International Journal of Construction Management

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Assessment of critical risk and success factors in

construction supply chain: a case of Pakistan

Muhammad Abas, Sikandar Bilal Khattak, Tufail Habib & Uroosa Nadir

To cite this article: Muhammad Abas, Sikandar Bilal Khattak, Tufail Habib & Uroosa Nadir (2020):
Assessment of critical risk and success factors in construction supply chain: a case of Pakistan,
International Journal of Construction Management

To link to this article: https://doi.org/10.1080/15623599.2020.1783597

Published online: 26 Jun 2020.

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INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT
https://doi.org/10.1080/15623599.2020.1783597

Assessment of critical risk and success factors in construction supply chain: a case
of Pakistan
Muhammad Abasa, Sikandar Bilal Khattaka, Tufail Habibb and Uroosa Nadirb
a
Department of Industrial Engineering, University of Engineering and Technology Peshawar, Pakistan; bDepartment of Industrial Engineering,
Jalozai Campus, University of Engineering and Technology Peshawar, Pakistan

ABSTRACT KEYWORDS
Assessment of critical risk and success factors is essential for successful execution of construction projects. Construction supply chain;
This paper aims to identify the critical risk and success factors that affect the performance of the supply risk factors; severity index;
chain in the construction projects of Pakistan. For this purpose, a methodology was developed to identify success factors
risk and success factors. A questionnaire was designed to obtain the opinions of contracting companies,
consulting firms, and project managers. Data were collected from 259 respondents and were analyzed
statistically. The results of this study identified the top five critical risk factors that were prioritized based
on the severity index. The most critical risk factors identified were, funding with a highest percentage of
93.89%, followed by shortage of material/equipment, cash flow, and bad weather. Among success factors,
the communication has the highest severity index of 93.23%, followed by trust with a supplier, risk alloca-
tion, problem-solving, and joint working. These factors were discussed with implications that affect and
impact the performance of the construction industry. The findings of this research can be used to guide
the improvements in the construction industry in Pakistan, and other terror hit countries.

Introduction material, machine, skilled labor, unskilled labor, or any other

The construction projects are usually hybrid (Meng 2012). The
execution of construction projects uses not only manufactured
goods but also energy and raw materials. Similar to other prod-
ucts, a construction project quality is defined by the client (i.e.
the satisfaction of customer), whereas project success is directly
dependent on the project team. Concerning Gross Domestic
Product (GDP), the construction industry has a significant
impact on the national and global economy (Yun and Jung
2017). According to Shahbaz Rana (2019) growth rate of
Pakistan’s construction industry during 2017–2018 was 9.13%.
The construction projects are not only labor extensive (Dlamini
et al. 2019), but drives and support other manufacturing and ser-
vice units as well (Liu and Kim 2019).
In developing countries, the construction industry is the
second largest employer for both skilled and unskilled labors
(Goel et al. 2019). Roughly 30–35% of employment is directly or
indirectly associated with the construction industry (Farooqui
and Ahmed 2008). The job offered by the construction industry
is at all levels of society. A small change in the construction
environment and procedures can impact the society at large,
especially the daily wage workers.
Typically, a construction project involves a client, contractor,
consultant, and sub-contractors. A client initiates a construction
project, by initiating ideas, arranging finances, and integrating
the supply chain (Segerstedt and Olofsson 2010). A consultant
provides feasibility plans and safeguards client specifications. A
contractor transforms the resources into a physical entity and is
hired by the client in consultation with all the stakeholders. The
contractor may have tens of different sub-contractors depending
on the requirements. The selected sub-contractors could be for
requirement. These multi echelons make the supply chain the
heart for successful project completion and client satisfaction.
Figure 1 illustrates the supply chain interaction between different
stakeholders of a construction project.
The concept of supply chain management originated from the
manufacturing industry (Vrijhoef and Koskela 2000). Toyota is
one of the pioneers in applying the concept of Just in Time (JIT)
for the delivery system (Shingo 1988). It assures the right
amount of supplies at the right time. It reduces inventory and
streamlines the interaction of suppliers with the production line
(Vrijhoef and Koskela 2000). Due to its successful implementa-
tion in the manufacturing sector, researchers adopted some of its
aspects in the construction sector as well (Akintoye and
Fitzgerald 2000; Vrijhoef and Koskela 2000; Tennant and
Fernie 2014).
According to Kumaraswamy (1996), the primary objective of
a supply chain within a construction project is to help the pro-
ject team in better utilization of resources and achieves schedul-
ing goals. Palaneeswaran et al. (2003) emphasized that a supply
chain should benefit all the members by developing a good rela-
tionship between client, contractor, consultant, suppliers, and
sub-contractors. A good supply chain sustains effective commu-
nication, integration, collaboration, and coordination between
stakeholders throughout the project (Segerstedt and Olofsson
2010). According to Vrijhoef and Koskela (2000), success factors
for the supply chain are incentive-based contracting, and part-
nering. Moreover, the flow of raw material, information, and
cash flow are critical risk factors for project success (L€
onngren
et al. 2010). Selection of suppliers, number of deliveries deter-
mination, and resource allocation are critical aspects of the suc-
cessful supply chain (Deng et al. 2019). High fragmentation and

CONTACT Sikandar Bilal Khattak sikandarbilal@uetpeshawar.edu.pk

ß 2020 Informa UK Limited, trading as Taylor & Francis Group
2 M. ABAS ET AL.
Figure 1. Supply chain within a construction project.
dynamic nature complicate the construction supply chain
(Cheng et al. 2010). The application of information technology
in the construction supply chain improves resource utilization,
time, and logistics performance. Getuli et al. (2016) integrated
building information modeling (BIM) with the construction sup-
ply chain to improve the exchange of information during differ-
ent phases of the project.
Limited research is available regarding the supply chain prac-
tices in the construction industry in Pakistan. For instance,
Khattak et al. (2015) studied the risk factors affecting the supply
chain environment of the construction industry of Khyber
Pukhtunkhwa (KPK), a province of Pakistan. They identified
that escalation of material prices, cash flow, terrorism, shortages
of material and equipment’s and funding are the most critical
risk factors affecting the performance of the construction supply
chain. However, success factors and perceptions of consultants
are not discussed in their study. Furthermore, their study is lim-
ited to only one province of Pakistan. Shahbaz et al. (2018), in
their study, identified that supplier relationship, customer rela-
tionship, and risk and reward sharing effect the construction
supply chain performance of Pakistan. However, their study is
limited to a stakeholder management approach and ignores the
aspect of contractors and consultants. In another study, Shahbaz
et al. (2019) studied the impact of supply chain capabilities on
logistic efficiency for the construction projects. They concluded
that collaboration with stakeholders and flexibility in terms of
cost, time, labor, and other vital decisions is efficient for the
logistic supply chain. According to Gabol and Siddiqui (2019),
the success of the construction supply chain in Pakistan is greatly
affected by top management commitment, information sharing,
and mutual trust. Ahmed et al. (2019) identified the critical bar-
riers impeding the adoption of green supply chain management
in construction sectors of developing countries (Including
Pakistan, India, Bangladesh, Qatar, Iran, Kuwait, Saudi Arabia,
Egypt, UAE, Yemen, Ghana, Somalia, and Argentina). The crit-
ical factors identified are insufficient policies, incentives, regula-
tions, or a commitment by leaders or top management,
government support, and lack of public awareness and know-
ledge. The integration of the construction supply chain as a busi-
ness process in the construction sector of Pakistan is still in
infancy. Likewise, the adoption of technology such as informa-
tion and communications systems and the Internet of Things
(IoT) is very slow in the construction industry in Pakistan.
Previous literature, especially in the context of Pakistan, did not
take into account the risk factors and their implications on suc-
cess parameters. As these factors vary from region to region, lim-
ited research is available regarding the supply chain practices
within the Pakistan construction environment. Thus, it motivated
the authors to conduct a holistic study to identify the critical
risk and success factors that affect the performance of the supply
chain in the construction projects of Pakistan. The purpose of
this study is twofold, first to develop awareness among stake-
holders, especially contractors and consultants, concerning the
possibility of potential risk in a construction supply chain and
second to give recommendations to reduce the occurrence of
risk factors in the construction supply chain.
Literature review
An adequate supply chain in the construction industry cannot be
developed unless the success and risk factors are identified and
quantified. The following section discussed the literature related
to success and risk factors:
Critical success factors of supply chain
Fearne and Hughes (1999) argued that the critical success factors
for the supply chain are the commitment of top management,
team skills, consultant skills, and the reliability of schedule and
budget. Whipple and Frankel (2000) identified clear goals, trust,
good partnership, efficient leadership, committed human resour-
ces. According to Power et al. (2001), continuous improvement,
relation with suppliers, computer-based technology, management

style, and utilization of technology are the success factors of an
agile supply chain. For managing an effective web-based supply
chain, the success factors are communication, training, educa-
tion, the commitment of top management, and reliability of
computer hardware and software (Ngai et al. 2004). Chen and
Paulraj (2004) in their study discussed that customer focus,
uncertainty in the environment, information technology, supplier
relationship, integration of logistics, and support from top man-
agement are critical success factors for the supply chain. Rao
Tummala et al. (2006) identified that information and communi-
cation technology, no blame culture, supplier relationship, and
performance measurement are success factors of supply chain
assessment. The study by Hong et al. (2008) identified govern-
ment policies, costs, technology, relationships, and service qual-
ity. The critical factors affecting the performance of the supply
chain in the UAE construction industry are technical back-
ground, customer needs, and company procedures (Albaloushi
and Skitmore 2008). Wu and Weng (2010) implored that critical
factors to be considered when selecting a supplier are manage-
ment capability, financial capability, price response, delivery
time, quality management, and technological capability.
Moreover, for a successful supply chain, partnering, trust, no
blame culture, standardized data, and mutual objectives are the
key factors (Koh et al. 2011). Additionally, critical factors for the
implementation of green supply chain management are; informa-
tion technology, support from government, awareness, manage-
ment commitment, trust, and procurement strategies (Luthra
et al. 2014). Luo et al. (2018) conclude that supply chain excel-
lence can be achieved through building trust, communication,
mutual objectives, continuous improvement, performance meas-
urement, no blame culture, and partnering.
Gale and Luo (2004) mentioned that joint working and a
joint venture are critical for the construction supply chain. Joint
working not only shares responsibility but also provide the
expertise required to complete a project. The key aspect of the
joint venture is technology transfer (Chowdhury and Chowdhury
2001). It is considered to be successful if the competitive position
of parent firms about technology and management improves
(Scaringella and Burtschell 2017). A joint venture encourages
acquisition and knowledge sharing (Min et al. 2005). Building
trust is a fundamental consideration in building a supply chain
relationship (Khalfan et al. 2007). A firm cannot compete indi-
vidually but must collaborate with other members in a supply
chain (Kwon and Suh 2004). Trust develops excellent communi-
cation, reduces risk and uncertainty among participants (Ryciuk
2017). Trust and good relationship results in knowledge sharing,
experience, mutual problem solving, and shared planning
(Khalfan et al. 2007). Groznika and Trkman (2012) conclude
that trust decreases the complexity of negotiations. Olanrewaju
et al. (2017) and Trkman and McCormack (2009) highlighted
inappropriate mutual objectives for creating the inabilities to rec-
ognize ownership and project goals. Meng (2010) reported that
lack of communication results in rework, non-uniformity, uneth-
ical behavior, worker frustration, and onsite violence. Effective
communication results in proper planning and scheduling of
construction activities and ensures on-time availability of mater-
ial and labor (Meng 2010).
Pain and benefits sharing are the key factors in developing a
robust and trustful supply chain (Andelin et al. 2015). All con-
struction projects are prone to risk. The risks must be allocated
among parties in such a way that no party is at a disadvantage
(Meng 2010). The risk should be allocated to those contracting
parties which can handle it effectively. Lam et al. (2007)
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 3
determined risk allocation in construction projects based on
three significant factors, which are the form of payment, risk
management, and the form of contract. Smith (1995) classified
the risk into five major groups, namely, economic risk, capability
risk, physical factor risk, contractual and legal risks, and political
and societal risks. Shukla et al. (2011) held an inadequate risk
assessment responsible for inaccurate estimates.
Construction organization, which intends to have a competi-
tive edge, needs to focus on continuous improvement.
Continuous improvement is related to lean manufacturing.
Project managers who intend to reduce wastage need to stream-
line the business chain (Meng 2012). To develop a continuous
improvement cycle, the problem-solving approach from each of
the participants is mandatory. Problem solving plays a vital role
in daily construction activities. Incentive mechanism is practiced
in construction to mitigate the performance problems (Bubshait
2003). One cannot blame others for the sake of their own mis-
take. Additionally, suppliers could not be given the same status
and benefits if they fail to achieve targets. Incentives mechanism
for goods participants can boost the morale of all the suitable
suppliers (Peckiene et al. 2013; Chen et al. 2017).
The other studies identified on-time funding, law and regula-
tion, rewards, expertise, skills, technical staff availability, good
weather, and teamwork as success factors (Gunduz and Yahya
2015; Mashwama et al. 2017; Zakaria et al. 2017; Afolabi et al.
2019; Ahmadabadi and Heravi 2019; Sfakianaki 2019).
Critical risk factor for supply chain
According to Brindley (2004), the adoption of risk management
in the construction supply chain is beneficial to the organization
that is looking for technological advancement and global compe-
tition. Chopra and Sodhi (2004) identified that the risk factors
that disrupt supply chain are natural disasters, terrorism, com-
munication infrastructure, delays in supplies, inaccurate fore-
casts, fluctuations in the exchange rate, and uncertainties in
demand and supply. Liu and Wang (2011) argued that the sour-
ces of disruption of a collaborative supply chain are law and
regulation, labor strikes, technology inconsistencies, and lack of
communication. Zou and Couani (2012) analyzed the key risks
and their dissemination in the green supply chain. Their results
show that the most common risk factors are lack of commitment
to supply chain and higher investment cost. Gosling et al. (2013)
reported that late specification changes, late deliveries, bad wea-
ther, and supplier bad performance are the most influential risk
factors. According to Badea et al. (2014), ineffective supply chain
risk can cause delays, cost-overrun, and quality problems in con-
struction projects. In their study, they identified 16 potential
risks. Among them, competitive cost risk, delivery risk, procure-
ment risk, material quality risk, and delay risk are the most crit-
ical. Khattak et al. (2015) ranked the external risk factors based
on the analytical hierarchy process (AHP) affecting the perform-
ance of a construction supply chain. Among 19 risk factors, the
top five factors identified are an escalation of material prices, fol-
lowed by cash flow, terrorism, shortages of material and equip-
ment, and funding. Darko et al. (2016) identified 11 potential
critical risks and concluded that fluctuation in prices, instability
of interest rates, shortages of material, and unexpected changes
in demand are critical risks in the Ghana construction industry.
Panova and Hilletofth (2018) concluded that delays in the supply
of material and other resources, overcapacity or deficiency ware-
house, on-time loading, and shipment of goods are the possible
risks in the supply chain.
4 M. ABAS ET AL.

The literature review discussed the issues and factors that Table 1. Identified factors.
affect the performance of a supply chain in construction projects. S. no Risk factors S. no Success factors
The significance of these factors varies depending upon the type 1 PC-1 preparation 1 Benefit shared
of project, project team, and region. It is crucial to identify the 2 Funding 2 Trust with supplier
3 Procurement unit of contractor 3 Communication
factors that impact the performance of a construction supply
4 Financial capability of contractor 4 Problem solving
chain and the knowledge to improve the construction industry 5 Management team of contractor 5 Risk allocation
of Pakistan. The present study aims to highlight critical risk and 6 Communication infrastructure 6 Continuous improvement
success factors that affect the performance of a construction sup- 7 Escalation of material prices 7 Incentive mechanism
8 Technical person availability 8 Pain and gain sharing
ply chain and to develop awareness among the construction 9 Cash flow 9 Performance measurement
practitioners to adopt successful supply chain practices. 10 Shortage of material/equipment 10 Joint working
The rest of this paper is organized as follows. Section 11 Low bid 11 No blame culture
‘Methodology’, includes pilot study, questionnaire design, and 12 Bad weather 12 Mutual objective
13 Bureaucracy and political influence
analysis methods. ‘Results’ section presents the data analysis 14 Terrorism
using various measures such as reliability analysis, agreement 15 Regulatory authority
analysis, and ranking of identified factors. Section ‘Discussion’ 16 Government policies
deals with the success and risk factors and their implications. 17 ISO certification
18 Inflation
Section ‘Limitations and Future Research’ provides the limita- 19 Law and order situation
tions of the proposed method. Section ‘Conclusions and
Recommendations’ presents the practical implication of the study
and concludes the paper. Respondent selection
Contractors, clients (owners), and consultants were the potential
respondents. Only those contractors and consultants were
Methodology
approached that were registered with the Pakistan engineering
The methodology used for the present study is discussed council (PEC). Information related to contractors and consul-
as follows: tants was retrieved from the PEC website (PEC. 2019). PEC
divides the contractors into eight different categories based on
the project cost limit. These categories are CA, CB, and C1–C6.
Pilot study Category CA is the highest category with no project cost limit,
For a pilot study, identified factors were analyzed and validated CB up to 4000 million (PKR), C1–C6 between 2500 and 25 mil-
through experienced professionals. A preliminary questionnaire lion (PKR). Total local contractors registered with PEC of all cat-
was designed based on identified risk and success factors affect- egories are 20593, with CA 195, CB 123, C1 353, C2–C6
ing the construction supply chain performance. For survey-based (1013–9075). Local consultants registered with PEC are 2021. To
maintain the uniformity among respondent’s perception, only
research (Hill 1998) suggested 10–30 respondents. So a total of
the professionals who have more than 5 years of experience in
15 project participants having experience of more than 20 years
construction projects were considered as potential respondents.
were interviewed. The respondents thoroughly reviewed the draft
Table 2 shows the respondent profile.
of the designed questionnaire in a head-on interview. The dur-
488 questionnaires were distributed. However, with a response
ation of the interview was dependent on the degree of discussion
rate of 53.07%, only 259 responses were received, as shown in
and time allocated by the respondents. The purpose of the pilot
Table 3. According to Dillman et al. (2014), with a ± 5% sam-
study was to test the relevancy and comprehensiveness of the pling error, and a 95% confidence interval, a minimum sample
questionnaire. As no significant reviews were received from size of 246 was enough. Table 3 shows the questionnaires distrib-
respondents. The designed questionnaire with minor changes uted and received from respondents of different categories and
was adopted for the study. The risk and success factors that were their response rates. As the average response rate is above 50%,
finalized are shown in Table 1. A total of 19 risk factors and 12 so it is adequately good, as suggested for a construction survey
success factors are considered in this research. by Black et al. (2000).

Questionnaire design Analysis method

The designed questionnaire is divided into three sections:
1. The first section dealt with respondents’ personal informa-
tion such as name, designation, organization, and email.
2. The second is concerned with the organization, such as type
of organization, annual work done, and the number of
qualified workers (at least a bachelor’s degree).
3. The third section lists the factors shown in Table 1. The
respondents were asked to give the significance score based
on a Likert scale from 1 to 9 (1 strongly disagree, 2–3 dis-
agree, 4–6 neither agree nor disagree, 7–8 agree and 9
strongly agree).
Nine points Likert scale is a better option because it increases
reliability and provides sensitivity to sense small significant dif-
ferences (Tabish and Jha 2011).
The reliability and normality of collected data were analyzed
through the Omega (xt) coefficient and the Shapiro–Wilk nor-
mality test. Moreover, Kendall’s coefficient of concordance was
performed to analyze the level of agreement on the ranking of
factors among different respondent groups. Finally, the top 5
most critical factors were ranked based on the severity index/
relative importance index.
Results and analysis
Reliability analysis
The reliability test based on the Omega (xt) coefficient was per-
formed to check the internal consistency of the collected data.
 INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 5

Table 2. Respondents profile.

Target respondents Respondent designation Years of experience Project executed
Contractors (CA, CB, C1) Directors 15–35 More than 100
Project Manager 10–30 Between 50 and 100
Owners Private 5–25
Public Government 5–30 More than 100
Consultants 10–35 More than 100

Table 3. Questionnaire distributed and response rate. where:

Target respondent category Questionnaire Average response rate (%) n X
X
Distributed Received W¼ Rj Þ2
Contractors j¼1
CA 90 47 52.22
CB 60 31 51.67 ‘m’ is the number of factors, ‘p’ is the number of respondent’s
C1 110 56 50.91 groups, and j is the factor 1, 2, 3 … m.
Owners Kendall’s coefficient of concordance K for the available data is
Private 50 27 54.00
Government 75 40 53.33
0.9312. Test hypothesis is needed to know whether the respond-
Consultants 103 58 56.31 ents of different groups agree or disagree on the ranking
488 259 53.07 of factors.
 Null hypothesis, H0¼There is disagreement among respond-
ents of different groups on the ranking of factors (means every
The test was developed by McDonald (1999) and provide good
respondent ranked the factors differently).
reliability estimation (Trizano-Hermosilla and Alvarado 2016).
 Alternate hypothesis, Ha¼There is agreement among
Omega coefficient is expressed as Equation 1:
respondents of different groups on the ranking of factors (means
P
ð kj Þ2 every respondent ranked the factors in the same order).
xt ¼ P 2 P (1) Chi-square (v2) approximation of the sampling distribution of
½ð kj Þ þ ð1  kj 2 Þ
K is calculated for testing the hypothesis using Equation 3.
where kj is loading of item j, kj2 commonality of item j.
The value of the Omega (xt) coefficient varies between 0 and v2 ¼ gðm  1ÞK (3)
1. The acceptable range of xt is 0.7, while 0.9 and higher where g is the number of groups.
values provide high reliability (McDonald 1999). The xt calcu- The test statistics computed for Kendall’s coefficient of con-
lated for the data collected from contractors is 0.916, consul- cordance is shown in Table 4. As P value is less than the alpha
tants is 0.923, and owners is 0.908, while the combined xt is value of 0.05, so we reject the null hypothesis (H0) in favor of
0.903, so this shows that the data is highly reliable and suit- the alternate hypothesis (Ha). It is concluded that there is a sig-
able for further analysis. nificant level of agreement among respondents of different
groups on how they rank the factors.
Normality test
Ranking of factors
As the sample size of the collected data is less than 2000, so
the Shapiro–Wilk normality test is performed to check the The risk and success factors were ranked according to the sever-
normality (Royston 1982). For the normality of the data, sig- ity index (SI)/relative importance index. According to Le-Hoai
nificance values must be higher than 0.05. The results revealed et al. (2008), Rooshdi et al. (2018), Kamal et al. (2019), severity
that the significance value for each factor is less than 0.05, index is a more suitable method to prioritize indicators/factors
showing that the collected data is not normally distributed. So rated based on the Likert scale. The severity index is calculated
it concludes that non-parametric/distribution-free tests are through Equation 4.
suitable for further analysis. P9
x f
i i i
Severity index ð%Þ ¼  100 (4)
9N
Agreement analysis
where
Questionnaires were received from respondents of different xi ¼ weight assigned to ith response, i ¼ 1,2,3,4,5,6,7,8,9
organizations of different categories (contractors, clients, and fi ¼frequency of ith response,
consultants). A conflicting opinion about the ranking of critical N¼total number of responses,
risk and success factors of a construction supply chain might 9 is the highest point on the Likert scale.
exist. Therefore, agreement analysis needs to be performed to Table 5 shows factors, their SI percentage and ranking.
analyze the extent of agreement among respondents. Kendall’s The most critical risk factors identified are funding (93.89%),
coefficient of concordance test (non-parametric test) is one of followed by a shortage of material/equipment (90.05%), cash
the preferred methods to evaluate agreement in comparison to flow (89.78%), and bad weather (89.05%). ISO certification
other methods such as Cohn’s kappa (Ahmed et al. 2007). (50.34%) and PC-1 preparation (59.33%) are on the lower side.
Kendall’s coefficient of concordance values varies between zero Among success factors the communication has the highest sever-
and one and can be calculated from Equation 2: ity index of 93.23%, subsequently trust with a supplier (92.16%),
risk allocation (91.56%), problem solving (90.67%) and joint
12W 3p2 mðm1Þ2
K¼ (2) working (90.12%), whereas benefits sharing (79.56%) and mutual
p2 mðm1Þ2 objective (80.88) have a low ranking.
6 M. ABAS ET AL.

Discussion
Critical risk factors
With a severity index value 93.89%, funding is the most critical
risk factor in a construction supply chain. Late funding, create
financial problems. This finding agrees with Xie et al. (2019),
who suggested that shortening the payment period accelerate the
flow of fund and reduces the financial burden on contractors.
According to respondents, the decisive reasons for late funding
are poor communication, late approval of invoices, poor financial
management, and economic instability. To mitigate late funding
problems, the contractor should study the financial stability of
their clients and their performance on funds payment.
With a severity index of 90.05%, the second most critical risk
is the shortage of materials and equipment. This finding coin-
cides with Chapman (2001) and Darko et al. (2016), who argued
that a shortage of material and equipment is the primary source
of disruption in a construction supply chain and causes signifi-
cant delays. The core materials for construction are cement, steel,
bricks, and sand. Their shortage leads to a stoppage of work,
which causes delays and affects the supply chain. To avoid such
problems, contractors need to incorporate inventory manage-
ment guidelines. Request the quotes from multiple suppliers to
get reasonable prices. Perform daily supervision of material to
avoid pilferages and stock out. Make an adequate estimation of
material. Introduce the information-sharing system to share
inventory and demand data with suppliers for a quick response.
Many construction firms face a problem in the supply chain
due to poor cash flow. Cash flow is the third most critical risk
factor, having a severity index of 89.78%. This finding concurs
with Blackhurst et al. (2005), who proposed that poor cash flow
are responsible for delays in construction projects and disrupt
the supply chain performance. Respondents suggest that poor
cash flow occurs because of late payment from clients, poor
communication, error in estimation, and poor performance by
the procurement team. The contractors need to understand these
Table 4. Kendall’s coefficient of concordance results.
Test statistics
Sample size
Kendall’s K
Chi-square
Degree of freedom
P value
issues and should prepare a remedial plan. Additionally, the pro-
ject manager should be aware of how the accounting department
collects and report cashflow. The supply chain finance system
can ensure excellent performance (Ali et al. 2019).
With a severity index of 89.25%, terrorism is the fourth most
critical risk factor. According to Blackhurst et al. (2005), it dis-
rupts the supply chain activities and affects the performance of
construction projects. Terrorism and terrorist attacks can lead to
site closure. Moreover, it can interrupt the supply and transpor-
tation of material, equipment, and staff. The contractors need to
accurately calculate the safety stock and be in constant liaison
with government and security agencies to ensure the provision
and safety of workers, material, and equipment.
Unusual weather is the fifth most significant risk factor (with
a severity index of 89.05%). J€ uttner et al. (2003), also implores
weather to be a critical risk factor. Extreme weather such as
floods, hurricanes, and storms can disrupt worksite and are also
responsible for late deliveries of material and utilities
(Christopher and Lee 2004; Wedawatta et al. 2010). Construction
companies can monitor weather conditions of the region by
incorporating private weather forecast service. Furthermore, the
project manager is required to keep in view the risks associated
with adverse weather when making a project schedule. A con-
struction project that depends on dry weather conditions such as
roads and foundations are significantly affected when too many
wet days occur. Hence, it is essential to introduce a risk manage-
ment system to avoid delays.
Critical success risk factors
Communication with a severity index of 93.23% is the most crit-
ical success factor. This finding corroborates with Love et al.
(2004), Luo et al. (2018), who identified that a successful supply
chain in construction projects is not possible without effective
communication. It is considered to be an indispensable aspect of
a construction supply chain. The suppliers and managers fail to
communicate changes or other relevant information on time. For
a successful supply chain, communication needs to effective and
259
efficient among all stakeholders. The integration of technology
0.9312 can effectively reduce the communication gap.
1197 With a severity index of 92.16%, trust with the supplier is the
30 second most significant success factor. Kwon and Suh (2004),
0.001
Ryciuk (2017), Luo et al. (2018) suggest that developing trust

Table 5. Ranking of risk and success factors based on severity index.

Risk factors Severity index (%) Rank Success factors Severity index (%) Rank
PC-1 preparation 59.33 18 Benefit shared 79.56 12
Funding 93.89 1 Trust with supplier 92.16 2
Procurement unit of contractor 78.45 15 Communication 93.23 1
Financial capability of contractor 80.01 13 Problem solving 90.67 4
Management team of contractor 81.56 12 Risk allocation 91.56 3
Communication infrastructure 83.61 8 Continuous improvement 81.48 10
Escalation of material prices 87.23 6 Incentive mechanism 82.15 9
Technical person availability 85.63 7 Pain and gain sharing 85.56 6
Cash flow 89.78 3 Performance measurement 85.17 7
Shortage of material/equipment 90.05 2 Joint working 90.12 5
Low bid 75.21 16 No blame culture 82.56 8
Bad weather 89.05 5 Mutual objective 80.88 11
Bureaucracy and political influence 82.32 10
Terrorism 89.25 4
Regulatory authority 79.81 14
Government policies 72.91 17
Iso certification 50.34 19
Inflation 82.45 9
Law and order situation 81.79 11

with a supplier is considered to be necessary for a successful sup-
ply chain. The respondents implore that due to mistrust, neither
the project manager nor the supplier offers any favor or cost–be-
nefit. Participants fail to blend their expertise to help each other.
Effective communication with suppliers is a crucial parameter
for developing trust. Regular discussion sessions with suppliers
can provide acme and grab their apprehensions and uncertainties
as they happen during the life cycle of a project.
Risk allocation with a severity index of 91.56% is the third
most significant success factor. This finding matches with Meng
(2012), who concluded that risk allocation is one of the critical
construction supply chain factors. Due to fragmentation, a con-
struction supply chain is more prone to risk. A risk management
team can integrate suppliers with other parties and educate them
about possible risks during the project. A review of the last project
to answer a question regarding the type of risks, effect of those
risks, responsible party, and probability of those risks in the cur-
rent project can help in preventive and predictive measures.
Problem solving with a severity index of 90.67% is the fourth
most critical success factor. Problems start with minor issues, and
if it is overlooked or remains unsolved, it can lead to major dis-
putes and challenging to solve (Jones et al. 2003; Meng 2012). A
construction project is prone to different problems. The strategies
for practical problem-solving needs to identify the problem, its ori-
gination, nature, level of severity, and then search for possible solu-
tions. The problems need to be adequately documented, so it can
be used to resolve future problems on time effectively. Moreover,
creating a culture of continuous improvement reduces problems.
With a severity index of 90.12%, joint working is the fifth
most significant success factor. Meng (2012) argues that joint
working provides clear guidelines for mutual objectives. Joint
working is the collaboration between partners that may be short
term or long term depending on the level of their relationship.
For continuity of project without delays, long term partnership is
essential. Joint working is possible in the presence of mutual
trust, no blame culture, and pain and gain sharing.
In synopsis, the construction supply chain is affected by sev-
eral factors. However, due to budget and other constraints, one
cannot target or improve all these factors. The significant success
and risk factors identified in this research can be a starting point
to develop an effective and robust construction supply chain for
developing countries like Pakistan.
Practical implications
Identification of risk and success factors in the construction sup-
ply chain is the most critical step for supply chain managers.
The purpose of this study is to develop guidelines that may be
useful for the identification of supply chain risk and success fac-
tors for the Pakistan construction industry. From a practical per-
spective, construction practitioners should focus on the most
critical risk and success factors identified in this study. This
study will support construction practitioners in executing supply
chain activities proficiently and thereby shall improve the per-
formance and productivity of construction projects. Finally,
awareness about the importance of these factors leads to a suc-
cessful implementation of the construction supply chain.
Limitations and future research
Although 259 responses were considered enough for the present
study. The number could be increased for extensive analysis to
get more in-depth analysis. The perspective of foreign
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 7
contractors and consultants registered with the Pakistan
Engineering Council (PEC) is not considered in the present study.
Further research could investigate their views by comparing them
with the views of local contractors and consultants. Future studies
can develop a model or framework for the construction supply
chain in Pakistan by considering the identified critical factors.
Also, comparative studies can be carried out with other countries.
Moreover, case studies can be conducted to analyze how these fac-
tors impacted the performance of projects during different phases.
Conclusions and recommendations
The present study aimed to identify critical risk factors affecting
the construction supply chain, which has a direct impact on the
successful execution of projects. The purpose of this study was to
develop awareness among stakeholders, especially contractors
and consultants, concerning the possibility of potential risk in a
construction supply chain. For this reason, risk and success fac-
tors were identified based on literature and were finalized after
consultation with professionals. The results in the study show
that the most critical risk factors are funding that is 93.89%, fol-
lowed by shortage of material/equipment that is 90.05%, cash
flow is 89.78%, bad weather is 89.05%, while the ISO certification
is 50.34% and PC-1 preparation is 59.33% having lowest signifi-
cance rank. Among success factors, communication has the high-
est severity index of 93.23%, subsequently trust with the supplier
is 92.16%, risk allocation is 91.56%, problem solving is 90.67%,
and joint working is 90.12%, whereas benefit-sharing is 79.56%
and mutual objective is 80.88% having low significance ranking.
For effective implementation of the supply chain, the identified
factors are required to be considered during the decision-mak-
ing process.
The following recommendations can be made to reduce the
occurrence of risk factors in the construction supply chain:
 To mitigate late funding problems, the contractor must
study the financial stability of their clients and their per-
formance on funds payments.
 To avoid a shortage of materials, contractors need to have
inventory management systems.
 To avoid supply disruption due to terrorist activities, the
contractors need to be in constant liaison with government
and security agencies to ensure safety to workers, material,
and equipment.
 To reduce the risks associated with bad weather, the project
manager must consider the weather conditions in their
schedules by incorporating weather forecast services.
 Establish effective communication with suppliers to
develop trust.
 Regular discussion with suppliers highlights the uncertainties
as they happen during the life cycle of a project.
 A risk management team can integrate suppliers with other
parties and educate them about possible risks during the
project. A review of the previous project, especially the risk
factors, can support the current project to have preventive
and corrective actions.
 A useful problem-solving strategy should be practiced to
identify the problem, its origin, and search for possible solu-
tions. Documentation of the problems and their mitigation
is necessary for continuous improvement.
Disclosure statement
No potential conflict of interest was reported by the authors.
8 M. ABAS ET AL.
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