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Strategic
Strategic supply supply chain
chain management factors management
influencing agribusiness
innovation utilization 487
Received 28 February 2013
Maree Storer Revised 27 December 2013
UQ Business School, Faculty of Business Economics & Law, Accepted 5 March 2014
University of Queensland, Brisbane, Australia
Paul Hyland
School of Management, Faculty of Business,
Queensland Institute of Technology, Brisbane, Australia
Mario Ferrer
Business Faculty – Operations Management, Alfaisal University,
Riyadh, Saudia Arabia
Ricardo Santa
Business Faculty – Production and Operations Management,
Alfaisal University, Riyadh, Saudi Arabia, and
Andrew Griffiths
UQ Business School, Faculty of Business Economics & Law,
University of Queensland, Brisbane, Australia

Abstract
Purpose – The purpose of this paper is to examine empirically, an industry development paradox,
using embryonic literature in the area of strategic supply chain management, together with
innovation management literature. This study seeks to understand how, forming strategic supply
chain relationships, and developing strategic supply chain capability, influences beneficial
supply chain outcomes expected from utilizing industry-led innovation, in the form of electronic
business solutions using the internet, in the Australian beef industry. Findings should add valuable
insights to both academics and practitioners in the fields of supply chain innovation management and
strategic supply chain management, and expand knowledge to current literature.
Design/methodology/approach – This is a quantitative study comparing innovative and
non-innovative supply chain operatives in the Australian beef industry, through factor analysis and
structural equation modeling using PAWS Statistical V18 and AMOS V18 to analyze survey data from
412 respondents from the Australian beef supply chain.
Findings – Key findings are that both innovative and non-innovative supply chain operators attribute
supply chain synchronization as only a minor indicator of strategic supply chain capability, contrary to the
literature; and they also indicate strategic supply chain capability has a minor influence in achieving
beneficial outcomes from utilizing industry-led innovation. These results suggest a lack of coordination
between supply chain operatives in the industry. They also suggest a lack of understanding of the benefits
of developing a strategic supply chain management competence, particularly in relation to innovation
agendas, and provides valuable insights as to why an industry paradox exists in terms of the level of
The International Journal of Logistics
investment in industry-led innovation, vs the level of corresponding benefit achieved. Management
Vol. 25 No. 3, 2014
pp. 487-521
r Emerald Group Publishing Limited
Acknowledgment is given to the Cooperative Research Centre for Beef Genetic Technologies 0957-4093
(CRCBeef) which provided the Doctoral Scholarship that enabled this research to be undertaken. DOI 10.1108/IJLM-02-2013-0026
IJLM Research limitations/implications – Results are not generalized due to the single agribusiness
industry studied and the single research method employed. However, this provides opportunity for
25,3 further agribusiness studies in this area and also studies using alternate methods, such as qualitative,
in-depth analysis of these factors and their relationships, which may confirm results or produce
different results. Further, this study empirically extends existing theoretical contributions and insights
into the roles of strategic supply chain management and innovation management in improving supply
chain and ultimately industry performance while providing practical insights to supply chain
488 practitioners in this and other similar agribusiness industries.
Practical implications – These findings confirm results from a 2007 research (Ketchen et al., 2007)
which suggests supply chain practice and teachings need to take a strategic direction in the twenty-
first century. To date, competence in supply chain management has built up from functional and
process orientations rather than from a strategic perspective. This study confirms that there is a need
for more generalists that can integrate with various disciplines, particularly those who can understand
and implement strategic supply chain management.
Social implications – Possible social implications accrue through the development of responsible
government policy in terms of industry supply chains. Strategic supply chain management and supply
chain innovation management have impacts to the social fabric of nations through the sustainability of
their industries, especially agribusiness industries which deal with food safety and security. If supply
chains are now the competitive weapon of nations then funding innovation and managing their supply
chain competitiveness in global markets requires a strategic approach from everyone, not just the
industry participants.
Originality/value – This is original empirical research, seeking to add value to embryonic and
important developing literature concerned with adopting a strategic approach to supply chain
management. It also seeks to add to existing literature in the area of innovation management,
particularly through greater understanding of the implications of nations developing industry-wide,
industry-led innovation agendas, and their ramifications to industry supply chains.
Keywords Innovation utilization, Strategic supply chain capability,
Strategic supply chain relationships
Paper type Research paper

Introduction
Traditional agribusiness industries such as the Australian beef industry are some
of the most competitive industries in the world (MLA, 2012). Yet there is little
understanding of the supply chain’s role in the competitiveness and sustainability of
this industry. Although some argue that the supply chain is now the arena for
competition for global industries (Ketchen and Hult, 2007a, b), if this is the case then
supply chains need to take a strategic approach toward relationship and capability
building if they are to remain competitive in what is now a dynamic global market
(Ketchen and Guinipero, 2004; Ketchen and Hult, 2007a). Beef industry supply chains
are comprised of a diverse group of intra- and inter-organizational relationships that
move goods from paddock to plate through varying levels of coordination, cooperation
and collaboration, utilizing a range of supply chain capabilities. One of the key drivers
of the competitive advantage for this supply chain globally is the constant source of
industry-led innovation available to it, co-funded by the national government and
industry levies on the sale and slaughter of cattle. However, research has shown that
the benefits of these innovations are not always equally dispersed throughout the
industry or its supply chains (Moreland and Hyland, 2010).
Taking this view the objective of this research is to explore the existence of strategic
supply chain capability and its influence on competitive outcomes in the Australian
beef supply chain through utilizing industry-led electronic business (e-business)
technology innovation using the internet. This research seeks to extend previous
studies in the areas of strategic supply chain management by Ketchen et al. (2007) and
strategic supply chain capability (Hult et al., 2002, 2008) to develop a framework, which Strategic
in part explains some of the relationships between strategic supply chain capabilities, supply chain
relationships and utilizing industry-led innovation. This study combines a resource-
based view (RBV) of the firm (Barney, 1991a) and the supply chain (Crook et al., 2008), management
with the relational view of the supply chain (Dyer and Singh, 1998), and the views from
innovation management (Adams et al., 2006) to expand the literature relating to a
strategic approach to supply chain innovation management, through an 489
interdisciplinary empirical study at an industry supply chain level. In this research
we examine the influence strategic relationships and strategic capability can have on
utilizing e-business technology innovations to meet the competitive priorities of the
Australian beef industry, through its supply chain performance, in dynamic consumer
markets (Black and Boal, 1994; Godfrey and Hill, 1995). We survey innovative and
non-innovative beef supply chain operatives on their preparedness to engage in
industry-led innovation for competitive supply chain outcomes through the
exploitation of sophisticated internet-based electronic business systems (EBS) to
streamline supply chain transactions, communications and engagements generally.
Data from 202 innovative supply chain operatives and 212 non-innovative operatives
were gathered and analyzed using PASW Statistics V18 and AMOS V18. This research
addresses the research question:

RQ1. How do strategic supply chain relationships influence supply chain performance
outcomes, through strategic supply chain capability and utilizing industry-led
electronic business innovation, in innovative firms in the Australian beef industry?

Although results of the study are limited to the Australian beef industry they do
provide lessons for other traditional agricultural sectors, where innovation has been
mainly industry led, and for supply chain researchers examining the role of supply
chains in the utilization and adoption of innovations, and the issue of intangible
strategic supply chain resources, such as strategic supply chain capability. The following
section provides an explanation of the research setting both in terms of offering definitions
and a better understanding of the context of the research. Subsequent sections provide the
research methodology, results and discussion, leading to a discussion and conclusion that
includes ideas for future research.

Research context
The Australian beef supply chain is a good example of a global agribusiness supply chain.
They consist of multiple individual supply chain operatives, geographically dispersed and
demographically diverse. The supply chain can include research and development,
breeding operations, professional services, grow-out operations, first-phase processing,
secondary manufacturing, logistics which includes live animal transport, feedstock
transport, dry-goods transport, cold-chain transport, warehousing, and distribution,
wholesaling, food-service, retail, export and ultimately the consumers. Most suppliers are
driven by both domestic and global competition by high volume/low margin bulk
consumer product development, unpredictable natural environments, fluctuating foreign
and domestic currency markets and lessening availability to relevant human capital and
capability, conditions that ensure there is a constant pressure on performance and profit
taking (Bowersox, 1990). These market conditions often lead to supply chain opportunistic
behavior, with individual firms pursuing their own goals (Eliashberg and Michie, 1984),
rather than taking an industry or supply chain perspective. These industries constantly
IJLM seek cost efficiencies while still attempting to meet what can only be described as dynamic
25,3 customer demand across local and global markets (RMCIC, 2010). Particularly, as food
products, such as meat, have many substitutes, consumer eating trends wax and wane
and other threats affect the industry into twenty-first century (Bell et al., 2011). The
literature notes this process can often leave supply chain relationships in a tenuous state
(Simatupang and Sridharan, 2005b), and supply chains appear conditioned to resist any
490 impetus to change or utilize many of the industry-led innovations (Moreland and Hyland,
2010). Particularly innovation involving enabling technologies such as internet-based
advanced EBS (Gregor and Jones, 1999; Storer and Hyland, 2011) that underpin electronic
tracking of live animals from paddock to plate, electronic communication and electronic
commerce strategies (Trevarthan, 2006). Factors also influencing these industries and
maintaining a competitive edge through innovation utilization may be a lack of strategic
focus on relationships, cooperation and capability in the supply chain which is often
required to implement such systems across an entire industry.

Theoretical background and hypothesis development

According to Drucker (1985), innovation can be generally defined as the process
of equipping organizations with new, improved capabilities or increased utility.
Supply chain innovation often involves collaborative and partnering relationships,
particularly in terms of utilizing industry-led and industry-wide innovation, considered
mutually beneficial, such as new technologies and information systems (Smith et al.,
1996). Developing a supply chain’s competitive edge through the utilization of
innovations often involves pooling together capabilities and resources that reconfigure,
adapt and coordinate supply chain offerings in new and more satisfying ways for
customers, thus creating flexibility and efficiencies in supply chain operations
(Storer and Hyland, 2011). By combining tangible and intangible resources, the supply
chain ensures both customers and suppliers share some of the costs, risks and benefits
associated with innovating (Ketchen and Hult, 2007a), particularly when new or
improved products, processes and systems are developed as strategies to meet
changing market demand (Hult et al., 2007). Supply chains seeking to improve
outcomes from innovating need to possess the ability to adopt and implement the
innovation across key supply chain operatives and customers. When utilizing
industry-led innovation, supply chains such as the Australian beef supply chain need
to be prepared to adapt and change if they are seeking better performance and greater
levels of supply chain and industry competitive advantage.
Although some industry supply chains have moved to a more integrated approach,
such as the automotive, aeronautic and pharmaceutical supply chains, in agribusiness
supply chain operatives appear to be taking the path of least resistance and focussing
only on daily market specifications, and appearing to innovate individually rather
than at an industry level to optimize supply chain profitability and sustainability. This
behavior may suggest conflicting interests within this supply chain with relationships
primarily modeled on one-off transactional relationships, rather than cooperative or
collaborative supply chain models (Sabath and Fontanella, 2002) and may be reflected
with the recent horsemeat substitution scandal in the UK where horsemeat was
substituted and sold as cow meat in the UK beef supply chain.
In order to extend understanding of this phenomena more clearly, this research
seeks to examine how different supply chain relationships types, and certain strategic
supply chain capabilities, impact supply chain operatives exploiting industry-led
innovation, specifically sophisticated internet–based EBS, which are proposed to
improve supply chain and industry performance, and in the context of a specific Strategic
agribusiness industry – the Australian beef industry supply chain. The literature supply chain
underpinning this study is based in the strategy field. As Dyer and Singh (1998) point
out many scholars in this field are concerned fundamentally with explaining management
differential performance (Rumelt et al., 1991), either at the firm level or, as is the
case in this research, at the supply chain level. Two key areas utilized assist to examine
factors at both the organization and supply chain level and in terms of industry 491
competitiveness – the resource based view of the firm or RBV (Barney, 1996) and the
supply chain (Ketchen et al., 2007), and the relational view (Crook and Combs, 2007)
which looks at inter-firm relationships.
RBV examines firm capability in terms of obtaining and/or exploiting strategic
resources to leverage a competitive advantage in the market. These abilities are viewed
as strategic resources (Crook et al., 2008) and include tangible and intangible assets
that are organizationally activated, rare, valuable and difficult to imitate or substitute
(Barney, 1991b; Wernerfelt, 1984). Tangible assets are those resources that are physical
and easily transferred, whereas intangible assets are tacit and difficult to define and
transfer (Barney, 1991b; Villalonga, 2004) and are considered the most valuable in
relation to achieving a competitive advantage. Conversely, the relational view takes
into consideration the inter-firm resources (which are also tangible and intangible) that
are strategic and provide competitive advantage because their combinations are rare,
valuable and also difficult to imitate or substitute (Dyer and Singh, 1998). Drawing on
both the RBV and relational view literature, we argue it is possible to gain supply chain
competitive advantage through the unique combinations of reactive and proactive
capabilities that result from varying levels of coordination and cooperation within a
supply chain. These strategic capabilities tend to be unique to a supply chain at any
point in time. Figure 1 generally guides this exploratory, empirical study, and the
development of hypotheses to be tested, to address the central research question
previously identified.

Strategic supply chain capability in an agribusiness setting

Strategic supply chain capability for the purpose of this research describes higher-
order supply chain resources (Godfrey and Hill, 1995), defined as capabilities having
the capacity to influence important supply chain and industry outcomes, by default,
over and above the normal course of business (Hult et al., 2002). Strategic supply chain
capabilities can incorporate capabilities such as integrated information exchange,
systems-level coordination, inter-firm activity integration and supply chain
responsiveness (Wu et al., 2006). They can also include strategic and competitive

Strategic
Agribusiness
Supply Chain
Relationships
Industry-led
Agribusiness
Supply Chain /
Innovation
Industry Outcomes
Utilization

Strategic
Agribusiness This model tests responses from innovative vs
Figure 1.
Supply Chain non-innovative supply chain operatives Proposed research
Capability framework
IJLM capabilities such as organizational resource bundling, reconfiguration and
25,3 synchronization capabilities within the supply chain (Black and Boal, 1994; Teece et al.,
1997). These strategic capabilities are not always evident within all chain operatives (Hult
et al., 2008) and can vary across operatives. In this research we describe and differentiate
between two types of strategic supply chain capabilities mentioned in the literature:
reactive (immediate and instantaneous) capabilities, such as supply chain dynamic
492 capabilities – indicated in the literature by the ability of the supply chain to reconfigure
and adapt to changing market conditions (Ketchen and Hult, 2007a); and performance
differential capabilities indicated by the supply chain’s ability to control supply chain
issues and manage complexity (Storer and Hyland, 2011); vs synchronization capability
(Hahn et al., 2000) and innovation utilization capability (Storer and Hyland, 2011), which
we describe as proactive (constant and gradual) capabilities, and indicated by a supply
chain’s ability to coordinate soft and hard infrastructure for the competitiveness of the
supply chain at any given time.

Reconfiguration and adaptability – supply chain dynamic capability

Utilizing and implementing industry-initiated innovation at firm and the inter-firm
levels of a supply chain often triggers reconfigurations within that supply chain.
Reconfiguration is often reactive and is considered a dynamic capability describing the
process of changing existing configurations of resources into new ones that match
the changing environment (Menon, 2008). Menon (2008) argues that reconfiguration as
a capability has been connected to the appropriateness (Galunic and Rodan, 1998),
timeliness (Zott, 2003) and efficiency (Kogut and Zander, 1992) by which existing
resources are re-shaped by business and supply chain operatives into new operational
competencies. Complementary to this process, especially in changing markets, supply
chains that are innovating also need to be able to adapt to the changes such innovation
can cause to its members. Adaptability, another dynamic capability, enables supply
chain operatives to reshape business practices in a new direction for the supply chain,
which may have reconfigured through innovation episodes in response to changing
market pressures. Adaptability involves supply chain operatives sensing, or learning,
what is required to meet new or changing consumer trends or market demands,
particularly in relation to the rising level of sophistication required in the information
systems that inform these shifts and trends (Lee, 2004; Ketchen and Hult, 2007a).

Complexity and control – supply chain performance differential capability

Adding to these reactive strategic supply chain capabilities are those that characterize
performance differentials or discrepancies within a supply chain (Storer and Hyland,
2011). These capabilities relate to how, individually and collectively, supply chain
operators gain strategic and competitive advantage from their unique ability to
manage the complexities of supply chain relationships and activities, and control
respective outputs, for the competitive benefit of all supply chain participants. This is
especially relevant during phases of dynamic change that are the result of utilizing
innovations throughout the supply chain. Supply chain complexity stems from the
intra- and inter-organizational transactions within the supply chain, and the layers of
infrastructure and systems interacting during any given transaction, as well as
potential goal incompatibilities (Lee et al., 2010). For the Australian beef supply
chain, complexity varies in terms of business activities, innovation capacity and the
geographical dispersion of chain participants. For example, large numbers of supply
chain participants operate in remote areas of Australia. Additionally, there is industry
divergence where moderately dynamic (Eisenhardt and Martin, 2000) activities relate to Strategic
the processing of commodity beef cuts for domestic and global consumption. While supply chain
extremely complex, high velocity (Eisenhardt and Martin, 2000) activities relate to
processing by-products from the first process and value-adding into by-products, co- management
products and derivative beef products for domestic and global customers. Complexity may
also reside in the incompatibility of information, technology and communications (ICT)
systems (Devaraj et al., 2007). Simple issues such as inadequate online bandwidth and 493
telephone infrastructure, typical in more remote production areas, or the lack of
synchronization of ICT systems with other supply chain operatives can cause this
incompatibility (Lee et al., 2010). Therefore, achieving competitive advantage through
individually and collectively managing varying degrees of complexity within the supply
chain closely relates to the level of control within and between supply chain operators.
Often there are differing degrees of control exerted by supply chain operators within
a supply chain at any point in time. However, controlling supply chain relationships
and processes, and managing complexities within the supply chain for the competitive
benefit of the entire chain is very important. This is especially the case when the
supply chain is attempting to utilize innovation such as new industry-wide electronic
business solutions through the internet (Krause et al., 2007; Devaraj et al., 2007; Sabath
and Fontanella, 2002). Control is also often associated with “power” in terms of supply
chain literature (Cox, 1999) and managing complexity, both in terms of the innovation
process (Chapman and Hyland, 2004) and supply chain management. Control ensures
the supply chain sustains and maintains its ability to appropriate and accumulate
value for all its participants, through flexibility in design and by processing
information accurately and efficiently (Cox, 1997). As discussed, control and managing
complexity are not confined within the legal boundaries of a single supply chain
firm (Newman et al., 2009) and often differentiate the supply chain to competition,
particularly through their associated roles in increasing or decreasing costs and their
appropriation within the chain, and in coordinating and synchronizing supply chain
activities (Hopwood, 1996). In the Australian beef industry degrees of control may
fluctuate due to the size of the supply chain operative (Cohen and Klepper, 1996;
Nieto and Santamaria, 2010). Differences in scale reside between the domain of the
multi-national and large-scale national operators and the micro/smaller operators,
together with fluctuating capability and differentiated access to strategic industry
resources. Once a supply chain has significantly altered through reconfiguration and
adapting to market forces varying degrees of control are required to manage the
complexities so that the supply chain remains synchronized.

Coordination and alignment – supply chain synchronization capability

Coordinating the supply chain ensures supply chain members behave as a part of a
unified and aligned system that delivers an end product or service to its ultimate
consumer (Arshinder et al., 2011). Alignment, a factor in coordinating supply chains,
describes the linear or consistent fit between systems, processes and activities
occurring between operatives, and often involves organizing supply chain incentives in
such a way that they fit the requirements of the whole supply chain (Ketchen and Hult,
2007a). Supply chain synchronization capability describes how supply chain operators
proactively coordinate, align, and realign supply chain relationships and activities to
meet dynamic and new market direction (Hahn et al., 2000; Kambil, 2008). This
synchronization is necessary to ensure maximum efficiencies and effectiveness within
the supply chain continues to occur through coupling, decoupling, and recoupling of
IJLM suppliers is maintained at all times. In other words, maintaining coordination and
25,3 alignment on a daily basis determines how well supply chains maintain unanimous
decision making, constant and transparent information sharing and equilibrium in
incentive sharing (Simatupang and Sridharan, 2005a). Ensuring supply chain
synchronization is a strategic skill between supply chain operators that enables them
to moderate, between lesser and higher degrees, the sharing of systems, processes,
494 activities and relationships, in order to achieve greater supply chain efficiencies and
quality controls on a daily basis to generate superior returns (Powell, 1992) through
new synergies that meet the demands of customers and suppliers in the face of
competition. For the agribusiness industries such as the Australian beef industry, the
introduction of advanced electronic business solutions using the internet could be
disruptive if the supply chain lacks synchronization, and any advantage from use of
these solutions could be lost as a competitive advantage in global markets. Therefore,
we propose the following hypothesis to direct this area of the research:

H1. Strategic agribusiness supply chain capabilities in innovative firms

positively influence utilizing industry-led electronic business innovation
through performance outcomes in the supply chain.

Strategic agribusiness supply chain relationships – One-off vs cooperative

Supply chain relationships involve groups of supply chain operatives entering
into formal or informal business agreements at specified points in time to secure
supply and demand in order to meet consumer expectations (Lambert and Knemeyer,
2006). However, not all supply chain relationships are strategic. This research argues
that strategic supply chain relationships are those combinations of purposive
relationships that engender innovation capacity and drive the supply chain’s
competitive advantage. These supply chain relationships involve specific levels of
coordinated one-off transaction relationships and various levels of cooperative
relationships. To understand these interactions better this research explored the
various levels of cooperation and coordination that exist between various supply chain
operatives as presented in Figure 2.
The exchange mechanisms outlined in Figure 2 suggest supply chain relationships
can be transactional and one-off, or can be more cooperative and developed through
varying degrees of collaborating (partnering). These varying levels of relational
capability refer to the strategic intent by supply chain operatives to determine the
intensity and formality of sharing and integration, which will exist between various
supply chain operatives. We suggest that both one-off transaction and varying levels of
cooperation within a supply chain are strategic relational states.

One-off supply chain relationships

One-off relationships are dynamic transactional relationships that require constant
coordination, varying degrees of low-level alignment and integration within the chain.
These relationships are not perceived to be long lasting, yet there is a perception that
these types of relationships provide strategic value through their ability to provide
supply chain operatives with a greater level of flexibility (Hulsmann et al., 2008;
Wadhwa et al., 2008). This flexibility relates to the ability of supply chains to decouple
existing supply chain relationships and couple to new supply chain relationships to
meet changing demand conditions in the marketplace. The strategic nature of this type
of supply chain relationship is very competitive, and often this competitive behavior
 Supply Chain Relationship Types vs Nature of Business Exchanges Strategic
Relational
Large Degrees of Coordination
Partnerships and Long
supply chain
- based on Cooperation
Collaborations Term management
BUSINESS EXCHANGE

STRATEGIC INTENT
Level of strategic intent
495
to develop supply
chain capabilities

One-Off
Discrete Transactional Minimal Degrees of Coordination Short
Relationships Figure 2.
- based on Competition Term
Degrees of exchange
SUPPLY CHAIN OPERATIONAL INTEGRATION between supply chain
relationships
Source: Adapted from Wagner and Boutellier (2002)

becomes more powerful as supply gets closer to the end users of a final product.
While supply chain cooperation is encouraged in certain areas of activity, the closer
supply gets to the end consumer, often levels of competition increase and cooperation
within the supply chain diminishes, based on rent-seeking behavior, organizational
competencies and research efforts (Lado et al., 1997).

Cooperative relationships
Cooperation and collaboration in supply chain relationships usually invoke varying
degrees of formal and informal partnerships, which can be dyadic ( Jongkuk and William,
2010) or involve broader cooperation between multiple supply chain actors as interests
converge and they strive to derive mutual benefits and outcomes (Contractor and Lorange,
1988). These types of supply chain relationships usually involve medium to high levels of
alignment and varying degrees of integration of systems and processes. They also suggest
supply chain operatives are able to control how they act within the supply chain to
strategically compete at the firm level and at the inter-firm level, yet achieve focussed
outcomes as part of competitive supply chain behavior (Stevenson and Spring, 2007).
Cooperative and collaborative supply chain relationships are perceived to provide a
strategic value usually associated with high degrees of sharing across processes such as
research and development activities, innovation activities, developing strategic
management initiatives, and designing supply chain functions and systems such as
integrating EBS in order to achieve improved supply chain outcomes. Competitors within
a supply chain can also cooperate – a relationship described as coopetition (Brandenburger
and Nalebuff, 1996; Bengtsson and Kock, 2000).
More often than not, developing and utilizing industry-led innovations across a
supply chain involves varying degrees of inter-relationship coordination and
cooperation and is rarely an isolated process, particularly in the Australian beef
industry (Burgess, 2007). The intrinsic and extrinsic nature of innovation in the supply
chain affects both individuals and organizations (Shavinina, 2003), particularly
innovations that involve market challenges or realign market trajectories (Mangan and
IJLM Christopher, 2005). This often requires strategic redevelopment or realigning of supply
25,3 chain relationships and capabilities, including much of the physical infrastructure and
systems that go with those relationships. Innovation capacity is a critical tool in
developing supply chain competitiveness (Ferrer et al., 2008; Storer et al., 2007). In the
Australian beef industry, supply chains which utilize innovation, and particularly
industry-led innovation, are striving to reduce costs, increase efficiencies and
496 effectiveness and definitely improve profitability across the industry – not just at the
individual firm level. We argue in this research that both one-off transaction and
cooperative relationships can provide strategic capability, although innovation
researchers argue that it is the level of cooperation and collaboration between firms
that is important to innovation and its utilization (Bessant, 1994). We therefore propose
the following hypothesis to guide this section of the research:

H2. Developing strategic agribusiness supply chain relationships positively

influences strategic supply chain capability in innovative firms.

Innovation utilization capability – agribusiness industry-led innovation

Supply chain innovation utilization as a strategic capability can deliver higher-order
supply chain resources (Godfrey and Hill, 1995) and a capacity to influence important
supply chain performance outcomes over and above the normal course of business
(Hult et al., 2002). Innovation is often described as evolutionary, incorporating
continuous and incremental improvement (Utterback, 1986), or revolutionary
(Carayannis et al., 2003), incorporating radical or disruptive change (Bessant, 2006),
and may not create value every time (Bessant et al., 2005). Further, innovation can
bring uncertainty and discontent as participating supply chain organizations,
particularly those involved in industry-led innovation, grapple with any change
brought about by the implications of new or improved products, processes or systems.
This is particularly relevant to innovation involving internet-based advanced EBS
across a national agribusiness industry and its supply chains, and may require a
strategic response involving both proactive and reactive capabilities. Especially in
situations that involve excessive distances and high levels of remoteness and
ruggedness of locations between supply chain operators act as compounding factors.
Furthermore, some operatives may lack the relevant expertise to set up electronic
infrastructure, programs and systems, hampered by their limited access to training,
being time poor, and not being of sufficient size to afford engaging expert staff (Gregor
and Jones, 1999). These factors may result in supply chain performance benefits from
innovating through internet-based EBS being somewhat mixed. This is particularly
true when challenges of variability in infrastructure and capability continue to
undermine the quality and usefulness of such an initiatives and performance measures
are still evolving (Murali et al., 2009).
For the purposes of this research, utilizing industry-led innovation is measured
through three supply chain performance outcomes identified in the literature as:
financial benefits, operational efficiencies and growth (Trienekens et al., 2012). These
measures also acknowledge that these types of technology innovations have a
reputation for challenging the functional and operational capacities of some supply
chain organizations and causing unreported negative impacts (Storer, 2007). Financial
benefits, as a measure of the effects of industry-led innovation in the supply chain, are
gauged in this research by a perceived increase in profits and turnover, and reduced
operating costs (Brewer and Speh, 2000) across the supply chain. Operational efficiency,
however, relates to perceived more effective use of time, improved efficiencies in Strategic
business and supply chain operations, and improved overall performance efficiencies supply chain
that align with supply chain objectives (Chandra and Kaumar, 2001). Finally, growth
factors have been adapted from literature relating to value-adding and continued management
improvements in the supply chain (Christopher, 2005) through perceived improved and
more frequent contact with customers/distributors/staff, and increased business
opportunities in domestic and global markets. Therefore, we offer the following hypothesis 497
to direct this area of the research:

H3. Developing strategic supply chain relationships positively influences supply

chain performance outcomes derived from utilizing industry-led electronic
business innovation in innovative firms in the Australian beef industry.

Using confirmatory factor analysis and structural equation modeling (SEM), and the
SEM framework in Figure 3 to guide the next phase of this research, these hypotheses
are tested against industry data, comparing two models (innovative vs non-innovative
supply chain operatives).
The next section focusses on describing the research methods used in this research.

Research methods
Survey data collection
The process for developing the survey instrument, its measurement constructs and the
“best fit” model to answer the research questions outlined in this research has been
developed using the instrument development process as recommended in Hair et al.
(2010). Scale development followed acceptable procedures already set out by Churchill
(1979) with each construct clearly defined in terms of what would be included or
excluded. Relevant scales and measures were adopted or adapted from the existing
literature where appropriate, as identified in Table II.
If none were available or appropriate, new measures were developed (Churchill,
1979). Initial factor analysis was undertaken using PASW SPSS V18 software to ensure

1 1 1 1 1 1 1

Control Complexity Reconfiguration Adaptability Coordination One-Off Cooperative

1
1

Strategic H2 Strategic
1 Agribusiness Agribusiness
Z1 Supply Chain Supply Chain
Capability Relationships
Model Tests: H3
IS = Innovative SC Operatives vs H1
NIS = Non-innovative SC Operatives Supply Chain Financial 1
Outcomes

Supply Chain Operational 1

Industry-led
Z2 Agribusiness Efficiency Outcomes
1 Innovation Figure 3.
Utilization Supply Chain Growth 1 Structural equation
Outcomes model (SEM) constructs
IJLM measures and factors achieved reliability through Cronbach a scores. Observed
25,3 variables are indicators/measures presented in the survey instrument in Appendix,
based on Likert-scaled items ranging from 1 (negative) to 5 (positive) responses. a
Scores for the scales ranged from 0.79 to 0.93, and factor loadings of items were
acceptable (Dewberry, 2004).
Data for this research were collected through a postal survey instrument sent to
498 2,400 Australian beef industry supply chain participants across various industry
categories representing the majority of activities undertaken by the supply chain. All
mailings, including a cover letter, the survey and a postage paid return envelope were
sent via registered mail and within four weeks of the initial mailing, follow-up was
undertaken through telephone calls or e-mails to any respondents who had not replied,
as suggested in Dillman’s total design method (Dillman, 1978).
The Non-response bias was checked by comparing early and late respondents
(Armstrong and Overton, 1977) using t-tests which revealed there was no significant
different on major constructs between the two groups. Therefore it was accepted there
were no significant issues with a non-response bias for this study. This study was also
tested for common method bias using the Harman one-factor test with no dominant
factor emerging, and therefore it was concluded there was no presence of common
method bias in the study (Podsakoff and Organ, 1986). From that survey 416 responses
were accepted and represented a response rate of 17.3 percent which is acceptable of a
survey of this nature. Both SPSS V18.0 (SSPS Inc and IBM Company, Chicago, III,
USA) and Analysis of Moment Structures (AMOS version 18.0, AMOS Development
Corporation, Spring House, Penn., USA) software programs are used to undertake
multivariate analysis research on this data.
Although not ideal, the data still provides interesting insights into this topic, as this
response rate reflects the difficulties of extracting data across a national agribusiness
supply chain, characterized by geographic diversity and compounded by the time
constraints for conducting such research. Data are compared in two structural
equation models, between 202 supply chain operatives prepared to innovate through
the use of industry-led e-business systems using the internet, and placed a high
importance on product and breeding innovation (innovative), and 212 supply chain
operatives who rated product and breeding innovation as unimportant or not
important (non-innovative). This response rate is well within the 100 cases
recommended for undertaking multivariate analysis (Cramer, 2006). A sufficient
power analysis is dependent on the ratio between the total number of variables and the
sample size; one observed variable per ten operatives is given as reliable (Hair et al.,
2010; Schumacker and Lomax, 1996; Jöreskog, 1977). Thus, this sample size is
acceptable bearing in mind the geographically and demographically diversified nature
of this type of supply chain. Respondents are from production, logistics, processing,
wholesaling, retailing, services and upstream manufacturing set out in Figure 4(a), and
drawn from either company owners or senior supply chain/business managers set out
in Figure 4(b).

Data analysis
To simplify modeling and ensure “goodness of fit” measures prior to testing the
measurement model a series of composite indicators ( Jöreskog, 1971) were developed
to avoid some of the inherent modeling issues in modeling large numbers of factors in
AMOS (Grace and Bollen, 2008). These composite indicators represent the regression
of the set of observed indicator variables on a single latent variable; in this case,
 (a) (b) Strategic
Production Chief Executive Officers supply chain
Live and Cold Chain Logistics and Warehousing Supply Chain or Procurement Managers management
Professional and Other Services Business Owners/Managing Directors
Processing/Manufacturing
Sales 499
21%
15%

30% 17% Figure 4.

62%
28% (a) Supply chain
participation and (b)
10% respondents
17%

first-order indicators of strategic supply chain capability: supply chain performance

differential capability (control and complexity); supply chain dynamic capability
(reconfiguration and adaptation) and supply chain synchronization (coordination and
alignment); and industry-led innovation utilization (financial benefit, operational
efficiency and growth).
Table I lists composite indicators, tested for their reliability and distribution values,
through their standard deviation scores, new factor loadings and measurement error
variances, using coefficient tables to establish composite Cronbach’s a scores, and
factor score weights.
An SEM was then constructed to examine the relationships between these
three key latent variables (strategic agribusiness supply chain capability, strategic
agribusiness supply chain relationships and utilizing industry-led innovation)
measured through their respective indicators. Construct validity was then tested
against the structural model developed using maximum likelihood estimation
procedure ( Jöreskog et al., 1999). SEM confirmed the accuracy of the Variant
Model verses the Invariant Model as the “best fit” model for both data sets. Model fit
indices are set out in Table II.
The Akaike information criterion (AIC) score was used to test for parsimony and
model fit using the lowest indicator (Byrne, 1998). The variant model received the
lowest AIC score of 176.87 vs 178.70 for the invariant model. Other measures such as
the CMIN/df test for fit, together with some baseline comparison indices such as the
incremental or comparative fit through the Tucker-Lewis Index; and the Comparative
Fit Index. Model reliability scores all ranged within or over the norm of X0.95 for
these tests. Additionally, confirmation was found through the most important fit index,
the root mean square error of approximation (RMSEA) fit index (good model
fit at p0.05 with PCLOSE X0.5), which also takes into account the error of
approximation in the population (0.02 with a 90 percent confidence interval of 0.01-0.03
and a PCLOSE (X0.5) value of 1.00). Discriminate validity relating to the model’s
reliability was achieved with the parameters constrained to be the same across two
groups: innovative supply chain operatives (IS) (n ¼ 202) to non-innovative supply
chain operatives (NIS) (n ¼ 210) for both models (Thomas, 1959). The models in
Figure 5 represent a comparison of the Variant Model using data from innovative and
non-innovative supply chain operatives.
The following section provides a summary of the results.

Table I.
Constructs and literature
Indicators Concept description
Strategic supply chain capability
Reconfiguration Level of supply chain dynamic capability – ability
Adaptability to re-act, to reconfigure and adapt supply chain
capabilities and operations in changing market
conditions and to changing consumer trends
Control Level of supply chain performance differential
Complexity capability – ability to react, to maintain control while
addressing and managing complexities within the
supply chain in changing market conditions and to
changing consumer trends
Coordination Level of supply chain synchronization – ability to be
Alignment proactive and continually coordinate and align
supply chain technologies, capabilities and activities
on a day to day basis to ensure seamless and cost-
effective operations in changing market conditions
and to changing consumer trends
25,3
500
IJLM
Sample literature
E.g. Amit and Schoemaker (1993), Chang et al. (2008),
Danneels (2008), Dyer and Chun (2001), Eisenhardt
and Martin (2000), Helfat (1997), Jongkuk and
William (2010), Mahoney (2004), Menon (2008),
Storer and Hyland (2011), Storer and Hyland (2011),
Teece et al. (1997), Winter (2003), Zott (2003), Crook
et al. (2008), Hult et al. (2008), Ketchen and Hult
(2007a), Ketchen and Guinipero (2004), Ketchen
et al. (2007), Shook et al. (2009), Wang et al. (2009)
E.g. Beamon and Ware (1998), Christopher (2000),
Cox et al. (2001), Craighead et al. (2009), DeAngelis
(2011), Eisenhardt (1985), Fearne and Hughes (1999),
Kotler (1997), Lambert and Pohlen (2001), Leiponen
(2008), McMillan and Hamilton (2004), Wang et al.
(2007)
E.g. Chandra and Kaumar (2001), de Boeck and
Vandaele (2008), Dekker (2004), Jansen et al. (2006),
Omar et al. (2012), Reuer and Ariño (2007),
Simatupang et al. (2002), Stank et al., Tan (2002),
Wolf et al. (2001)
(continued )
Indicators Concept description Sample literature

Strategic supply chain relationships

One-off Level of intensity of supply chain relationships Baihaqi and Sohal (2012), Bengtsson and Kock
transactions (2000), Bensaou (1999), Beth et al. (2003), Boxersox
Coordinated and and Lahowchic (2008), Boyd et al. (2010), Burgess
cooperative (2007), Chase (1985), Cox et al. (2001), Davies (1996),
Donada and Dostaler (2005), Ferrer et al. (2011),
Freeman and Gilbert (1987), Harland (1996), Hofstede
(2007), Kasouf and Celuch (1997), Kaufman et al.
(2000), Lambert and Knemeyer (2006), Maloni (2000),
Managers (2006), Storer and Hyland (2011), Vickery
et al. (1999)
Innovation utilization capability – performance measurements
Financial Better priced products; reduced costs; improved E.g. Brewer and Speh (2000), Gunasekarana et al.
benefits profits and turnover; increased sales volumes (2004), Lambert and Pohlen (2001), Langfield-Smith
Operational Better Quality; product improvements; volume and Smith (2005), Adams et al. (2006), Alegre et al.
efficiencies flexibility; delivery flexibility; product flexibility; (2006), Fearne and Hughes (1999), Tipping and
increased total chain efficiencies; volume reliability Zeffren (1995)
and continuity
Growth Increased new product offerings; better overall value-
adding; offering unique/exclusive products;
improved chain relationships
management
Strategic
supply chain

501

Table I.
IJLM Coeff.
25,3 SD of H Rel. Factor
Cronbach Comp Comp Load (l) Error Var. (q)
Indicators Measures a (sx) (rx) (sx*Örx) (s2x [1-rx])
Composite indicators: strategic supply chain relationships
One-off 4 0.79 0.99 0.76 0.83 0.13
Cooperative 3 0.77 0.97 0.74 0.85 0.12
502 Composite indicators: strategic supply chain capability
Coeff.
SD of H Rel. Factor
Cronbach Comp Comp load (l) Error var. (q)
Composite indicators Measures a (sx) (rx) (sx*Örx) (s2x [1-rx])
Reconfiguration 9 0.88 0.90 0.77 0.78 0.19
Adaptability 6 0.96 0.92 0.84 0.84 0.14
Control 13 0.80 0.93 0.75 0.81 0.22
Complexity 11 0.91 0.97 0.85 0.90 0.14
Coordination 12 0.93 0.90 0.81 0.81 0.16
Composite indicators: utilizing industry-led innovation for beneficial outcomes
Performance benefits 4 0.96 0.94 0.88 0.88 0.11
Table II. Operational
Construct reliability efficiencies 4 0.95 0.93 0.87 0.87 0.11
and validity Growth 4 0.95 0.89 0.80 0.80 0.16

Results
The results outlined in Table III show supports for the three hypotheses. Key
constructs identified in the structure of this model all have a critical ratio (CR) value of
41.96, and p-values of o0.000 (***), indicating statistical significance. This confirms
that all coefficients or estimates of all measures are significantly different from zero
and should remain in the model, even though SMC values may be o0.2 as
recommended, and may indicate they are very poor measures and should be dropped.
We argue these factors and measures are important to the model and have redeeming
features as they represent the literature and are reflective of attitudes in this industry
toward this topic at this time. Through the standardized regression weights, the results
show the strength of affect varies between each of the key factors and their measures
between innovative and non-innovative suppliers (Table IV).

Discussion
For this agribusiness industry and others like it around the world, national
governments are imposing mandatory regulatory reporting of activities on and off
farm, from paddock to plate. An example of this, is the mandatory reporting and
electronic tagging of all beef cattle movements in Australia through the use of
electronic radio frequency identification tags (RFID tags); use of electronic domestic
and export waybills and other electronic commerce transactions; and increased
reporting requirements in relation to quality controls, particularly the use of
antibiotics, growth hormones and industrial chemicals in the beef supply chain. This
increase in communication and transaction complexity has been constantly occurring
in agribusiness industry supply chains over the past decade as global consumers and
regulatory agencies demand food safety and governments address food security issues.
This has resulted in an increasing reliance on electronic information and business
systems at both the global supply chain and whole-of-industry level (Bell et al., 2011).
 Best Fit to Data: Variant Model — Standardized: Innovative SC Operatives Strategic
E10 E11
supply chain
0.55

OneOff
0.68
Cooperate
0.69 management
0.82 0.83

Strategic
Supply Chain
503
Relationships

Z1 0.16 Z2
0.49 0.48
0.69
E1 Adaptability 0.66 0.23 0.03
0.70 0.83 FINBENFIT E7
E2 Reconfiguration 0.81 0.83
0.54 Strategic Industry-Led 0.91
0.74 0.03 OPBENEFIT E8
Supply Chain Innovation
E3 Complexity 0.54
0.58 0.74 Capability Utilization 0.73
GROWTH E9
E4 Control 0.22
0.95
E6 Synchronization

Best Fit to Data: Variant Model — Standardized: Non-Innovative SC Operatives

E10 E11

0.29
0.85 0.41
OneOff Cooperate

0.92 0.64

Strategic
Supply Chain
Relationships

Z1 Z2
0.52 0.46 0.15
E1 0.82
Adaptability 0.21 0.03
0.52 0.72 E7
0.91 FINBENFIT
E2 Reconfiguration 0.72 0.82
0.41 0.90
0.64 Strategic 0.03 Industry-Led OPBENEFIT E8
E3 Complexity
0.69
Supply Chain Innovation
0.80 0.65 Figure 5.
0.48 Capability Utilization
E4 Control 0.25 GROWTH E9 Structural equation
0.96
model (SEM) constructs
E6 Synchronization

SEM – variant model – fit indices

w2 90.87
df 67
w2/df 1.35
p-value (40.5) 0.03
RMR 0.06
RMSEA (o0.05) 0.03
90% Confid. interval (0.05-o0.05) 0.01-0.44
PCLOSE (40.5) 0.99
GFI 0.96
RFI 0.93
IFI 0.99
TLI 0.98 Table III.
CFI 0.98 SEM fit indices
 25,3

504
IJLM

Table IV.

chain operatives
non-innovative supply
SEM Model – fit to data
statistics – innovative to
Innovative p SRW SMC Non-innovative p SRW SMC Hypotheses

SSCC’SSCR *** 0.48 0.23 SSCC’SSCR *** 0.46 0.21 Supported

ILIU’SSCC *** 0.03 0.03 ILIU’SSCC *** 0.03 0.03 Supported
ILIU’SSCR *** 0.16 ILIU’SSCR *** 0.15 Supported
Financial benefits’ILIU *** 0.83 0.54 Financial Benefits’ILIU *** 0.91 0.82
Operational efficiency’ILIU *** 0.91 0.83 Operational efficiency’ILIU *** 0.90 0.82
Growth’ILIU *** 0.73 0.69 Growth’ILIU *** 0.80 0.65
Reconfiguration’SSCC *** 0.81 0.66 Reconfiguration’SSCC *** 0.72 0.52
Adaptability’SSCC *** 0.70 0.49 Adaptability’SSCC *** 0.72 0.52
Complexity’SSCC *** 0.74 0.54 Complexity’SSCC *** 0.64 0.41
Control’SSCC *** 0.75 0.55 Control’SSCC *** 0.69 0.48
Coordination’SSCC *** 0.21 0.05 Coordination’SSCC *** 0.25 0.06
One-Off Transactions’SSCR *** 0.82 0.68 One-Off Transactions’SSCR *** 0.92 0.85
Cooperative’SSCR *** 0.83 0.69 Cooperative’SSCR *** 0.64 0.41
Notes: Estimates with a CRX1.95 and a significance level of p ¼ p0.000 represented by ***are considered significantly 40 and therefore should stay in the
model, even though SMC values may be o0.2 as recommended, and may indicate they are very poor measures and should be dropped. We argue these factors
and measures are important to the model and have redeeming features as they represent the literature and are reflective of attitudes in this industry toward
this topic at this time
The respondents in this study acknowledge these trends, and also provide valuable Strategic
insights into the level of importance being placed by agribusiness supply chain supply chain
members on addressing these issues. The study also highlights influential factors that
may have some effect on take-up of industry-wide agribusiness EBS innovation management
agendas, including highlighting the complexity of the task, and indicating there are
potential conflicts of opinion within agribusiness supply chains in relation to this type
of innovation which may be a result of the varying degrees of strategic supply chain 505
management capability available to exploit such innovations.
Outcomes from this research reflect both innovative and non-innovative supply
chain operators support the three hypotheses argued in this research, albeit to varying
degrees. Non-innovative operatives have shown that although they may not use
electronic business solutions and the internet in their business, they acknowledge the
benefits that might accrue to the supply chain from utilizing this type of innovation. Of
most interest is that non-innovative operatives have suggested a higher level of
financial (b ¼ 0.82, po0.01) benefits accruing from this type of innovation to the
supply chain than innovative operatives (b ¼ 0.54, po0.01), respectively. This may
suggest that initially high levels of financial benefits are anticipated (as indicated by
non-innovative operators) but do not actually accrue at those levels (as indicated
by innovative supply chain operators). Further, results confirm this type of
technological innovation can be disruptive, and may not accrue the benefits expected,
due to its revolutionary rather than evolutionary nature (Assink, 2006), and the fact
that development and implementation of disruptive innovation is not well understood
(Leifer et al., 2001).
In terms of comparing attitudes to the importance of developing strategic supply
chain relationships, innovative operators believe both one-off transactional
relationships (b ¼ 0.68, po0.01) and cooperative relationships (b ¼ 0.69, po0.01)
have approximately equal weight. Typically, non-innovative operatives, give much
greater weight to one-off relationships (b ¼ 0.85, po0.01) in preference to cooperative
forms of relationships (b ¼ 0.41, po0.01). This could be seen as a typical reaction and
reflect the fact that non-innovative supply chain operators have less regard for supply
chain cooperation, and reflects the fact that they are not participating in this industry-
led innovation agenda (which requires coordination, cooperation and collaboration).
Non-innovative supply chain operatives obviously seek competitive advantage
through greater flexibility which they perceive comes from reliance on transacting one-off
relationships and the ability to couple and decouple quickly and without repercussion.
Additionally, findings support earlier studies of this agribusiness industry that
suggest not all industry-led innovation is being adequately utilized or assessed prior to
release – with calls both to academia and the industry to better understand the issues
that may inhibit adoption and utilization (Moreland and Hyland, 2010). A cause may be
the lack of regard at the individual firm level to consider the ramifications of
supporting or not supporting such innovation at the supply chain level. That is, to
ensure any innovation efforts are well coordinated and aligned across the whole supply
chain and not just left to individual firms to decide to participate or not. In this study
this is lack of coordination and alignment is obvious with the notable result that there
is a lack of support from both innovative (b ¼ 0.05, po0.01) and non-innovative
(b ¼ 0.06, po0.01) operators for supply chain synchronization as an indicator of
strategic supply chain capability. Even though supply chain literature suggests supply
chain coordination and alignment (synchronization) are strategic and integral to
effective decision making and efficient supply chain operations (Wadhwa et al., 2008).
IJLM This point is further supported through joint agreement by both innovative (b ¼ 0.03,
25,3 po0.01) and non-innovative (b ¼ 0.03, po0.01) operators that strategic supply chain
capability (measured by the ability to reconfigure, adapt, control, manage complexity
and synchronize at the supply chain level) while influencing utilizing industry-led
innovation for beneficial supply chain outcomes, this influence is minimal. This result
may evidence a lack of strategic intent (Hamel and Prahalad, 1989) by members of this
506 agribusiness supply chain to act in the best interests of the supply chain and industry,
and that generally they compete as individual entities rather than as a supply chain
and an industry. While these agribusiness supply chain practitioners acknowledge
benefits may accrue from developing strategic supply chain relationships and
capabilities and utilizing available industry-led innovations to some degree; findings
also confirm there are a mosaic of multi-dimensional relationships, capability and
operational complexities within these type of supply chains influencing how well such
industry-funded and driven innovation is exploited by all members. Preparedness to
innovate or not has only a marginal influence on these findings.
Although taking a strategic supply chain management approach is argued to ensure
supply chain activities support the competitive priorities of improved speed to market,
increased cost reductions, improved quality control and maximum flexibility
(Ketchen and Hult, 2007a); it is apparent from this study not all agribusiness
industry supply chain members may be able to engage in innovation utilization in an
equal fashion. The nature of their relationships within the supply chain and also their
level of capabilities to exploit such innovation may expose potential gaps in the level of
engagement possible as global supply chains become more complex (Malik et al., 2011).
Especially when agribusiness industries constantly struggle with global competitive
pressures stemming from the constant threat of product substitution by the consumers;
unpredictable weather events influencing farming operations and supply chain
operations; unexpected trade embargoes and foreign currency fluctuations; and a
constant narrowing of profit margins for producers, manufacturers and logistics
operators due to increased profit margins sought by large monopolistic global and
national retailers.
It may be important for Government policy makers, agribusiness industry bodies
and industry supply chain members to reconsider how strategic supply chain
management practices might be engaged before considering the development of
industry-level innovation programs that engage at a supply chain level, especially
when there appears to be some reflection from these respondents that these types of
sophisticated electronic business and communication system innovations can be
disruptive to supply chain and industry workings. It is obvious some supply chain
operatives are unable to reconfigure and adapt to the required changes, or manage and
control the complexities involved in synchronizing and utilizing these types of
sophisticated electronic business technologies and systems, as part of a whole-of-
industry agenda due to a lack of either hard or soft infrastructure. Agribusiness supply
chains need to be strategic in their design and management of supply chain
relationships and capabilities, if they are to achieve a totally integrated industry
information and quality management system from paddock to plate. Exploiting
sophisticated EBS can “change the game” for existing supply chain businesses in
either a positive or a negative manner (Christensen, 2003; Christensen et al., 2002).
Negative results often occur when capability deficiencies and/or incompatibilities
between existing systems and technologies operated by individual supply chain
operatives (Bessant, 2008; Simatupang and Sridharan, 2005b; Malhotra et al., 2005)
may exist. Additionally, as we have already pointed out, a lack of infrastructure and Strategic
geographic isolation, together with the dispersed nature of many other agribusiness supply chain
industries, compound these negative effects. High-speed broadband telecommunications
infrastructure nation-wide are integral to the strategic and successful utilization and management
exploitation of these sophisticated EBS, if they are to underpin competitive performance
outcomes for national agribusiness industries and their related supply chains (Bell et al.,
2011). In this instance there is an apparent reluctance by many operatives to get involved 507
in “shared” electronic information systems and networks or to synchronize the supply
chain through varying degrees of systems and process alignment and integration that
ensure the supply chain and industry continually meets its competitive goals. For this
industry, this lack of importance on supply chain synchronization may be at the heart of
the industry paradox of why millions of dollars invested in innovation results in uneven
results across the industry.

Contributions
The first contribution of this study is the delineation of key factors in the model,
represented by the three latent constructs: strategic supply chain relationships,
strategic supply chain capability and industry-led innovation utilization. The second
contribution is the contradiction by this industry to the literature in recognizing supply
chain synchronization as a key indicator of strategic supply chain capability. The
effective coordination of supply chain activities reduces the “bullwhip” effect and
information distortions in the supply chain (Lee et al., 1997), which would be of
importance to any supply chain, yet both innovative or non-innovative operatives in
this industry do not agree. This may indicate a lack of understanding and cohesion by
supply chain practitioners on exactly what defines supply chain synchronization.
Much of the current academic literature discusses its attributes, coordination,
alignment, integration and cooperation with few, if any, articles actually referring to
supply chain synchronization as a strategic capability made up of those components.
Much of the literature that informs this topic relates to information technology and
EBS, rather than to strategic supply chain management of relationships, decision
making and building successful and coordinated supply chains across an industry.
This research has shown the predictability and inter-relationship of these factors,
even though some measures proved more reliable than others, and some factors such as
synchronization are seen as more influential than others. Individual and opportunistic
one-off transactional relationships vs the more long-standing, complex cooperative
relationships represent strategic internal and external relational states to supply chain
participants in this industry. Further, as identified in the organizational literature and
supply chain literature, four key supply chain capabilities – supply chain dynamic
capability, supply chain performance differential capability, supply chain synchronization
capability, and utilizing industry-led innovation capability – are also identified as
influential and strategic. The framework presented aims to encourage further research
that extends and addresses potential limitations found in this study, through exploration
and examination in other industry contexts and through use of other research methods,
such as qualitative or mixed methods, that provide an opportunity for more in-depth
knowledge on the topic.
Strategic supply chain management is still evolving as a competency at both the
academic and practitioner level (Hitt, 2011) with potential gaps in the literature in
the areas of knowledge dissemination, practice and research for the near-term future of
supply chain management (Melnyk et al., 2006; Vokurka, 2011). A final contribution
IJLM from this study is an integrated framework presented in Figure 6, developed to assist
25,3 both academics and supply chain practitioners alike further explore and examine these
factors and their interlinking relationships.

Conclusion
This study undertook to contribute and extend current thinking in the embryonic area of
508 strategic supply chain management and strategic supply chain capability building (Hult
et al., 2007) by examining their influence in utilizing industry-led innovation a global
agribusiness industry supply chain, the Australian beef industry. This study compared
two types of supply chain operators, innovative vs non-innovative, and their views on
utilizing innovation in the form of new and sophisticated industry-wide supply chain EBS
and technologies based on internet platforms. The premise of this work argues that in
order to develop greater supply chain competence, in terms of innovating across supply
chains, a strategic approach is required. This study defined three latent constructs and
examined their relationships empirically. Specifically, this study examined how creating
beneficial supply chain outcomes from agribusiness industry-led innovation was
influenced by two forms of strategic supply chain relationships identified in previous
supply chain management literature, one-off transactions and cooperative relationships
(Lambert et al., 1996), together with a sample of three conceptual strategic supply chain
capabilities also identified in the literature. These included: supply chain dynamic
capability, delineated through indicators, reconfiguration and adaptability capability
identified by Ketchen et al. (2007); supply chain performance differentials, delineated
through indicators, managing control and complexity in the supply chain identified by
Cox (1997); and supply chain synchronization, delineated through indicators,
coordination, alignment, integration and cooperation identified by Arshinder et al. (2011).
The results show that both innovative and non-innovative supply chain operators in
this industry believe positive relationships exist between developing strategic supply
chain relationships, strategic supply chain capability and successfully utilizing
industry-led innovation in the form of sophisticated EBS and communication using
the internet. However, there are variations between the two levels of operators as to the
Strategic Supply Chain - Reactive Capabilities

Supply Chain Supply Chain

Dynamic Performance Differential
Capability Capability
(Reconfiguration and (Controlling and Managing
Adaptability) Complexity)

Supply Chain
Internal and External
Improved Supply Chain
Relationship Types
Industry Performance
(On-off Transaction based
Performance Benefits
relationships vs
cooperative relationships)
Supply Chain Supply Chain
Synchronization Innovation Utilization
Capability Capability
(Coordinating (Exploring and Exploiting
Figure 6. and Aligning Operations and New Ideas and Invention)
An integrated framework Transactions)
for examining strategic
supply chain management Strategic Supply Chain - Proactive Capabilities
capabilities
Source: Developed for this research by Maree Storer (2012)
degree of influence exerted between key variables, and between associated indicators Strategic
and these variables. A key finding was that, while innovative and non-innovative supply chain
supply chain operators agree one-off transactional relationships and cooperative
relationships are strategic relational states, non-innovative operators prefer one-off management
relationships, whereas innovation supply chain operators indicate they give equal
weighting to both one-off and cooperative relationships. Further, findings indicate that
in this agribusiness industry, both innovative and non-innovative operators, found 509
minimal value in supply chain synchronization as a strategic supply chain capability,
nor do they see strategic supply chain capability having a large level of influence on the
ability to utilize industry-led innovation for supply chain benefit.
As a contribution we have proposed an integrated framework that provides a
valuable resource for future researchers and practitioners alike to consider the various
attributes of taking a strategic approach to supply chain management and industry
development, through supply chain innovation, by developing strategic supply chain
relationships and capability. It suggests that supply chains access both reactive and
proactive strategic supply chain capabilities that will allow them to respond
strategically to market challenges. It also suggests considering supply chain relational
capabilities when building the linkages that are required to underpin supply chain
competitive behavior at any given time and overall industry sustainability. While these
findings have limited generalization, they do have implications for other agribusiness
supply chains faced with the same issues.
These results suggest a gap still exists between the theoretical literature and the
approach practitioners are actually taking. Further research and analysis could explore
how supply chain relationships are developed and for what purpose – low cost
provider or because of a more strategic reason? There may also be low levels of trust
across agribusiness supply chains related to differentiated power relationships
between the various activities of the supply chain which are running contrary to
establishing good levels of coordination, alignment, integration and cooperation across
these supply chain? Studies from more sophisticated industry supply chains, such as
automotive, suggest and acknowledge that a high level of coordination and alignment
of relationships, capabilities and innovation, using sophisticated electronic business
and communication systems, are required if supply chain activities are to be truly
globally competitive (Chandra and Kaumar, 2001; Hahn et al., 2000).

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Appendix. Survey measures

Strategic agribusiness supply chain capability
(Supply chain dynamic capability)
Measure: Reconfiguration
Question 1: Rate from (1) not important to (5) very important, the following statements relating to
developing strategic supply chain capability that enhances and changes practices in the
Australian beef supply chain for improved performance, and to utilize industry-led innovation in
the form of electronic business solutions through the internet?
(1) We engage in supply chain relationships that encourage the introduction of new products,
processes and systems across the Australian beef SC to improve its performance
(2) We learn from our customers and constantly change to ensure the supply chain meets
market demand
(3) We learn from our suppliers and constantly change to ensure the supply chain meets
market demand
(4) We constantly change to ensure volume continuity
(5) We constantly change to ensure to provide better quality product
(6) We constantly change to ensure timeliness for the customer
(7) We constantly change to ensure timeliness for the supply chain
(8) We constantly change to ensure cost reductions for supply chain members
(9) We constantly change to ensure cost reductions for customers
Measure: Adaptability
Question 2: Rate from (1) not important to (5) very important, the following statements relating to
developing strategic supply chain capability that allows the Australian beef supply chain to
adapt to change in order to enhance performance and to utilize innovation in the form of
electronic business solutions through the internet?
(1) Supply chain members understand and adjust to market conditions by working together
(2) Supply chain members understand new consumer directions by working together
(3) Research, development and business innovation help the supply chain to adapt to market
changes
(4) Supply chain member work together to adapt to new banking and finances practices
(5) Supply chain members use information sharing, collective marketing, advertising and
promotional activities to adapt to market changes
(6) Supply chain members adapt through cooperative supply chain strategic planning
IJLM (Supply chain performance differential capability)
Measure: Complexity
25,3 Question 3: Rate from (1) not important to (5) very important, the following statements relating to
how important the following activities are in terms of managing the complexity of participating
in the Australian beef supply chain, and utilizing innovation such as electronic business
solutions through the internet?
518 . Measuring customer satisfaction; customer complaints; end-user consumer satisfaction
. Measuring supplier performance; On-time deliveries; product quality; production lead-times
. Financial information relating to processing costs; inventory costs; cash flow management;
business profitability
. Transport information relating to transport errors; back orders; stock-out rates; fill rates;
re-order lead times; changes in consumer behavior
. Understanding staff absenteeism; staff moral; staff turnover; workplace health and safety
incidents; skill levels; training requirements
. Ensuring our customers and suppliers understand and support our business
. Sharing sensitive information with our customers and suppliers
. Trusting our customers and suppliers encourage our competitive market position
. Trusting our suppliers
. Trusting our customers
. Trusting suppliers and customers are committed to our business

Measure: Control
Question 4: Rate from (1) not important to (5) very important, the following statements relating to
how important the following activities are in terms of controlling your participation in the
Australian beef supply chain, and utilizing innovation such as electronic business solutions
through the internet?
(1) Day-to-day management of internal and external business activities;
(2) Maintaining accurate accounting and financial controls
(3) Strategic business planning
(4) Staff training and education services
(5) Conducting research and industry innovation exercises;
(6) Marketing advertising and promotion activities;
(7) Activities relating to purchasing and procurement
(8) Transport, distribution and warehousing
(9) Stock/inventory management (including livestock; sales; joint scheduling of new equipment,
parts and machinery purchases
(10) Assisting customers/suppliers to ensure sales stay buoyant
(11) Access to services such as professional services
(12) Purchasing plant and equipment
(13) Scheduling maintenance of plant and equipment

(Supply chain synchronization capability)

Measure: Coordination/Alignment
Question 5: Rate from (1) not important to (5) very important, the following statements relating to
how important the following activities are in terms of coordinating participation in the
Australian beef supply chain and benefiting from the utilization of innovations such as electronic Strategic
business solutions through the internet?
supply chain
(1) We coordinate with customers and suppliers prior to the purchase of new parts and
machinery
management
(2) We coordinate with customers and suppliers in the design of business management and
customer communication practices
(3) We coordinate our operations through the design of staff training and education systems 519
(4) We coordinate planning purchasing and procurement with customers and suppliers
(5) We coordinate planning transport, warehousing and logistics with customers and suppliers
(6) We coordinate outsourcing operational and sales services with customers and suppliers
(7) We coordinate provisions of professional services to optimize supply chain operations
(8) We coordinate servicing and scheduling of plant and equipment maintenance to optimize
supply chain operations
(9) We coordinate best practice through quality controls and standards of production with
customers and suppliers
(10) We coordinate production, processing and retail activities across the supply chain
(11) We communicate with customers and suppliers to help us be timely in delivering orders
(12) We communicate with our customers and suppliers help us identify means to reduce costs
Strategic agribusiness supply chain relationships
Measure: One-Off Supply Chain Relationships
Indicate your level of agreement with the following statements (1) Totally Disagree to (5) Totally
Agree about the state of supply chain relationships in the Australian beef supply chain, and
utilizing innovation such as electronic business solutions through the internet.
(1) Most people in the Australian beef industry focus on looking after themselves rather than
the good of the industry
(2) Businesses operating across the Australian beef industry are reluctant to cooperate with
each other
(3) We do not exchange information frequently with our customers
(4) We do not exchange information frequently with our suppliers
Measure: Cooperative Supply Chain Relationships
Indicate your level of agreement with the following statements (1) Totally Disagree to (5) Totally
Agree about the state of supply chain relationships in the Australian beef supply chain, and
utilizing innovation such as electronic business solutions through the internet.
(1) There is good communication between people in the beef industry about developing our
industry
(2) Players in the beef industry jointly plan for our future
(3) People in different sectors of the beef industry generally cooperate well with each other
Industry-led innovation utilization
Indicate the level of agreement you have with the following statements to describe the level of
performance benefits achieved in the Australian beef supply chain by developing strategic
supply chain relationships and capabilities, and utilizing new electronic business systems
through the internet.
Measure: Financial Benefits
(1) Reduced individual operating costs for supply chain participants
(2) Increased supply chain orders and revenue
(3) Reduced overall supply chain costs
(4) Increased profits/business turnover for supply chain participants
IJLM Measure: Operational Efficiencies
(1) Better quality assurance response across the supply chain
25,3 (2) Product enhancements as required and on demand
(3) Product and Volume flexibility as required
(4) Delivery and Warehousing flexibility as required

Measure: Growth
520 (1) New product and service offerings to customers and suppliers
(2) Better overall value-adding to supply chain activities
(3) Offering unique/exclusive products and services
(4) Improved supply chain personal relationships

About the authors

Dr Maree Storer recently received her Doctorate of Philosophy in the field of Supply
Chain Management from the School of Business, Faculty of Business Economics and Law within
the University of Queensland. She was the recipient of a 2007 Australian Cooperative
Research Centre (CRC) for Beef Genetics Technologies PhD scholarship which has supported
her PhD research. She is a self-employed Director/Owner of a small consultancy
company following a successful 13-year career with the Business Innovation Group of the
Queensland Government Department of Science, Information Technology, Innovation
and the Arts. In that role she was awarded the 2011 Australian Business Award for
Innovation and the Department’s Australia Day Award for Innovation in the Public Service.
Her research focus is extending embryonic academic research in the field of strategic supply
chain management in an agribusiness setting to drive supply chain and industry performance
improvements. She is an active member of the International Continuous Innovation Network
(CINet), the Academy of Management (AOM), the Australian New Zealand Academy of
Management (ANZAM), the Australian Institute of Company Directors (AICD), the Economic
Society of Australia (ECA), The Association for Operations Management (APICS), and the
Logistics Association of Australia. Dr Maree Storer is the corresponding author and can be
contacted at: m.storer@business.uq.edu.au
Dr Paul Hyland is a Professor in Management at the Queensland University of Technology.
His research focusses predominantly on innovation management and business development.
He is internationally recognized for his research and has been invited to review funding
applications for the European Science Foundation and the Italian government. He is widely
published in the area of innovation management with over 50 journal articles, 100 conference
papers and five book chapter published in the last 15 years. He is currently working with
the Cooperative Research for Integrated Engineering Asset Management and is an active
member of CINet.
Dr Mario Ferrer is an Assistant Professor of Operations Management at the Alfaisal
University in Saudi Arabia. His research focusses on supply chain relationships and operations
management innovation. He is an active member of the global Continuous Innovation Network
(CINet), Logistics Association Australia and Intellectbase international consortium. He is an
invited reviewer for conferences like Cinet, LACCEI, Intellectbase and ANZAM (Operations,
supply chain and services management) and the Journal of International Business Management
& Research. Prior to Dr Ferrer’s seven years in academia he worked as a Logistics Manger in the
FMCG sector.
Dr Ricardo Santa is an Assistant Professor in Production and Operations Management at the
Alfaisal University in Saudi Arabia. He was previously working as a Lecturer in Business and
Innovation at Charles Darwin University, Australia. He has extensive experience as a Software
Engineer and in the implementation of enterprise information systems. He has an active interest Strategic
in continuous innovation, operations management, management information systems, human
resources management and strategic management. He is also a member of CINet, continuous
supply chain
innovation network. management
Dr Andrew Griffiths is the Dean of the Business School at the University of
Queensland and a Professor/Chair in Business Sustainability and Strategy. He is an
accomplished academic in Australia and internationally recognized for his research both in 521
Australia, and overseas.

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