Supply chain risk’s impact on corporate financial performance

Abstract

Purpose Researchers have long sought to understand how risks in supply chains (SCs) affect firm performance. Yet, they have not fully subjected claims of how SC risks affect firm financial performance to theoretical and empirical scrutiny. The purpose of this paper is to investigate the links between SC risks and firm financial performance. Design/methodology/approach The author analyzes how SC risks affect firm financial performance from the perspective of marginal financial performance (MFP) using survey and financial statement data. The author employs structural equation modeling to examine the hypotheses using 106 Taiwanese listed companies across 20 industries. Findings The findings regarding the importance of industry-specific risk, organizational risk, internal business process risk, and demand risk are consistent with prior studies. The author finds that demand risk has an MFP of −0.20, the highest negative effect among the risk variables. The findings also show that industry-specific risk possesses an MFP of −0.16, the second-highest negative effect, despite having no direct effect on financial performance. Research limitations/implications This paper examines how SC risks affect MFP via combining survey and financial statement data. It does not assume the reported MFP estimates apply to all businesses in other countries. However, future research could triangulate our findings. Originality/value This study combines survey and financial data to analyze how SC risks affect firm financial performance. Specifically, it provides a methodology for estimating quantitative cause-effect relationships between SC risk and firm financial performance, an important topic that receives less research interest in the field of supply chain management.

Eco-oriented culture and financial performance: roles of innovation strategy and eco-oriented continuous improvement in manufacturing state-owned enterprises, Indonesia

“…Continuous improvements will have a good impact on financial performance. This is supported by Chen (2018) stating that a better management of supply chain risks has affected corporate financial performance. Eco-oriented continuous improvement in development, sourcing, manufacturing and transportation activities needs one policies to find solutions for company's environmental issues.…”

Challenges in Applying Artificial Intelligence for Supply Chain Risk Management

“…Enterprise supply chain risk analysis, as an important part of the overall enterprise risk management, plays an important role. Supply chain risk analysis seeks to identify the key risks that affect business processes and relationships: relationships with suppliers, relationships with customers, managing relationships with customers (Bavarsad et al, 2014;Chen, 2018;Chen and Liao, 2018;Colicchia and Strozzi, 2012;Fan and Stevenson, 2018;Fraser and Simkins, 2016;Noja, 2018). Organizations strive for continuous process evolution, which is also found in risk management.…”

Analisis Risiko Pada Supply Chain Management Menggunakan Framework Iso 31000:2009 (Studi Kasus: Pt. Xyz)

“…Analisis manajemen risiko supply chain pada perusahaan penebangan (Mensah dkk, 2017), produk segar (hasil pertanian) (Norman dan Jansson, 2004). Manajemen risiko supply chain pada e-commare (Caldwell dkk, 2013;(Dutta dkk, 2019) dan (Stefanus dan Hartono, 2018), manajemen risiko supply chain dari sudut pandang praktisi (Jüttner, 2005), risiko supply chain dalam bidang keuangan (Blome dan Scoenhar, 2011), dan manajemen risiko supply chain pada pelayanan (Chen, 2018) dan (Choi dkk, 2016), risiko supply chain pada industri makanan (Diabat dkk, 2012), risiko supply chain design produk (Khan dan Christopher, 2008), penilaian risiko dan pendekatan operasional dalam manajemen risiko supply chain (Kumar dkk, 2014), Studi analisis pada risiko supply dan manufaktur terhadap kinerja bisnis (Kumar dkk, 2018) manajemen risiko supply chain pada perusahaan (Lavastre dkk, 2012), identifikasi pemilihan supplier (Lesisa dkk, 2018), manajemen risiko informasi dalam supply chain (Agrell dkk, 2004) dan (Faisal dkk, 2007).…”