Dealing with supply chain risks: Linking risk management practices and strategies to performance

Andreas Wieland; Carl Marcus Wallenburg

doi:10.1108/09600031211281411

Document Information:
Title:	Dealing with supply chain risks: Linking risk management practices and strategies to performance
Author(s):	Andreas Wieland, (Department of Technology and Management, Technische Universität Berlin, Berlin, Germany), Carl Marcus Wallenburg, (Chair of Logistics and Services Management, WHU – Otto Beisheim School of Management, Vallendar, Germany)
Citation:	Andreas Wieland, Carl Marcus Wallenburg, (2012) "Dealing with supply chain risks: Linking risk management practices and strategies to performance", International Journal of Physical Distribution & Logistics Management, Vol. 42 Iss: 10, pp.887 - 905
Keywords:	Agility, Performance management, Risk management, Robustness, Strategy, Supply chain, Supply chain management
Article type:	Research paper
DOI:	10.1108/09600031211281411 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Acknowledgements:	This research project was rendered possible by the generous funding of the Kühne Foundation. Furthermore, the authors want to thank the participants of the 23rd NOFOMA Conference in Harstad, Norway for their valuable comments on an earlier version of this paper and Kathleen Renneißen for her valuable contribution to the qualitative data collection.
Abstract:	Purpose – The effects of supply chain risk management (SCRM) on the performance of a supply chain remain unexplored. It is assumed that SCRM helps supply chains to cope with vulnerabilities both proactively by supporting robustness and reactively by supporting agility. Both dimensions are assumed to have an influence on the supply chain's customer value and on business performance. The aim of this research is to provide clarity by empirically testing these hypotheses and scrutinizing the findings by the means of case studies. Design/methodology/approach – The research is empirical. Survey data were collected from 270 manufacturing companies for hypotheses testing via structural equation modeling. Additionally, qualitative data were collected to explore the nature of non-hypothesized findings. Findings – It is found that SCRM is important for agility and robustness of a company. Both agility and robustness show to be important in improving performance. While agility has a strong positive effect only on the supply chain's customer value, but not directly on business performance, robustness has a strong positive effect on both performance dimensions. This important finding directs the strategic attention from agility-centered supply chains to ones that are both robust and agile. The case studies provide insights to the fact that robustness can be considered a basic prerequisite to deal with supplier-side risks, while agility is necessary to deal with customer-side risks. The amount of agility and robustness needs to fit to the competitive strategy. Practical implications – Since volatility has increasingly become a prevalent state of supply chains, companies need to consider robustness to be of primary importance to withstand everyday risks and exceptions. Originality/value – This is the first study to view the relationship between SCRM, agility/robustness, and performance.