An Evidence-Based Review of Exploratory Factor Analysis Methods and Practices in Supply Chain Research

Exploratory factor analysis (EFA) is widely used in supply chain management, yet a considerable gap has emerged since the last focused review in this area. As a result, scholars may rely on outdated practices and may also draw inaccurate inferences about the latent constructs underlying their indicators. Recent studies have emphasized the need for field-specific EFA guidelines, particularly in the interpretation of factor loadings, which remain unavailable for supply chain management without a contemporary review. To address these issues, this study presents a systematic literature review of 441 articles and 914 EFAs published in eight leading supply chain management journals since 2000. The findings reveal that researchers frequently apply obsolete factor retention techniques and rotation methods, such as the Kaiser criterion and varimax rotations, and researchers show substantial inconsistency in the selection of factor loading cutoffs. These practices raise concerns about the interpretability and stability of EFA results in supply chain management research, as analytical decisions are often not aligned with current methodological recommendations. In response, we offer practical recommendations informed by contemporary methodological guidance for conducting robust EFAs, wherein we direct readers to applicable resources. We also produce tailored recommendations for interpreting factor loadings based on percentile distributions observed in our review, enabling the more consistent and theoretically grounded measurement practices in supply chain management.