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

Purpose This paper aims to identify and assess global risks in the supply chain performance. Design/methodology/approach First, global risks are identified and classified according to three criteria: content, probability and context. A set of supply chain performance indicators are then defined by the theory of resource-based view and balanced scorecard. Structural equation modeling is adopted to access risks in the global supply chain. Findings This article contributes to the supply chain risk management literature by providing a detailed operationalization of global supply chain risk constructs, e.g. natural disasters, war and terrorism, fire accidents, economic and political instability, social and cultural grievances, decease. Empirical results reveal that the supply chain is predominantly regarded as being vulnerable as the proposed model of risks can explain up to 12.6% variance of supplier performance, 25.2% innovation and learning, 23% internal business, 40.6% customer service and 32.4% finance. Research limitations/implications These risks are relevant contextual variables in strategic supply chain decisions. Supply chain managers should keep in mind acceptable cost/benefit tradeoffs in their firms' mitigation efforts associated with major contingency risks. This research advocates the allocation of scarce resources to adopt the supply chain strategies of avoidance, speculative and postponement. Originality/value The application of the strategic content/process/context to explain global supply chain performance is an interesting approach. Moreover, globalization trends and the COVID-19 perspectives are considered to be the main reasons for increasing such complex factors. Data on validating research models collected during the COVID-19 pandemic reflect the topicality of this study.

Automated summary

This paper identifies and assesses global risks in the supply chain performance by classifying risks based on content, probability, and context. It defines supply chain performance indicators and uses structural equation modeling to assess risks. Results show that the proposed risk model can explain variance in supplier performance, innovation, internal business, customer service, and finance. Supply chain managers should consider cost/benefit tradeoffs in mitigating major risks and allocate resources to adopt supply chain strategies like avoidance, speculation, and postponement. The application of strategic content/process/context in explaining global supply chain performance is innovative, especially considering globalization trends and the impact of events like COVID-19.