Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures

Research output: Contribution to journalArticle

Abstract

Firms are increasingly held accountable for their suppliers' transgressions. Consequently, firms need to develop upstream visibility to exercise control over their supply chains. An emerging body of work has recognized the importance of supply chain visibility and has examined it using analytical models, behavioral methods, and case studies. Still, large-sample empirical evidence on the benefits of supply chain visibility remains elusive. We seek to bridge this gap by examining conflict minerals disclosures (mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) and financial reports to evaluate whether firms with greater visibility into their conflict minerals supply chains achieve improved operating and market performance. We use the data from conflict minerals disclosures (Form SD) to distinguish between firms that have high or low visibility into their conflict minerals sources. Then, we use event study methods to analyze differences in operating and market performance between firms with high visibility and firms with low visibility. We find that firms with high visibility into their conflict minerals supply chains achieve higher profitability than comparable firms with less visibility. In addition, we find that firms with high visibility into their conflict minerals supply chains realize improved sales performance and stock market valuations. Our results are relevant to managers because they show that firms can attain operational and market benefits by improving visibility in their supply chains.

Original languageEnglish (US)
JournalJournal of Operations Management
DOIs
StatePublished - Jan 1 2019

Fingerprint

Visibility
Supply chains
Minerals
Operating performance
Disclosure
Supply chain
Consumer protection
Analytical models
Profitability
Sales
Managers

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Cite this

@article{e534f3bddcbc4a8898862651ddb13ef2,
title = "Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures",
abstract = "Firms are increasingly held accountable for their suppliers' transgressions. Consequently, firms need to develop upstream visibility to exercise control over their supply chains. An emerging body of work has recognized the importance of supply chain visibility and has examined it using analytical models, behavioral methods, and case studies. Still, large-sample empirical evidence on the benefits of supply chain visibility remains elusive. We seek to bridge this gap by examining conflict minerals disclosures (mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) and financial reports to evaluate whether firms with greater visibility into their conflict minerals supply chains achieve improved operating and market performance. We use the data from conflict minerals disclosures (Form SD) to distinguish between firms that have high or low visibility into their conflict minerals sources. Then, we use event study methods to analyze differences in operating and market performance between firms with high visibility and firms with low visibility. We find that firms with high visibility into their conflict minerals supply chains achieve higher profitability than comparable firms with less visibility. In addition, we find that firms with high visibility into their conflict minerals supply chains realize improved sales performance and stock market valuations. Our results are relevant to managers because they show that firms can attain operational and market benefits by improving visibility in their supply chains.",
author = "Caroline Swift and Guide, {V. Daniel R.} and Suresh Muthulingam",
year = "2019",
month = "1",
day = "1",
doi = "10.1002/joom.1021",
language = "English (US)",
journal = "Journal of Operations Management",
issn = "0272-6963",
publisher = "Elsevier",

}

TY - JOUR

T1 - Does supply chain visibility affect operating performance? Evidence from conflict minerals disclosures

AU - Swift, Caroline

AU - Guide, V. Daniel R.

AU - Muthulingam, Suresh

PY - 2019/1/1

Y1 - 2019/1/1

N2 - Firms are increasingly held accountable for their suppliers' transgressions. Consequently, firms need to develop upstream visibility to exercise control over their supply chains. An emerging body of work has recognized the importance of supply chain visibility and has examined it using analytical models, behavioral methods, and case studies. Still, large-sample empirical evidence on the benefits of supply chain visibility remains elusive. We seek to bridge this gap by examining conflict minerals disclosures (mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) and financial reports to evaluate whether firms with greater visibility into their conflict minerals supply chains achieve improved operating and market performance. We use the data from conflict minerals disclosures (Form SD) to distinguish between firms that have high or low visibility into their conflict minerals sources. Then, we use event study methods to analyze differences in operating and market performance between firms with high visibility and firms with low visibility. We find that firms with high visibility into their conflict minerals supply chains achieve higher profitability than comparable firms with less visibility. In addition, we find that firms with high visibility into their conflict minerals supply chains realize improved sales performance and stock market valuations. Our results are relevant to managers because they show that firms can attain operational and market benefits by improving visibility in their supply chains.

AB - Firms are increasingly held accountable for their suppliers' transgressions. Consequently, firms need to develop upstream visibility to exercise control over their supply chains. An emerging body of work has recognized the importance of supply chain visibility and has examined it using analytical models, behavioral methods, and case studies. Still, large-sample empirical evidence on the benefits of supply chain visibility remains elusive. We seek to bridge this gap by examining conflict minerals disclosures (mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act) and financial reports to evaluate whether firms with greater visibility into their conflict minerals supply chains achieve improved operating and market performance. We use the data from conflict minerals disclosures (Form SD) to distinguish between firms that have high or low visibility into their conflict minerals sources. Then, we use event study methods to analyze differences in operating and market performance between firms with high visibility and firms with low visibility. We find that firms with high visibility into their conflict minerals supply chains achieve higher profitability than comparable firms with less visibility. In addition, we find that firms with high visibility into their conflict minerals supply chains realize improved sales performance and stock market valuations. Our results are relevant to managers because they show that firms can attain operational and market benefits by improving visibility in their supply chains.

UR - http://www.scopus.com/inward/record.url?scp=85064002720&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85064002720&partnerID=8YFLogxK

U2 - 10.1002/joom.1021

DO - 10.1002/joom.1021

M3 - Article

AN - SCOPUS:85064002720

JO - Journal of Operations Management

JF - Journal of Operations Management

SN - 0272-6963

ER -