Contingency Management and Supply Chain Performance in Korea: A COVID-19 Pandemic Approach

Segu Oh,Hee Cheol Moon,Yongping Zhong

doi:10.3390/su12239823

Abstract

Unexpected incidents are driving global supply chains to the brink of collapse. To effectively manage contingency events like the COVID-19 pandemic and improve operational performance, factors such as information technology (IT), relational competencies, cooperation with supply chain partners and integration of supply chain systems that contribute to cooperation are essential. This study found that IT and relational competencies positively influence the integration of supply chain systems, and relational competencies have a stronger implication on supply chain integration and collaboration. In addition, supply chain collaboration, strengthened by supply chain integration, positively affects contingency management. Finally, contingency management positively influences operational performance. In this study, we adopted partial least squares structural equation modeling (PLS-SEM) method in the analysis with 102 surveys collected from business managers. Through the evaluation of determinants of contingency management and supply chain performance, this study widens the theoretical base of supply chain management and provides managers with optimal ways to build a more resilient supply chain system to cope with unexpected incidents. Consequently, with collaboration-based contingency management, companies can solve problems properly and reduce additional loss, which will enhance operational performance and enable sustainable business success.

Highlights

Chain risk problems have become increasingly prominent in the academic discourse and practical field
We adopted the Partial least squares (PLS) method for the following reasons: PLS is more suitable for small sample sizes compared to general structural equation programs; it is suitable for analyzing correlations of constructs with less focus on the fitness of the entire model
Convergent validity is evaluated by composite reliability (CR) and average variance extracted (AVE) of each factor

Summary

Introduction

Chain risk problems have become increasingly prominent in the academic discourse and practical field. Risk management of supply chains has attracted significant attention, because crises, disasters, globalization, and dynamic changes in the market have made the modern supply chain more vulnerable than ever [1]. According to Wieland and Wallenburg [2], supply chain risk management is the implementation of a strategy that aims to cope with daily and accidental risks within the supply chain. As a part of supply chain risk management, the concept of contingency (accidental events) management was proposed in the early 2000s by Alvarenga and Schoenthaler [3] and Asgekar [4], and they emphasized the importance of contingency. The process cycle for managing these contingencies includes identifying and evaluating to controlling and monitoring the risks [6]. Managing supply chain risks positively impacts organization and supply chain management performance [7]

Methods

Results

Discussion

Conclusion