Adaptive Supply Chain Management under Severe Supply Chain Disruption: Evidence from Indonesia

Abstract

The recent Covid-19 outbreak has caused severe disruption of the global supply chain, which tests firms’ ability to survive and build resilience. The concept of adaptive supply chain management (A-SCM) has never been tested against a severe supply chain disruption, such as a pandemic. Purpose: The aim of this study is to examine how firms in Indonesia develop resilience through the implementation of components of adaptive supply chain management, namely risk management, resource reconfiguration and supply chain flexibility, in order to survive severe supply chain disruption. Research design, data and methodology: A qualitative method and PLS-SEM were used to analyze 120 data collected from Indonesian manufacturing firms in various industries. Results: The findings show that risk management, resource reconfiguration, and supply chain flexibility are important components that make up A-SCM. However, only risk management contributes to help build firm resilience in the presence of severe supply chain disruption. Conclusions: The components of A-SCM have been empirically tested. The implication is that managers should carefully use RM to prepare firms for different scenarios to develop contingency strategies. This research contributes to the supply chain management body of knowledge in the context of pandemic-level disruption and broadens the dynamic capabilities perspective.