Supply chain innovation and risk management capability : their relationships and impacts on competitive advantage

Purpose This study aims to propose and validate a theoretical model to demonstrate that supply chain innovation affects risk management capabilities, such as robustness and resilience, and in turn how risk management capabilities improve competitive advantage. Design/methodology/approach A theoretical model was developed by extant studies given the resource-based view. This model was validated by using a large-scale questionnaire survey conducted with Korean manufacturers and logistics intermediaries. The data was used to validate the suggested model by confirmatory factor analysis (CFA) and structural equation modelling (SEM). Findings It was found that innovative supply chains have a discernible influence on all dimensions of risk management capability, which in turn has a significant impact on competitive advantage. Research limitations/implications This work contributes to the efficacy in augmenting competitive advantage through supply chain innovation and risk management capability so that it expands a theoretical foundation and existing body of knowledge for SCM and global logistics. Practical implications This study provides practitioners with a diagnostic tool to evaluate the current situations of supply chain innovation and risk management capability. Also, it can provide firm ground for managerial decisions on the investment into the process and technology innovation. Original/value This research is the first of its kind to empirically validate the relationships between supply chain innovation, risk management capabilities and competitive advantages.