AbstractThis study examines the effects of operational scope (breadth of product offering, extent of geographical diversification, and extent to which production processes can effectively meet varying demand) and operational slack (resources in excess of what is required to fulfill expected demand) on firm performance, contingent on two components of a firm's dynamic environment, unpredictability and instability. We collate quarterly data on 3857 publicly traded firms in 19 industries from the years 1991 to 2013 (representing 99,559 firm‐quarter observations). Using panel data analysis, we find that narrow product offerings, low geographical diversification, low levels of excess capacity, and low inventory slack are each positively associated with firm performance. More importantly though, we find that operational scope is associated with improved performance in unpredictable environments, whereas operational slack is associated with improved performance in unstable environments. These findings contribute to the research on operations strategy by identifying the industry‐specific environmental conditions under which operational slack and operational scope are associated with firm performance.

We combine insights from information processing theory (IPT), supply chain resilience literature, and collaboration with a leading supply chain planning technology provider to study the effects of excess inventory (a buffering tactic) and usage of supply chain planning systems (SCPSs) (a bridging technology) on supply chain resilience. Utilizing the exogenous disruptions caused by the COVID-19 pandemic as the setting for quasi-natural experiments, we compare profit impact and time-to-recover across manufacturing firms that operated with varied levels of inventory and SCPS use in the period leading up to the onset of the pandemic. The results of multiple tests provide no evidence that inventory buffering aided firms in being more resilient, even for firms in industries that experienced positive demand shocks during the pandemic. In contrast, we find that firms that used SCPS evidenced fewer negative financial impacts throughout the disruptive period, and they recovered faster than their peers. The results are robust to sample characteristics, time frame, and control-group matching procedures. Our study extends a growing literature on supply chain resilience by offering a more refined explanation of IPT in a disruptive context, highlighting the limitations of inventory as a buffering tactic, and describing how SCPSs help planners cope with uncertainty and disruptions. In addition, interviews with managers from a leading SCPS provider and from user firms highlight specific ways in which SCPSs provide faster and more effective responses to disruptions. We discuss the implications of these findings for future research.