A meta-analysis of supply chain complexity and firm performance

Official URL: http://dx.doi.org/10.5465/AMBPP.2020.14065abstract

Increased globalization, pressure to meet varying customer needs and requirements, extended product lines, uncertainty in supplier deliveries and a myriad of related factors make supply chains utterly complex. Extant literature shows that Supply Chain Complexity (SCC) plays an important role in explaining several performance outcomes. However, the accumulating evidence is ambiguous. To better understand SCC and its consequences under specific boundary conditions, we conducted a meta-analytical synthesis of the extant literature. Meta-analytic results from 23,810 observations across 85 independent samples from 103 empirical studies indicated that rather than an aggregate analysis of SCC’s effect on performance, a finer-grained analysis of the relationships between sub-components of both SCC and performance is required. While the majority of previous studies seem to advocate that complexity in supply chains is detrimental to firm performance, our results demonstrate that SCC only has a negative effect on operational performance, but an overall positive effect on innovation performance and financial performance. We further decompose SCC into sub-dimensions (i.e. upstream/downstream/internal) illustrating how exactly complexity in the supply chain of a firm affects its performance across a range of relevant outcomes. Our findings also reveal moderating effects of construct operationalization and study characteristics. We discuss the implications of the findings for theory and practice.