Impact of supply chain disruptions during the COVID-19 pandemic to micro, small and medium enterprises in Davao Region, Philippines

Abstract

PurposeThis paper aims to investigate the impact of supply chain disruptions on the operations and sales performance of micro, small and medium enterprises (MSMEs) and the adoption of “green” technology during the COVID-19 pandemic in Davao Region, Philippines.Design/methodology/approachA business impact survey was conducted among 113 MSMEs in Davao Region through the Regional Inclusive Innovation Center participated by the industry, government and the academe from October–December 2020. The impact of supply chain disruptions on the status of business operations was determined using ordered logit regression, while the impact on sales performance during the lockdown and new normal periods were modeled using logit regression. The technology upgrading plans of the MSMEs, including the adoption of “green” technology, were also determined.FindingsThis study found that the extent of disruption in processing the goods and services resulted in a negative impact on business operations, and the disruption of the availability of raw materials negatively affected the sales performance during the lockdown period. Moreover, around 20%–33% of MSMEs experiencing heavy supply chain disruptions had a plan to upgrade their business processes by adopting “green” technology.Research limitations/implicationsMSMEs need to establish strategic collaboration among the different stakeholders through public, private, non-government institutions and academe collaboration to enhance the capabilities of MSMEs in handling supply chain disruptions and pursuing technology upgrading.Originality/valueThis paper is among the early studies of the impact of COVID-19 to supply chains in the Philippines focusing on the MSMEs.