As discussed earlier, the characteristics of three types of supply chain strategies
(lean, agile, and lean/agile) are different. The lean supply chain strategy requires
that manufacturersmake cost reduction their first priority.Adopters of lean strategy
may implement practices such as mass production, just-in-time, and long-term
supplier relationships to eliminate waste and achieve a lower cost. On the other
hand, the agile supply chain strategy underscores flexibility and responsiveness.
Hence, adopters of agile strategy need more capacity buffers to handle the market
volatility. In the short run, there are likely to be trade-offs between the two kinds
of strategies. However, over time, companies may develop innovative ways to
improve both leanness and agility. One way to do this is to combine the lean
and agile approaches at a decoupling point to form the lean/agile supply chain
by operating cost-effectively in the upstream supply chain and responsively to
volatility in the market downstream as observed by Bruce et al. (2004). Firms may
also use other ways to develop both the lean and agile capabilities in their supply
chain. Each of these supply chain strategies has been identified in prior literature
based on relatively small sample sizes, thus there is a strong need to assess their
effectiveness in a larger sample. In particular, the successful implementation of a
lean/agile strategy seems to be a more challenging hurdle than implementing either
a lean or agile strategy due to the need to master two sets of guiding principles.
Since Porter (1986) proposed the well-known typology of competitive strategies,
many studies have examined the firm’s strategic behavior and their impacts on
performance. Several studies found that the firm’s performance would deteriorate
if it does not have a clear strategic thinking (Dess & Davis, 1984). However, the
strategic management literature strongly emphasizes that strategy involves careful
matches between internal strategy, organization and structure, and external environment
(Bozart,Warsing, Flynn, &Flynn, 2009).We believe that similar thinking
can be extended in supply chain strategies and test the following proposition and
hypotheses: