24) would aid in supply chainfunctioning. Thus, we created twovariables to account for these skilltypes. After settling on laten t variableclassifications, we created larger fac-tor categories. For example, we con-sidered communication and com-puter skills as broad knowledge andskills (i.e., not specific to SCM) and,thus, created the factor category"Broad Skills and Knowledge." Wesimilarly developed factor categoriesfor other supply chain concepts.The third step involved investigat-ing patterns and relationships amongthe factor categories (Miles and Hub-


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CROOK, GIUNIPERO, REUS, HANDFIELD AND WILLIAMS 165chain performance. The fourth stepwas to develop a model based on thefactor categorizations and linkages,taking into account current researchon the topic areas (Hale et al, 2006).

FINDINGS AND DISCUSSIONBased on executives' responses, weidentified several antecedents andoutcomes of effective SCM. Table 1lists the antecedents and outcomeswe identified via con ten t analysis, and

provides the overall number of exec-utive comments (i.e., comment fre-quency) as well as the number ofunique executives (i.e., participantfrequency) who commented on a re-spective antecedent or outcome.Drawing on the frequencies, butguided by extant research. Figure Idepicts our overarching model. Themodel highlights the role of skills andknowledge, technology, and trust,and how these factors relate to knowl-edge sharing, supply chain effective-ness, and focal firm performance.Antecedents of Supply ChainEffectiveness

Shills and K nowledge. Sir Francis Ba-con once said that "knowledge ispower." Our focus groups revealedthat supply management executivesbelieve not only that knowledge ispower, but that knowledge is also acore antecedent of supply chain ef-fectiveness. In particular, our analysisof executive responses yielded twodistinct skills and knowledge dimen-sions(1) broad business skills andknowledge as well as (2) specialized

tance of interpersonal communica-tion, computer/Internet, customer,project management, leadership, andnegotiation skills as well as the expec-tation that supply chain professionalscarry out tasks ethically. Regardingspecialized skills and knowledge, ex-ecutives highlighted the need for sup-plier relationship management andcoordination, materials manage-ment, quantitative measurement(i.e., supplier performance metrics),market analysis, legal and risk man-agement skills and knowledge. Asshown by the 95 comments by 36 executives, a dominant theme thatemerged was the increasing impor-tance of skills related to managingand coordinating supply chain rela-tionships.In addition, numerous participantsbelieved that supply chain profession-als should possess broad businessskills and knowledge, stating that pro-fessionals need to possess "economicliteracy and industry knowledge" andalso be capable of "specifying mate-rials and qualifying the right sup)-pliers." Thus, not only must theseprofessionals be business generalists,but they must also possess specializedsupply chain skills and knowledgethat can help their firm strategicallymanage its supply base. Indeed, onerespondent asserted: "Our purchas-ers need to be able to connect thedots. It's that understanding of theentire supply chain. They really needto understand our business and ourinternal and external customers.When they understand this, they arebetter prep ared to write supply agree-m en ts" and, thus, leverage the supply


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166 ANTECEDENTS AND OUTCOMES OF SUPPLY CHAIN EFFECTIVENESSand knowledge to belp firms achievemaximum supply cbain effectiveness.As one participant put succinctly, sup-ply cbain professionals need to"think tbrougb tbe wbole life cycle ofdesigning for manufacturability, newproduct introduction, look at tbe lifecycle management, obsolescence riskand implications, whether to deployand how to position inventory, and

bow to use logistics to good advan-tage."Sucb skills and knowledge seem tobe increasingly important today, es-pecially since one of tbe most sub-stantial business trends is tbe movefrom adversarial to collaborativebuyer/supplier relations (Bowersoxet al, 2000). Today, supply chain pro-fessionals possessing higb levels ofTable 1

Executive Responses for Each FactorBroad Skills and Knowledge

CommunicationComputerUnderstanding End CustomerProject ManagementLeadershipNegotiationEthics

Comment Frequency^4842413225227

Participant Frequency''2224222116164

Specialized Supply Chain Skills and KnowledgeSupplier Relationship Managementand CoordinationMaterials ManagementMetricsMarket KnowledgeLegal IssuesRisk ManagementElectronic ResearchTranslation Software

957853383722

Technology132

Integrated Systems for E-business Scheduling 2

Risk-sharingSharing Lead-time InformationSupplier ConsolidationSharing Cost Information

Trust 19221

363340263015922

16221


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C R O O K , G I U N I P E R O , R E U S , H A N D F I E L D AND W I L L I A M S 167Table 1 (Continued)Executive Responses for Each FactorKnowledge SharingComment Frequency"Cross Functional Product Development Teams 27Virtual Teams and Net Meetings 13Customer M eetings 4

Supply Chain EffectivenessRemove Unnecessary P arts and Processes 42Lower Inventories ]9Improved Productivity 9Cycle Time Reductions 4Enhanced Responsiveness 4Enhanced Product Development 1

Higher Profits via:Lower CostsIncreased Product Value

Focal Firm Performance58

Participant Frequency''22113

27148441

31

"The overall number of executive comments about a variable.''The overall number of unique executives who commented about a variable.both broad and specific supply chainskills and knowledge can help lever-age tbeir firms' supply chains (Dasand Narasimhan, 2000), knowingthat selecting and collaborating witbstrong supply chain partners can ben-efit tbeir firm, especially wben knowl-edge is shared.

Since the supply cbain manage-ment function is at the center of theseefforts, it is perhaps not surprisingthat one supply cbain executivestated tbat the function is no longer"viewed as a tactical departmentwhere purchase orders are justrubber stamped and otber employeesoffer no respect. Tbat bas changed."Instead, supply cbain professionalspossessing specialized knowledge

sucb, the executives pointed to whatCook and Brown (1999) have calledthe generative dance between organ-izational knowledge and organiza-tional knowing. Executives look fortbe knowledge possessed by them-selves and supply chain partners andthe way in which together they cancontribute to the supply chain. Butperhaps more important is the em-phasis on supply chain members'skills to work together in the chain.Tbis could be referred to as supplycbain knowing, as the members to-gether learn bow to use the knowl-edge tbey bold collectively. Tbe resultof increased skills and knowledge istbat tbe supply cbain collectively canbetter share this knowledge. Thus,


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168 ANTEC EDENT S AND OU TC OM ES OE SUPPLY CH AIN EFFECTIVENESS

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Proposition 1: Skills and knowledge of sup-ply chain m embers enable knowledge shar-ing along supply chains. changes have dramatically increasedthe speed of communication and re-


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CROOK , GIUNIPER O, REU S, HANDFIELD AND WILLL^MS 169also has enabled SCM effectiveness.The operating speed of technologyenables interfirm collaboration,which allows for improved informa-tion and knowledge sharing. As high-lighted in Table 1, participants iden-tified three key technological factorsthat aid in such efforts, includingelectronic research, translation soft-ware, and integrated systems forscheduling and payments. Whereastranslation software and electronicresearch capabilities aid in the searchfor prospective supply chain partners,systems integration aids in informa-tion sharing. One participant be-lieved that systems integration wascritical to managing the chain be-cause other supply chain participantsbecome "extensions of the com-pany." Thus, appropriate links needto be established to facilitate infor-mation sharing via technologies suchas enterprise resource planning sys-tems (ERP) and collaborative fore-casting systems. Such systems affectboth how and the extent to which in-formation and knowledge is shared.As one participant put it, integratedsystems "enable us [our firm] to re-spond immediately. We can also seeall the way back into not only our ex-isting supply, but all our other supplychain participants. As our environ-ment becomes more dynamic, whichseems to be where we're headed, thisbecomes more critical."Extant research supports the no-tion that technology is a key ingredi-ent to supply chain effectiveness.Since technology is becoming a pop-ular way to coordinate activitieswithin and between firms (Beal and

techniques (Dyer and Singh, 1998;Kaynak, 2005). The Internet andelectronic data interchange (EDI),for example, have proven to be effec-tive knowledge-sharing methods thatenable cost improvements by simpli-fying tasks (Croom, 2000). In addi-tion, electronic Collaborative Plan-ning Eorecasting and Replenishment(CPFR) systems have proven to savefirms along the supply chain inven-tory while still maintaining or im-proving customer service (Anton-nette et al, 2002). Eirms lacking suchtechnology may, thus, be at a com-petitive disadvantage. Given this,technology is a key requirement toimproving information and knowl-edge flows that enable enh anced sup-ply chain effectiveness.

Proposition 2: Technology enables knowl-edge sharing along supply chains.Trust. Trust is the willingness to bevulnerable in a relationship; it lubri-cates interactions between firms(Ring and Van de Ven, 1992). Ourfocus groups revealed that trust doesindeed lubricate the supply chain;without it, knowledge tha t can lead toimproved supply chain effectiveness

will no t be shared. As shown in Table1, the trust variables that emergedfrom our focus group interviews in-cluded: collaborative risk-sharing(e.g., joi nt product developm ent),sharing lead-time and cost informa-tion, co-location (i.e., when a supplieror supply chain partner is located ina buyer's or customer's facility, suchas a Proctor and Gamble representa-tive located at Wal-Mart headquar-ters), and collectively sharing eco-


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170 ANTECEDENTS AND OUT COM ES OF SUPPLY CHAIN EEEECTIVENESSthat "when you have a basic under-standing of what the profit marginsare with suppliers, you can negotiatearound them rather than just guess-ing." Another trust factor was co-lo-cating with other chain participants.As one participant pu t it, "co-locationcreates intimacy," which enables in-formation and knowledge to be trans-ferred more readily. In addition, themost important trust factor was shar-ing risk along the chain, such as injoint investments.

Research also supports the notionthat trust is important in collaborativeexchange. Downey and Cannon(1997) view trust as a two dimensionalconstruct. The first dimension in-volves perceived credibility and be-nevolence (i.e., that the exchangepartner is credible and tbat theirword or written statement can be re-lied upon). The second dimensioninvolves the ex tent to which one part-ner is genuinely interested in theother party's welfare and motivatedto seek joint gain. The knowledge-based view emphasizes that trust iskey to developing an atmosphereconducive of sharing knowledge(Dhanaraj et al, 2004; Kogut and Zan-der, 1992). While the availability ofknowledge and skills foster the abilityto share knowledge, and technologycreates the opportunity to shareknowledge through supply chainlinks, trust is key for developing a mo-tivation to share knowledge amongsupply chain members (cf Adler andKwon, 2002). Trust is, thus, a key an-tecedent to information and knowl-edge sharing (Handfield and Be-

ships and, consequently, shapes theextent of knowledge sharing across achain.Proposition 3: Trust enables knowledgesharing along supply chains.Knowledge Sharing. Whe n e xc ha ngepartners nurture close, collaborativeties, they can learn innovative newpractices from one another (e.g..Dyer and Nobeoka, 2000; Hamel,1991; Powell et al, 1996). At the coreof the KBV is that a key source of com-

petitive advantage is knowledge shar-ing because it allows for the effectivecombination of knowledge thatmakes the creation of new knowledgepossible (Kogut and Zander, 1992).Similarly, knowledge sharing im-proves supply chain effectiveness. Asrevealed by focus group interviewsand highlighted in Table 1, there areseveral available methods to imple-m ent knowledge sharing. These tech-niques include cross-functional prod-uct developm ent teams, virtual teamsand net meetings, as well as regularmeetings with other chain partici-pants (particularly customers).

Assembling product developmentteams that contain people not justfrom different departments withinthe same firm, b ut also from key func-tions of other firms, can be an impor-tant knowledge-sharing and learningmechanism for a chain. One partici-pant said that "we need to bring ourpartners into the design process earlyenough so they can see what the par-am eters of a particular piece of equip-ment are, understand what the costissues are, understand w hat our target


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CROOK , GIUNIPERO , REU S, HANDFIELD AND WILLIAMS 171bring in supply partners to meet withcustomers. One participant said theirfirm "goes to the highest level andgives them the nam e an d face of a pa-tient jus t to prove what happens iftheir needs are not met." Virtualteams and net meetings enable in-creased knowledge sharing in that con-ducting regular meetings allows chainparticipants to share knowledge aboutinnovations and product deficienciesso that the chain can become more ef-ficient an d /o r end-product quality canconsistendy improve.Research supports the notion thatsucb knowledge sharing across firms'boundaries can improve focal firmperformance. Uzzi (1996), for exam-ple, found that close partnersexchange proprietary and tacit infor-mation, which improves perform ancethrough enhanced transaction effi-ciency and environmental responsive-ness. In the biotechnology industry,Powell et al (1996) showed that closeties with small partners can improvelarger firms' knowledge developmentand application abilities. These newlyacquired abilities enable exchangepartners to improve their rate andquality of innovations. Studying alarge, integrated supply chain, Hultand colleagues (2002) found that"cultural competitiveness" withinsupply chains reduces cycle times.Cultural competitiveness is an intan-gible resource derived from the spiritand extent of learning, entrep reneu r-ship, and innovativeness (Hult et al,2002). It was also found that cultur-ally competitive supply chains fillmarket gaps by creating environ-ments that embrace innovation,

plier, Toyota shared mo re knowledgeand learned more, thereby produc-ing lower defect rates. T'aken to-geth er, this suggests that chain partic-ipants can share knowledge and learnfrom other supply chain participants,which can be leveraged to improvethe overall chain's performance.Proposition 4: Knowledge sharing alongsupply chains enables supply chain effect-

Supply Chain Effectiveness andFocal Firm PerformanceOur focus group participants as-serted that supply chain effectivenessencompasses numerous outcomes,including the reduction of unneces-sary activities, lower inventories, pro-ductivity improvem ents, cycle time re-ductions, as well as enhanced

responsiveness and product develop-ment capabilities. Unlike the previ-ous sections, however, where we re-lied heavily on participants'responses, this section mainly relieson the supply chain and managem entliteratures to link how knowledgesharing shapes both supply chain ef-fectiveness and firm performance.Broadly speaking, the supply chainliterature highlights several impor-tant SCM goals; these goals can becategorized as both short term andlong term. These goals corroboratefocus group findings.

In the short term , for exam ple, sup-ply chain goals include reducing cy-cle times, increasing productivity,and lowering inventories (Wisner andTan, 2000). In the long term, on theother hand, supply chain goals in-


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172 ANTECEDEN TS AND OU TCO ME S OF SUPPLY CH AIN EFFECTIVENESS(Barney, 1991; Porter, 1980; Tan,2002). Th e ultimate measure of an ef-fective supply chain is tbe firm's per-formance. These SCM executives re-alized tbat reduced costs was one oftbeir most important goals. Indeed,reduced costs was a major goal towardimproved firm performance as indi-cated by the 58 responses by 31 ex-ecutives. This indicates that these ex-ecutives operate under a continuousmandate from tbeir top managementteams to continually reduce costs.Tbe increased competitivenessgained tbrougb reduced costs ena-bles increased market share and im-proved customer satisfaction. Tbe ul-timate result of these improvementsis typically increased profits for allchain m embers (Tan, 2002).

Reducing costs and increasingprofits along the supply chain bas cre-ated new market opportunities. Infact, some have argued tbat compe-tition is now "chain-to-cbain" ratherthan between individual firms (Vick-ery et al, 1999). Providing evidencefor this assertion, our focus groups re-vealed that tbe majority of firms inour study now view the world differ-ently, and participants mainly viewsupplier relations as "win/win"tbrougb "co-development and de-sign, resource sbaring, and risk andreward sharing." Tbrougb knowl-edge sbaring, supply chain memberscan more effectively manage tbeirchains and, as a result, reduce costsfor focal firms and increase the valuetbey can deliver to their partners up-stream in tbe chain.

Proposition 5: Supply chain effectivenessenables improved focal firm performance.

itations merit attention. First, al-though tbe 46 focus group interviewsprovided exposure to diverse organi-zations from several industries, tbeantecedents and outcomes of supplycbain effectiveness could be studiedin a larger sam ple. Such efforts w ouldlikely identify additional antecedentsand outcomes as well as increasesome aspects of our study's general-izability. Second, our study simply of-fers propositions and a testablemodel. If we had empirically testedtbe model, then we could have madestronger assertions about tbe find-ings. Tbis, however, opens up a po-tentially fruitful avenue for future re-search.

In spite of these limitations, we be-lieve this study provides several im-portant contributions. Tbe study'score implication supports extant re-search^when inde pe nd en t firms col-laborate and share knowledge witbothers, tbey can achieve advantagesbeyond what could be achieved inarm's length exchange (Dyer andSingh, 1998; Dyer and Hatch, 2006).In many supply chains, the advan-tages accrued by tbe entire cbaintranslate into higher profits for allcbain participants (Crook andCombs, 2007). But, wbat is requiredto increase supply cbain effectivenessand, thus, obtain higher profits fromtbe cbain? Our results suggest tbatthe answer lies, in part, within thecbain participants' specialized knowl-edge, aided by technology and trust.If this is tbe case, a key managerialimplication is tbat organizations mustbe willing to make investments intraining and development geared to-


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CROOK, GIUNIPERO, REUS, HANDFIELD AND WILLIAMS 173the requisite investments in systemsintegration efforts and find ways toimprove trust and collaborationthrough means such as co-location.

O ther implications include that thesupply chain can function as an effec-tive knowledge-sharing mechanismand that supply chain professionalscan act as critical knowledge-integra-tion mechanisms. Indeed, the execu-tives in our sample made importantknowledge-hased considerations intheir efforts to improve supply chaineffectiveness. As such, a KBV on sup-ply chains emerged as a dominantperspective. Future research can fur-ther develop this theory. For exam-ple, future inquiry can more closelyexamine contextual factors, such asabsorptive capacity of supply chainmembers (Cohen and Levinthal,1990), as well as procedural factors,such as the partners' motivation toshare knowledge, as enablers ofknowledge sharing across the supplychain. More generally, a key a rea f'orthis emerging research stream is toexplore how supply chain partnersbecome a source of new knowledge.Although our study reveals somekey antecedents (i.e., knowledge,technology, and trust) to knowledgesharing and supply chain effective-ness, more research is needed to gaininsight into oth er key success factors.One potentially fruitful line of in-quiry would be to differentiate be-tween supply chains that share a com-mon culture and those that do not(Hult et al, 2002). An other area of in-quiry would be to assess not just com-

patible exchange partners, but also toexamine how chain members nego-tiate contracts in ways that lowerexchange costs over the long term(Artz and Norman, 2002) and howthis negotiation process affects sub-sequent knowledge sharing. And fi-nally, more research into the appro-priate application of technologyenabling supply chain success ap-pears warranted (Kaynak, 2005).In conclusion, this study sought toimprove our understanding of thesources of effective SCM and how ef-fective SCM shapes focal firm per-formance. By interviewing 46 supplymanagement executives and blend-ing findings with extan t research, wetake a step toward achieving thesegoals. In particular, we found that thesupply chain appears to be a poten-tially important source of improvedperformance. Such improvementsare increasingly possible iffirmspos-sess skillful supply chain manage-ment professionals who leveragetechnology to enable change andnurture trust. For researchers, ourstudy suggests that more effortsshould be directed towards under-standing key antecedents of supplychain effectiveness. For managers,our study suggests an increased needfor emphasis on managing the supplychain and the key role that knowl-edge sharing plays in effective supplychains. More broadly, collaborativeinter-organizational relationships,such as supply cha ins, can be strategicweapons geared towards improvingfocal firm performance.


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174 ANTECEDENTS AND OUTCOMES OF SUPPLY CHAIN EFFECTIVENESSReferences

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