A supply network governance framework: a case study of the South Australian mining industry

Abstract

Purpose – The competitiveness of mining regions largely depends on the performance of the regional supply chains that provide services to mining companies. These local supply chains are often highly intertwined and represent a regional supply network for the industry. Individual companies often use supply chain strategies that are sub-optimal to overall supply network performance. To effectively respond to an uncertain business environment, policy-makers and supply chain participants would benefit by a governance framework that would allow to incentivise the formation of supply networks structures enabling effective operations. The purpose of this paper is to offer an empirically grounded conceptual framework based on Complex Adaptive Systems (CASs) governance principles, which links network governance mechanisms with supply network structure and operational performance to incentivise the formation of adaptive and resilient supply networks in the mining industry. Design/methodology/approach – A mixed method research design and a case study of the South Australian mining sector were used to collect empirical data. Qualitative interviews and network analysis of the SA mining industry regional supply network structure were conducted. The relationships between network parameters were interpreted using CAS theory. Findings – An empirically grounded conceptual framework based on CAS governance principles is developed. The case study revealed that supply chain strategies and governance mechanisms in the SA mining industry have led to the formation of a hierarchical, scale-free structure with insufficient horizontal connectivity which limits the adaptability, responsiveness and resilience of the regional supply network. Research limitations/implications – The findings are drawn from a single case study. This limits generalisability of the findings and the proposed framework. Practical implications – The proposed framework draws the attention of the policy-makers and supply chain participants towards the need for utilising CAS governance principles to facilitate the formation of adaptive, responsive and resilient regional supply networks in the mining industry. Originality value – The proposed conceptual framework is an attempt to parameterise the governance of the regional supply networks in the mining industry.