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

Abstract

Purpose: This article aims to examine the simultaneous effect of risks on physical and intangible dimensions of supply chain performance under the globalization and Covid-19 perspectives. Design/methodology/approach: The manipulation of literature reviews together with the combination of Q-sort and empirical data in the construction industry to identify and assess risks and supply chain performance, is a novel approach in the supply chain risk management area. The analysis of Structural Equation Modeling that is able to calculate the simultaneous impact of various risks on supply chain performance, is used to validate this relationship. Findings: Global supply chains are currently facing interruptions caused by several sources of inherent uncertainties, e.g. natural disasters, war and terrorism, external legal issues, economic and political instability, social and cultural grievances, and diseases. The weaknesses of the current global supply chain have been revealed, resulting in delays, supply unfulfillment, labor shortages and demand fluctuation. These supply chain risks have a great on supply chain performance indicators, and the magnitude of their impact tends to increasingly impact in the context of globalization and the Covid-19 pandemic. Findings showed that the proposed risk models can be explained with Variance of supplier performance (25.5%), Innovation and learning (21.2%), Internal business (61.9%), Customer service (39.4%) and Finance (39.7%). Research limitations/implications: Supply chain managers should keep in mind acceptable cost/benefit trade-offs in corporate risk mitigation efforts associated with major contingency risks. In doing so, the proposed hypothesized model can be “a road map” to achieve this purpose. Our research favors the adoption of supply chain management strategies, e.g. postponement, speculation and avoidance. Originality/value: The trend toward globalization and the emergence of the Covid-19 pandemic increasing supply chain complexity are regarded as key drivers of supply chain risk and therefore enhance vulnerability to supply chain.