Managing risks and system performance in supply network: a conceptual framework

Abstract

Examining a certain risk will provide an insight into a single dimension, but a picture of different risks in the supply chain (SC) is still lacking, as risks do not take place independently, but typically simultaneously. This research aims to propose and validate a conceptual framework for linking various dimensions of risks to system performance in the SC. To this end, first, risks in supply network were identified by applying SC mapping -a new approach in SC risk body of literature. Then the theoretical conceptual framework comprising a holistic set of SC risks was proposed. In this model, risks were classified into three categories with regard to their level of impact on performance, i.e. core risks (supply, operational and demand risks), infrastructure risks (finance, information and time risks) and external risk. Empirical evidence at Vietnam construction industry showed that a total of nine SC risks were established. Accordingly, there are two new concepts formed from operational risk, namely (1) investor-related operational risks and (2) contractor-related operational risks. External risk moreover was split into two new dimensions: (1) human-made risks and (2) natural risks. Except for relationships between demand risk & SC performance and between SC risks & financial performance, these risks have mutual interaction and detrimentally affect SC performance. Using this framework, companies will have a systematic view of risks in the whole SC network whereby they can define risks in their own context and ascertain critical SC risks that cause negative effects on SC performance. Moreover, this framework can be used as a 'guidemap' in an effort to mitigate SC risks.

Risks and supply chain performance: globalization and COVID-19 perspectives

“…Time risk refers to delays in supply chain operations (Truong Quang and Hara, 2018). Failure to reach the target timeframes could lead to risks of supply, operations and demand across the entire supply chain network (Quang and Hara, 2019a). Manavazhi and Adhikari (2002) have shown that delays in the procurement of materials and equipment are often the cause of increasing costs in construction projects.…”

The impact of global risks on supply chain performance. An empirical study on construction sector in the COVID-19 pandemic

“…All most operational research-related scholars support the first viewpoint of risk that is totally negative, which can be seen in business reality, especially in supply chain management (SCM) and SCM fields (Quang and Hara, 2019a;Ho et al, 2015;Bode, 2008). J€ uttner et al (2003) argued that risks appear everywhere and are associated with everything.…”

“…Internal measures consistent with business processes, referring to an SC's ability to reduce management costs/cycle-times/lead-times, improving quality/ workforce skills/productivity as well as enhancing the efficiency of raw material use and distribution capacity (Quang and Hara, 2019a). These measures are also an SC's core competencies to ensure continued market leadership.…”

“…Risks are inherent in the SC with both their effects and management under greater investigation (Zimon and Madz ık, 2019;Gaudenzi and Qazi, 2020), but current knowledge is still restricted as most SC risk-related studies are qualitative or case study-based (Quang and Hara, 2019a;Ho et al, 2015). Wagner and Bode (2008) argued that findings from large-scale empirical research studies are scant and primarily descriptive.…”

“…This paper aims to identify and assess global risks in the SC performance. Risk assessment models will be validated by empirical data from the construction sector, one of the most impactful sectors in the COVID-19 pandemic (Chamola et al, 2020), however, has very little related research (Quang and Hara, 2019a;Ho et al, 2015).…”