An integrated supply chain – human resource management approach for improved supply chain performance

• DOI: https://doi.org/10.1108/IJLM-03-2020-0151
• Published date: 11 May 2021
• Date: 11 May 2021
• Pages: 918-941
• Subject Matter: Management science & operations,Logistics
• Author: Sarat Kumar Jena,Abhijeet Ghadge

An integrated supply chain –

human resource management

approach for improved supply

chain performance

Sarat Kumar Jena

Operations Management, Xavier Institute of Management,

Bhubaneswar, India, and

Abhijeet Ghadge

School of Management, Cranfield University, Bedford, UK

Abstract

Purpose –Human resource management (HRM) is struggling to cope with the increasingly volatile demand

for skilled resources in the logistics and supply chain sector. Thus, this study discovers the possible integration

of HRM and supply chain management (SCM) practices for improved supply chain performance. The purpose

of this study is to explore the effect of intra HRM–SCM and joint HRM–SCM decisions on the performance of

the supply chain.

Design/methodology/approach –An intra HRM–SCM and joint HRM–SCM model is developed following

an empirical study. Survey data collected from 109 supply chain managers from Indian logisticsfirms are used

to test the developed hypotheses. Structural equation modeling is used to analyze and validate the model.

Findings –The results suggest that supply chain performance is significantly influenced by joint HRM–SCM,

compared to intra HRM–SCM practices, especially under volatile demand environments. Training and

development, recruitment and selection, and performance management affect joint HRM–SCM significantly

compared to the other three factors identified. Moreover, HRM and SCM show strong correlation and mutual

support in identifying and fulfilling the demand of the logistics and supply chain sector.

Practical implications –With a growing trend toward globalization and digitalization, a joint HRM–SCM

model will help businesses make robust and informed decisions for improved supply chain performance.

Originality/value –An empirical relationship between joint HRM–SCM, intra HRM–SCM, supply chain

inhibitors and supply chain performance is established in this study. Although some part of this relationship

may already exist, the study provides robust evidence to support this complex, collaborative relationship.

Keywords Supply chain performance, Supply chain integration, Human resource management,

Supply chain inhibitors, Logistics competencies

Paper type Research paper

1. Introduction

Logistics, a part of supply chain management (SCM) is used to maximize customer value and

achieve sustainable competitive advantage through effective movement and storage of

related goods and information from origin to destination (Gopal and Thakkar, 2016). The

global logistics industry is constantly growing because of an increase in online transactions

(Maiden, 2020). Moreover, the growing demand for logistics services in India is largely driven

by the remarkable growth of the Indian economy (Gopal and Thakker, 2016;Tiwari and

Kalogerakis, 2017). This growth is projected to be around 9–10% over the next few years,

with the compounded annual growth rate expected to grow at 7–8% (LCLogistics India, 2011;

Gopal and Thakker, 2016). Currently, the logistics sector contributes more than 7% to India’s

gross domestic product (GDP) (Gupta et al., 2018). Globalization, dynamic environment,

technological innovation and the increasing role of the logistics firms’strategic planning

intensify the need for skilled supply chain (SC) experts who can manage the SC’s multiple

activities effectively through statistical analysis and engage in fact-based decision-making

IJLM

32,3

918

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 31 March 2020

Revised 12 August 2020

21 January 2021

8 April 2021

17 April 2021

Accepted 20 April 2021

The International Journal of

Logistics Management

Vol. 32 No. 3, 2021

pp. 918-941

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-03-2020-0151

(Ellinger and Ellinger, 2014). Moreover, Indian logistics firms are faced with a shortage of

talented SC experts, leading to operational inefficiency on several fronts (Li and Fung limited,

2012;Bureau, 2020). Although the remuneration paid to SC managers is steadily rising, SCs

face a serious sector-specific skill shortage, and this gap is expected to worsen over the

coming years (Ding et al., 2015).

The shortage of logistics and SCM managers with an extensive set of skills to satisfy

market demand can be largely attributed to many firms placing more emphasis on the cost

reduction and customization process than on developing people’s skills to achieve SCM

objectives (Prajogo and Sohal, 2013;Ellinger and Ellinger, 2014). Relative lack of focus on the

people’s skills in SCM may create barriers to developing operational innovation. This

happens due to a lack of interest and knowledge of logistics and SC managers toward

operational innovations (Hammer, 2004, p. 84). However, nowadays, logistics firms are

focused on developing the skill sets and knowledge required for innovative working

environments within and between the firms (Mentzer et al., 2008).

The shortage of SCM expertise is further compounded by a lack of resources and

strategically focused organizations where senior-level managers tend to have limited

knowledge of SCM (Hammer, 2004;Slone et al., 2007), which thereby creates a negative

influence on SC performance (SCP). Besides, SC managers also need a balanced knowledge of

hard (analytical and technical) and soft (human and behavioral) skills to accomplish seamless

integration in the current global and competitive business environment (Sweeney, 2013).

Furthermore, SC managers must be capable of multi-tasking and have analytical proficiency

for coordination with different network partners. However, recent prescriptions for achieving

better coordination contend that acquiring and developing the best SCM talent is the first

phase of execution of the SC transformation strategy (Dittmann, 2012;Slone et al., 2010).

Further, to minimize the talent shortfall, logistics experts suggest that SCM managers must

go through training and development (T&D) processes for acquiring the necessary skills and

gain competitive competencies to manage increasingly complex and dynamic SC processes

(Barnes and Liao, 2012;Prajogo and Sohal, 2013). While conducting and providing such

training sessions, the coordination between human resource management (HRM) and SCM

experts is important for achieving effective SCP (Ellinger and Ellinger, 2014).

Recent SCM research has used a knowledge-based view (KBV) as a theoretical basis for

the alignment of expertise between SCM and HRM (Flothmann et al., 2018). This theoretical

lens views knowledge as a company’s most strategically important resource and investigates

the impact of knowledge on SC and/or firm performance (Flothmann et al., 2018). Meanwhile,

HRM plays a vital role in identifying the resources with the appropriate skills needed for

improving SCP (Guersola et al., 2018). Numerous studies have argued that, to obtain better

SCP, the next trend of HRM should focus on the people and skills necessary to manage and

operate increasingly complex SCs (e.g. Daugherty et al., 2000;Agyabeng-Mensah et al., 2020).

Therefore, HRM practices increase competitive advantage by leveraging external customers

and supply resources (Koulikoff-Souviron and Harrison, 2010). Furthermore, HRM practices

have emerged as one of the important strategic priorities in SC and firms’efforts to gain

sustainable growth by leveraging human capital (Stank et al., 2011;Hohenstein et al., 2014;

Huo et al., 2015). The professionals’capabilities in T&D and change management (CM) help

SC managers disseminate a broader understanding of SCM concepts within and between

firms (Ellinger and Ellinger, 2014).

The SCM literature often focuses on managing supplier and customer relationships,

ignoring the essentials of HRM activities such as recruitment, succession planning and

training in logistics and SCM (Sweeney, 2013;Hohenstein et al., 2014). Thus, HRM practices

have not adequately advanced to understand the needs of SCM, resulting in a severe shortage

of skilled resources in logistics and SCM (LCLogistics India, 2011). Recently, Flothmann et al.

(2018), examining the relationship between SCM and HRM, have also identified the effect of

Integrated

SCM and HRM

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