Philippine E-Journals

Identifying Potential Critical Risks in the Construction Supply Chain – An Empirical Study in Ghana

Amos Darko | De-Graft Owusu- Manu | Erika Parn | David John Edwards

 

Abstract:

Risk management is an important tool for organizations operating in a global environment. Hence, this paper seeks to identify potential critical risks existing in the construction supply chain (SC) in order to aid risk management processes. From the literature, 11 risks factors that may affect the construction SC were identified. A questionnaire survey based upon these factors was then carried out and 49 responses were received from contractors and suppliers in Ghana. The mean score analysis was used together with the one-sample t-test to identify potential risks in the construction SC. The K-S test was used to investigate any differences between ratings given by the two groups of respondents for a particular risk factor. The internal consistency and reliability of the risk factors was assessed using the Cronbach’s alpha coefficient (α).The results show that fluctuations in prices, changes in interest rates, shortage of materials, frequent changes in SC inputs and unexpected changes in demand are potential critical risks. Generally, there was no statistical difference between the perceptions of the stakeholders on the ranking of the risk factors. Using the research presented, readers are able to identify potential risks in the construction SC for risk management activities and implement suitable risk mitigation. Although a plethora of research exists on risk management, few studies have attempted to identify risks in the construction SC – this research goes some way to fill that void.