Resilience through appropriate response: a simulation study of disruptions and response strategies – case COVID-19 and the grocery supply chain

Abstract

AbstractIn the wake of disruptions such as the COVID-19 pandemic, supply chains (SCs) face unprecedented levels of uncertainty, underscoring the critical need for resilience capabilities. We study how the operational dynamics of SCs influence the efficacy of key resilience capabilities, specifically flexibility and visibility. Utilizing a system dynamics simulation model, we analyze the contingency effects within Finnish grocery SCs, examining how the operational tempo—characterized by lead times, inventory buffers, information updating—affects the efficiency of resilience strategies in response to diverse disruption scenarios. Our model, informed by real-world disruption events and responses, reveals distinct preferences for resilience capabilities based on SC operational dynamics. For fast-moving SCs, flexibility in ramping up capacity emerges as paramount, whereas for slower SCs, enhanced visibility becomes crucial. We contribute to the contingent Resource-Based View (RBV) on SC resilience by proposing that responsiveness is important moderator of flexibility and visibility as resilience capabilities. We highlight the importance of prevention of phantom ordering through improved visibility and caution against destocking following sudden demand declines. By aligning operational dynamics with tailored resilience strategies, our research offers actionable insights for SC managers aiming to navigate future disruptions more effectively.