Purpose Risks can arise from vulnerabilities at any supply chain tier, including disruptions caused by financial instability, operational failures or external shocks impacting suppliers, manufacturers or distributors. This study aims to create a decision guide for supply chain practitioners in a multi-tier environment to improve their business profitability and performance based on the Indian automotive industry. This study offers practical insights, facilitates adoption and contributes to the academic literature. Design/methodology/approach This study uses secondary data obtained from the Ministry of Corporate Affairs, Government of India, for the period spanning from 2012 to 2021. The sample consists of 2,800 observations for 11 independent variables covering 280 companies, divided into 5 tiers (Tier 1 to Tier 5) of firms. The analysis uses the panel data regression to identify significant variables for each supply chain tier. Further, the authors used the design of experiments technique to determine the optimal operational levels of significant variables for enhancing profitability for each tier of firms in the supply chain. Findings This research contributes to the contingency theory of management from a supply chain perspective by demonstrating that various tiers of firms in the supply chain should concentrate on specific variables to increase profitability based on their operating conditions. By effectively targeting these variables, the study estimates that all firms in the supply chain can scale up their return on assets under the most favorable modeled scenarios. Originality/value This research applies contingency theory to the supply chain context, offering a tier-specific analysis (Tiers 1–5) of profitability drivers within the Indian automotive supply chain. The study’s focus on tier-specific strategies is unique, addressing the varying needs and challenges across supply chain levels. Furthermore, the research bridges theory and practice by offering actionable insights that enhance profitability without compromising supply chain efficiency. Its emphasis on the Indian automotive sector adds originality, as this market is underexplored in global supply chain literature. This study significantly contributes to academic understanding and practical decision-making in supply chain management.
Ambadapudi et al. (Mon,) studied this question.