The realities of supply chain risk management in the Kingdom of Saudi Arabia: A case study on the providers of logistics services

Abstract

The issue of risk is a recent and growing topic in supply chain management. Supply chain risk management (SCRM) plays a key role in successfully managing business operations in a proactive manner. Therefore, excellent supply chain management has become a vital factor in running a successful business with a sustainable competitive advantage in today's global marketplace. In line with this development, the Kingdom of Saudi Arabia (KSA) launched Vision 2030; based on its logistical location linking three continents to boost its non-oil economy, the KSA’s transformation into an international logistics hub was one of the most important pillars of this vision. This research aims to investigate the SCRM practised in the KSA to discover any obstacles currently hindering the function of the supply chain in the country and give recommendations for mitigating risks in the reality of managing supply chain risks in the KSA. This paper is based on a pilot study of 19 samples of medium-sized companies for chain and logistics service providers in various fields. An interview with one of the most important logistics service providers in the KSA and a member of the Chamber of Commerce illustrated that, for organisations to be effective, SCRM must be a common administrative function between organisations in nature and closely related to the strategic reality based on infrastructure, regulations and operational systems. Furthermore, the results of our pilot study indicated that some logistics providers in the KSA lack an independent department for SCRM, and in the same regard, there is a lack of a consistent methodology for managing supply chain risks for most Saudi companies.