A framework for assessing value chain agility

Correlation analysis suggests that firms derive higher levels of agility through integrating information across the VC rather than within VC activities, and firms with flexibility in their VC functions enjoyHigher levels of ensuing VC agility and on‐time delivery, ROA, and market share.

Abstract

Purpose To gain understanding of value chain (VC) agility in terms of value‐adding processes, this paper seeks to present a VC agility framework and then to develop the involved constructs. Design/methodology/approach A framework of VC agility and its theoretical underpinnings is presented. Within the framework, drivers and determinants of VC agility are identified as characteristics enabling flexibility within key components of a firm's VC. Also, it is posited that information technology (IT) capability impacts the levels of achieved flexibility and agility, and that VC agility impacts business performance. Findings From scale development, key determinants of flexibility within VC activities are identified. Correlation analysis suggests that firms derive higher levels of agility through integrating information across the VC rather than within VC activities. Firms with flexibility in their VC functions enjoy higher levels of ensuing VC agility and on‐time delivery, ROA, and market share. Research limitations/implications While the sample size is adequate for scale development, it is not adequate for structural equation modeling since the guideline is to have at least five survey responses for every item measure. Thus, insights were gleaned from initial analysis based on correlations. Practical implications Managerial insights concerning key value‐adding activities that build flexibility and ultimately agility are identified. Originality/value To the best of one's knowledge, this work is the first to operationalize VC agility from the perspective that agility is derived from flexibility in the VC processes and is enabled by IT integration. From exploratory research, insights are gained on how VC agility links with business performance.