Recent geopolitical and global health issues have shown the limits of various business continuity plans when facing major, prolonged supply chain disruptions. Supply chain agility and dynamic capabilities are beneficial for financial performance in both normal conditions and under circumstances caused by operational risks. However, there is minimal evidence about their effect in reducing the impact of global supply chain disruptions. This study investigates their value in managing dynamic, evolving and uncertain environments caused by major prolonged disruptions.
Survey data from 101 UK managers in the aftermath of the COVID-19 pandemic is analyzed using structural equation modelling to examine the influence of dynamic capabilities in mitigating the damage of major prolonged disruptions and to contrast strategies based on supply chain agility and supply chain robustness. The results are contextualized using information from the responses of two companies to the pandemic.
Findings show a statistically significant influence of supply chain agility on reducing the adverse impacts caused by disruptions and delivering financial benefits for the company. On the other hand, the results suggest that the widespread damage caused by prolonged disruptions limits the effectiveness of supply chain robustness.
This is the first investigation evaluating the influence of dynamic capabilities in mitigating the impact of prolonged supply disruptions and contrasting the impact of agility and robustness as strategies to manage these disruptions. The results inform managers of the importance of investing in agility to manage unexpected conditions and the limitations of robustness in prolonged disruptions.
