An empirical analysis of supply and manufacturing risk and business performance: a Chinese manufacturing supply chain perspective

Vikas Kumar,Claudia Colicchia,Ruizhi Guo,Ozlem Bak,Archana Kumari,Jose Arturo Garza-Reyes,Sarah Louise Shaw

doi:10.1108/scm-10-2017-0319

Abstract

PurposeThis study aims to explore the importance and impact of supply and manufacturing risk management upon business performance within the context of Chinese manufacturing supply chains.Design/methodology/approachA two-phased multi-method approach was adopted, which included a survey questionnaire to practitioners in Chinese manufacturing supply chains followed by semi-structured interviews. The findings included 103 valid survey responses complemented by six semi-structured interviews.FindingsThe results indicate that in Chinese manufacturing context supply risk and manufacturing risk management are both vital for business performance. A high correlation between business and manufacturing risk management performance exists; however, no significant impact of supplier dependency, systematic purchasing, maturity of production and supply chain and human resources was found despite previously these elements being regarded as key influencers for supply and manufacturing risk management performance. The Chinese manufacturing supply chain indicated that elements such as the supplier and customer orientation, flexibility, manufacturing and supply risk highly connotes with business performance.Practical implicationsIn the current unpredictable and volatile business environment, the competitiveness of manufacturing supply chains to a large extent depend on their ability to identify, assess and manage the manufacturing and supply risks. The findings of this study will assist supply chain managers in taking decision on manufacturing and supply risk management and reducing the uncertainty upon their business performance.Originality/valueThe supply chain risk has been widely explored within the context of individual case studies, or standalone models focusing on either supply or manufacturing risk in supply chains; however, to what extent this has been applicable to a wider context and its impact upon business process has not been explored. Hence, this study simultaneously has analysed manufacturing risk and supply risk and its impact upon Chinese manufacturing supply chains business performance. Moreover, this study uses a combination of quantitative and qualitative methods, which is often limited in this area. Finally, the institutional theory lens offers novel insights in better understanding the factors that can affect the impact of supply and manufacturing risk management upon business performance in those contexts, such as China, where the institutional aspect presents specific features.

Highlights

The growing scale and scope of supply chain architecture has brought various risks influencing an organization’s capability to operate continually and provide goods and services to the market (Jordan and Bak, 2016)
Respondents were asked about the business performance, the supply risk management performance and manufacturing risk management performance and asked to rank the items using a five point Likert scale
Part two investigated the correlation between supply risk management performance and the other aforementioned factors influencing it

Summary

Introduction

The growing scale and scope of supply chain architecture has brought various risks influencing an organization’s capability to operate continually and provide goods and services to the market (Jordan and Bak, 2016). The responses achieved 3.67 and 3.70 average means, with supplier dependency and systemic purchasing relatively low with 3.26 and 3.31, indicating that in general the constructs (business performance, the supply risk management performance and manufacturing risk management performance) were relevant to supply chain practices and can/or are partially applied to the surveyed organizations in general (See Table 4).

Objectives

Results

Conclusion