With major risks comes great resilience: the COVID-19 effect on SMEs in a developing country

Abstract

As small companies do not have abundant resources and their mitigation and preparation capabilities for large impacts are minimal, this study presents an alternative that can be adopted to face crises resulting from pandemics and develop resilience to respond and recover from major disruptions. The study contributes to the supply chain resilience literature in investigating the gap related to supply chain capabilities for small and medium enterprises' resilience in developing countries. The focus was on micro, small and medium-sized Brazilian breweries. The growth in the number of breweries in Brazil has been a trend in recent years in all country regions. This trend represents an opportunity to develop the local market by generating jobs and strengthening small and medium cities economies. The research objective was twofold: analyze the adoption of resilience strategies from a minimal but possible perspective for small and medium companies (visibility, collaboration, and flexibility), and measure their capacity to anticipate, respond, recover, and learn/ grow from the pandemic's impact. Findings demonstrate the need for visibility and investments in digital transformation and flexibility for workforce reconfiguration and to adjust production to demand. Supply chain collaboration was demonstrated in re-negotiating credit with existing suppliers, finding new suppliers, and getting specific credit lines from the State and Federal Government. These pieces of evidence empirically support previous research findings, although most prior studies were concentrated on large organizations in developed countries. Future research should investigate emergent technologies for small and medium companies to handle supply chain outbreaks in developing countries.