This study addresses manufacturers’ ability to influence their supply chain network in order to adapt to their competitive environment. From the perspective of a manufacture, the supply chain comprises a network of suppliers and customers, and is theoretically viewed as a complex adaptive system. The supply chain network is the set of suppliers and customers whose strategies, products, technologies, and systems can be influenced by the manufacturers. Different degrees of adaptability of supply chain network emerge, which this study defines as the ability of the supply chain network to reconfigure and adjust its operations in the face of changing competitive environments. This study considers the following questions: (1) How can adaptability of supply chain network be operationally defined? (2) How does adaptability of supply chain network lead to combinative capabilities? (3) What is the influence of adaptability of supply chain network on business performance? Drawing on literature streams in supply chain management, operations strategy, organizational change and learning, and complexity theory, this study develops and tests the constructs and operational measures of adaptability of supply chain network and model the nomological set of relationships among constructs that form the basis of our theory. This study then develops and tests a model describing the outcomes of adaptability of supply chain network and its influence on combinative capability and firm performance. Using data from 234 supply chain managers, this study tests for the effects of adaptability of supply chain network on exploitation and exploration activities and for the effects of adaptability of supply chain network on combinative capability. Based on complex adaptive system theory, this study develops eight competencies that characterize exploitation and exploration in supply chain network practices: partner compatibility, supplier information exchange, customer information exchange, implementation capacity, management openness, supplier empowerment, customer openness, and landscape awareness. Empirical results of this study show that adaptability supply chain network directly and positively affects combinative capability. Further, this study finds that adaptability of supply chain network does not impact business performance directly, but rather is mediated through combinative capability, which provides the requisite variety for firms to survive and thrive in dynamic environments. Ultimately, it is possible and desirable for manufacturers to strengthen exploitation and exploration practices simultaneously in order to enhance the adaptability of supply chain network and improve business performance.