The Covid-19 pandemic had undoubtedly caused difficulties in sourcing and supply chain management, but all in all, the pandemic situation had been an opportunity for the company.
One of the participants rightly noted that almost all operators on the retail and grocery market in Finland had had a great year. Still, comparisons on the level of success were challenging to make. Power asymmetry greatly heightened the difficulty in meeting demand in specific product segments than the other larger buyers on the market. This asymmetry is greatly emphasized by the global disruptions of supply and unprecedented demand (Sinha et al. 2020).
A larger company can ensure its resilience through the sheer amount of resources it has at its disposal and can bear the cost of resilience better than the smaller competitors by having a more decisive influence on suppliers (Polyviou et al., 2019). Power-asymmetry had been a significant issue for Company D. The outsourced logistics and lack of a central warehouse was often mentioned to be the critical source of capability and competitive advantage by both participants. This sentiment did prove to be an asset during the initial stages of the pandemic but is also a source of uncertainty due to the lack of ensured capacity stemming from the fact that the company has no direct control over service availability. The difficulty in meeting sudden demand spikes is almost universal, especially in the retail sector, where forecasting consumer behavior influenced by perceived scarcity is challenging (Nikolopoulos et al. 2020).
The company had, however, managed well due to comparatively large buffer- and safety stocks. The proactive capacity for resilience was rated high by both participants. Still, after the first stages of a disruption event, there can be some issues if the large safety stocks cannot be replenished if the outsourced supply network has no excess capacity left. The lack of delivery availability is especially critical with fresh produce and other perishable goods as the current service-provider situation resembles a duopoly. While it is improbable that one or both operators become unavailable, there is a chance for a critical source of disruption from this perspective; this somewhat hampers the firm's absorptive and proactive capacity. Therefore, reduced supplier bases are a real threat as dependence can further increase uncertainty (Settanni 2020).
Figure 11 Resilience Capacity Distribution of Company D
The reactive and adaptive capacities were deemed excellent by both participants citing the network's excellent scalability and flexibility; this was reflected by the balance in readiness and response (47% and 39%, respectively) (see figure 10). The company focused heavily on logistics quality, flexibility, and openness with its suppliers, reflected by the perfect balance in absorptive capacity. The logistics network's scalability and the focus on more extensive safety- and buffer stocks undoubtedly ensure competitive advantage through redundancy, agility, and flexibility. The recovery capabilities remained relatively untested, but the flexible logistics network and tight supplier collaboration enabled a quick recovery during the most challenging months of the pandemic. The area in need of the most improvement was the integration of information systems, leaving some room for improvement in connectedness and coherence approaches in the adaptive capacity (Ponomarov & Holcomb 2009).
Table 13 Company D Vulnerability Ranks
Company D Vulnerability Ranks Score Weighted score
Resource Limits 5 10
External Pressures 7 10
Supplier/Customer disruptions 5 8
Connectivity 6 6
Sensitivity 5 6
Turbulence 3 3
Deliberate Threats 0 0
Regarding the most critical sources of vulnerability (See table 11), the participants cited similar factors. The resource limitation factors were especially prominent during both interviews, and risk related to the availability of goods was rated the highest. The power asymmetry perspective was fascinating to note. While PSM-G mentioned it more heavily concerning domestic sourcing, PSM-C also stated it to be an issue on bulk-product procurement. Besides the emphasis on logistics outsourcing, safety stocks, and increased purchasing, addressing this issue could be difficult. Still, the suggestions of increased collaboration and joint demand planning and prediction could be the right choice moving forward. Further resilience can be achieved with a higher level of cooperation with key suppliers and subsequent synergies that facilitate joint planning and real-time information change. Emphasis on shared knowledge can further cement a competitive advantage and enable mutually beneficial growth. (Scholten &
Schilder 2015; Scholten et al. 2014)
The issue of regulatory pressure from environmental reporting was not an issue highlighted by the pandemic. Vulnerability from fluctuations and volatility in consumer behavior was featured prominently during the interviews, and the lack of visibility was also brought up, especially with the far-eastern sourcing. The former had been effectively addressed with moves in the direction of tighter supplier collaboration. The former lack of visibility in the supply chain's farthest nodes could be further increased by increasing direct purchasing.
Supply chain visibility achieved through direct purchasing can reduce negative impacts in disruption events through transparency (Brandon-Jones et al. 2014).
Table 14 Company D Resilience Capability Ranks
Company D Capability Ranks Score Weighted score
Flexibility in Sourcing 6 10
Financial Strength 4 7
Redundancy 5 7
Collaboration 5 6
Market position 4 5
Flexibility in order fulfilment (agility) 4 5
Visibility 5 5
Anticipation 5 5
Adaptability 4 4
Dispersion 3 3
Efficiency 3 3
Recovery 1 1
Security 1 1
Organization 0 0
The participants' key capabilities (see table 10) greatly reflected the supply chain scalability capabilities. Critical relationships between vulnerability and resilience capabilities could be drawn between redundancy, flexibility, and agility concerning disturbances related to customer-related disruptions and resource limitations. The buffer created with flexible supplier interactions and physical stock is the key source of resilience from an operational perspective. The company's flexibility was achieved through flexibility in the supply chain design through multi-sourcing, flexibility in supply chain relationships by emphasizing information sharing between parties, and future flexibility through inter-firm systems (Stevenson & Spring 2009). External competitive pressures and power asymmetry are offset by a strong brand presence and customer loyalty in the company’s market area. The low organizational ceiling enables the company to be more agile in its response efforts than its competitors. The collaboration was by the account of both participants an area in development, but it will continue to play a pivotal role in the future. The before mentioned and the future investments for a more substantial online presence will be the driving factors continuing forward.