A three-way contingency-based supply chain management: integrating speed, slack, and sustainability controls for strategic performance

What the paper says

Purpose Earlier researchers have used slack as a boundary condition to resolve conflicting perspectives in the speed–performance relationship. However, a challenge arises in finding the optimal level of operational slack, creating a “slack paradox”. Too little slack, and a firm loses the benefits; too much, and it wastes resources unnecessarily. This study introduces sustainability control systems as a resolution. This study aims to empirically investigate how sustainability control systems moderate the moderating role of supply chain slack on the relationship between supply chain speed and strategic supply chain performance. Design/methodology/approach The study develops a three-way contingency-based supply chain slack framework, which is then tested using time-lagged data from 355 managers across 5 industries in an emerging economy, leveraging the product indicator method of the PLS-SEM technique of Smart PLS 4.1.1.2. Findings The pressure associated with supply chain speed drives firms to improve strategic supply chain performance (β = 0.395, p = 0.000, t = 5.319). When supply chain slack is high, firms find the buffering capacity that enables simultaneous pursuit of speed and strategic performance and vice versa (β = 0.022, p = 0.010, t = 3.188). Sustainability control systems obtain a negative and significant three-way moderation effect (β = −0.036, p = 0.030, t = 2.309), implying that firms with effective sustainability controls are more capable of efficiently using supply chain slack – minimising waste and potential complacency – to produce strategic supply chain performance as supply chain speed pressures increase. Research limitations/implications Further research should explore how interactive versus diagnostic control systems may be configured to influence the moderating role of supply chain slack in the relationship between supply chain speed and strategic supply chain performance. Practical implications Operations and supply chain managers should avoid fixed slack allocation. Instead, they should develop dynamic slack management approaches based on sustainability control capabilities. For example, Amazon maintains higher inventory slack during peak seasons but only when supported by their sophisticated sustainability tracking systems that prevent waste. Supply chain partners and suppliers should develop collaborative control systems. Universities should teach operations and sustainability as a combined subject. Originality/value This study develops and tests a sophisticated three-way contingency-based framework that resolves the “slack paradox”, showing when and why slack becomes productive. It demonstrates how sustainability and efficiency can work together effectively using sustainability control systems, thereby making a methodological contribution to the operations and supply chain management fields.