THE IMPACT OF SUPPLY CHAIN RISK ON THE PERFORMANCE ON AFRICAN COMPANIES.

Abstract 

Supply chain risk management as turned out to be a critical function for organization around the globe as a consequence or change in technology, economic, environment of organizations. Most companies or organizations view supply chain risk as a disruption of the flow of products or services that meet their requirements and consequently reduce their performance. Supply chain disruption as become so frequent and severity has been on the increase and which as a great impact on various economic sectors. Supply chain risk management is now a priority for business organizations as they seek to minimize risks and also gain a competitive advantage as they result of been prepared for unforeseen circumstances when they arise. While  demand planning, process combination, and synergistic relationship are extremely important to African supply chains, the improvement stages contrast substantially. Numerous organizations across Africa  are  still  in  the  early  phases  of  deciding  customer  needs  and  actualizing  important resource planning programming. Clients frequently experience organizations and business units in  which  the  attention  is  more  on  mechanizing  back  office  capacities  than  on  overseeing relationships with clients and suppliers.  Supply  chain  disruptions  are  one  of  the  most  important  issues  facing  contemporary organizations. Identifying the impact of risk on the performance and developing appropriate mitigation strategies is very important for  a company’s sustainability.  However, a literature survey  conducted  for  this  study  indicated  that  no  empirical  study  about  supply  chain  risk management was undertaken so far in the African region. This study was initiated to fill this gap. The  purpose  of  this  study  is  to  identify  the  impact  of  supply  chain  risks  on  the  business performance (profitability, sales etc.) on African organizations. For this purpose, supply chain risks are categorized into three: suppliers risk, operational risk, security and environmental risk.  Supplier risk entails on-time delivery risk the desired amount of delivery risk, quality risk, knowledge sharing risk, and right supplier selection risk.  Machine breakdown risk, insufficient capacity risk, planning risk, inventory risk (unnecessary or excess inventory), and employee risk is included in operational risks. Security risks include Information technology risk, terrorist activity risk, natural disaster risk, the risk of fire, and risk of accidents. On the other hand, environmental risks entail economic risk, the risk of increasing raw material costs, demand risk, and bureaucratic  risk.  Data is collected from  62  companies operating in Africa  through an online survey questionnaire. Wilcoxon test for paired samples and risk-performance matrices 

  5  were employed for data analysis. Overall, it is found that supply chain risk is high in Africa and affect organizational performance in the region. Especially, results show that companies are vulnerable to environmental risk. It is expected that this study can serve as a guide to supply chain practitioners in Africa.

.Table of Content

 CHAPTER 1 ....................................................................... 15 

INTRODUCTION ................................ 15 

1.1  Introduction ............................................ 15 

1.2  Supply Chain ............................................................................ 16 

1.3  Supply Chain Management ............................................. 17 

1.4  Supply Chain Risk and Supply Chain Disruption .............................. 17 

1.5  Supply Chain Risk Management .............................................. 17 

1.6  Types of Supply Chain Risk ............................................................. 18 

1.6.1  Supplier Risk ................................................................................................................. 18 

1.6.2  Operational Risk ............................................................................................................ 18 

1.6.3  Security Risk ................................................................................................................. 19 

1.6.4  Environmental Risk ....................................................................................................... 19 

1.7  Background ........................................................................... 20 

1.8  Problem Statement ........................................................... 20 

1.9  Aim, Objective, and Scope ...................................................... 21 

1.10  Research Question ......................................................... 22 

1.11  Justification ........................................................................ 22 

CHAPTER 2 .......................................................................... 23 

LITERATURE REVIEW .......................................... 23 

2.1.  Introduction ...................................................................... 23 

2.2.  Theoretical Review ........................................ 24 

2.2.1.  Contingency Theory ............................................................. 24 

2.3.  Empirical Review ................................................................. 26 

2.4.  Risk Mitigation ............................................................................ 28 

CHAPTER 3 ..................... 31

 RESEARCH DESIGN AND METHODOLOGY 31

 3.1.  Introduction ........................................................ 31 

3.2.  Research Design ......................................................................... 31 

3.3.  Population and Sample .................................................................... 32 

3.4.  Data Collection .............................................................................. 33 

  8  3.5.  Validity and Reliability ......................................................... 34 

3.6.  Data Analysis ........................................... 34

 CHAPTER 4 .......................................... 35 

RESULTS ............................................... 35 

4.1.  Introduction ............................................................................ 35 

4.2.  Test for Normality ................................................................... 35 

4.3.  Perceived Supplier Risk and Its Performance Impact ............................................. 36 

4.4.  Perceived Operational Risk and Its Performance Impact ............................. 38 

4.5.  Perceived Security Risk and Its Performance Impact ......................................... 40 

4.6.  Perceived Environmental Risk and Its Performance Impact .................................... 41 

4.7.  Frequency Distributions of Perceived Risks and Their Impacts on Performance .......... 43 

4.7.1  Supplier Risk ................................................................................................................. 43 

4.7.2  Supplier Risks’ Impact on Performance ........................................................................ 44 

4.7.3  Operational Risk ............................................................................................................ 45 

4.7.4  Operational Risks’ Impact on Performance................................................................... 45 

4.7.5  Security Risk ................................................................................................................. 46 

4.7.6  Security Risks’ Impact on Performance ........................................................................ 47

 4.7.7  Environmental Risk ....................................................................................................... 47 

4.7.8  Environmental risks impact on performance ................................................................. 48 

CHAPTER 5 ....................................................................................... 49

 CONCLUSION AND RECOMMENDATION ...................................... 49 

5.1.  Conclusion ................................................................................................................. 49 REFERENCES .................................................................................. 51 

APPENDIX I: QUESTIONNAIRE ............ 57 

APPENDIX II: ETHICS APPROVAL FORM STAGE ONE ................................................... 62

 APPENDIX III: ETHICS APPROVAL FORM STAGE TWO ................................................. 66

 APPENDIX IV: SUPERVISION MEETING RECORDS ....................................................... 75