Impact of integration on supply chain performance in construction: risk as a driver

Abstract

This study explores the relationships between supply risk (strategic and operational risks), integration (supplier and internal integration) and supply chain performance (SCP) within the construction industry. Data were gathered from construction firms operating in Vietnam, and structural equation modeling was used for testing the proposed hypotheses. It is indicated that strategic risk, rather than operational risk, drives construction firms to enhance supplier and internal integration. Furthermore, these two dimensions of integration contribute to improvements in SCP, specifically in terms of cost, flexibility, quality and delivery. While extensive research on construction supply chains (SCs) has primarily focused on the four stages of the risk management process (i.e. risk identification, evaluation, mitigation and monitoring), existing studies predominantly regard risk as an adverse event impacting SC activities. In contrast to this conventional perspective, this study adopts the dynamic capabilities view, asserting that supply risk can serve as a catalyst for SC integration. The study offers actionable insights for construction managers, emphasizing the critical role of enhancing supplier and internal integration as a proactive response to strategic risk. Strengthening collaboration with suppliers and improving internal coordination enable firms to achieve significant advancements in overall SCP. This study represents one of the earliest efforts in construction to empirically validate the positive relationships between supply risk, integration and SCP.