Assignment
Submitted to: Dr. Nazim Hussain
Subject: Operations And SCM Strategies
Title of the Research Paper: Empirical research on the relationships between demand and
supply-side risk management practices and their impact on business performance
Group Members Name
1. M Rashid Haneef
2. M Muzammil Zahid
Introduction: The paper delves into the complex challenges of supply chain management,
where disruptions and risks can have devastating effects on businesses. Despite the importance
of effective risk management, there is a significant lack of empirical research in this area,
particularly in understanding the impact of demand- and supply-side risk management practices
on business performance.
To address this knowledge gap, the paper aims to:
- Develop and validate a comprehensive model that links demand- and supply-side risk
management practices to business performance
- Provide a clear and concise distinction between the related concepts of supply chain flexibility,
agility, robustness, and resilience, which are often confused or used interchangeably in the
literature
- Investigate the relationships between risk management practices and business performance,
including the impact on operational, market, and financial performance
- Offer actionable insights and recommendations for businesses to improve their risk
management capabilities and mitigate the impact of disruptions on their supply chains
Using a conceptual model and research hypotheses, the paper tests its arguments on survey data
collected from 89 multinational companies based in Europe, providing a robust and generalizable
basis for its findings. By exploring the critical role of risk management in supply chain
management, the paper contributes to both theoretical and practical knowledge in this important
field.
Literature Review:
The paper uses the following variables:
1. Supply Chain Robustness (SCR): Proactive ability of a firm to withstand supply-side
disruptions.
Role: To maintain supply chain operations despite disruptions.
Importance: Ensures continuity of supply chain operations, reduces vulnerability.
2. Flexibility (FLX): Proactive ability to operate effectively at different output levels to meet
customer demand.
Role: To adapt to changes in demand, ensure market responsiveness.
Importance: Enhances customer satisfaction, increases market share.
3. Agility (AGL): Reactive ability to rapidly adapt to changes in customer demand.
Role: To quickly respond to changes in demand, ensure market responsiveness.
Importance: Enhances customer satisfaction, increases market share.
4. Resilience (RES): Reactive ability to absorb and cope with supply-side disruptions, recover.
Role: To quickly recover from disruptions, minimize impact.
Importance: Ensures supply chain continuity, reduces vulnerability.
Business Performance (BP): Financial and commercial performance indicators.
Role: To evaluate firm performance, ensure goal achievement.
Importance: Reflects firm success, economic goals achievement.
Supply-Side Risks (SSR): Risks associated with supply base, suppliers, supply markets.
Role: To disrupt supply chain operations, impact firm performance.
Importance: Highlights need for proactive risk management.
Demand-Side Risks (DSR): Risks associated with market demand, customer needs.
Role: To impact firm performance, require adaptive responses.
Importance: Highlights need for reactive risk management.
These variables are important as they help firms achieve supply chain resilience, adapt to
changing market conditions, ensure business performance, and ultimately achieve competitive
advantage.
Methods: The study employed a cross-sectional survey research design to investigate the
relationship between supply chain resilience and business performance. The study population
consisted of large and mid-sized companies with annual sales above €50m based in Europe,
operating in dynamic environments with advanced capabilities in demand and supply chain
practices.
Participants/Subjects:
- High-level managers with expertise in demand- and supply-side practices in their companies
- 89 completed datasets received from 647 emails sent to targeted participants
Data Collection Methods:
- Web-based survey using a questionnaire designed based on an extensive literature review
- Questionnaire pre-tested for content validity by a panel of experts
- Survey items measured on a seven-point Likert scale
Statistical Techniques:
- Descriptive statistics (mean, standard deviation, frequency) to summarize demographic data
and survey responses
- Inferential statistics (t-test) to test for non-response bias
- Factor analysis (Harman's one-factor test) to test for common method bias
- Regression analysis or other appropriate statistical tests to examine the relationship between
supply chain resilience and business performance
The study's research methodology is robust, with a well-designed survey instrument, a targeted
sample of experts in the field, and appropriate statistical techniques used for analysis. However,
potential limitations include reliance on self-reported data and potential biases inherent in survey
research.
Results: Here are the main findings of the study:
- Supply chain flexibility and robustness positively impact agility and resilience.
- Agility and resilience positively impact commercial and financial performance.
- Agility partially mediates the relationship between flexibility and commercial performance.
- Resilience fully mediates the relationship between robustness and financial performance.
Significant statistical results include:
- R2 values of 0.54 and 0.49 for supply chain resilience and agility.
- Cronbach's alpha and composite reliability exceeding 0.70 for all constructs.
- Average variance extracted (AVE) exceeding 0.50 for all constructs.
Discussion: The study's findings align with existing literature on supply chain resilience and
agility, highlighting the importance of flexibility, robustness, and resilience in achieving business
performance. The results support the theoretical framework of risk management, which
emphasizes the need for proactive and reactive strategies to mitigate supply chain disruptions
(Tang, 2006).
The study's implications suggest that:
- Firms should invest in supply chain flexibility, agility, and resilience to enhance business
performance.
- Robustness alone may not be sufficient to achieve financial benefits; it needs to be
complemented by resilience.
- Managers should understand the distinct concepts of supply chain flexibility, agility,
robustness, and resilience to avoid redundancies and inefficiencies.
Limitations:
- Cross-sectional data may not capture dynamic relationships.
- Single-respondent data collection may pose biases.
Future research suggestions:
- Explore additional relationships between supply chain risk management practices.
- Investigate the principles at a deeper level using qualitative methods.
- Examine the trade-offs between proactive and reactive practices.
- Investigate the role of top management and implementation approaches in strengthening supply
chain capabilities.
By addressing these limitations and suggestions, future research can further advance our
understanding of supply chain risk management and its impact on business performance.
Conclusion:
Summary:
- Supply chain flexibility and robustness positively impact agility and resilience.
- Agility and resilience positively impact commercial and financial performance.
- Flexibility alone enhances financial and commercial performance, while robustness needs
resilience to benefit financially.
Implications:
- Invest in flexibility, agility, and resilience to improve business performance.
- Understand the distinct concepts to avoid redundancies and inefficiencies.
Importance and contributions:
- This study advances our understanding of supply chain risk management practices and their
impact on business performance.
- It highlights the importance of separating and clearly defining flexibility, agility, robustness,
and resilience.
- The findings contribute to the development of effective supply chain risk management
strategies, enhancing firms' competitiveness and long-term success.
- The study's framework and results provide a foundation for future research, offering insights
for practitioners and scholars alike.
