Procurement Risk Management to Improve Supply Chain Performance

Abstract

This research aims to analyze the impact of logistics integration and procurement risk management on supply chain performance in goods distribution for fast-moving consumer goods (FMCG) companies. The SEM method uses Smart-PLS software version 3.3. The respondents are 202 companies from the economic sector, logistics centers, and transportation service providers. The study results show that information sharing and supplier integration have a significant positive impact on supply chain performance through sharing information about plans, volumes, key performance indicators (KPIs), on-schedule delivery status, and transportation management systems. The novelty of this study is that it shows that procurement risk management is proven to moderate the impact of information sharing on supply chain performance. However, procurement risk management does not reduce the impact of long-term supplier relationships and integration on supply chain performance. It was clear that deliveries were not going well, as deliveries were made in response to demand via the spot market due to truck availability and high prices. Long-term relationships do not have a significant positive impact on supply chain performance.