An empirical analysis of supply and manufacturing risk and business performance: A Chinese manufacturing supply chain perspective

Abstract

Purpose – This study explores the importance and impact of supply and manufacturing risk management upon business performance within the context of Chinese manufacturing supply chains.

Design/Methodology/Approach – A two phased multi-method approach was adopted, which included a survey questionnaire to practitioners in Chinese manufacturing supply chains followed by semi-structured interviews. The findings included 103 valid survey responses complemented by six semi-structured interviews.

Findings – The results indicate that in Chinese manufacturing context supply risk and manufacturing risk management are both vital for business performance. A high correlation between business and manufacturing risk management performance exists, however no significant impact of supplier dependency, systematic purchasing, maturity of production and supply chain, and human resources was found despite previously these elements being regarded as key influencers for supply and manufacturing risk management performance. The Chinese manufacturing supply chain indicated that elements such as the supplier and customer orientation, flexibility, manufacturing and supply risk highly connotes with business performance.

Theoretical/Practical implications – In the current unpredictable and volatile business environment the competitiveness of manufacturing supply chains to a large extent depend on their ability to identify, assess and manage the manufacturing and supply risks. The findings of this study will assist supply chain managers in taking decision on manufacturing and supply risk management and reducing the uncertainty upon their business performance.

Originality/value – The supply chain risk has been widely explored within the context of individual case studies, or standalone models focusing on either supply or manufacturing risk in supply chains, however to what extent this has been applicable to a wider context and its impact upon business process has not been explored. Hence, this study simultaneously has analysed manufacturing risk and supply risk and its impact upon Chinese manufacturing supply chains business performance. Moreover, this study uses a combination of quantitative and qualitative methods, which is often limited in this area. Finally, the institutional theory lens offers novel insights in better understanding the factors that can affect the impact of supply and manufacturing risk management upon business performance in those contexts, such as China, where the institutional aspect presents specific features.