Supply chain resilience in Finnish grocery industry during COVID-19

Abstract

The COVID-19 outbreak subjected grocery supply chains to exceptional disruptions with consumer panic buying, demand shift to online channels, logistic bottlenecks, and supply shortages. Despite these simultaneous shocks, grocery supply chains were able to swiftly recover their balance and performance by activating various response strategies. These resilience-increasing strategies have been documented in qualitative research. This research uses system dynamics modeling to quantitively assess these response strategies in light of multiple real-life demand scenarios. The most impactful response actions are outlined and linked to corresponding supply chain disruption. The optimal combination of strategies is also discussed. The simulation results indicate that the optimal response strategy depends on the demand scenario. For supply chains experiencing a severe drop in demand, preventing destocking and increasing information sharing leads to the highest resilience. For supply chains experiencing demand increase, the combination of increased information sharing and the ability to increase production capacity derives the most resilient outcome. Finally, managerial implications are discussed, and a design for a pandemic resilient supply chain is proposed.