Investigating the relationship between supply chain innovation, risk management capabilities and competitive advantage in global supply chains

Abstract

Purpose: The purpose of this paper is to propose and validate a theoretical model to investigate whether supply chain (SC) innovation positively affects risk management capabilities, such as robustness and resilience in global SC operations, and to examine how these capabilities may improve competitive advantage. Design/methodology/approach: A theoretical model was developed from extant studies and assessed through the development of a large-scale questionnaire survey conducted with South Korean manufacturers and logistics intermediaries involved in global SC operations. The data were analysed using confirmatory factor analysis and structural equation modelling to validate the suggested model. Findings: It was found that innovative SCs have a discernible positive influence on all dimensions of risk management capability, which in turn has a significant impact on enhancing competitive advantage. Therefore, this work provides evidence for the importance of SC innovation and risk management capability in supporting competitive advantage. Research limitations/implications: This study contributes to providing an empirical understanding of the strategic retention of SC innovation and risk management capabilities in the SC management discipline. Furthermore, it confirms and expands existing theories about innovation and competitive advantage. Practical implications: The finding provides firm grounds for managerial decisions on investment in technology innovation and process innovation. Originality/value: This research is the first of its kind to empirically validate the relationships between SC innovation, risk management capabilities and competitive advantage.