Journal of Logistics Management 2017, 6(1): 1-10

DOI: 10.5923/j.logistics.20170601.01

Enhancing Supply Chain Ambidexterity by

Adapting Resiliency
Selvarajah Krishnan1,*, Thillai Raja Pertheban2

1
International University of Malaya-Wales, Kuala Lumpur, Malaysia
2
SEGi University, Malaysia

Abstract This research investigates the influences of supply chain resilience strategies on supply chain ambidexterity as
a dynamic capability. The ability to excel simultaneously on competitive capabilities of small medium enterprises (SME’s)
and in, turn on their business performance. Supply chain resililence is conceptualized as a simultaneous pursuit of both
explorative and exploitative supply chain. Applied two main theoretical frames from the literature (dynamic capabilities and
organizational ambidexterity) to SCM to examine mitigation strategies after SC disruption. "Ambidexterity as a dynamic
capability" indicates that dynamic capability is fundamentally associated with a combination of exploitation and exploration.
Found that a key element of achieving ambidexterity is the strategic integration and configuration ability to utilize existing
competencies and develop new ones. Moreover, successful SC ambidexterity allows firms to have the resiliency to mitigate
enterprise risks. Thus, this research seeks to investigate how firms' SC ambidexterity is developed through a dynamic
capability-building process and how this, in turn, can mitigate the negative impact of SC disruptions and improve business
performance, study offers a practical implementation of Supply chain ambidexterity framework in the supply management,
increases focal points on improves the sustainability of operational performance of the Small Medium Enterprise’s
(Manufacturing sector) overall supply chain. Optimistically, in the end, this study seeks to enhance the operational
sustainability in SMEs manufacturing sector.
Keywords Supply Chain Resilience, Supply Chain Ambidexterity

from raw materials to final product, events that create

1. Introduction interruption of material flow, even happen in remote place,
can create large –scale disruptions. Due to a continually
Business environment has defined as a highly competitive changing business landscape, firms need to continually
and has become increasingly complex and dynamic recently. develop and adapt to survive (Matthews, Tan, & Marzec,
Competitors give more attention to rough each other up, blitz 2015). As such firms face risk of disturbance from the
each other with new products introduction, undercut each uncertainties along the supply chain. For example, Japanese
other’s prices, gang up on each other via alliances or merges earthquake in March, 2011, subsequently tsunami disaster
and hammer away at each other’s stock price. Ability to caused significant losses of both people and property; the
minimise the damage, recover fast from business disaster also negatively affected global supply chain badly.
uncertainties and quickly get back to business direction with Japanese companies, which account for the production of
new strategies, business models and products are widely about 40 percent of the world’s technology components,
acknowledged to build and maintain a competitive advantage endured rolling blackouts to manage electric components
(Elahi, 2013). As of late, a number of researchers have given supply. As results, many firms worldwide had to adjust to
more propriety on exploring the impact of Supply Chain supply shortages from Japan (Reuters, 2011; Lee and Rha,
Management (SCM) on firm sustainability (Paulraj, 2011; 2014). This disaster forced the global manufacturer to delay
Reuter, Kai, Evi & Constantain, 2010). SCM is crucial for the completion and launch of their products. “The ability of a
increasing organisations’ effectiveness as well as for system to return to its original state or move to a new, more
enhancing competitive edge, customer service and desirable state after being disturbed” (Christopher and Peck,
profitability. With supply chain crossing several countries 2004), as known as state of “resilient” has emerged an
and continents, transporting a multi-diversity of materials, essential topic within domain of SCM and Risk Management
today. Innovativeness in management process as an
* Corresponding author:
kselvarajah@iumw.edu.my (Selvarajah Krishnan) imperative for minimizing risk related organisation growth
Published online at http://journal.sapub.org/logistics has become focus on both management scholars and
Copyright © 2017 Scientific & Academic Publishing. All Rights Reserved practitioners. By adapting innovativeness in management
2 Selvarajah Krishnan et al.: Enhancing Supply Chain Ambidexterity by Adapting Resiliency

process, organisations can adapt to environment change and develop them further (Day, 1994). Owing to their dynamics
mitigate the negative impacts of threats and risks effectively and complexity, however, capabilities are often difficult to
(O’Reilly and Tushman, 2007; Teece, Pisano, & Shuen, identify. In addition, capabilities often span over several
1997). functional areas, which makes it even more challenging.
Innovation, organizational learning and performance While some capabilities can be identified using the standard
improvement are the key theoretical perspective of functional approach, the most important capabilities often
ambidexterity has emerged in the field of SCM (Lee and Rha, arise from integration of individual functional capability.
2016). Organizations and business units need to be Thus, integration and coordination of resources are they key
ambidextrous (balance exploitation and exploration) to characteristics of capability.
preserve short-term and long term efficiency and Teece et al., (1997), developed the RBV approach one
performance goal (Grant, 1996). To adapt ambidexterity step further by formulating the dynamic capabilities
over the long term, an organization should acquire dynamic perspective. The term “dynamic” refers to the capacity to
capability (Janses, Tempelaar, Van Den Bosch, & Volberada, renew competences so as to achieve congruence with the
2009; Kristal, Huang, & Roth, 2010; Kriz, Voola, & Yuksel, changing environment. The capabilities reflect the major role
2014; O’Reilly and Tushman, 2007). Resiliency perceived as of strategic management in adapting, integrating and
a dynamic capability to achieve ambidexterity in an reconfiguring resources, organisational skills and functional
organization. Ambidexterity based on dynamic competencies to respond to the challenges of the external
capability-building process improves competencies and environment. Capabilities or distinctive competencies
helps firms address uncertain and unexpected environments. consist of those attributes, abilities, organizational processes,
Thus, resiliency as a dynamic capability can make supply knowledge, and skills that allow a firm to achieve superior
chain more ambidextrous for effectively dealing with the performance and sustained competitive advantage over
negative impact of supply chain disruption. competitors. Dynamic capabilities are defined as the firm’s
Pragmatically, the association between SC resiliency and potential to systematically solve problem, formed by its
SC ambidexterity as a dynamic capability, which reduce the propensity to sense opportunities and threats, to make timely
negative impact in SC instability, has yet to be and market-oriented decisions, and to change its resource
comprehensively explicated. Basically, the SC instability base (Barreto, 2010).
occurs at random (Dejonckheere, Disney, Lambrecht, & Furthermore, resilience is proposed to be a multi-faceted
Towill, (2003), firms should enhance their resiliency and dynamic capability (Eltantawy, 2016). In other words,
capabilities to quickly and effectively address SC-disruptive resilience acts as the dynamic capability by which firms
events (Christopher and Peck, 2004; Macdonald and Corsi, integrate, build and reconfigure internal and external
2013; Pettit, Croxton, & Fiksel, 2013; Revilla and Saenz, competencies that can sustain firm performance. Scholars
2014). Thus, building a resilience SC can play a critical role organize these capabilities hierarchically, first routine-based
in SC risk management (Christoper, 2004; Christopher and capabilities (e.g. production, processes, purchasing and
Peck, 2004; Macdonald and Corsi, 2013; Sheffi, 2005a; marketing), which represent the foundation of a firm’s
Tang, 2006). The purpose of this study is to empirically activity and pave the way for deliberate learning inside firms
investigate how SME’s SC ambidexterity is developed (Becker, Lazaric, Nelson,& Winter, 2005). Second,
through SC resilience as a dynamic capability-building first-order dynamic capabilities (e.g. R&D, reengineering
processes and how this, in turn, can mitigate the negative and innovation processes), which provide knowledge to
impact of SC disruptions and improve business performance. adapt and change routine-based capabilities as the changing
environment necessitates (Zollo and Winter, 2002). Third,
second or higher-order multifaceted dynamic capabilities,
2. Literature which govern the adaptation and changes of first-order
dynamic capabilities in an organisation or organizational unit
2.1. Dynamic Supply Chain Capability
(Winter, 2003; Wang and Ahmed, 2007). These
Dynamic capabilities Theory (DCT) is an advancement of higher-order multifaceted dynamic capabilities address the
resource-based view (RBV) (Ponomarov and Holcomb, resource allocation conflicts on the level of first-order
2010) with a specific focus on value creation activities, as dynamic capabilities. Interestingly, such conflicts typically
opposed to value appropriation/capture focus of current arise because first-order dynamic capabilities involve change
mainstream RBV. The RBV of the firm provides important routines with intensity and direction of an antagonistic nature,
insights for understanding how competitive advantage as some of them pursue an exploration approach, while
within firms is created and how such advantage is sustained others follow exploitation logic (Wang and Ahmed, 2007).
over time. The RBV states that organisations obtain This notion of “addressing resource allocation conflicts”
competitiveness advantages by accumulating internal corresponds with this study’s research questions and propels
resources and capabilities that are rare, valuable and difficult the theoretical conceptualization of resilience in this study as
to imitate (Barney, 1991). Thus, one of the main objectives a higher-order dynamic capability that captures two
for firms applying a RBV is to identify their capabilities and contrasting aspects of stability; one that focuses on
 Journal of Logistics Management 2017, 6(1): 1-10 3

efficiency and constancy (exploitation) and another that frameworks that accurately represent the resilience
focuses on change and unpredictability (exploration). phenomenon.

2.2. Supply Chain Resilience 2.3. Supply Chain Ambidexterity

The concept of resilience extensively appears in The term “ambidexterity” to represent dual organisational
engineering, ecological and organisational perspective (Cash systems for aligns of current certainties and the other for
et al., 2013; Gunderson and Holling, 2002; Martin and Peck, adaptation to new possibilities (Duncan, 1976).
2004). The term of resilience developed in the field of Ambidexterity in an organisations are able to exploit existing
ecology (Holling, 1973), but has a wider influence and well competences and explore new opportunities with equal
established the mid of 1990s onwards, has been applied in dexterity (Lubatkin, Simsek, Ling, & Veiga, 2006). The
multi-disciplinary contexts to study the integrations in ambidexterity is the ability involves simultaneously utilizing
socio-economic systems (Limnions, Mamouni, Mazzarol, exploitation and exploration. Exploitation focuses on
Ghadouani, & Schilizzi, 2014). Meanwhile, early work in utilizing resources and current competitive advantage, while
engineering on robustness, which translates into being able exploration is aimed at searching for new resources and
to return to a stable state after disruption (Pimm, 1984), expanding markets. Whereby exploitation includes
influenced a great deal of work in conceptualizing resilience refinement, choice, production, efficiency, selection
in supply chain and operations literature (Zsidisin and implementation, and execution, whereas exploration usually
Wagner, 2010). includes search, variation, risk taking, experimentation, play,
Academic and practitioner interest in resilience was flexibility, discovery and innovation (March, 1991).
largely driven by escalating business vulnerabilities; both In recent studies ambidexterity acknowledged in supply
external, as such legislative and environmental chain and operations management literature (Eltantawy,
vulnerabilities and internal such as financial and internal 2016). There are three approaches in conceptualizing and
business-process vulnerabilities (Mann, Kumar, Kumar, & defining ambidexterity (Simsek 2009). The first approach
Mann, 2010). Supply chain and operations management refers to structural ambidexterity, refers to firm’s design
literature initially focused on key principles of resilience by containing separate structural units for exploration and
identifying vulnerability characteristics and management exploitation, for instance upstream units are responsible for
responses (Martin and Peck, 2004; Sheffi, 2005). exploitation (purchasing) and downstream responsible for
Nonetheless, the resilience term remains ambiguous and exploitation (Marketing and Sales) (Benner and Tushman,
elusive in the supply chain and operations management 2003; Najafi, Sharifi, & Ismail, 2014). This suggests that
literature (Wieland and Marcus, 2013). cycling between periods of exploration and exploitation is
There are two main observation emerge within the current more viable than simultaneously pursuing both (Duncan,
conceptualizations of resilience in the literature. First, there 1976).
is a lack of consensus on the nature of the dimensions that The second approach refers to contextual ambidexterity
represent residence and on their respective relationship to which suggests that the ambidexterity arises from features of
resilience as a higher-order construct. For instance, some unit or organizational context (Gibson and Birkinshaw,
studies use robustness as a direct dimension of resilience 2004). This approach promotes the understanding of the
(Wieland and Marcus, 2013), while others use it as an practices required to enable effective trade-off of an entire
indirect determinant of resilience, i.e. using robustness as a organisation rather than a separate units or functions
dimension of flexibility, which in turn is a direct dimension responsible for new business development. According
of resilience (Zsidisin and Wagner, 2010). Others criticize Eltantawy (2016), stated this approach may seem more
the use of robustness altogether as a dimension of resilience applicable and sustainable compared to the structured or
because, although a robust process may be desirable, it does temporal separation models discussed above.
not itself equate to a resilient supply chain (Martin and Peck, Third, views ambidexterity as a higher-order construct
2004). This lack of concurrence on the conceptualization and that manifests itself in the organisation’s or business unit’s
dimensionality of resilience in supply chain and operations exploitative and explorative attainments (March, 1991). This
management literature suggests a need to delineating the approach suggests that exploitative and explorative
construct in the context of supply chain phenomenon. attainments comprise ambidexterity itself, as compared to
Second, the concept of resilience is conflated with its structural and contextual ambidexterity, that merely refer to
precursors. As such, some studies describe and methods, practice and processes used to attain that
operationalize resilience by the strategies (Wieland and ambidexterity (Eltantawy, 2016). Supply chain and
Wallenburg, 2013), or the practices (Zsidisin and Wagner, operation management literature has recently espoused this
2010) used to achieve resilience. Despite the importance of approach (Narasimhan and Narayanan, 2013), suggesting
exploring the means to achieving organizational resilience, that ambidexterity is determined by the organisation’s or
the construct in itself needs to be clarified and explored business unit’s capacity to simultaneously demonstrate
distinctly from its precursors to allow verification of valid exploitation and exploration.
4 Selvarajah Krishnan et al.: Enhancing Supply Chain Ambidexterity by Adapting Resiliency

2.4. Hypotheses Development is because flexibility considers a key element for adaptation
Based on the approaches in conceptualizing and defining and its can play essential role sourcing and reducing resource
ambidexterity, based on the structural ambidexterity delivery time with quality materials. Thus, the following
approach, contextual ambidexterity approach and hypothesis is suggested;
higher-order approach the following hypothesises developed H4. Diversification has significant positive influence on
referring to the discussion in literature review based on the SC ambidexterity.
linkages between SC resilience and SC ambidexterity.
According to Hohenstein, Feisal, Hartmann, & Giunipero,
(2015) were identified the key elements of Supply chain 3. Research Methodology
resilience as such Inventory management (Blackhurst, Dunn,
A survey instrument was developed to investigate the
& Craighead, 2011), Visibility (Christopher and Peck, 2004;
impact of SC ambidexterity on the SMEs in manufacturing
Craighead, Blackhurst, Rungtusanatham, & Handfield, 2007;
sector. The questionnaire was pre-tested several times to
Blackhurst et al., 2011), Predefined decision plan (Knemeyer,
ensure that the wording, format and sequencing of questions
Zinn, & Eroglu, 2009; Zsidisin and Wagner, 2010;
were appropriate. Data for this study were collected from a
Blackhurst et al., 2011) and Diversification (Christopher,
sample of 166 medium manufacturing SMEs operating in
2004) which are received least attention by scholars.
Malaysia. The actual estimation of samples is 200 from total
Exchanging information along in supply chain, especial
establishment of 2,061. 2 questionnaires are rejected due to
backward integration, by sharing information of supply,
insufficient of information, double entry of information and
inventory level and purchasing schedules enables
in complete of answers. Only 164 questionnaires are
organisations to generate higher levels of supply intelligence
analyzed. Confirmatory factor analysis (CFA) and structural
and greater visibility of enhancing organizational
equation modelling (SEM) were run on SPSS (version 21.0)
performance. This dynamic capability –building process
and AMOS (version 22.0) to test the hypotheses developed
should be routine and embedded in the process of
to answer research questions.
organisation to achieve and develop effective SC by
For this research, the electronic questionnaire (Online
exploitation (Benner and Tushman, 2003; Najafi et al., 2014).
questionnaire, send via e-mail to participants) considered as
Thus, the following hypothesis is proposed:
suitable method to collect the data. Basically the set of
H1. Inventory management has significant positive questionnaire send via e-mail to respondents, it was
influence on SC ambidexterity. requested that the questionnaire be completed by a senior
As per stated by Lee and Rha (2016), visibility in SC will officer/ executive in charge of Supply Chain Management
help to reduce complexity and uncertainty along SC. This (SCM). This is mainly because they can use their own
will help and enhance to rapidly capture business personal computers to respond the questions. This method
opportunities, identify and react to risks and realign their considers fast reach all participants at a same time,
resources and assets along the SC as part of SC exploitation inexpensive and the participants can response to questions at
and explorations. Sensing external and internal environment their own convenience (Sekaran, 2013). But the participants
improves the organisations ability to evaluate and restructure must computer literacy; it is believes that the respondents are
business process effectively (Lacerda, Ensslin, & Dutra, mostly from top level executives and no doubt on their
2014; Simatupang, Wright, & Sridharan, 2002). The computer knowledge. Another problem highlighted by
following hypothesis is developed: Sekaran (2013) in this method is the willingness of
H2. Visibility has significant positive influence on SC respondent to complete the survey.
ambidexterity. Commonly, for this kind of method the responses are
typically low and Sekaran (2013) stated 30% response
Timely decision making part of SC agility (Lee and Rha,
considered acceptable. To avoid poor response, the set of
2016), decision plans to deal with SC problems, for instance,
questionnaire send to entire population in medium category
delivery issues, customers dissatisfaction, lead time problem.
of SMEs (total 2,061) and considered the first 200 (10%)
Predefined decision plan allows to quickly dealing with
respondents as samples. According to Sekaran (2013), “As a
conflicts in the strategic decision-making process and
rule of thumb, sample sizes larger than 30 and less than 500
improves responsiveness of organisation toward market
are appropriate for most research” (p.296). Concerning on
change. This will help to enhance high level of exploitation
this limitation, the sample size that considered for this
and exploration performance goal (Eltanway, 2016), Thus
research is 200 participants from total establishment SMEs
following hypothesis is proposed;
(Medium) in manufacturing sector. This considers as 10
H3. Predefined decision plan has significant positive percentages of the establishment.
influence on SC ambidexterity. The details of participants gather from latest updated
Diversification in term of procurement strategies part of version of Malaysia SME Business directory. This directory
achieving SC resilience (Pereira, Christopher, & Da silva, provides all information pertaining with establishment of
2014). The flexible procurement system (Multi sourcing) to SMEs in Malaysia such as SMEs latest listing with name,
respond to changes leads to high level of ambidexterity. This address, contact details (e.g. Tel No, E-mail) and their
 Journal of Logistics Management 2017, 6(1): 1-10 5

business nature. In the same time, provides the contact directory. There searchers considered send the questionnaire
person details such as Owner of the company, Director of to respondents early as possible to provide around five (5) to
company and Managers. Basically the researcher uses this six (6) weeks to response. Furthermore, second reminder
business directory to obtain the contact details and all this sends to all respondents to invite them to participate in the
information are available in CD-ROM and provides full survey. This helped to reduce the poor response and have
details or the business guide of Malaysian SMEs. The details achieved the desire sample requirement. The following
of SMEs are well organized and easy to excess from this Table 1 shows the constructs and items measures.
Table 1. Measurement items

Constructs and item measures

Inventory Management
INM1 :we can perceive demand shifts and can adjust stocks effectively
INM2 : we can reconfigure the inventory in time to address environmental change
INM3 : we can quickly increase and reduce inventory based on demand
INM4 : we can effectively manage materials cost and source of supply
INM5 :we can successfully build collaborative relationship with suppliers to manage inventory

Visibility
VIS1:we can perceive demand shifts and changes in customer preference before competitors do
VIS2 : We can fully understand the impact of internal and external environment
VIS3:We can feel the major potential opportunities and threats in our SC
VIS4: we have good observation and judgment ability in our SC
VIS5:We have perfect SC information management system

Predefined decision plan

PDP1: we can quickly deal with conflicts in the strategic decision-making process in our SC
PDP2:under any circumstance we can make timely decisions to deal with SC problems
PDP3: we can reconfigure resources in time to address environmental change
PDP4 : we can quickly adjust delivery capability and reliability
PDP5: we can quickly improve responsiveness to changing market needs

Diversification
DIV1: we can successfully realign or reinvent SC in response to market change
DIV2 :we can successfully reconfigure SC resources to come up with new productive assets
DIV3: we are able to engage in resource re-combinations to better match the product-market areas in this SC
DIV4: we can effectively integrate and combine existing resources into novel combinations SC
DIV5: we can rapidly send and receive products cost effectively as customers and sources of supply change

SC ambidexterity
SCA1: In order to stay competitive, our SC managers focus on reducing operational redundancies in our existing processes.
SCA2: In order to stay competitive, our supply chain managers focus on improving our existing technologies
SCA3:Leveraging our current SC technologies is important to our firm's strategy
SCA4 : Our managers focus on developing strong competencies in our existing SC processes
SCA5: we proactively pursue new supply chain solutions
SCA6:we continually experiment to find new solutions that will improve our SC
SCA7: To improve our SC, we continually explore new opportunities
SCA8 : we are constantly seeking novel approaches in order to solve SC problems
6 Selvarajah Krishnan et al.: Enhancing Supply Chain Ambidexterity by Adapting Resiliency

4. Results and the t-value was greater than the threshold of 1.96
(Anderson and Gerbing, 1988) as shown in Table 2. The
4.1. Measurement Model AMOS output provides the t-value as a critical ratio value
As per suggested by Andreson and Gerbing (1988), that can be calculated by dividing the estimated covariance
Confirmation Factor Analysis (CFA) was undertaken to by its standard error. Furthermore, all values of AVE, the
examine the measurement model before structural model construct relative to the total amount of variance, were
was analysed. The items that contributed to a standardized greater than the recommended value of 0.5. Discriminant
coefficient with values less than 0.50, and the overall fit validity can be assured by comparing AVE with the squared
statistics of measurement model acceptable fits. correlation between constructs. Thus, discriminant validity
The convergent validity was confirmed because all of the was established (refer to Table 4)
standardized estimated were significant at the 0.001 level
Table 2. Measurement model result

Composite Standardized
Constructs and item measures Cronbach's α AVE Mean SD CR p -value
reliability factor loading
Inventory management 0.823 0.804 0.512 4.73 0.78
INM1 4.73 0.99 0.605 fixed
INM2 4.79 0.91 0.651 11.383 <0.001
INM3 4.69 0.97 0.808 9.731 <0.001
INM4 4.73 0.98 0.774 9.653 <0.001
INM5 4.75 1.02 0.873 9.768 <0.001

Visibility 0.785 0.802 0.512 4.78 0.79

VIS1 5.03 1.35 0.803 fixed
VIS2 5.12 1.33 0.795 14.737 <0.001
VIS3 4.84 1.36 0.514 8.969 <0.001
VIS4 4.95 1.34 0.712 12.937 <0.001
VIS5 5.13 1.35 0.785 11.819 <0.001

Predefined decision plan 0.863 0.879 0.548 4.97 0.84

PDP1 4.98 1.08 0.733 fixed
PDP2 4.97 1.01 0.793 13.437 <0.001
PDP3 4.99 1.01 0.764 12.986 <0.001
PDP4 4.97 1.06 0.786 13.367 <0.001
PDP5 4.99 1.09 0.663 11.24 <0.001

Diversification 0.916 0.911 0.563 3.33 0.92 0.717 fixed

DIV1 3.31 1.16 0.744 15.489 <0.001
DIV2 3.33 1.14 0.732 12.332 <0.001
DIV3 3.41 1.23 0.734 12.317 <0.001
DIV4 3.43 1.11 0.803 13.526 <0.001
DIV5 3.28 1.19 0.768 11.424 <0.001

SC ambidexterity 0.883 0.887 0.567 4.78 8.11 0.715 fixed

SCA1 4.69 1.02 0.712 14.392 <0.001
SCA2 4.84 1.05 0.745 12.391 <0.001
SCA3 4.77 0.95 0.734 11.882 <0.001
SCA4 4.73 1.03 0.732 13.663 <0.001
SCA5 4.82 1.01 0.827 13.128 <0.001
SCA6 4.84 0.96 0.834 12.111 <0.001
SCA7 4.79 1.04 0.745 11.453 <0.001
SCA8 4.89 1.06 0.783 11.654 <0.001

Notes : AVE, Average variance extracted =∑(factor loading2) / (∑ (factor loading2) + ∑(error));
composite reliability = ∑ (factor loading)2/( ∑(factor lading)2 + ∑ (error))
 Journal of Logistics Management 2017, 6(1): 1-10 7

Table 3. Significant path coefficients in the model

Hypothesized path Path coefficient SE p-value Result

H1: Inventory Management - SC ambidexterity 0.458 0.075 0.000** Supported
H2 : Visibility - SC ambidexterity 0.772 0.157 0.000** Supported
H3 : Predefined decision plan - SC ambidexterity 0.611 0.564 0.000** Supported
H4 : Diversification - SC ambidexterity -0.364 0.055 0.000** Supported
Notes : *p <0.05; **p < 0.001

Table 4. AVE and correlation

Inventory Predefined SC
Constructs AVE Visibility Diversification
Management decision plan ambidexterity
Inventory management 0.51 1
Visibility 0.51 0.395** 1
Predefined decision plan 0.54 0.344** 0.652** 1
Diversification 0.53 0.235** 0.362** 0.271** 1
SC ambidexterity 0.61 0.267** 0.645** 0.623** 0.547** 1
Notes : n = 166. *p <0.05; **p < 0.01 (two-tailed)

Table 5. Curve estimation and construct

Construct Linear Value (R) R2 Quadratic Value (R) R2

Inventory management 0.81 0.656 0.811 0.658
Visibility 0.795 0.633 0.797 0.634
Predefined decision plan 0.775 0.601 0.779 0.606
Diversification 0.784 0.615 0.784 0.615
comparing with SC ambidexterity 0.793 (average value)

Cronbach’s α was calculated to identify reliability score ambidexterity. Besides, Hypothesis H4 suggested that the
for each construct using equal factor weighting (refer to negative impact of Diversification would be negatively
Table 2). The table clearly shows that all construct values associated with SC ambidexterity. The results showed a
more than 0.75 and its consistency is well assured. negative link between the two construct.
Furthermore, composite reliability as well was used to justify
the degree to assure which scale indicators reflect and 4.3. Curve Estimation
underlying factor. As per shown in Table 2 the composite The Quadratic method was performed on the SC resilience
reliability values were greater than the recommended value against SC ambidexterity in order to extract the dimensions
of 0.6, this as well assured the reliability of construct. underlying each construct. The main reason is to identify the
4.2. Structural Model value of R either correlated and the strength and direction of
the linear relationship. The R tends to optimistically estimate
The structural model was used to analyze to test the how well the model fits the sample in this study. The
research hypothesis after the justification of reliability and following R value presents the linear relationship between
validity test. The results of structural model as shown in SC resilience against SC ambidexterity. The average value
Table 3, according to the results, generally there are positive of R (Quadratic value) construct is 0.79.
and significant path loadings liking elements of SC resilience
to SC ambidexterity except Diversification. For instance,
Inventory management to SC ambidexterity (β = 0.458, p < 5. Conclusions
0.001) (H1), Visibility to SC ambidexterity (β=0.772,
p <0.001) (H2), Predefined decision plan to SC ambidexterity Inventory management allows SMEs to share information
(β = 0.611, p < 0.001) (H3) and Diversification to SC with supply partners and effectively manage and control,
ambidexterity (β = -0.364, p < 0.001) (H4). planning, scheduling, and delivery the inventories in turn
Hypotheses H1 to H3 were posited to investigate the improving their ability to react quickly to unexpected risks
dynamic SC resilience capability-building process well chances to strengthen capabilities .Consistent with this idea,
established. The SEM showed a positive link between the the empirical results confirmed that Inventory management
first four elements of SC resilience towards SC is positively associated with SC ambidexterity. Visibility in
ambidexterity. This clearly shows there is positive SC leads to greater flexibility in adapting dynamic situations
significant relationship between SC resilience and SC as such good observation and judgment ability in SC to feel
8 Selvarajah Krishnan et al.: Enhancing Supply Chain Ambidexterity by Adapting Resiliency

the major potential opportunities and threats in SC. There SMEs. SMEs should continuously search for novel
was significant direct relationship between SC ambidexterity approaches to solving SC issues. Implementing exploitative
as well. Predefined decision or contingency plans as well as strategies focussed on existing core competencies is easier
communication protocols to decrease response time and than searching for new opportunities (Groysberg and Lee,
reduce mistakes during execution for instance, can quickly 2009). SMEs that make an effort to search for new
deal with conflicts in the strategic decision-making process opportunities along the SC are more likely to be able to
in SC and quick improve responsiveness to changing market quickly handle difficult situations. Morever, exploration is a
needs (Knemeyer et al., 2009; Zsidisin and Wagner, 2010; risk-taking strategy (Gibson and Birkinshaw, 2004; He and
Blackhurst et al., 2011). Thus, predefined decision plan Wong, 2004). SMEs tend to focus on developing stronger
provide direct effects towards SC ambidexterity as per competencies in existing SC processes and ignore the
suggested by Gibson and Birkinshaw (2004) that importance of actively seeking out new technologies for SC
ambidexterity arises from the unit or organisational context systems.
and process. The fact that Diversification was not
significantly related to SC ambidexterity is contrary to the
hypothesis. Even the diversification perceived as element of 7. Limitation and Future Research
SC resilience by providing additional resources diffuse
impacts of disaster and also improves preparedness and this Even though the research was well and carefully planned
consider part of approach of ambidexterity (Eltantawy, and executed, there are several limitations are acknowledged
2016). in this study. The first limitation concern is the
Overall, the findings provide substantial empirical support generalization of outcome of research. The study on SMEs
for the idea that a dynamic SC resilience capability-building (Medium manufacturing sectors) that might have specific
process in based on positive relationship with SC characteristics those are not suitable for other SMEs. It is
ambidexterity. Based on the organisational resiliency view, also possible those only focus on few manufacturing sectors
this research found that diversification is negatively related rather than overall is a source of bias. Further research is
to the impact of SC ambidexterity. This implies that recommended to apply the framework to further focus on
diversification not a really proper mitigation or recovery more different sectors of SMEs as a means of strengthening
strategy to address SC ambidexterity. and enriching the research findings.
The second limitation there is various antecedents of SC
ambidexterity are excised. Therefore further research should
6. Theoretical and Managerial investigate different antecedents of SC ambidexterity to
enlarge and enrich knowledge gaining in SCM. Thirdly, the
Implications use of the methodology presented in this study is the ability
This research makes two theoretical contributions to the to generate the necessary data from participants, but may be
SCM literature. First, this research applied the concept of circumstances where some participants are reluctant to share
resilience as dynamic capability to SCM. Dynamic their information accordingly. Further study should concern
capabilities are not congenital but can be developed through on the effective methodology to attract more participants. In
a well-reutilized organizational process for long-term the same time the data should be collected at different time
performance improvement (Schreyogg and Kliesch-Eberl, period, which leads to causal inferences because it satisfies
2007; Teece, 2007). Through a SCM literature review, this temporal precedence. Thus, for future research, data should
research suggested that in order to develop dynamic be collected in a consecutive order.
capabilities along SC, firms should enhance inventory
management, visibility, predefined decision plan and
diversification.
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