External Supply Chain Operational Risk and Operational Performance. Mediating Role of Supply Chain Integration as DCV

Abstract

The purpose of this study is to create a theoretical framework for analyzing the causal relationship between external operational risks in the supply chain, such as supply risk (SR), demand risk (DR), supply chain integration (SCI), and operational performance (OP), in the automobile industry. A quantitative research approach was adopted, in which a structured online questionnaire using google Form was utilized to collect data from the automotive industry of Pakistan. Partial least square structural equation modeling (PLS-SEM) was used to test the model. Empirical analysis reveals that although SR and DR both have a negative impact on OP, SR has a particularly adverse effect. However, the study discovered that SCI has a partial mediation effect on the relationship between SR and OP, and DR and OP. Accordingly, this study is unusual in its conclusion that DR as compared to SR, has no significant impact on OP in emerging economies, like Pakistan, and also is not a significant factor that limits SCI. This study is novel in the way that it analyzes the mediating role of SCI to evaluate the relationship between external supply chain operational risks and OP in the growing automotive sector of Pakistan’s economy. The study also discovered that incorporating SCI into organizations mitigates the negative impacts of SCR and helps managers to further enhance OP. As a result, the findings add to the body of increasingly complicated research that evaluates the function of SR and DR in the OP of the automotive sectors. Additionally, the scale and the models can be used to evaluate how companies in the automobile industry respond to external supply chain operational risk with SCI to attain OP.