The impacts of operational risks in the supply chain of construction projects in malaysia

Abstract

Construction glitches have become serious issues for Malaysian construction projects. The construction industry is one of the industries driven by supply chains and affected by interconnected risks. Any disruption happening anywhere will halt the whole project or even other projects. However, massive literature is available to deal with various kinds of risks from the supply chain (SC) of the construction industry that have never been discussed before. This is an empirical investigation and the data was collected through a questionnaire distributed to the construction industry through systemic probability sampling. Final and purified data was analyzed with Structural Equation Modelling through Smart PLS. A total of three types of risks were identified from literature namely supply side risks (SR), process side risks (PR) and demand side risks (DR). It has been found that supply side risks and demand side risks have significant negative effects on supply chain performance (SCP) while process side risks also have negative effects on supply chain performance but not significant. This study will help managers to understand how supply chain risks (SCR) affect the construction industry and what type of risks they should be more aware of. This study covers only operational side risks while future research can be on other risks. Furthermore, various approaches can be proposed for mitigation but there is also a need to verify these approaches for Malaysia.