Effect of Supply Chain Risk Management on Organizational Performance of Nigeria Liquefied Natural Gas Limited (NLNG)

Abstract

The performance of Nigeria Liquefied Natural Gas (NLNG) Company, a key player in Nigeria’s economy, is vital for operational efficiency and financial stability in the global LNG market. Supply Chain Risk Management (SCRM), encompassing risk identification, risk assessment, risk mitigation strategies, and risk monitoring and control, is critical for mitigating disruptions and enhancing performance. This study examined the effect of SCRM on NLNG’s performance, measured through operational performance (on-time delivery rate) and financial performance (cost efficiency/reduction and revenue stability). A cross-sectional survey design was adopted, collecting data from 207 management and senior staff across NLNG’s supply chain operations using a structured questionnaire distributed via a census approach. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed for data analysis. Results indicated that risk identification (β = 0.328, p = 0.003), risk assessment (β = 0.154, p = 0.013), risk mitigation strategies (β = 0.226, p = 0.005), and risk monitoring and control (β = 0.252, p = 0.034) significantly and positively influence NLNG’s performance, collectively explaining 76.1% of the variance in performance (R² = 0.761). These findings revealed that robust SCRM practices enhance NLNG’s operational and financial outcomes, though challenges like infrastructure deficits and regulatory instability persist. Recommendations include adopting advanced risk detection technologies, integrating probabilistic risk assessment models, expanding mitigation strategies like dual sourcing, and implementing real-time risk monitoring systems to bolster performance.