Abstract:
The role of innovation has, over the last decade, evolved into a significant determinant in the operations of businesses. The purpose of this study was to propose and validate a theoretical model to investigate whether supply chain innovation positively influences risk management capabilities (i.e. robustness and resilience) in supply chain operations and further to investigate that these capabilities may improve competitive advantage. Thus, a theoretical model was developed from extant studies and evaluated through development of questionnaire survey conducted among construction industry of Islamabad/Rawalpindi. The data were analysed using confirmatory factor analysis and structural equation modelling to validate the suggested model. Analysing 210 respondents from managerial staff, a positive impact of supply chain innovation has been witnessed on risk management capabilities which in turn put a significant influence on enhancing competitive advantage. Therefore, this study reveals an apparent evidence of importance of supply chain innovation and risk management capabilities in supporting competitive advantage. Moreover, this study provides an empirical understanding of strategic retention of supply chain innovation and risk management capabilities in supply chain management and also confirms and expands existing theories about innovation and competitive advantage. This research empirically validate relationships between supply chain innovation, risk management capabilities and competitive advantage with moderator variable of buyer-supplier relationship. Further, the findings also provide firm grounds for managerial decisions on investment in technology and process innovations and indicates that these indicators are necessary to achieve competitive advantage.
