Author’s Accepted Manuscript

Supply Chain Resilience: Conceptualization and

Scale Development Using Dynamic Capability
Theory

Md Maruf H Chowdhury, Mohammed Quaddus

www.elsevier.com/locate/ijpe

PII: S0925-5273(17)30114-7
DOI: http://dx.doi.org/10.1016/j.ijpe.2017.03.020
Reference: PROECO6689
To appear in: Intern. Journal of Production Economics
Received date: 9 September 2015
Revised date: 24 March 2017
Accepted date: 27 March 2017
Cite this article as: Md Maruf H Chowdhury and Mohammed Quaddus, Supply
Chain Resilience: Conceptualization and Scale Development Using Dynamic
Capability Theory, Intern. Journal of Production Economics,
http://dx.doi.org/10.1016/j.ijpe.2017.03.020
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Supply Chain Resilience: Conceptualization and Scale
Development Using Dynamic Capability Theory

Md Maruf H Chowdhury1, Mohammed Quaddus2*

1
UTS Business School, University of Technology Sydney, Sydney, Australia
2
School of Marketing, Curtin University, GPO Box U1987, Perth WA 6845, Australia
*
Corresponding author. m.quaddus@curtin.edu.au

Abstract

A growing number of researchers and practitioners have placed supply chain resilience
(SCRE) at the forefront of their research agendas due to an increased susceptibility to
disruptive events in the global supply chains. However, empirical research in this area has
been hamstringed by the lack of a validated measurement model. In this context, drawing on
dynamic capability theory, this research develops a measurement instrument for SCRE. This
research conducts a qualitative field study, followed by a quantitative survey. Content
analysis is used to explain various dimensions in the qualitative field study, and partial least
squares (PLS)-based structural equation modelling (SEM) is used to analyse the data
collected in the quantitative survey. The research is conducted with three rounds of data
collection and analyses. The results show that SCRE is a multidimensional and hierarchical
construct, which consists of three primary dimensions: proactive capability, reactive
capability and supply chain design quality. These three primary dimensions are further
operationalized through twelve sub-dimensions. The findings also affirm that the SCRE scale
potentially better predicts supply chain operational vulnerability (OV) and supply chain
performance (SCP) and conforms to the “technical” and “evolutionary” fitness criteria of
dynamic capability theory. The implications of these findings are discussed in the context of
theory and practice. Limitations and future avenues of research are also discussed.

1
Keywords

Supply chain resilience, dynamic capability, measurement instrument, multidimensional

construct

1. Introduction

With the increasing complexity of global business, supply chains are often exposed to

numerous disruptions. The detrimental effects of such disruptions are quite pronounced if

compounded and not addressed at the right time (Pettit et al. 2013). The consequences are

even worse if disruptions are reported in the media, resulting in rapidly declining stock prices

(Hendricks & Singhal 2003). For example, after an extended power disruption in Japan due to

the 2011 tsunami, Toyota lost over 17% of its value (Kachi & Takahashi 2011). The

multiplicity of disruptive events has spurred renewed scholarly interest in supply chain

resilience (SCRE) (Pettit et al. 2013; Wu et al. 2006), as attempts to tackle disruptions via

traditional risk management approaches are insufficient in the era of highly uncertain and

dynamic business environments (Jüttner & Maklan 2011). Therefore, to combat the

challenges arising from uncertain and dynamic environments, organizations must develop a

resilient approach (Jüttner & Maklan 2011; Brandon-Jones et al. 2014), which Fiksel (2006)

defines as the capacity of an enterprise to survive, adapt, and grow in tumultuous times.

Given the enormous importance of SCRE in the event of disruptive events, a

comprehensive conceptualization of SCRE is of utmost importance. Organizations and their

supply chains must develop both proactive and reactive resilience capabilities to increase the

required level of readiness, response and recovery ability during the pre-disaster and post-

2
disaster phases. Otherwise, supply chain operations will suffer from discontinuity, which

adversely affects both the revenues and costs of the whole chain (Ponomarov & Holcomb

2009). Apart from the proactive and reactive aspects, some studies (Craighead et al. 2007;

Falasca et al. 2008; Azaron et al. 2008; and others) emphasize the quality of supply chain

design in developing SCRE.

A review of the extant literature reveals that a theoretically grounded, comprehensive

conceptualization and measurement of SCRE is lacking (Ponomarov & Holcomb 2009). A

pool of studies (e.g., Pal et al. 2014; Wieland & Wallenburg 2013; Ponis & Koronis 2012;

Jüttner & Maklan 2011; Ponomarov & Holcomb 2009; among others) address the

significance of SCRE. Wieland and Wallenburg (2013) use proactive and reactive dimensions

of resilience, such as robustness and agility. Pettit et al. (2013) and Ambulkar et al. (2015)

develop a framework for SCRE assessment. Pettit et al. (2013) deal with seven vulnerability

factors and fourteen capability factors to develop a resilience score. Ambulkar et al. (2015)

measure SCRE based on four measurement items (coping with changes, being able to adapt

to supply chain disruptions, providing quick response, and maintaining high situational

awareness) and develop a model of the antecedents of “firm resilience”. The authors conclude

that to develop resilience, firms should have a supply chain disruption orientation, a resource

configuration and a risk management infrastructure in place. As will be argued later, supply

chain design is also an important dimension of SCRE (Ponis & Koronis 2012; Haberman et

al. 2015) that we use in our conceptualization of resilience. The theoretical foundations of the

framework/model of resilience are also observed to be deficient in extant studies. Although a

hierarchical approach to resilience has been studied in the extant literature (Pettit et al. 2013),

we take an alternative approach – developing a hierarchical and multidimensional

measurement scale for SCRE using the dynamic capability view (DCV) (Teece et al. 1997;

Eisenhardt & Martin 2000).

3
 The DCV focusses on a firm’s competiveness in a dynamic market of “rapid and

unpredictable change” (Eisenhardt & Martin 2000). It is thus an extension of the traditional

resource-based view (RBV) of the firm (Wernerfelt 1984; Barney 1991). The essential

components of the DCV relate to identifying strategic organizational processes,

reconfiguring resources (integrating, gaining, and releasing), and identifying the path to

follow to attain competitive advantage (Teece et al. 1997, Eisenhardt & Martin 2000). We

argue that supply chain management is a significant strategic organizational process (Tan et

al. 2002) for which resilience (or the lack thereof) must be appraised following a structured

path; thereafter, corrective actions can be taken by identifying and integrating appropriate

resources. Lee (2004) mentions that supply chains need to be “Agile, Adaptable and Aligned”

(the triple-A supply chain) to gain competitive advantage. Since the DCV calls for

developing appropriate capabilities and reconfiguring resources within firms, we argue that

the requirements for a triple-A supply chain can be achieved by managing SCRE via the

DCV. We will show that the components of our SCRE scale (proactive, reactive and design

elements) are essentially dynamic in nature. These elements also need to be agile and

adaptable. We thus take the DCV to conceptualize SCRE. However, the DCV has been

criticized for its lack of “empirical grounding” (Eisenhardt & Martin 2000). In this respect,

our research contributes significantly by developing and empirically testing a scale for SCRE

measurement to determine its effectiveness. In doing so, we adopt the concept of the

“technical” and “evolutionary” fitness of the DCV, as proposed by Teece (2007).

In line with the research objective, this paper used both qualitative and quantitative

methods. In the qualitative approach, we used content analysis on the relevant literature and

field study findings to contextualize the measurement instrument. In the quantitative

approach, a series of studies were conducted to develop and validate the SCRE scale. Once

the dimensions of SCRE were identified from the literature review and the qualitative study,

4
data from study 1 (n = 81 supply chain executives from the apparel industry) were used to

select items based on exploratory factor analysis. Subsequently, confirmatory factor analysis

(CFA) was conducted on data obtained from study 2 (n = 296 supply chain executives) to

examine the factor structure and to provide evidence of dimensionality, scale reliability and

validity. Lastly, in study 3, data from 207 supply chain executives from multiple industries

were used to test the scale generalizability of SCRE measures. Structural equation modelling

(SEM) has been adopted to analyse the collected data. Our findings confirm that SCRE is a

hierarchical (third-order) and multidimensional construct, which is measured by the

following primary dimensions: proactive supply chain capability, reactive capability and

supply chain design quality. These three primary dimensions were further divided into twelve

sub-dimensions.

This study makes several important theoretical and practical contributions to the

existing literature. First, drawing on the DCV (Teece et al. 1997), this study consolidates the

dispersed literature on SCRE and develops and validates an integrated measurement scale for

SCRE construct which is a unique contribution. In the spirit of the DCV, this study assumes

that supply chains must have proactive features, reactive features and proper design qualities

to sense, reconfigure and transform resources in line with environmental changes. Such

dynamic capabilities can be viewed as the resilience capabilities of the organizations and

their supply chains to overcome these turbulent changes. Second, this research addresses the

existing void that studies aligned with the DCV of SCRE have with regard to their empirical

and measurement aspects (Eisenhardt & Martin 2000; Ponomarov & Holcomb 2009).

Therefore, we contribute to the DCV by using the “technical” and “evolutionary” fitness

criteria of Teece (2007) to develop and validate an integrated measurement model for SCRE.

The third contribution of this study is the comprehensive development of a hierarchical and

multidimensional SCRE scale, which is a major contribution to the literature. The SCRE

5
scale is conceptualized and operationalized as a third-order hierarchical model. Supply chain

decision makers will benefit from the findings of our study by developing the necessary

proactive and reactive capabilities and ensuring supply chain design quality.

The rest of the paper is structured as follows: the next section presents the literature

review, followed by a description of the research instrument development process; the

subsequent section presents instrument testing, followed by the confirmatory study; the final

section presents the discussion and implications, along with limitations and avenues for

future research, followed by conclusions.

2. Literature review

2.1 Concept of supply chain resilience

Resilience is a multidisciplinary concept. Holling (1973), one of the pioneering

researchers of resilience, states that resilience is the ability of a system to absorb changes.

Since then, many authors have echoed the concept of resilience as a system’s ability to

recover and return to its original state (e.g., Mitroff & Alpasan 2003; Christopher & Peck

2004). In an organizational context, resilience can be characterized as the organizational

capability to survive in a turbulent environment (Ates & Bititci 2011). Resilience has

ultimately become enormously important in the supply chain domain because of increased

disruptions in the global supply chain. However, scholars still debate how SCRE should be

conceptualized and measured (Jüttner & Maklan 2011), as the studies are ambivalent in

differentiating the measurement and antecedent constructs of SCRE. Existing debates and

gaps in the literature necessitate the conceptualization and empirical investigation of SCRE

measurement constructs.

Bhamra et al. (2011) conduct an extensive literature review on resilience in the

context of small and medium-sized enterprises (SMEs). The authors conclude that research to

6
“empirically prove theories” and to determine whether resilience is a “measure, feature,

philosophy or capability” is urgently needed. Durach et al. (2015) develop a framework of the

antecedents of supply chain robustness, which they conceptualize as a dimension of SCRE.

The authors also discuss proactive and reactive strategies to cope with the “turbulence” in

supply chains. Hohenstein et al. (2015) conduct a systematic and comprehensive literature

review to find the overarching “building elements” of SCRE. The authors conclude that most

research in the resilience domain has been qualitative in nature and that research “assessing

and measuring” SCRE is genuinely lacking. Scholten and Schilder (2015) follow a case study

approach to study the influence of buyer–supplier collaboration in SCRE. The authors show

how collaborative activities “enable visibility, velocity and flexibility” and, in turn, SCRE.

Wieland and Wallenburg (2012, 2013) conceptualize SCRE as agility and robustness. The

authors also argue that an agile strategy is reactive while a robust strategy is proactive.

Thus, as is evident from the existing literature, conceptualizations of SCRE can be

explained from multiple perspectives. Some studies focus on proactive aspects of resilience

(e.g., flexibility, visibility, redundancy, integration, financial strength, and market capability)

(Jüttner & Maklan 2011; Pal et al. 2014; Erol et al. 2010), while other studies embrace

resilience as both proactive and reactive capabilities (e.g., flexibility, redundancy, agility,

recovery time, cost and response effort) (Sheffi & Rice 2005; Christopher & Peck 2004;

Falasca et al. 2008; Martin 2004; Vugrin et al. 2011; Pettit et al. 2013). In a similar vein, the

proactive and reactive concepts of resilience are also interchangeably defined according to

the notions of pre-disaster resilient actions and post-disaster resilient actions (Rose 2004;

Wieland & Wallenburg 2013; Sheffi & Rice 2005). In line with the extant literature, we

assert that supply chains need both proactive and reactive capabilities to adapt, integrate and

reconfigure during the pre-disaster and post-disaster phases surrounding disruptive events.

7
 An examination of the extant literature also reveals that studies, such as Craighead et

al. (2007), Falasca et al. (2008), Azaron et al. (2008), introduce the concept of supply chain

design factors that reduce supply chain vulnerability and increase resilience. According to the

authors, a “complex and critical supply chain” is more susceptible to disruptions that affect

the resilience of the supply chain. The success of supply chain managers depends on their

ability to select appropriate strategies with regard to supply chain design. For example, in an

environment of supply uncertainty, adopting multiple suppliers helps reduce supply side

vulnerabilities. Selecting such strategies can be attributed to defining the path of

competencies in uncertain environments. We argue that, depending on the context, supply

chain design can be considered either proactive or reactive. For example, to satisfy

customers’ needs, companies deliberately design appropriate supply chain (proactive design)

(Vonderembse et al. 2006). However, supply chain design is also dynamic in responding to

changes in the environment (reactive design) (Harland et al. 2003). Companies need to

redesign the supply chain based on their experiences of disruptions in the supply chain

(Fiksel 2006; Chowdhury & Quaddus 2015). Therefore, we have treated supply chain design

as another dimension of SCRE.

2.2 Proactive aspects of supply chain resilience

Supply chains need proactive capabilities to be resilient against disruptions (Pettit et

al. 2010; Christopher & Peck 2004; Jüttner & Maklan 2011). Hollnagel et al. (2006) mention

the proactive resilience capability of a system as the capability to recognize, anticipate and

defend against the changing shape of risk before adverse consequences occur. Tenhiala and

Salvador (2014) emphasize the need for a formal communication channel to cope with

disruptions and improve resilience. Supply chain research emphasizes different proactive

capabilities such as flexibility, redundancy/reserve capacity, robustness, adaptability,

8
collaboration, integration, visibility, market strength, financial strength, diversity, and

efficiency to measure resilience (Pettit et al. 2010; Pettit et al. 2013; Pal et al. 2014; Sheffi &

Rice 2005; Fiksel 2003; Ponomarov & Hollcomb 2009). In addition, Jüttner and Maklan

(2011) focus on proactive capabilities such as flexibility, velocity, visibility and

collaboration. Further, the risk management literature provides a handful of studies (e.g.,

Knemeyer et al. 2009; Grötsch et al. 2013; Sullivan & Branicki 2011; and others) that discuss

proactive capabilities such as proactive planning, buyer–supplier relational quality,

resourcefulness, readiness and rapidity to mitigate disruptions in organizations and their

supply chains. Based on the commonalities in the literature, flexibility, redundancy/reserve

capacity, integration, efficiency, market strength, and financial strength can be regarded as

proactive supply chain capabilities. Although a number of studies identify different proactive

capabilities to mitigate supply chain disruptions (e.g., Jüttner & Maklan 2011; Pettit et al.

2013), empirical validation of the dimensions of supply chain proactive capabilities and their

sub-dimensions has yet to be established. Therefore, this study validates supply chain

proactive capabilities and their sub-dimensions within a hierarchical and higher-order SCRE

scale.

2.3 Reactive aspects of supply chain resilience

In line with Sheffi and Rice (2005) and Ponomarov and Holcomb (2009), the reactive

facets of SCRE can be established based on the response and recovery abilities of

organizations.

Supply chain response concerns mitigating disruptions in the shortest possible time

and with the smallest impact (Pettit et al. 2013). The ability to respond quickly to market

needs during critical situations is an important determinant of SCRE (Sheffi & Rice 2005;

Wieland & Wallenburg 2013). Hence, we also argue that supply chains should be able to

9
respond quickly to return to normal or stronger positions. To explain the resilience capability

of successful companies during the global financial crisis, Jüttner and Maklan (2011) state

that resilient companies can respond to environmental changes more quickly than their non-

resilient counterparts. An organization’s ability to respond quickly to environmental forces is

arguably a distinctive capability that is a unique source of competitive advantage.

Recovery from disruptions is a critical and distinctive capability of organizations and

their supply chains. Some systems, whether a business network, an ecological system or a

nation, can recover quickly from disasters because of their idiosyncratic capabilities. In line

with the research of Wang et al. (2010), Sheffi & Rice (2005) and Välikangas (2010), such

capabilities can be attributed as the resilience of a dynamic system. The extant literature

(Wang et al. 2010; Sheffi & Rice 2005; Willroth et al. 2001; and others) mostly measures

resilience in terms of recovery time. However, the cost of recovery effort should also be

considered (Vugrin et al. 2011). Martin (2004) includes cost as a parameter for measuring

resilience. Similarly, other studies, such as Vugrin et al. (2011), emphasize on the cost of

resilience. A system may recover in less time (Wang et al. 2010), with less effort and at lower

cost (Vugrin et al. 2011) because of its efficiency and unique ability to absorb the shock

(Holling 1973) or reduce the impact of the disruption (Rose 2004) or its inherent ability to

return to its original position (Christopher & Peck. 2004). Therefore, resilience can be

measured by the extent of recovery time, cost, disruption absorption and ability to reduce the

impact of the loss.

Although a few studies illustrate the concept of supply chain reactive capability to

explain SCRE, the literature lacks empirical validation of supply chain reactive capabilities.

Therefore, this study empirically validates the supply chain reactive capabilities within the

SCRE scale.

10
2.4 Supply chain design quality

A number of studies (Craighead et al. 2007; Falasca et al. 2008; Speier et al. 2011;

Ponis & Koronis 2012; among others) illustrate the relevance of supply chain design issues

for supply chain risk and SCRE. For example, Ponis and Koronis (2012) characterize SCRE

as the ability of a supply chain to proactively plan and design its network to anticipate

ensuing supply chain disruptions and to respond to disruptions effectively. Haberman et al.

(2015) study the impact of the dispersion and co-location of supply chain partners to reduce

supply chain disruption risk. In line with previous studies (e.g., Craighead et al. 2007; Falasca

et al. 2008), supply chain design quality is conceptualized in terms of supply chain node

density, complexity and criticality.

Node density is high in a supply chain where a large number of nodes exist in a

limited geographical area (Craighead et al. 2007; Falasca et al. 2008). Supply chain nodes

exist in high-density clusters when the sources of supply or distribution markets are

concentrated in a particular area. By contrast, nodes are expanded when the sources of supply

and the markets are diverse (Kleindorfer & Saad 2005). Craighead et al. (2007) and Falasca

et al. (2008) emphasize that increased density in the supply chain creates more vulnerabilities

and reduces SCRE. Therefore, node density is an important attribute of supply chain design

quality.

Complexity is related to both the number of nodes in a supply chain and the

interconnections between those nodes (Craighead et al. 2007). For example, the large number

of forward and backward flows in the supply chain (Bozarth et. al. 2009) due to the numerous

components and parts required for the product and the extensive inter-firm relations among

different members in the supply chain network (Choi & Krause, 2006) makes a supply chain

more complex (Craighead et al. 2007; Perona & Miragliotta 2004). A less complex supply

chain would have fewer nodes and/or fewer interconnections between nodes (Craighead et al.

11
2007; Falasca et al. 2008). Increased complexity in the supply chain usually creates more

vulnerabilities (Craighead et al. 2007; Falasca et al. 2008). However, additional nodes that

create a buffer in the supply chain reduce vulnerability. For example, sourcing from multiple

suppliers instead of a single supplier increases supply chain node complexity but reduces

vulnerability through enhanced flexibility and resilience (Falasca et al. 2008; Wagner & Bode

2006). Sourcing from alternative suppliers, which opens alternatives during supply

disruptions, is another way to reduce vulnerability (Jüttner 2005; Berger et al. 2004).

Arrangements with alternative suppliers also allow the organization to reduce supply cost

risks, i.e., supply disruptions due to cost inflammation (Tang & Tomlin 2008).

Node criticality depends on the relative importance of a given node or set of nodes

within a supply chain (Craighead et al. 2007). A very important node (e.g., an important

distributor or supplier on which others in the supply chain are highly dependent) makes the

supply chain critical and vulnerable. A critical transportation hub during sourcing and

distribution (e.g., freight consolidation in Singapore) also creates supply chain criticality

(Craighead et al. 2007). Alternate distribution channels are important when a critical

transportation hub exists during sourcing and distribution (Craighead et al. 2007; Falasca et

al. 2008). Colicchia et al. (2010) have also shown the effectiveness of using alternative

transportation modes to reduce transportation risk while outsourcing from a complex and

distant location. Thus, supply chain node criticality is an important element of supply chain

vulnerability and SCRE.

2.5 Theoretical justification

The need for resilience capability requirements in the wake of disruptive events can

be analysed through the lens of the DCV (Teece et al. 1997), which is an extension of the

RBV (Wernerfelt 1984; Barney 1991). The RBV stresses that organizations need to develop

12
capabilities to overcome difficulties and to gain competitive advantage. However, the

traditional RBV lacks proper delineation of capabilities when dynamic changes occur in

uncertain environments. The DCV addresses this gap in the traditional RBV by planning

appropriate resources and capabilities to respond to situation-specific changes (Teece et al.

1997; Eisenhardt & Martin 2000), thereby addressing the idiosyncrasies of contingencies.

The basic premise of the DCV is a firm’s capacity to integrate, build and reconfigure

organizational resources using its processes to respond to environmental changes and

uncertainties and to design new value-creating strategies (Teece et al. 1997; Eisenhardt &

Martin 2000). In the same vein, we argue that organizations’ supply chains need to develop

dynamic capabilities to mitigate vulnerabilities in an uncertain environment, which

necessitates resilience capabilities to survive in the long run.

The proactive and reactive capabilities of SCRE can be expounded upon through the

lens of the DCV (Teece et al. 1997). According to the DCV, firms must have the capability to

adapt, integrate, and reconfigure their resources and capabilities to address rapidly changing

environments. To accelerate such changes, organizations must be proactive in scanning

environmental changes and obtaining the necessary flexibility and adaptability (Teece et al.

1997) which, in our study, is commensurate with the supply chain proactive capability to

adapt to environmental changes and to prevent potential vulnerabilities in the supply chain.

The DCV (Teece et al. 1997) stresses that winning companies in the market should

reconfigure their resources and capabilities quickly to recover competencies during turbulent

times. We also argue that supply chains should have the reactive capability to reconfigure

resources and capabilities to recover quickly from disruptions.

Pettit et al. (2013, pp. 47) introduce the concept of “balanced resilience”, which is

essentially the balance between increasing resilience capabilities and increasing costs to

control vulnerabilities. Grounded in the DCV, Ponomarov and Holcomb (2009) emphasize

13
the importance of resource/capability specificity and their adequate measurement to sustain

profitability by improving the resilience balance. Although the extant literature (e.g., Jüttner

& Maklan 2011; Christopher & Peck 2004; Ponomarov & Holcomb 2009, etc.) provides a

framework for resource specificity of SCRE, the tenets of resource measurement for SCRE

are still lacking (Ponomarov & Holcomb 2009). The central premise of this study is to

explain and extend the measurement aspect of dynamic capabilities in the context of SCRE to

combat challenges arising from environmental uncertainties. In this study, we propose the

specification and measurement of dynamic capabilities in terms of proactive and reactive

capabilities in the context of SCRE. Therefore, this study provides a significant extension of

dynamic capability theory.

Based on the discussions above on the DCV and its links with the dimensions of

SCRE, this paper conceptualizes SCRE as “the characteristics of a well-designed supply

chain network with proactive and reactive capabilities, which enables the supply chain

members to reduce the probability of disruptive events (or to reduce their impact) to take the

organization to a stronger and more sustainable state”. Our extended definition of SCRE is

in line with the notion of resilience put forward by Fiksel (2006), who conceptualizes

enterprise resilience as “the capacity for an enterprise to survive, adapt, and grow in the face

of turbulent change”. In line with the DCV, companies can use disruptions as opportunities

to learn, grow, and perhaps move to a different “state” by allocating idiosyncratic resources

through SCRE management.

3. Methodology

To develop a scale to measure SCRE, we have followed the research process shown

in Table 1, in line with Akter et al. (2013), Rosenzweig and Roth (2007) and Shafiq et al.

(2014). This study appropriately uses both qualitative and quantitative approaches to conduct

the research. In doing so, the recommendations of Fawcett et al. (2014) are strictly followed.

14
In the context of qualitative research, Fawcett et al. (2014) recommend that the context of the

study, the sample, and data analysis be transparent. In our research process, we conduct a

qualitative study in two phases: an extensive literature review to conceptualize SCRE and a

field study to explore the dimensions of SCRE further. In each phase, we follow the

recommendations of Fawcett et al. (2014) (see the next section for further detail). In addition,

Fawcett et al. (2014) mention that good quantitative research must elucidate the following:

the sample frame and characteristics, data collection/questionnaire administration, non-

response bias, common method bias, scale development, measurement validation, and (data

analysis) method selection. In our research, an extensive quantitative study is conducted

during the instrument testing and scale generalizability phase. We strictly follow all the

recommendations suggested by Fawcett et al. (2014) (see the following sections for further

detail).

Our study also follows the guidelines and recommendations of MacKenzie et al.

(2011) for scale development. The scale development procedure specified by MacKenzie et

al. (2011; Figure 1, pp. 297) includes Conceptualization, Development of measures, Model

specification, Scale evaluation and refinement, Validation and Norm development. Our scale

development process (Table 1) is very much in line with the procedure of MacKenzie et al.

As will be shown later, we conceptualize SCRE as having both reflective and formative

indicators. Hence, we pay special attention to the discussions by MacKenzie et al. (2011, pp.

300-303) with regard to reflective and formative indicators in scale development.

(Insert Table 1 about here)

3.1. Conceptualization of supply chain resilience (SCRE)

To conceptualize the dimensions of SCRE, this study began by investigating commonly cited

items for each dimension of SCRE, as outlined in the literature review section. The literature

15
review reveals that SCRE is a multidimensional and hierarchical concept. Through this

process, three primary dimensions were identified that reflect SCRE: proactive supply chain

capability, reactive supply chain capability and supply chain design quality. However, the

literature review also reveals many sub-dimensions for each of these primary dimensions.

The SCRE capability is also found to be context dependent (Pettit et al. 2013). Therefore, we

conducted an exploratory qualitative study to explore the sub-dimensions of the three primary

dimensions of SCRE and to confirm the contextual appropriateness of the dimensions

identified in the literature review.

3.2. Instrument development process

The formal instrument development process started with a qualitative field study. The

findings from the qualitative study were then justified based on the literature. Item creation

and item sorting were then performed for scale development.

3.2.1 Qualitative study

This study collected data from the apparel industry in Bangladesh, one of the leading

apparel exporters in the world. The apparel industry is the economic propeller of Bangladesh,

accounting for 78.6% of total export earnings and direct employment for over 4 million

workers, of which 80% are women. In 2011, apparel exports from Bangladesh amounted to

USD 19.90 billion, making the country the second largest apparel exporter in the world

(BGMEA 2012). Despite its huge potential, the apparel supply chain is facing a climax

situation due to the multiple challenges, such as labour unrest due to human rights violations,

poor wages, a lack of safety measures and hazardous working environments, environmental

pollution, political instability, interruptions in utility supply, power shortages, and inefficient

customs and port management (Islam et al. 2012; Islam & Deegan 2008; Haider 2007; Paul-

16
Majumder 2001; Nuruzzaman 2009). These challenges pose threats to the sustainability of

apparel supply chain in Bangladesh and thus call for an exploration of the resilience

capabilities of the apparel supply chain in Bangladesh.

In our study, we obtained qualitative data from 15 in-depth interviews conducted with

supply chain decision makers in apparel manufacturing companies, accessory producing

companies (suppliers) and buying agents. Table 2 presents the profile of the respondents.

Each interview lasted for approximately 45–60 minutes. In each case, respondents were asked

a number of questions to explore their SCRE practices to mitigate supply chain

vulnerabilities. The interview responses were recorded, scripted, coded and categorized to

identify the themes and sub-themes for different dimensions of SCRE. The extracted

dimensions were then matched with the literature to support our findings to ensure the

content validity of the measurement instrument. For the sake of brevity, the details of the

qualitative study are not reported in this paper. Table 3 summarizes the factors and variables

derived from the qualitative study and the enterprises (interviewees) that expounded upon the

specific variables.

(Tables 2 and 3 about here)

3.2.2 Justification of field study findings based on the literature

The constructs and variables from the field study were confirmed based on evidence

provided in the literature. The selected factors and variables in the field study were derived

based on the commonalities in and consistency of the responses. Table 4 presents the factors

and variables that align with the relevant literature. As shown in Tables 3 and 4, SCRE is a

multidimensional construct that can be measured by the following dimensions: proactive

capability, reactive capability and supply chain design quality. Supply chain proactive

capability is measured by the following dimensions: supply chain disaster readiness,

17
flexibility, reserve capacity, integration, efficiency, market strength and financial strength.

The reactive capability is measured by the response and recovery dimensions. Finally, supply

chain design quality is measured by the following dimensions: the density, complexity and

criticality of the network. These constructs and their interrelationships are the inputs for our

research model.

Table 4 also shows the items that fall under the constructs “operational vulnerability”

(OV) and “supply chain performance” (SCP) constructs. These two constructs are used to test

the nomological validity of the SCRE scale, which is described in section 3.3.3 below.

(Table 4 about here)

3.2.3 Scale development

To develop scales for the SCRE dimensions (i.e., proactive capability, reactive

capability, and supply chain design quality), item creation and item sorting were performed

next (Akter et al. 2013; Rosenzweig & Roth 2007; Shafiq et al. 2014). On the one hand, item

creation was performed to ensure content validity by selecting the appropriate items for the

construct. On the other hand, item sorting was conducted to affirm both content validity and

construct validity by determining the convergence and divergence of the items for each

dimension. After the item sorting and pretesting procedure, the refined instrument was tested

in a pilot study. In the pilot study process, factors were categorized through exploratory factor

analysis, and the findings resembled those in the literature and the field study.

3.2.3.1 Item creation

Using the existing literature, a pool of items for each SCRE dimension was created.

To develop a parsimonious SCRE scale, we very carefully selected the items for each

dimension from the existing literature. For example, in previous studies (Swafford et al.

2006; Braunschidel & Suresh 2009), supply chain flexibility has been measured by a large

18
number of items; however, we selected the items most relevant to SCRE and the research

context. The findings from the qualitative study were compared with the existing literature to

determine which items to add or delete from the item pool created from the literature review.

To develop scales for supply chain proactive capability, most of the items were adapted from

Pettit et al. (2013); however, no valid and reliable scales were identified to measure reactive

capability and supply chain design quality. Therefore, new scales must be developed for these

constructs. For reactive capability, such as the response and recovery sub-dimensions, items

were selected from a number of studies (e.g., Sheffi & Rice 2005; Pettit et al. 2013; Vugrin et

al. 2011) with context-specific modifications. To develop items for supply chain design

quality, items were selected mainly from the study of Craighead et al. (2007). Finally, item

pools were created for the twelve sub-dimensions of SCRE with an extensive re-evaluation of

the existing items from the literature and the qualitative study and the addition/adaptation of

new items to contextualize the study model. The seeming redundant or confusing items were

eliminated. The selected items went through further reliability and validity tests in the

quantitative phase of the study.

3.2.3.2 Item sorting

As mentioned earlier, item sorting was conducted to ensure domain coverage and the

reliability of the items under each construct. First, we evaluated the domain coverage using

the judgements of three experts (two scholars and one supply chain manager). The experts

applied the Q-sort procedure, which ensures the correct placement of items under different

constructs, to sort each SCRE sub-dimension item (Rosenzweig & Roth 2007). This

procedure provided adequate evidence of construct validity with respect to the selected items

under each construct. Second, two different experts (a scholar and a supply chain manager of

the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)) undertook

two rounds of sorting. Using the data from the two rounds of the Q-sort process, the

19
reliability of the item classifications for different dimensions was assessed. Reliability was

evaluated based on the placement ratio of the items under a specified dimension/construct.

The item placement ratio results from the final round (see Table 5) show that a total of 125

correct placements (or “hits”) were achieved out of 147 possible item placements (49

measurement items with 3 respondents), resulting in an aggregated hit ratio of 84.6% (see

Table 5). In this Q-sorting process (the final round), no individual hit ratio fell below 75%,

which is the accepted cut-off value according to Menor and Roth (2007). Table 5 also shows

that the associated average kappa (Cohen 1988) (the average from rounds 1 and 2) for the

inter-judge agreement scores for each construct exceeds the cut-off value (≥65%) for inter-

judge agreement scores (Moore & Benbasat 1991; Akter et al. 2013). Therefore, based on the

overall findings, an aggregate of 49 items from different sub-dimensions was selected for the

preliminary questionnaire development (Table 7).

(Table 5 about here)

3.3 Instrument testing

The instrument testing process started by developing a primary version of the

questionnaire and pretesting the questionnaire to make necessary modifications. Following

the pretesting process, a pilot study was conducted to identify the factor structure through

exploratory factor analysis. Based on the dimensions identified from exploratory factor

analysis, a SCRE model was then specified and tested through a confirmatory study.

3.3.1 Development of initial questionnaire and pretesting

A primary version of the questionnaire was prepared, and the 62 questions (49

corresponding to SCRE scale) were answered on a 6-point Likert scale. For the sake of

brevity, the questionnaire is not included in the paper. Before conducting the pilot study, the

developed instrument was pretested on 10 respondents (4 supply chain managers from

20
apparel manufacturing companies, 3 from accessory producing companies, 1 buyer/buying

agent and 2 supply chain scholars) to ensure that the questions were appropriate in terms of

their wording, order, layout and clarity. Based on respondents’ feedback, some statements in

questionnaire needed further clarification. For example, the “contract flexibility with supply

chain partners” item was elaborated by adding partial orders, partial shipments and partial

payment facility (see FLX4 of Table 7). All comments were considered in the final design of

the questionnaire. The final version of the questionnaire was then prepared for a pilot study to

test the instrument.

3.3.2 Pilot study

The pilot study of the SCRE scale was conducted with real data. Supply chain

managers were targeted for data collection. One hundred ten managers were approached, and

86 managers (54 managers from apparel manufacturers, 25 from accessory supplying

companies and 7 from buying agents) ultimately agreed to participate in the survey. After two

rounds of follow up, 86 responses – 5 of which were found to have incomplete data or to be

extreme outliers – were obtained. These five responses were discarded, resulting in 81 usable

responses from the pilot study. We used a back-translation procedure (Brislin 1970) to

translate the questionnaire into the local Bengali language. As literal back-translation suffers

from conceptual equivalence issues, we used a collaborative team approach (inviting two

other academics) to achieve the conceptual equivalent back-translation (Douglas & Craig

2007). The respondents were offered both English and Bengali versions of the questionnaire.

Most of our respondents chose the English version of the questionnaire. However, they also

took the Bengali version as a backup to clarify some questions. This practice was followed

for all subsequent data collection and worked very well.

21
 Table 6 presents the demographic profile of pilot study respondents. We conducted

exploratory factor analysis on the pilot study (see Table 7) data using the varimax rotation

procedure to assess the initial measurement scale. We also used the Kaiser–Meyer–Olkin

(KMO) test and Bartlett’s test of sphericity to evaluate the appropriateness of the factor

analysis. The KMO test ensured the overall sampling adequacy with a value of 0.725 (>0.50).

Bartlett’s test of sphericity provided evidence of the validity of the instrument (2167.958, df

= 1035, significant at p = 0.000). Twelve factors with eigenvalues of greater than 1 were

extracted (see Table 8). The twelve components had a cumulative variation explained of

71.050%.

In evaluating the results of the factor analysis, items were deleted that had loadings of

<0.40 or that had cross loadings (>.5) with other factors. The Cronbach’s alpha values

corresponding to each construct were also examined to ensure reliability, revealing that the

Cronbach’s alpha values of the extracted factors exceeded the minimum threshold of 0.70.

For further scale refinement, corrected item–total correlation was also examined to improve

reliability (see Table 8). The initial instrument was refined by removing items with low

loadings or cross-loaded items. Thus, of the initial 49 items, 40 items were retained for the

next stage of confirmatory analysis.

(Tables 6, 7 and 8 about here)

3.3.3 Model specification

Based on the factor structure of SCRE in the exploratory study and evidence from the

literature, a research model (see Figure 1) is proposed to measure the dimensions of SCRE

and their relationship with supply chain OV and SCP. We postulate SCRE as a hierarchical

(third-order) model with three primary dimensions (i.e., supply chain proactive quality,

supply chain reactive quality, and supply chain design quality) and twelve sub-dimensions.

22
Regarding the issue of reflective and formative constructs, we first followed the decision

criteria of Jarvis et al. (2003) and Polites et al. (2011). We thus argue that the relationship of

the focal construct with sub-constructs (second- and third-order constructs; see Figure 1) can

be operationalized as reflective (Jarvis et al. 2003). For example, in this study, proactive

resilience capability is reflected by the supply chain readiness, flexibility, reserve capacity

and integration sub-dimensions. These sub-dimensions are interrelated and interdependent;

for example, to increase flexibility, reserve capacity and integration is essential (Sheffi &

Rice 2005). Moreover, integration and redundant capacity are also interrelated (Chen &

Daugherty 2009). For first-order constructs, we followed the guidelines of MacKenzie et al.

(2011), who argue that “Constructs are not inherently, formative and reflective in nature, and

most can be modelled as having either formative or reflective indicators…” (p. 302).

MacKenzie et al. (2011) also state that, from an ontological perspective, a construct with

reflective indicators is a “real entity that exists independently”, while a construct with

formative indicators is “seen as a theoretical construction (rather than real entity)”, which is

constructed by the items of the construct (pp. 303). Therefore, in our study, we heeded the

recommendations of three academic experts to decide on the reflective and formative

constructs at the first-order level 1 . The three academic experts are knowledgeable in the

SCRE area. After two rounds of semi-Delphi opinion collection, we settled on flexibility,

integration, financial strength, response and recovery as reflective constructs and reserve

capacity, efficiency, market strength, density, complexity, criticality, and disaster readiness as

formative constructs (see Figure 1). Hence, SCRE is a mixed reflective–formative type of

multidimensional, hierarchical construct.

(Insert Figure 1 about here)

1
We are indebted to one of the reviewers who suggested this.

23
 To assess the nomological validity of the higher-order reflective SCRE model, we

tested the relationship with related outcome constructs (Churchill 1995). Well-grounded

theoretical support allows us to a negative relationship between SCRE and supply chain OV

(Jüttner & Maklan 2011; Ponomarov & Holcomb 2009) and a positive relationship between

SCRE and SCP (Pettit et al. 2013; McCann et al. 2009). In line with Sheffi (2005; p. 25), we

assert that OV comprises “everything from supplier disruptions to theft by employees. These

are mainly disruptions to the means of production”. Sheffi (2005; p. 25) categorizes

vulnerabilities as financial, hazard, strategic and operational risks. We claim that financial,

hazard and strategic vulnerabilities can be grouped as “non-operational” vulnerabilities.

Figure 1 shows the resilience model with its predicted relationship between OV and SCP.

The literature shows that SCRE is essential in reducing vulnerabilities (Christopher &

Peck 2004; Ponomarov & Holcomd 2009; Pettit et al. 2013). The extant literature also reveals

a multiplicity of OV factors, such as utility crisis, poor quality, supply problems due to the

loss of key suppliers or problems in the suppliers’ plants, logistics mode and route

disruptions, and IT system failures (Blos et al. 2009). These vulnerability factors have a huge

impact on the supply chain if they are not addressed in time (Ponomarov & Holcomb 2009),

particularly when disruptions have spiral effects on the supply chain network (Christopher &

Lee 2004). For example, disruptions in the suppliers’ plants have an impact on the operations

of manufacturers and the sales of distributors. As noted earlier, Ericsson lost USD 400

million in revenue due to a fire in its chip supplier’s plant (Tomlin 2006). However, due to its

resilient approach, Nokia overcame the OV arising from a similar disruption, which saved it

from potential financial losses and delays in serving customers (Tomlin 2006). Pettit et al.

(2013) show that SCRE has a positive impact on SCP. Hendricks and Singhal (2003) reveal

that announcing supply chain disruptions (such as an operational issue or a delay in shipment)

decreases shareholder value significantly. Therefore, the development of resilience

24
capabilities is essential to mitigate OV, thereby reducing economic losses and securing SCP.

These arguments indicate the dynamic relationships between SCRE and OV and between

SCRE and SCP. Therefore, the arguments above lead us to posit the following hypotheses:

Hypothesis 1 (H1): Supply chain resilience has a direct negative impact on operational vulnerability.

Hypothesis 2 (H2): Operational vulnerability has a direct negative impact on supply chain

performance.

Hypothesis 3 (H3): Supply chain resilience has a direct positive impact on supply chain performance.

Hypothesis 4 (H4): Supply chain resilience has an indirect impact on supply chain performance

through mitigating operational vulnerability.

3.3.4 Confirmatory study

Although the items and the factor structure of the proposed SCRE scale were

validated in the pilot study, it provided little evidence of convergent and discriminant

validity. As a result, we used confirmatory factor analysis (CFA) (McFarlan et al. 1983) to

thoroughly assess the refined instrument using larger samples. Data were collected from a

cross-section of garment manufacturers, accessory producers and buying agents via face-to-

face and mailed surveys. Three hundred fifty respondents were targeted for this phase of the

study. Ultimately, 296 usable responses were collected. Table 9 shows the profile of the

respondents. The sample size of 296 is adequate for data analyses using partial least squares

(PLS)-based SEM (Chin 1998; Chin & Newsted 1999), which is our chosen method.

We performed a non-response bias (more specifically, late response bias) test on the

early and late respondents (Armstrong & Overton 1977) based on the selection of some

variables. Table 10 shows that response bias is not a cause for concern in our data. As the

data were collected from a single respondent from each firm and were gathered using a cross-

sectional research design, common method variance may result in systematic measurement

25
error (Huber & Power, 1985). Following Podsakoff et al. (2003), several efforts were made to

reduce the chance of common method bias ex ante. First, data were carefully collected from

respondents who possessed relevant knowledge in the subject area. For example, the supply

chain managers or the people involved in supply chain functions within an organization were

selected. Second, the respondents were assured that their responses would remain

anonymous. Third, the questions were designed to be simple and specific to avoid ambiguity.

Some terminology was explained with relevant examples so that the respondents could easily

understand the intended meaning of the scale item. Fourth, the researcher attempted to avoid

double-barrelled questions. Fifth, the independent and dependent variables in the survey was

addressed separately.

As shown in Figure 1, SCRE is the only exogenous variable in our research model

(Figure 1), which has two endogenous variables: OV and SCP. Three primary sources of

endogeneity problems are “omitted variables”, “simultaneity” (also referred as the “direction

of causality”), and “measurement error”. For detailed discussions of these issues and more,

see Roberts and Whited (2013) and Guide and Ketokivi (2015). We are confident of the

direction of causality in our research model, as detailed in the hypothesis development

section above. Hence, the direction of causality (Guide & Ketokivi 2105) does not present

any endogeneity problem in our case. We have attempted to minimize the measurement

errors following an extensive procedure of measurement item selection and data collection

and conducting extensive reliability and validity tests of our instruments. However, as with

any other research model, the issue of omitted variables will remain a limitation of our

model.

(Tables 9 and 10 here)

To estimate the hierarchical SCRE model, this study applied PLS-based SEM (Chin

1998) for the following reasons. The research model developed in this study is hierarchical

26
and complex, containing 18 constructs (i.e., 12 first-order, 3 second-order, 1 third-order and 2

outcome constructs) and 40 items. Because of its component-based approach, PLS-based

SEM will be able to easily find solutions to this complex hierarchical model (Chin 1998, Hair

et al. 2013). PLS also helps achieve more theoretical parsimony and less model complexity in

assessing the hierarchical model (Akter et al. 2013). In addition, the research model includes

both formative and reflective measurement constructs. PLS-based SEM can readily handle

formative and reflective constructs in the same model (Hair et al. 2011).

Based on the arguments above, this study deployed PLS-based SEM (Smart PLS v. 3)

to estimate this hierarchical, multidimensional SCRE model. PLS has recently been used for

scale development, and it also has a goodness-of-fit (GoF) measure (Akter et al. 2013).

Therefore, using PLS-based SEM seemed logical to develop and validate a multidimensional

and hierarchical SCRE model. To estimate the higher-order construct of SCRE, this study

used a two-stage approach to simplify the model (Wetzels et al. 2009; Becker et al. 2012).

Nonparametric bootstrapping (Efron & Tibshirani 1993; Wetzels et al. 2009) has also been

applied with 1,000 replications to obtain the standard errors of the estimates.

3.3.4.1 Assessment of the first-order items

The data were initially screened, and missing data for any item were replaced by the

mean values of that item, in line with Hair et al. (2013). Table 11 presents the results of the

first-order item assessment, along with the means and standard deviations of all items. The

means are generally greater than 4 on a six-point scale. Hence, our sample items do not

follow a normal distribution, which poses no problem because we are using PLS for data

analysis. For covariance-based SEM (e.g., LISREL or AMOS), an estimator that can address

non-normal distribution, for example, robust weighted least squares (WLS), must be used.

For more information, see Finney and DiStefano (2013). With regard to construct reliability,

the results clearly show that the composite reliability (CR) for all of the subscales ranges

27
from 0.845 to 0.917, which meets the threshold value of 0.7 suggested by Nunnally (1978)

and Hair et al. (2011). Convergent and discriminant validity were tested to assess the

construct validity of the SCRE scale. The average variance extracted (AVE) for each

factor/construct (see Table 11) and the loading of the items corresponding with each

factor/construct were inspected to examine the convergent validity of the SCRE scale. The

analysis shows that the AVEs ranged from 0.681 to 0.813, exceeding the minimum threshold

of 0.5 (Fornell & Larcker 1981; Henseler et al. 2009; Hair et al. 2011). Table 11 also shows

that some items have been deleted due to low loadings and/or high cross-loadings. All other

remaining items have significant loadings and/or weights at p < 0.01 (see Table 11) (Henseler

et al. 2009; Hair et al. 2011). Thus, the scale for the SCRE dimensions possesses adequate

convergent validity. The SCP outcome construct has been modelled as a reflective construct

in line with the literature (Pettit et al. 2013; McCann et al. 2009); this construct also possesses

adequate item reliability (all loadings > 0.7), with an AVE of 0.775 and CR of 0.853.

However, the OV outcome construct has been modelled as a formative construct (Jüttner &

Maklan 2011; Ponomarov & Holcomb 2009). Table 11 shows that the item weights and/or

loadings are all significant for this construct (Hair et al. 2011).

In a recent paper, Henseler et al. (2015) show that the heterotrait-monotrait (HTMT)

ratio of correlations is superior to Fornell and Larcker’s (1981) AVE-SE method for testing

discriminant validity. Therefore, we used the HTMT method to test the discriminant validity

of the SCRE scale. Table 12 presents the HTMT results for all the SCRE constructs. The low

values (<0.85; Henseler et al. 2015) in Table 12 confirm the discriminant validity of the

scale. High multicollinearity among the indicators in formative constructs can pose problems.

Hair et al. (2011) recommend 5 as the maximum threshold value for the variance inflation

factor (VIF) in detecting multicollinearity. Table 13 shows that multicollinearity is not a

problem for the formative constructs in our study. Therefore, we conclude that the

28
measurement model is satisfactory given the evidence of adequate reliability, convergent

validity, discriminant validity and a lack of multicollinearity among the formative constructs.

(Tables 11, 12 and 13 about here)

3.3.4.2 Assessment of the higher-order scale

The results of higher-order assessment are shown in Table 14. Table 14 clearly shows

that the CRs and AVEs of the higher-order scales are greater than 0.70 and 0.50, respectively,

providing evidence of reliable higher-order measures. An assessment of the higher-order

constructs also confirms that the SCRE has a strong association with the second-order

constructs of supply chain proactive capability (β = 0.886, t = 85.2), supply chain design (β =

0.762, t = 75.4), and supply chain reactive capability (β = 0.839, t = 52.8) (see Figure 2),

which explains 87.9%, 66.5%, and 78.6% of overall SCRE variance, respectively (see Figure

2). This assessment also affirms that supply chain proactive capability has a strong

association with flexibility (β = 0.796, t = 43.72), reserve capacity (β = 0.679, t = 12.48),

integration (β = 0.868, t = 76.8), efficiency (β = 0.748, t = 38.25), market strength (β = 0.839,

t = 79.21), financial strength (β = 0.812, t = 87.15) and supply chain readiness (β = 0.823, t =

80.79). The supply chain design has strong associations with node density (β = 0.868, t =

84.2), complexity (β = 0.856, t = 88.3), and node criticality (β = 0.752, t = 312.6). Finally, the

supply chain reactive capability has a strong association with supply chain response (β =

0.834, t = 91.7) and supply chain recovery (β = 0.865, t = 94.8) (see Figure 2).

(Table 14 and Figure 2 about here)

3.3.4.3 Assessment of the nomological and predictive validity

As noted above, this study obtained the following R2 (the coefficient of

determination) values, which are rather large (>0.50) (Hair et al. 2011): 0.879 for proactive

capability, 0.665 for supply chain design quality and 0.786 for reactive capability (see Figure

29
2). In addition, the nomological and predictive validity of the higher-order multidimensional

SCRE construct is assessed by examining its relationship with the following outcome

constructs (Akter et al. 2013; Mackenzie et al. 2011): “supply chain operational

vulnerability” and “supply chain performance”. The results yield standardized beta

coefficients of β = -0.615 (t = 14.36) from SCRE to supply chain OV, β = -0.092 (t = 2.59)

from supply chain OV to SCP, β = 0.703 (t = 19.82) from SCRE to SCP and β = 0.419 (t =

8.78) from SCRE to SCP through OV (see Figure 2 and Table 15). The path coefficients are

all significant (p < 0.001) (see Figure 2 and Table 15), thus supporting hypotheses 1, 2, 3 and

4. As all these path coefficients are significant (p < 0.001), the nomological validity of SCRE

is ensured (Akter et al. 2013).

This study also used Stone–Geisser’s Q2 (Stone 1974; Geisser 1974) to test the predictive

validity of the higher-order multidimensional SCRE construct. Using a cross-validated

redundancy approach, this study obtained Q2 values of 0.63 for supply chain OV and 0.579

for SCP. To ensure high predictive validity, Q2 should exceed zero (Chin 2010; Fornell &

Bookstein 1982). Therefore, the results of this study reveal the predictive validity of the

higher-order SCRE measurement.

(Table 15 about here)

3.3.4.4 Assessment of the overall parameters

To assess the overall parameters of the SCRE model, we examined the statistical

power and the GoF measure of the model. This study used G*Power 3.1 (Faul et al. 2009) to

obtain the statistical power of the model to assess the robustness of the hierarchical SCRE

scale. The overall power of the model is 95.8, and the t value is 1.68. The statistical power in

this study exceeds the required power (80%) suggested by Cohen (1988). Therefore, the

study has adequate confidence in the hypothesized relationships in the model. This study also

30
used AVE and R2 values to estimate the GoF index to measure the overall fitness of the

proposed model (Wetzels et al. 2009). The GoF of the model was 0.661, which is large

according to Wetzels et al. (2009). Therefore, the fit index for this model is satisfactory.

3.3.4.5 Technical and evolutionary fitness of SCRE Model

We argue that our SCRE model is a dynamic capability tool (Eisenhardt & Martin

2000, p. 1118), which organizations can use to improve SCRE. Using the SCRE model

effectively calls for the development of and allegiance to a process (and hence a unique path

to transform the organization) and the identification of a supportive “resource configuration”

(a unique position) (Teece et al. 1997). As Eisenhardt and Martin (2000, p. 1108) suggest, the

SCRE model has both “communalities” and “idiosyncrasies”. For example, the three basic

dimensions (proactive, reactive and supply chain design) and twelve sub-dimensions are the

unique features (commonalities) of the SCRE model. However, their measurements may vary

depending on the organizations, thus revealing the idiosyncrasies of the SCRE model.

Our SCRE model can also be assessed using the “technical” and “evolutionary”

fitness criteria of dynamic capability theory (Teece 2007). Technical fitness refers to “how

effectively a capability performs its intended function” (Helfat et al. 2007, Leiblein 2011).

We argue that the GoF of the SCRE model satisfies the technical fitness criterion. As noted

earlier, the GoF of the SCRE model is 0.661. The literature suggests that this value is

sufficiently large (Wetzels et al. 2009); therefore, the SCRE model is a “technically fit” scale

for measuring SCRE capabilities. Hence, our SCRE model adequately satisfies the technical

fitness criterion. Evolutionary fitness refers to “how well a dynamic capability enables an

organization to make a living by creating, extending, or modifying its resources” (Helfat et al.

2007; Teece 2007, Leiblein 2011). Pohjola and Stenholm (2012) state that the recent

literature has mostly used “performance” as the measure of the evolutionary fitness of

31
dynamic capabilities. We thus propose using an increase in SCP and a decrease in OV as a

measure of organizational performance based on the successful implementation and practice

of the SCRE model. The results above suggest that the SCRE scale positively influences SCP

(β = 0.703, t = 19.82) and negatively influences OV (β = -0.615, t = 14.36) (see Figure 2).

Hence, our SCRE model also adequately satisfies the evolutionary fitness criterion.

3.4. Scale generalizability

To provide evidence of the generalizability of the SCRE scale, a replicative study

with organizations from diverse industries is essential. In this regard, we conducted study 3 to

re-examine the CFA models using responses collected from 207 business executives from

different manufacturing industries in which SCRE is an important issue. Table 16 shows the

profile of the respondents in study 3.

(Table 16 about here)

3.4.1 Sample and data collection

In study 3, the same instrument was used to collect data from executive MBA

students at five universities in Bangladesh. The students who were executives in

manufacturing and responsible for supply chain functions were selected for the survey. The

sample students were located using the database of current students of the universities.

A total of 207 completed questionnaires were collected from 231 students. The

respondents cover many industries, including apparel (30.4%), garment accessories (8.2%),

pharmaceuticals (11.6%), footwear and leather products (7.25%), steel (10.6%), plastics

(3.4%), jute (1.3%) and others (10.15%). As a whole, the survey respondents comprised of a

diverse sample that lends itself well to a replicative study (see Table 16).

32
3.4.2 Data analysis

The replicative study results exhibit desired psychometric properties, as all the item

loadings corresponding to first-order constructs were greater than 0.7 and significant at p <

0.01 (except FLX7, i.e., new product development, and CRI2, i.e., critical distribution

centre). All AVEs and CRs exceeded the minimum thresholds of 0.5 and 0.7, respectively.

The results are also consistent with the measurement model results from study 2. The results

further show that SCRE had a strong association with supply chain proactive capability (β =

0.892, t = 87.52), supply chain reactive capability (β = 0.876, t = 84.9) and supply chain

design quality (β = 0.892, t = 95.34). Furthermore, supply chain proactive capability, reactive

capability and design quality explain 88.7%, 91.6% and 85.2%, respectively, of the overall

SCRE variance (see Figure 3). These results thus provide further evidence of the reliability

and operational nature of the proposed scale developed in this study to measure SCRE in a

wide range of industries. The replicative study results also show satisfactory results for the

predictive validity of SCRE with regard to improving SCP and mitigating operational

vulnerabilities. Figure 3 shows that all the predictive path loadings are significant. Overall,

the results are extremely encouraging in terms of scale generalizability.

(Figure 3 about here)

4. Discussion and implications

4.1 Implications for theory

Rooted in the DCV, building on previous research, and filling in gaps in the existing

literature, the findings of this study make several contributions to the supply chain literature.

This study introduces a hierarchical model of SCRE. The validated SCRE measurement scale

addresses the existing lack of knowledge on resource specificity and the measurement of

33
dynamic capabilities to combat the challenges associated with environmental uncertainties in

the supply chain.

The DCV postulates an accumulation of resources and capabilities to combat

challenges at the organizational level in tumultuous times. However, the impact of

environmental challenges is no longer confined within the boundaries of an organization;

instead, it is spread across the entire supply chain. In this study, we presume that

organizations’ supply chains need both proactive and reactive forms of dynamic capabilities

to develop resilience against disruptive events along their supply chains. We thus extend the

scope of the DCV from organizational boundaries to the entire supply chain.

Studies using the RBV, including the DCV, fall short of identifying processes,

resources and paths that increase competencies during environmental uncertainties along the

supply chain. Our study addresses process and resource specificities at the supply chain level

in the event of turbulence. Thus, the empirically validated measurement model of SCRE

extends the DCV in terms of resource specificity and measurement in the supply chain to

combat challenges arising from environmental uncertainty. Our research also contributes to

the empirical aspect of the DCV by assessing the SCRE model through the “technical” and

“evolutionary” fitness criteria of the DCV. We have justified that the GoF of the SCRE

model is equivalent to “technical” fitness, while the predictive validity of the SCRE model

(to improve organizational performance) is equivalent to the “evolutionary” fitness of the

DCV. Using the DCV as the theoretical foundation, this study thus enhances the body of

knowledge in the SCRE literature in particular and the risk management literature in general.

Our study also expands and extends the scope of the recent literature on SCRE

highlighted in the literature review section 2.1. As noted earlier, the primary research gap is

the lack of a comprehensive measurement scale of SCRE based on strong theoretical

underpinnings. Our study considers resilience to be a dynamic capability, and we have taken

34
an alternative approach to offer a multidimensional SCRE measurement model. This study

thus extends and expands earlier studies on SCRE in a comprehensive way.

4.2 Implications for practice

The implications of this research are significant for supply chain managers,

specifically those in the apparel industry in Bangladesh and elsewhere. The findings suggest

that supply chain managers take proactive approaches towards resilience, design a supply

chain that can reduce vulnerabilities, and develop reactive capabilities to respond and recover

quickly from vulnerabilities. Our findings validate that SCRE is a critical success factor for

SCP improvement. Firms that want to improve their performance need to constantly assess

the supply chain design quality and the proactive and reactive approaches to combating

supply chain vulnerability. In addition, managers can use the proposed scale as a diagnostic

tool to identify areas that require specific improvements. In fact, supply chain managers in

the apparel industry will be equipped with knowledge of the factors required to ensure

resilience in the supply chain. Supply chain practitioners should convince top management of

the paramount importance of proactive approaches (e.g., supply chain readiness, flexibility,

reserve capacity, integration, efficiency, market strength, and financial strength) and reactive

approaches (e.g., the ability to respond and recover to manage supply chain vulnerabilities).

Notably, the proposed SCRE scale introduces a new construct, supply chain design quality,

which has significant managerial implications. Supply chain managers should focus on

improving supply chain design quality by paying careful attention to supply chain density,

complexity and criticality to reduce supply chain vulnerability. Our study will assist supply

chain managers in making decisions regarding multi-sourcing versus single sourcing, a focus

on a few markets versus the diversification of market, the geographical distribution of

production facilities versus production in a concentrated area, centralized distribution versus

35
decentralized distribution, multimodal transportation options and other issues related to

supply chain design that seeks to overcome supply chain vulnerabilities. Leveraging the

supply chain network design to overcome vulnerabilities is crucial for supply chain decision

makers. Our study thus assists supply chain managers in strategizing and deciding on the

competencies developed to address environmental volatility. More specifically, the proposed

model is expected to elucidate matters so that apparel supply chain members can overcome

existing vulnerabilities and achieve sustainability in their supply chains.

4.3 Limitations and future research directions

Some limitations of this study are worth noting here. This research adopts a cross-

sectional design to investigate the phenomenon of SCRE at a particular time. A longitudinal

research design could capture the effects of SCRE on supply chain vulnerability in the long

run. Thus, a longitudinal focus is recommended for future studies. This research was

conducted within a specific industry (apparel) in one country (Bangladesh). Our respondents

are immersed in Bangladeshi culture, which is characterized by high power distance and high

in-group collectivism (House et al. 2004). Hence, our data will reflect the national cultural

bias. Replications in other contexts would increase confidence in the research model. Further

assessing the generalizability of the SCRE scale developed in this study to other business

environments, for example, testing the scale in other nations, would be worthwhile. The

range of variables in our SCRE model has been contextualized for a specific country. As

such, our variables should be adapted via field studies to contextualize them in other contexts

or countries. Future research might also be conducted to investigate the antecedents and

consequences of SCRE. For data analysis, a formal ex-post common method bias test should

be performed using an ideal CFA marker variable (Williams et al. 2010).

Although the results of our study show that SCRE has a positive influence on SCP,

SCP is a multidimensional construct that may be measured in a number of ways, including

36
sourcing, operational and distributional performance (Gunesekaran et al. 2004). Therefore, in

future studies, exploring the complexities of the relationship between SCRE and alternative

dimensions of SCP would be useful.

5. Conclusions

Despite the publication of a few studies on SCRE, a valid and reliable scale for

measuring SCRE was still lacking. This study thus developed and validated a scale for

measuring SCRE. The scale evaluation by PLS path modelling confirmed the scale’s

adequate psychometric properties. We have also evaluated our SCRE model in terms of the

“technical” and “evolutionary” fitness of dynamic capability theory. To this end, this study

makes an important contribution to the literature.

Although the SCRE scale has been assessed and validated in the context of the

apparel industry in Bangladesh, it can be adapted for other industrial sectors in other

countries with appropriate contextualization via qualitative studies.

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Zhang, Q., Vonderembse, M. A., Lim, J.S., 2003. Manufacturing flexibility: defining and analyzing
relationships among competence, capability, and customer satisfaction. Journal of Operations
Management, 21(2), 173-191.

43
 Table 1: Scale development process

CONCEPTUALIZATION OF SCRE
- Identifying dimensions based on literature review
-Theoretical Justification of SCRE concept
INSTRUMENT DEVELOPMENT PROCESS
- Qualitative study to contextualize the findings of literature on SCRE dimensions and
measurement items.
- Justification of field study findings based on literature
- Scale development
Items creation
Items sorting
INSTRUMENT TESTING
- Developing initial version of questionnaire and pretesting
- Pilot testing
- Model specification
- Confirmatory study
Assessment of the first-order scale
Assessment of the higher-order scale
Assessment of the nomological and predictive validity
Assessment of the overall parameters
SCALE GENERALIZABILITY

Table 2: Demographic Profile of field study respondents

Partici- Position Company type Company size (no Age of
pants of employees) company
D1 Supply chain manager RMG manufacturer 2000-3000 10-15
D2 Manager Merchandising Buying agent Less than 1000 5-10
D3 Manager Merchandising RMG manufacturer 1000-2000 0-5
D4 General manager RMG manufacturer More than 4000 5-10
D5 Managing director Buying agent Less than 1000 10-15
D6 Supply chain manager RMG manufacturer More than 4000 20-25
D7 General manager RMG manufacturer 2000-3000 20-25
D8 Supply chain manager RMG manufacturer More than 10000 20-25
D9 Manager Merchandising RMG manufacturer 3000-4000 5-10
D10 Supply chain manager Supplier Less than 1000 5- 10
D11 Deputy general manager RMG manufacturer More than 20000 25-30
D12 General manager Supplier Less than 1000 0-5
D13 Deputy general manager Supplier Less than 1000 10-15
D14 Deputy general manager Supplier Less than 1000 15-20
D15 Manager merchandising RMG manufacturer Less than 1000 10-15

Table 3: Factors and variables from the qualitative study

SC Variable Enterprises %
proactive 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Capability
SC Disruption detection y y y y y y y y y 60.0
Readiness

44
 Readiness training y y y y y y y y y y 66.6
Readiness resource y y y y y 33.3
Early warning signals y y y y y 33.3
Forecasting y y y y y y y 46.6
Security y y y y y y y y y y y 73.3
Flexibility Flexible production y y y y y y y y y y 66.6
volume
Product y y y y y y y y y y y 73.3
variety/customization
Multi-skilled workforce y y y y y y y y 53.3
Contract flexibility y y y y y y y y y y 66.6
Sourcing flexibility y y y y y y y 46.6
Distribution flexibility y y y y y y y y y y y y 80.0
Introducing New y y y y y 33.3
product
Reserve Back up capacity y y y y y y y y y 60.0
capacity
Buffer stock y y y y y y y 46.6
Backup energy/utility y y y y y y y y y y y 73.3
source
Integration Information sharing y y y y y y y y y y y 73.3
Internal integration y y y y y y y y y y y y 80.0
Collaboration y y y y y y y 46.6
ICT adoption y y y y y 33.3
Efficiency Waste reduction y y y y y y y y y 60.0
Efficiency of employees y y y y y y y y y y 66.6
Quality control y y y - y y y - y y y 60.0
Market Buyer & supplier y y y y y y y y y y 60.0
Strength satisfaction
Preferred brand (Having y y y y y 33.3
Buyers nomination)
Buyer-supplier relation y y y y y y y y 53.3
Product differentiation
Financial Diversified business y y y 20.0
strength portfolio
Fund availability y y y y y y y y y 60.0
Consistent Profit y y y y y y y y 53.3
Insurance y y y y y y y y y 60.0
SC Reactive
Capability
Response Quick response y y y y y y y y 53.3
Effective/adequate y y y y 26.6
response
Response team y y y y y y 40.0
Recovery Quick recovery y y y y y y y y y y 66.6
Loss absorption y y y y 26.6
Reduction of impact y y y y y y y y y 60.0
Recovery cost y y y y y y 40.0
SC Design
Quality
Density Sourcing from different y y y y y y y 46.6
area
Alternative market y y y y y y y y y y y y 80.0
Alternative production y y y y y 33.3
Complexity Few tiers in forward and y y y y y y y y y y 66.7
backward flows/deal
directly with buyer &
supplier

45
 Number of forward and y y y y y y y y 53.3
backward flows
Use of multiple supplier y y y y y y y y y y y y y 86.6
Having multiple buyers y y y y y y y y y y y y 80.0
Criticality No of critical supplier y y y y y y y y y y 66.6
No of critical y y y y y y y y y 60.0
distribution centre
Alternative y y y y y y y y y y y y 80.0
transportation option
Alternative for critical y y y y y y y 46.6
component and parts

Table 4: literature support of the factors and variables

Proactive dimensions
Variables References
Supply Disruption detection Helferich & Cook (2002); Knemeyer et al.
chain (2009)
Disaster Readiness training Pettit et al. (2013); Rousaki & Alcott (2006)
readiness Readiness resource Hale & Moberg (2005); Rousaki & Alcott
(2006)
Early warning signals Pettit et al. (2013); Craighead et al. (2007)
Forecasting Pettit et al. (2013); Sheffi (2005), Blackhurst et
al. (2005)
Security Sheffi & Rice (2005), Craighead et al. (2007);
Hale & Moberg (2005)
Flexibility Flexibility in production (different volume Swafford et al. (2006); Braunscheidel &
of order, flexible production schedule) Suresh (2009)
Ability to produce a wide variety of product Braunscheidel & Suresh (2009); Swafford et
as per buyer requirement (mix flexibility) al. (2006)
Multi-skilled workforce Swafford et al. (2006); Duclos et al. (2005)
Flexibility in contract with SC partners Duclos et al. (2005); Pettit et al. (2013)
(Partial order and payment, partial
shipment)
Flexibility in in sourcing (supplier lead Swafford et al. (2006); Gunasekaran et al.
time, changing quantity of supplier’s order (2008)
etc.)
Flexibility in distribution (e.g. meeting Swafford et al. (2006); Jüttner & Maklan
sudden demand of customer, changing (2011)
delivery schedule etc.)
Ability to produce and supply new products Swafford et al. (2006); Braunscheidel &
to different customer groups Suresh (2009)
Reserve Alternative and back up capacity Pettit et al. (2013) ; Pettit et al. (2010)
capacity (machinery, equipment and logistical
options)
Buffer stock Pettit et al. (2013)
Backup energy source Pettit et al. (2013)
Integration Sharing information with supply chain Braunscheidel & Suresh (2009); Blackhurst et
partners al. (2005); Pettit et al. (2013)
Information flow with different departments Braunscheidel & Suresh (2009); Pettit et al.
of organization (2013)
Joint or collaborative planning (e.g product Braunscheidel & Suresh (2009); Pettit et al.
development, inventory planning) (2013)
Communication with supply chain partners Braunscheidel and Suresh (2009)
ICT supported planning and integration Narasimhan & Kim (2001); Pettit et al. (2013)
Efficiency Waste/idle capacity reduction through Pettit et al. (2013); Fiksel (2003); Sheffi &
efficient use of resource Rice (2005)
Productive and hardworking employees Pettit et al. (2013)

46
 Quality control and less defection Pettit et al. (2013); Kleindorfer & Saad (2005)
Market Buyer & supplier satisfaction Pettit et al. (2013)
strength Preferred brand to buyers Zhang et al. (2003)
Good relationship with buyers & suppliers Pettit et al. (2013)
Product differentiation Field study
Financial Diversified business portfolio Field study
strength Fund availability Pettit et al. (2013); Tang (2006)
Profitability Pettit et al. (2013)
Insurance Pettit et al. (2013); Tomlin (2006)
Reactive dimensions
Response Quick response Sheffi & Rice (2005); Norrman & Jansson (2004)
Adequate response Field study
Response team Pettit et al. (2013); Field study
Recovery Quick recovery Sheffi & Rice (2005); Christopher & Peck (2004)
Willroth et al. (2011); Gunderson (2000)
Loss absorption Holling (1973); Dalziell & McManus (2004)
Reduction of impact Rose (2004); Dalziell & McManus (2004)
Recovery cost Martin (2004); Vugrin et al. (2011)
Supply Chain Design quality
Node Sourcing from concentrated area Vs diversified
Density sourcing
Concentrated market Vs diversified market
Concentrated production Vs diversified
Complexity More tiers in forward and backward flows or Craighead et al. (2007); Falasca et al.
dealing directly with buyers and suppliers (2008); Kleindorfer & Saad (2005);
Number of forward and backward flows Colicchia et al. (2010); Tomlin (2006);
Use of multiple suppliers rather than single Choi & Krause, 2006; field study
supplier
Having multiple buyers rather than depending on
few large buyers
Criticality Alternatives for critical supplier
Critical distribution center
Alternative transportation modes & rerouting
Alternatives for critical component
Operational Shortage of skilled worker Haider (2007); Field study
vulnerability Switching and absenteeism of workers Chowdhury et al. (2012); Field study
Production planning and inventory management Wu et al. (2006); Field study
Failure of IT system and machineries Blos et al. (2009); Field study
Disruption in utility supply Blos et al. (2009); Field study
Product quality defection Blos et al. (2009); Field study
Illiteracy of workers and supervisors Chowdhury et al. (2012); Field study
Supply Sales and business volume Shepherd & Gunter (2006), Perotti et al
chain (2012); Field study
Cost Shepherd & Gunter (2006), Perotti et al
performance (2012); Field study
Profit/net income Shepherd & Gunter (2006); Perotti et al
(2012); Field study
Customer satisfaction Gunasekaran et al. (2004)
On time delivery Gunasekaran et al. (2004)
Quality of product and service Epstein & Wisner (2001)

47
 Table: 5 Item placement ratios (final) and inter-rater reliability
Theoretical Actual construct classification Interrater
Construct
reliabilit
classificatio
n y
RE FL EF RD INT MS FS RE RE DE CO CRI Tota % Average
Kappa
D X S C N M l Hits
scores
RED 15 1 1 1 18 83.3 82.6

FLX 18 1 1 21 85.7 88.5

EF 7 1 1 9 77.7 81.3

RD 1 1 7 9 77.7 80.6

INT 1 11 12 91.6 92.2

MS 11 1 12 91.6 93.5

FS 1 11 12 91.6 90.5

RES 1 8 9 88.8 87.3

REC 1 11 12 91.6 94

DEN 1 7 1 9 77.8 88.2

COM 1 1 9 1 12 75.0 76.5

CRI 1 1 10 12 83.3 87.3

Total 18 20 8 8 13 13 13 9 12 10 11 11 147 84.6 86.9

%
% 83.3 90 87. 87. 84. 84. 84. 88.8 91.6 70.0 81.8 90.
5 5 6 6 6 9
Note: The values in the shaded cells represent the number of items placed correctly by the panel of judges within the intended construct.
RED=Readiness, FLX=Flexibility, EF=Efficiency, RD=Redundancy, INT=Integration, MS=Market Strength, FS=Financial Strength,
RES=Response, REC=Recovery, DEN=Density, COM=Complexity, CRI=Criticality.

Table 6: Demographic profile of Pilot study respondents (study -1)

Supply Chain Entity Number of Companies %
RMG manufacturer 53 65.4
RMG accessories suppliers 21 25.9
Buyer/buying agents 07 08.7
Number of employees Number of Companies %
<= 500.00 24 27.9
501.00 - 1000.00 21 24.4
1001.00 - 1500.00 16 18.6
1501.00 - 2000.00 11 12.8
2001.00+ 14 16.3
Number of years in Business Number of Companies %
<= 5.00 28 32.6
6.00 - 10.00 31 36
11.00 - 15.00 12 14
16.00 - 20.00 7 08
21.00+ 8 9.4
Turnover in Business (million Number of Companies %
BDT)

48
0-1000 39 45.3
1001-2000 26 30.2
2001-3000 13 15.2
3001+ 8 9.3

Table 7: Results of exploratory factor analysis in the pilot study

Extracted Factors
Code Items
1 2 3 4 5 6 7 8 9 10 11 12
FLX1 We have flexibility in
production in terms of volume
.776 .025 .098 .069 .143 .016 .170 .141 .064 .100 .059 .062
of order and production
schedule.
FLX2 We produce different types of
products to meet customer .642 .225 .075 .031 .038 .089 .037 .117 .301 .019 .048 .004
requirements
FLX3 We have multi-skilled
workforce to continue .626 .094 .153 .259 .108 .047 .054 .055 .118 .082 .194 .192
production
FLX4 We have contract flexibility
such as partial order, partial .561 .030 .165 .063 .007 .281 .037 .076 .152 .086 .025 .067
payment, partial shipment etc.
FLX5* We have flexibility in sourcing* .058 .062 .057 .235 .250 .039 .038 .141 .091 .090 .042 .714
FLX6 We have flexibility in
.466 .459 .059 .038 .011 .139 .104 .056 .028 .163 .377 .071
distribution
FLX7 We are capable of introducing .699 .066 .115 .145 .052 .023 .157 .105 .153 .273 .034 .046
new product
RD1 We have back up capacity for
machinery, parts and logistical .046 .030 .177 .075 .055 .158 .814 .106 .021 .005 .041 .104
supports
RD2 We have buffer stock for raw
.141 .128 .052 .135 .073 .068 .738 .039 .160 .015 .003 .356
material
RD3 We have backup energy/utility .131 .078 .137 .163 .046 .113 .700 .044 .097 .090 .195 .104
source
INT1 We share information with
.364 .163 .543 .144 .088 .145 .141 .029 .044 .224 .285 .229
supply chain partners
INT2 We have integration among
different departments of our .179 .149 .853 .003 .058 .103 .165 .037 .184 .083 .020 .012
company
INT3 We have collaborative relation
.103 .021 .828 .072 .013 .029 .014 .036 .157 .055 .013 .036
with our supply chain partners
INT4* We have ICT adoption for .560 .206 .078 .098 .076 .124 .375 .111 .190 .268 .105 .073
smooth flow of goods and
information*
EF1 We do not have idle capacity
.045 .146 .036 .093 .080 .870 .012 .043 .164 .062 .005 .002
and waste
EF2 Our employees are efficient -
.055 .043 .080 .030 .938 .012 .084 .028 .063 .051 .034
.002
EF3 We have strong quality control .100 .094 .045 .133 .012 .850 .194 .008 .120 .049 .051 .141
process
MS1 Our buyers and suppliers are
.085 .041 .063 .131 .900 .055 .045 .008 .011 .005 .008 .004
satisfied with us
MS2 We are preferred brand to our
buyers (Having Buyers .099 .046 .038 .136 .781 .031 .145 .052 .108 .131 .012 .097
nomination)
MS3 We have a good buyer-supplier
.013 .054 .071 .026 .878 .021 .004 .071 .090 .080 .169 .037
relationship
MS4* We produce product that are .016 .015 .029 .205 .281 .466 .352 .145 .226 .200 .353 .085
different from our competitor*
FS1* We have a diversified business
.024 .106 .021 .047 .102 .141 .188 .587 .327 .461 .249 .238
portfolio*
FS2 We have enough fund to
.080 .223 .099 .035 .100 .072 .085 .666 .018 .006 .018 .307
mitigate disruptions
FS3 We have consistency of Profit
.231 .182 .087 .321 .278 .173 .076 .559 .114 .240 .076 .213
over last couple of years

49
 FS4 We have insurance against .077 .142 .005 .157 .014 .069 .009 .865 .204 .029 .098 .007
potential damage and
destruction
DEN1 Our buyers are not concentrated
.131 .403 .051 .118 .068 .055 .219 .003 .557 .183 .479 .017
to specific geographic region
DEN2 We select suppliers from
diversified region (alternative
.068 .008 .080 .058 .048 .039 .001 .146 .835 .132 .110 .075
supplier) to avoid the risk of
supply in specific area
DEN3 We have production facility in
different area (alternative
production facility) to avoid risk .078 .013 .050 .003 .070 .051 .054 .399 .516 .039 .001 .069
of operational disruption in
specific area
COM1 We try to deal directly with
buyers and suppliers to reduce .059 .010 .042 .097 .212 .136 .374 .166 .182 .362 .492 .165
complexity in supply chain
COM2* We do not have much forward
and backward flow of goods and .152 .021 .067 .097 .205 .193 .476 .189 .212 .264 .423 .192
services in our SC
COM3 We use multiple suppliers to
.065 .025 .261 .037 .034 .022 .084 .054 .267 .066 .864 .061
avoid the risk of supply
COM4 We have multiple buyers to
.132 .127 .061 .039 .135 .121 .089 .152 .168 .163 .721 .166
avoid the buyers disruptions
CRI1 We are not critically dependent
.157 .113 .28 .163 .129 .217 .139 .175 .123 .059 .110 .572
on specific supplier
CRI2 We do not have critical
distribution center which is
.150 .019 .017 .080 .021 .073 .401 .102 .310 .362 .150 .610
responsible to distribute many
other distribution center
CRI3 We have alternative
.213 .113 .167 .181 .127 .221 .310 .137 .218 .317 .139 .586
transportation option
CRI4* We have alternative for critical .128 .102 .108 .134 .153 .235 .170 .188 .152 - .610 .554
component and parts .005
RED1 We have the ability to detect SC
.113 .646 .133 .106 .097 .076 .103 .105 .096 .051 .107 .117
disruptions quickly
RED2 We have readiness training for
.300 .639 .091 .057 .069 .099 .205 .018 .063 .187 .120 .153
overcoming crisis
RED3 We have resources to get ready
.032 .810 .002 .003 .027 .056 .114 .039 .084 .150 .033 .039
during crisis
RED4* We have early warning signals* .015 .248 .030 .008 .052 .012 .014 .050 .166 .752 .097 .019
RED5 We have forecasting for meeting
.263 .810 .011 .068 .041 .116 .126 .018 .112 .085 .052 .018
demand disruptions
RED6 We strong security system to .007 .660 .109 .123 .004 .118 .012 .196 .041 .041 .211 .034
protect man made crisis
RES1 We can respond quickly to
.218 .136 .259 .145 .090 .342 .071 .099 .428 .506 .145 -.004
disruptions
RES2* We can undertake adequate
.037 .013 .082 .727 .140 .055 .166 .132 .065 .185 .347 .076
response to crisis*
RES3 We have response team for .161 .045 .181 .741 .016 .176 .050 .006 .058 .543 .123 .177
mitigating crisis
REC1 We get recovery in short time .091 .167 .097 .509 .082 .018 .331 .021 .100 .294 .088 .140
REC2* We have the ability to absorb
.128 .017 .202 .357 .461 .157 .271 .134 .177 .336 .187 .124
huge loss*
REC3 We can reduce impact of loss
.023 .085 .079 .850 .036 .016 .061 .040 .060 .130 .088 .128
by our ability to handle crisis
REC4 We can recovery from crisis at
.126 .101 .010 .868 .039 .089 .155 .017 .030 .011 .054 .016
less cost
*Items that are subject to deletion because of low loading

50
 Table 8: Results of exploratory factor analysis in the pilot study after dropping items

Factors Items Loadings Item total Eigenvalue Cumulative Cronbach’s

correlation variation alpha
Flexibility FLX1 .778 .732 5.626 12.231 .798
FLX2 .647 .670
FLX3 .622
FLX4 .564 .706
FLX5*
FLX6 .468 .652
FLX7 .710 .627
Reserve RD1 .812 .775 4.945 22.982 .732
capacity
RD2 .739 .654
RD3 .706 .632
Integration INT1 .445 .575 3.804 31.253 .821
INT2 .854 .684
INT3 .826 .730
INT4*
INT5 .878 .785
Efficiency EF1 .872 .693 3.177 38.159 .716
EF2 .937 .679
EF3 .851 .565
Market MS1 .660 2.726 44.086 .865
.902
strength
MS2 .786 .708
MS3 .875 .698
MS4*
Financial FS1* 2.529 49.583 .724
strength
FS2 .669 .739
FS3 .556 .684
FS4 .868 .743
Density DEN1 .557 .767 2.183 54.329 .837
DEN2 .837 .596
DEN3 .519 .712
Complexity COM1 .494 .798 1.832 58.312 .758
COM2*
COM3 .867 .870
COM4 .722 .776
Criticality CRI1 .571 .781 1.742 62.099 .712
CRI2 .613 .695
CRI3 .588 .624
CRI4*
Readiness RED1 .642 .873 1.420 65.186 .845
RED2 .643 .850
RED3 .814 .682
RED4*
RED5 .807 .832
RED6 .663 .635
Response RES1 .508 .764 1.366 68.155 .893

51
 RES2*
RES3 .544 .669
Recovery REC1 .506 .683 1.332 71.050 .761
REC2*
REC3 .853 .810
REC4 .867 .705
* Low loading and cross loading items.

Table 9: Demographic profile of the survey respondents (study -2)

Supply Chain Entity Number of Companies Percentage (%)
Garment manufacturer 189 63.9
Accessory producers 76 25.6
Buying agent 31 10.5
Number of employees Number of Companies Percentage (%)
Less than 500 73 24.65
501- 1000 78 26.35
1001- 1500 57 19.30
1501-2000 41 13.85
2001+ 47 15.85
Number of years in Number of Companies Percentage (%)
Business
<= 5.00 78 26.35
6.00 - 10.00 84 28.35
11.00 - 15.00 58 19.6
16.00 - 20.00 40 13.5
21.00+ 36 13.2
Turnover (Million BDT) Number of Companies Percentage (%)
0- 1000 118 39.8
1001- 2000 85 28.7
2001- 3000 57 19.3
3001+ 36 12.2

Table 10 Mann–Whitney test results

Construct Z-Value Significance (1-tailed)

FLX3 -.342 .733
RD1 -.729 .466
INT1 -1.432 .152
EF3 -.713 .476
MS1 -.274 .784
FS1 -.576 .564
SCD1 -1.509 .131
RED4 -1.3 .193
RR2 -.472 .637
ECS1 -1.136 .257

Table 11: Psychometric properties of SCRE measurement model at first order level
Construct Sub- Items Loading t-v Weight t-v AVE CR Mean S.D
Construct
Proactive Flexibility FLX1-Production 0.842 39.71 0.512 8.52 0.681 0.917 4.71 .932
capability (FLX) flexibility
FLX2-customization 0.814 32.15 0.536 5.79 4.93 .876
FLX3-Multi-skilled 0.787 34.33 0.487 5.75 4.19 .971
workforce
FLX4-Contract 0.801 32.27 0.613 7.58 4.86 .852
flexibility
FLX5-Sourcing

52
 Flexibility*
FLX6- Distribution
Flexibility*
FLX7-New product 0.834 46.31 0.461 6.23 4.61 .877
Redundancy RD1-Reserve 0.725 83.37 0.642 8.59 4.85 .984
(RD) capacity
RD2-Stock 0.693 12.43 0.137 1.63 4.16 1.216
RD3-Back-up utility 0.847 58.17 0.327 4.33 4.81 .983
Integration INT1-Information 0.884 52.41 0.583 7.12 0.754 .845 4.76 1.12
(INT) sharing
INT2-Internal 0.876 55.39 0.536 6.57 4.54 1.205
integration
INT3-collaboration 0.885 53.42 0.419 5.39 4.26 1.113
INT4-ICT adoption* 3.98 1.181
Efficiency EF1-Waste reduction 0.812 32.71 0.638 9.26 4.73 .826
(EF)
EF2-Worker 0.835 43.47 0.461 5.38 4.52 .797
efficiency
EF3-Quality control 0.859 82.53 0.735 8.91 4.69 .954
Market MS1-Buyer-supplier 0.813 84.87 0.624 8.72 4.91 .832
strength (MS) satisfaction
MS2-Preferred brand 0.854 87.18 0.598 7.73 4.25 .966
MS3-Buyer-supplier 0.783 66.82 0.462 6.39 4.73 .972
relation
MS4-Product 0.651 19.26 0.417 5.91 4.44 .867
differentiation
Financial FS1-diversified .779 0.913
strength (FS) business portfolio*
FS2-Fund availability 0.912 71.92 .294 4.37 4.14 .906
FS3-Profit 0.916 85.73 .438 5.71 4.45 .873
consistency
FS4-Insurance 0.824 46.29 .631 8.93 4.87 1.024
Readiness RED1-Disrution 0.782 26.5 .375 5.29 4.38 .945
(RED) detection
RED2-Readiness 0.764 32.36 .431 5.42 4.08 .884
training
RED3-Readiness 0.818 37.92 .363 4.21 4.37 .921
resource
RED4-Early warning 0.531 7.82 .258 2.76 4.29 .821
signal
RED5-Forecasting .814 39.72 .171 1.86 4.74 1.137
RED6-Security .849 62.57 .237 2.91 4.95 1.261
Supply Density DEN1-Alternative 0.735 41.35 .438 5.76 4.97 .924
chain design (DEN) sourcing
(SCD) DEN2-Alternative 0.783 52.95 .521 5.88 4.77 .962
market
DEN3-Alternative 0.763 51.36 .325 4.12 4.18 1.291
production
Complexity COM1-Deal directly 0.785 51.29 .396 4.37 3.76 1.165
(COM) with buyers and
suppliers to reduce
number of tiers in SC.
COM2-Number of .417 6.23 .144 1.59 3.42 .931
forward and
backward flows
COM3- Multiple 0.791 56.35 .614 7.46 4.45 1.127
suppliers
COM4-Multiple 0.826 58.79 .581 7.33 4.96 1.081
buyers
Criticality CRI1- No critical 0.638 24.47 .562 6.79 4.56 .873
(CRI) supplier
CRI2- No critical 0.573 19.32 .416 5.63 4.17 .821
distribution center
CRI3-Different 0.671 23.51 .548 6.61 4.19 .943
distribution and
transportation options
CRI4-Alternative for 0.582 9.37 .351 .426 4.27 .891
critical component
and parts
Reactive Response RES1-Quick response 0.888 75.39 .642 11.76 .7604 0.911 4.48 .895
capability (RES)
RES2- Adequate
response*

53
 RES3-Response team 0.899 72.28 .517 5.79 4.16 .783

Recovery REC1-Quick 0.925 57.52 .475 9.67 0.813 0.892 4.29 .862
(REC) recovery
REC2-Loss
absorption*
REC3-Reduction of 0.891 32.91 .345 4.31 4.13 .838
impact
REC4-Recovery cost 0.831 32.25 .396 4.59 4.21 .947
Outcome Supply chain SCP1-Sales 0.911 95.81 .721 15.32 0.775 0.853 4.78 .961
constructs performance
SCP2-Cost 0.746 22.84 .548 7.78 4.02 .897
SCP3-Profit 0.881 62.63 .673 8.85 4.34 .924
SCP4- Customer 0.923 93.77 .825 13.36 4.67 1.25
satisfaction
SCP5- On time 0.823 33.4 .641 9.96 4.38 .891
delivery
SCP6- Quality 0.865 37.7 .592 7.74 4.52 .796
Item Loading t-v Weight t-v AVE CR Mean S.D

Operational OV1-Skill shortage 0.636 6.38 0.014 0.127 3.12 .736

vulnerability OV2-Switching and absenteeism 0.724 9.41 0.259 1.947 3.67 .724
OV3-Production planning 0.647 5.32 0.23 1.668 3.35 .962
OV4-IT system failure 0.342 2.56 0.19 1.437 3.13 .935
OV5-Utility disruption 0.725 7.31 0.261 1.898 4.45 1.34
OV6-Product quality 0.635 4.97 0.132 0.794 3.26 .792
OV7-Illeteracy 0.716 6.34 0.242 1.088 3.51 1.17
L = Loading; L t-v = t-value; AVE = Average variance extracted; CR = Composite reliability
*Items which are deleted due to low loading or high cross loading.

Table 12: HTMT criteria for discriminant validity test

DEN SCP EF FLX FS INT MS RD REC RED
COM CRI RES
COM 1 0 0 0 0 0 0 0 0 0 0 0 0
CRI 0.502 1 0 0 0 0 0 0 0 0 0 0 0
DEN 0.453 0.322 1 0 0 0 0 0 0 0 0 0 0
SCP 0.281 0.483 0.383 1 0 0 0 0 0 0 0 0 0
EF 0.356 0.416 0.511 0.458 1 0 0 0 0 0 0 0 0
FLX 0.248 0.498 0.342 0.352 0.301 1 0 0 0 0 0 0 0
FS 0.421 0.341 0.508 0.261 0.404 0.408 1 0 0 0 0 0 0
INT 0.305 0.432 0.482 0.461 0.381 0.351 0.338 1 0 0 0 0 0
MS 0.236 0.506 0.433 0.385 0.453 0.336 0.412 0.493 1 0 0 0 0
RD 0.374 0.419 0.529 0.503 0.479 0.425 0.348 0.437 0.402 1 0 0 0
REC 0.457 0.403 0.402 0.346 0.312 0.291 0.492 0.359 0.241 0.331 1 0 0
RED 0.411 0.127 0.401 0.439 0.508 0.476 0.386 0.341 0.495 0.266 0.351 1 0
RES 0.524 0.425 0.336 0.302 0.442 0.231 0.404 0.396 0.358 0.469 0.482 0.231 1
All HT-MT < 0.85, as a result the model show discriminant validity

Table .13: Collinearity test for formative constructs

Construct Item VIF Construct Item VIF
RD RD1 2.217 COM COM1 1.925
RD2 1.573 COM2 1.912
RD3 1.796 COM3 2.261
COM4 1.872
EF EF1 1.831 CRI CRI1 1.914
EF2 1.956 CRI2 1.869
EF3 2.147 CRI3 2.196
MS MS1 1.456 CRI4 1.824
MS2 1.824 READ1 1.982
MS3 1.761 READ2 1.738
MS4 1.926 READ READ3 1.996
DEN DEN1 1.624 READ4 2.217
DEN2 1.783 READ5 1.779
DEN3 1.917 READ6 2.227
DEN4 2.224

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 Table 14: Psychometric properties of SCRE measurement model at higher order level

Second order constructs Third order construct

Construct CR AVE Construct CR AVE
Proactive capability 0.915 0.615 SCRE 0.918 0.592
SCD 0.828 0.508
Reactive capability 0.903 0.761

Table 15: Result of Hypothesis testing

Hypothesis Link Standardized Path t-Value Outcome
Coefficient
H1 SCRE→OV (-) -0.615 14.36 Supported
H2 OV→SCP (-) -0.092 2.59 Supported
H3 SCRE→ SCP (+) 0.703 19.82 Supported
H4 SCRE→ SCP (indirect) 0.419 8.78 supported

Table 16: Demographic information of cross industry survey respondents (study -3)
Name of industry Number of companies Percentage (%)
Apparel 63 30.4
Garment/apparel Accessories 17 8.2
Food processing 23 11.11
Pharmaceutical 24 11.6
Footwear and leather goods 15 7.25
Electrical and electronics 11 5.3
Steel 22 10.6
Plastic 7 3.4
Jute 4 1.93
Others 21 10.15
Total 207 100

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 Figure 1: Multi-dimensional Supply chain Resilience model. SCR=supply chain resilience, RED=disaster
readiness, FLX=flexibility, RD= redundancy/reserve capacity, IN T=integration, EF= efficiency, MS= market strength, FS= financial
strength, RES=response, REC= recovery, DEN=density, COM= complexity, CRI= criticality, OV= operational vulnerability, SCP= supply
chain performance.

Figure 2: SCRE Model depicting study 2 results

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Figure 3: SCRE Model depicting study 3 results

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