Understanding the impact of supply-side decisions and practices on supply risk management

Purpose: In the era of market turbulence, sourcing specialists consistently face challenges to keep the availability of the material efficiently and effectively without any disruption. Sourcing strategies and planning have a huge impact on procurement performance. The purpose of this paper is to examine the relationships among different sourcing strategies and supply risk management and performance and additionally, the role of procurement practices in different strategic settings. Design/methodology/approach: This is empirical research that collected data gathered from 223 procurement specialists working in various manufacturing firms through a structured questionnaire. Valid data is then analyzed through the structure equation modeling technique for hypotheses testing. Findings: The findings of this study reveal that supplier development is a partial complementary mediator between multiple supplier strategy and supply-side risk management. While in a volatile business environment, strategic supplier strategy has a significant negative impact on supply-side risk management, and in this case supplier development acts as a competing partial mediator between the two. Contract management has resulted in an important mechanism to be deployed in a strategic sourcing strategy. It is also shown that supplier risk management is also associated with improved supply management performance. Practical implications: This paper establishes an explanation of theoretical and practical understanding of sourcing strategies and empirically shows that supplier development is the appropriate mechanism to deal with supply-side risk management, which in turn positively impacts on supplier management performance. Originality/value: This study contributes to supply chain risk management literature, especially in the context of strategic risk management and explains how a strategic decision can impact supply risk management. This provides a piece of empirical evidence regarding the use of well-established procurement practices to improve supply performance.