The Impact of Geopolitical Tensions on Supply Chain Strategies in Saudi Arabia

Abstract

This dissertation's overall objective was to highlight the impact of geopolitical tensions on the supply-chain strategies from an international perspective, and how Vision 2030 in Saudi Arabia adopted actions and endeavors to forecast geopolitical uncertainties. As geopolitical risks increase in the corporate economy, businesses continue to shift their supply chain approach beyond cost efficiency to a resilience-based approach to guarantee flexibility in navigating the emerging challenges. Specifically, this paper considered reshoring, supplier diversification, and the use of digital technologies as pertinent mitigating approaches and assesses how universal the highlighted approaches are in mitigating the risk caused by political and economic shocks whose impact without proper mitigation can reach drastic results. Data were collected from experts employed in mega-projects of Saudi Arabia (NEOM, The Line, and Oxagon) by using a quantitative methodology in a survey, and then to analyze the returns of these methods towards supply chain performance and, more specifically, the tradeoffs between risk reducing and enhancing the operational performance of the chain. Results suggest that while resilience-based approaches to supply chain recovery from disruptions are successful in supply chain terms, they are usually less competitive on cost, rendering trade-offs between flexibility and cost effectiveness challenging for organizations, which necessitates more attention. The study also indicates that the execution aspect of these strategies is different from the actions due to the terms of service, which are determined mainly by the employees, implying that policy makers and business organizations require a targeted plan and organization through a robust and adaptive supply chain in a geographical cluster.