Assessing the Evolving Role of Geopolitical Risks in Supply Chain Logistics: An Empirical Analysis of Risk Management Strategies

Abstract

Supply chain logistics have always been affected by geopolitics. Still, during the past two years, they have assumed a disproportionately large role that is expected to persist for the foreseeable future. Geopolitical risk will continue to be a significant factor in supply chain decisions, despite the COVID-19 epidemic highlighting the dangers of just-in-time sourcing tactics and the unavailability of alternate or dual sources in numerous supply chains. Internationally renowned organizations must think globally while making every effort to work locally and follow cultural norms to reduce risk. Geopolitical events of any size may impact the supply chain. Wars, revolutions, and significant political disputes are a few events with the most significant impact. Although they may be hard to find, even negligible, local events that don't make national headlines might impact the supply chain. This research aims to empirically analyse supply chain risk management strategies. A survey of 50 small and medium-sized businesses (SMEs) was undertaken in Saudi Arabia as the basis for the analysis. The study analyses supply chain risks by assessing their likelihood to occur and their possible impact on the supply chain following examining the susceptibility of supply chains in general and looking at the primary causes of supply chain risks. The probability-impact matrix, which distinguishes between internal and outside supply chain threats, displays the outcomes. The investigation of tools for managing supply chain hazards continues. As a result, the effect of supply chain risk management on productivity is evaluated. Additionally, the results demonstrate that the group seeking responsive supply chain risk management has superior values regarding adaptability or safety stocks. Still, the group pursuing preventative supply chain risk management has greater average values regarding disruptions tolerance.