Supply chains are resilient, or COVID disproves their impact.
Ozdemir et al. 22, Dilek Ozdemir, Assistant Professor at Izmir Katip Celebi University, Ph.D. in Management Engineering from Istanbul Technical University; Mahak Sharma, Researcher at the National Institute of Industrial Engineering, Ph.D. in IT Innovations and Management from the National Institute of Industrial Engineering; Amandeep Dhir, Professor of Research Methods at the University of Agder, Ph.D. in Consumer Psychology from the University of Helsinki, D.Sc. in Information Systems from Aalto University; Tugrul Daim, Professor in the Department of Engineering and Technology Management at Portland State University, Ph.D. and M.S. in Engineering Management from Portland State University, “Supply chain resilience during the COVID-19 pandemic,” Technology in Society, Vol. 68, February 2022, https://doi.org/10.1016/j.techsoc.2021.101847
The literature on supply chain resilience includes studies on various types of disruptions. However, pandemics are unique because they are unpredictable in terms of time and scale. The COVID-19 pandemic has caused business disruptions on an unprecedented scale. All industries have suffered sharp alterations in supply and demand structures. In fact, the pandemic disrupted markets so rapidly that companies could not develop and apply risk-aversion strategies, and they were simply unprepared when the disruption occurred [48]. The disruption thus forced them to make real-time decisions and act reactively [98]. Among all sectors, the perishable goods sector assumes exceptional importance because it provides people with essentials items [99]. Therefore, we aimed to investigate the ability of resilience-building efforts to absorb the effects of a disruption and enable recovery.
Our findings are twofold. Although all resilience-building efforts can mitigate disruptions within predetermined limits, the pandemic has exceeded these limits. Therefore, it has not only disrupted supply chains but also caused failures in resilience-building capabilities [100]. Our first significant finding indicates that organisations that were more effective in resilience-building activities were also less affected by the disruption. Some researchers have already sought to explain why some companies are more vulnerable than others. Belhadi et al. [15] report that service and manufacturing companies experience the negative effects of disruptions differently, and companies in global supply chains are more vulnerable to pandemic-related disruptions. Ivanov and Das likewise examined global supply chains and confirmed their greater vulnerability; however, they believe that local alternatives cannot replace the efficiency and effectiveness provided by global supply chains, which, they predict, will survive after the pandemic. Still, they suggest that working with local suppliers would create some flexibility during unexpected global crises [101]. Discussing the food supply chain performance of England during the pandemic, Garnett et al. [100] recommend investing in the agri-food sector and developing locally sustainable capacity that is sufficient to satisfy food demand in England. While they noted the inability of seasonal workers from other countries to cross the border during pandemics, the accuracy of this observation remains in question because such studies are rare and mostly compare companies from different industries. Our study examines only the perishable goods industry, and difference still exists.
Because the pandemic is recent and ongoing, very fewer papers in the supply chain literature have attempted to explain its interactions with supply chains. To the best of our knowledge, previous scholars have not statistically tested the effect of disruption on resilience-building activities or efforts. Our work also statistically demonstrates that less affected companies are perceived as higher performers in supply chain resilience activities. Understanding this phenomenon might provide clues for building more resilient supply chains in the future.
Understanding the effectiveness of existing practices must figure prominently on the agenda of the supply chain literature in the face of the pandemic. Our second main finding indicates that both proactive and reactive resilience-building activities have enhanced supply chain velocity during the pandemic. Studying the effect of supply chain risk management on supply chain resilience and robustness, El Baz and Ruel [102] report similar results. Examining supply chains of essential goods, Sodhi et al. assert that traditional approaches, such as redundancies, can be effective during pandemics [103]. Sharma and her colleagues state that focusing on resilience not only helps during pandemics but also exerts positive long-term effects on supply chain viability [104]. While noting that companies have applied multiple practices, Woong and Goh [105] identify ‘increasing capacity’, ‘diversifying single-product categories’, ‘local sourcing’, ‘prioritising critical categories’, ‘repurposing assets’, ‘establishing partnerships’ and ‘leveraging social media influence’ as the most common supply chain risk management practices. Consistent with our findings, they suggest that both proactive and reactive strategies have helped companies to overcome problems in their supply chains. Although these findings are valuable, the area remains open to additional investigation.
Highly contradicting findings and diverse perspectives exist in the pandemic-era supply chain literature. Nevertheless, we know that the pandemic has affected every industry differently; thus, no one-size-fits-all solution exists. The extant literature on supply chain resilience in the pandemic context emphasises the need to think outside the box. Supply chains must be reconsidered and redesigned to enhance their viability [37,48,101,[104], [105], [106]]. Our results reveal that existing resilience-building approaches are effective but insufficient.
We also know that the pandemic has changed every aspect of life. Some of these changes will persist in the post-pandemic period, while others will be discarded as soon as possible [107,108]. In any case, people, firms and supply chains will continue to face new demands and new concerns that require innovativeness. Thus, post-pandemic markets may include highly innovative actors [109] who have experience in failing supply chains. We predict that the supply chain management discipline is poised to enter an extremely innovative era, whose seeds the pandemic has sown. Our findings clearly demonstrate the crucial role of innovation in resilience building. Therefore, the next step should be qualitative analyses of success and failure stories to gather in-depth information and identify the critical decisions that brought failure and the critical innovations that produced success. We suggest that future researchers concentrate on qualitative studies to accumulate insights useful for building more resilient supply chains.