Impact of the COVID-19 on Global Supply Chain

Impact of the COVID-19 on Global Supply Chain

Chapter And Authors Information

Ahmad Naqiyuddin Bakar

Universiti Teknologi MARA (UiTM), Shah Alam, Malaysia Arshad Ayub Graduate Business School (AAGBS), UiTM Shah Alam, Malaysia

Juliana Mohamed Abdul Kadir

Universiti Teknologi MARA (UiTM) Johor, Segamat Campus, Malaysia

Zamri Miskam

Arshad Ayub Graduate Business School (AAGBS), UiTM Shah Alam, Malaysia Universiti Teknologi MARA (UiTM) Johor, Pasir, Gudang Campus, Malaysia

Syamsyul Samsudin

Universiti Teknologi MARA (UiTM) Johor, Segamat Campus, Malaysia
From the Edited Volume
Edited By:
Professor Richard Wilding
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As the coronavirus pandemic engulfed the globe, it has disrupted economic activities, including supply chain networks in consequent to the existing interconnected trade networks making more countries to be more susceptible and major traders affected. This Chapter aims to analyse the COVID-19 effect on the global and sectoral supply chain and the structural policy and economic measures taken by governments and business organisations to recover and stay resilient during this challenging period. Systematic literature review approach focusing on challenges and policy and economic and business responses during the COVID-19 pandemic. Online databases utilising Scopus and ISI Web of Science (WoS) for studies published from 2019-2021. 28 journal articles were selected for the final review. There is compelling evidence that COVID-19 has made profound impact that governments and companies seek to strengthen operations and business resilience, underscore the importance of supply chain resilience and risk management is more critical than ever. Prolong COVID-19 trade measures such as borders closure, export embargo and import sanction are a threat to supply value chain and total lockdown should be implemented with caution. Currently, many companies have begun to move from a “recovery mode” to more “sustainable and resilient mode” and have started longer term planning. The implication of the study is that policymakers and business leaders should pay attention to more proactive and flexible policy, economic and structural business reform. This review will help policymakers and business leaders to enforce policy and economic as well as business reform that build upon resilient supply chain to mitigating economic risks in bad times to reduce the effect of COVID-19 on global supply chain.


COVID-19, policy, economic, supply chain, resilience

1. Introduction

The new coronavirus 2019 (COVID-19) has infected millions of people worldwide since its first occurrence in December 2019, in Wuhan, China (Torales et al., 2020). More than a third of the world’s population had been under some type of restriction. 48 countries implemented partial or full lockdown and among these countries, Brazil, France, Italy, New Zealand, Poland and the UK have implemented the world’s longest and most restrictive movement (Langton, 2020). Despite widespread concern and action, the continuous rate of infection and death because COVID-19 pandemic has caused a devastating economic downturn around the world (Kells, 2020). In light of rapid globalization, businesses face an ongoing rate of uncertainty and, thus, a greater risk of supply chain disruption. As supply networks now span multiple geographic regions, this situation expose managers to greater environmental and operational risks (Sato et al, 2020). This has resulted in social distancing, the closure of towns and cities to prevent transmission of virus, and the need for anyone involved on the frontline to wear personal protective equipment. However, the need for lockdown and social distancing means that all elements of the supply chain in many economic sectors were interrupted, including manufacturing, procurement, distribution and supplies. This significant restrictions on transportation and movement has led to a significant socioeconomic effects on people’s livelihoods, even leading to an economic recessions. The remainder of this Chapter is organized as follows. In Section 2, we briefly describe the background of COVID-19 and its impact to supply chain management. Section 3 and 4 report the data source and the design as well as the findings of this study. Section 5 discusses the challenges including the impact of the COVID-19 pandemic on supply chain. Section 6 summarises the policy, economic and business responses to address the challenges. Section 7 reflects on specific policy intervention and determinants of a more resilient approach to minimize the impact of COVID-19 on supply chain. Section 8 provides the conclusions and a direction for future study.

2. Background: COVID-19 Overview and Impact

In consequent of rapid globalization, firms face increasing levels of uncertainty and, thus, a greater risk of supply chain disruption. As a matter of fact, supply networks now span multiple geographic continents and countries, exposing managers to greater demand and supply threat. As outlined by various studies, COVID-19 threat include global disruption, longer supply chains, supply diversity, capacity constraints, disasters risks, and so on. This has had major economic consequences in countries around the world. In addition, stock markets have collapsed dramatically (Baker et al., 2020), as economists have consistently predicted severe recessions (Baldwin & Weder di Mauro, 2020; McKibbin & Fernando, 2020). At the same time, many industries face supply-side issues, as governments curtail the activities of non-essential industries and workers are confined to their homes. Firms here need to face a number of challenges, including implementing required health protection measures, reduced production and demand, supply chain disruptions (Kraus et al., 2020).
Since supply chain management is a phased process, the COVID-19 pandemic has affected virtually all supply value chain for many reasons, forcing policy makers and business leaders to develop recovery plans as industries slowly recover, while there remains a mismatch between demand and supply (Simchi-Levi, 2020). The disruption of the flow of public goods and services from the manufacturer to the buyers has affected daily life with far-reaching consequences. Many governments have taken measures that greatly affecting the daily life of society. Studies conducted since the outbreak looked at the sectoral disruptions and thus contributes to broadening the picture of disruptions in supply chains impacts of COVID-19. They revealed a wide range of logistics and strategy executives who need to develop supply chain complexity as a strategic ability to manage the risk of disruption and its adverse effects.
However, most of the studies are empirical, researchers have so far mainly focused their attention on the response to catastrophic events as primary reason for supply chain disruptions and less on everyday operational disruptions, which are less severe, but more frequent (Marley et al., 2014) and there is a lack of analysis and criticism of the existing literature. A systematic review is needed to explore the recent trends, critically analyses the findings and observe current situation. Therefore, based on a systematic evaluation of the selected articles, this review Chapter aims to understand the recent progress on the supply chain impacts of COVID-19 pandemic and to describe underpinning key policy measures that should be the focus to stay resilient during this challenging period. Therefore, in this Chapter, we address this gap by identifying and discussing the actions taken and the information used by various stakeholder during and after operational disruptive events and to provide future research direction.

3. Methodology and Sample Identification

Our objective of this review is to better identify the role of the supply chain and its impact on the social and economic current of COVID-19, as well as the strategies adopted by policymakers and business leaders to improve the supply chain network performance. Considering this need, the study is designed to identify relevant literature, using Systematic Literature Review (SLR). The SLR method has gained interest among academics since it was first introduced by Mulrow in 1994. We employed a search strategy using online databases including Scopus and ISI Web of Science (WoS) for studies published from 2019-2021 due to the first COVID-19 case has found in 2019. The search for this article was executed on 28 February 2021.
Because of the wider number of a paper published on the topic of the supply chain, the search codes using the keywords “strategy” and “COVID or Pandemic” and “supply-chain” to a research topic that were explicitly mentioned in their title (for WoS); and either the strings used in title, abstract, and keywords (for Scopus) journals. However, for the screening process, paper titles that do not contain supply-chains and COVID-19 or pandemic terms were excluded from the lists.
A relatively wide selection of terms was used to reflect the objective of the research between the supply chain and the strategies implemented. This study was extended to see impact primarily on the economy and structural changes but to a lesser extent also generally to mitigate economic risks. The paper accepts all types of supply chain products as long as it is important for the economy such as agriculture, food, retails, medical goods, and other manufactured goods. As stated, the second criterion applied was that the accompanying paper should be relevant to production and not focused on service.
In this study, only full-text peer-review articles were considered and articles must be written in English. This helped us identify a list of 194 papers. Figure 1 shows the filtering process was conducted by removing all duplicate articles from the list, and also removing all studies from the book, book chapters, conference, and government papers which resulting in 172 papers remaining to be considered. At the abstract analysis stage, the abstracts of these articles were screened for eligibility. As pointed out in the introduction, this literature review focuses on studies related to supply-chain issues and COVID-19. Therefore, the initial selection of papers that do not meet this requirement can be made and consequently eliminated.
Of these, 141 sources that do not meet the title and abstract requirements were further excluded from the list. The remaining 31 papers were gone through full-text analysis. Papers that were eliminated for example do not mention both main keywords used. In addition, the sources are focused on the internet-of-things, accounting, vaccine development, waste management, financial liquidity management, psychological causes, and energy and environmental impacts were also taken out from the lists. Papers that try to examine consumer behavior and worker perceptions were also excluded from the analysis as these studies did not fit the focus of this research.
At the end of the full-text analysis, 3 papers were removed as no complete text was found, with the sample for this review now consisting of only 28 publications deemed relevant for further analysis.

Figure 1. Search and selection process of the papers

Note: Filtering process.

4. Findings

In total, the SLR identified 28 peer-reviewed articles that match the scope of analysis. Table 1 provides the list of articles included in the SLR together with their corresponding authors. The table also contains further information about the type of products or industries been investigated, model applied, and country.

Table 1.

Selection of Studies (Source: Authors’ Compilation)




Type of






Ronald, M.

Variety Products




Handfield, R.

Medical materials

National contingency supply chain cell (NCSCC)




Taqi H.M.M.

Readymade garment (RMG)

Grey theory & digraph-matrix approach




Sharma, R.


Knowledge-guided (fuzzy set theory) and data-driven approach




AL-Mansour, J.

Global Supply Chain (GSC)

Baseline analysis



Sharma, A.

NASDAQ 100 companies



Coustasse, A.


Theory of constraints




Ketchen, D.J.

Entrepreneurship & supply chain management

Leveraging resource orchestration theory



Ali, M.H.

Perishable food

Fuzzy-best worst methodology (F-BWM)




Coluccia, B.


Demand-side shocks & supply-side disruption




Tang, C.H.

Supply chain disruption on stock market

Chaos theory




Alikhani, R.


Retail supply chain network (RSCN)



Ali, M.H.

SMEs food industry (FSME)

Resource-based theory (RBT) & Contingency theory (CT)



Alkahtani, M.

Supply Chain Management Strategy

Non-linear supply

chain management model



Xu, Z.


Food supply

chain (FSC) Model

35 countries



Belhadi, A.

Automobile and airline industries (145 firms & stakeholders)

Supply Chain Resilience (SCRes)



Qin, X.

Health expenditure

Feasible GLS Model



Francis, J.R.

Personal protective equipment (PPE) and other medical–surgical

Distribution Model



Atkinson, C.L.

Public sector procurement




Derevyankina, E.S.

Supply Chain Management

Financial supply chain



Gunessee, S.

Ambiguity & Coping mechanisms

SCDM framework & behavioural decision theory (BDT)



Xu, Z.

Global supply chains (GSC)

Critical reading and a causal analysis



Guan, D.

Global supply chains (GSC)

Newly developed economic disaster model

China, USA, Europe, Global



Baveja, A.


Theory of Constraints



Pasuluri, B.S.

Variety Products




López-Santos, Y.

Agri-food SMEs

Sustainable Supply Chain Management (SSCM)




Schiele, H.

Supply risk management

Supply risk management model by Hoffmann (2013)



Russell, D.

Container freight transportation

Agile Model


5. Supply Chain Challenges

Pandemic has erupted the global supply chain and brought volatility and uncertainties to the market share causing vulnerable risk for the economy. Most of the ports in the world remain closed and stop manufacturing suppliers from supplying their raw materials. A large number of sectors are unable to operate at maximum capacity resulting in a decline in supply since production inputs are depleted. It became a sudden shock to the industrial supply chain while this is exceptional for some essential products such as food, groceries, and medical equipment. In addition, significant changes are mainly due to panic buying which in turn influences consumer spending patterns (Addo et al., 2020; Nicola et al., 2020). Thus, larger manufacturers continue to operate while smaller companies are affected and need to find good solutions or even use supply chain intermediaries (e.g., distributors) to achieve resilience to lower the risk of shortages in the production network (Ketchen & Craighead, 2020).
Considering the link between the pandemic and the supply chain, companies experienced a shortage in demand during this outbreak. With the limit of daily activity, most products such as gasoline, for instance, lack in demand as limited vehicles on the road. In addition, other products such as clothing, sports equipment, accessories, and furniture were affected as they are not classified as essential products for daily life, which in turn has erupted the industrial supply chain. In this regard, the Food and Agriculture Organization (FAO, 2020) reports that agricultural supply chains (ASCs) affect two different aspects of demand and supply. Despite the high demand for such industries, the ASCs are so reliant on food security thus it puts global food security at risk (Siche, 2020).
In another aspect, the closure of most offices, schools, restaurants, and other institutions during the nationwide lockdown has resulted in fresh produce such as vegetable and fruit waste. The case of Cameron Highland, Malaysia which is able to produce fresh produce in large quantities with 1.5 tonnes a day has gone destroyed. Products that are in high demand are food products such as rice, bread, chicken, eggs, sardines, and kinds of perishable stuff at the time when people work at home. This is evidenced by excessive demand for some supplies while surplus for other products is unpredictable during the initial stage of the outbreak, indicating companies and firms dealing with supply fluctuations and disequilibrium of demand-supply in good markets, threaten food supply chain responses to overcome vulnerabilities due to the COVID-19 pandemic.
The unprecedented shock of the pandemic affected the production chain of the food sector and agri-food SMEs, to maintain supply to retailers and consumers, a large amount of inventories is required (Alikhani et al., 2021). It also affects workers whereas agricultural production systems are more labour-intensive like fisheries, meat products, and high-value crops (Sharma et al., 2020). These shocks in the labor market affect other activities from harvesting, processing, and other markets produce, thus handling the supplies is a crucial task from disease transmission prevention. In addition, the health of all workforce is another important aspect that should be taken into account because improper food handling can affect food safety (Ali et al., 2021) thus that cannot be ignored. Companies can identify risks and opportunities and put higher priorities on the supply process to gain consumer confidence and build trust in citizens (Coluccia et al., 2021; Nakat & Bou-Mitri, 2021).
In other cases, the readymade garment (RMG) sector is exposed to additional uncertainty and instability when engaging with the global supply chain (Taqi et al., 2020). The problems that always exist are late delivery, long waiting periods for returns and re-shipment to customers; and surplus inventories and over-stocks even before pandemic (Mustafid et al., 2018; da Silva et al., 2021). Delays in fashion manufacturing that later resulted in the cancellation of product orders have hit an industry that does not accommodate a large number of workers in a company, and millions of workers are unemployed, as is the case in South Asian countries (Majumdar et al., 2020). The disruption in the global supply chain has interrupted flows of raw materials and finished goods from factories to other destinations, which have had a devastating impact on the international economy and global supply-chains due to worldwide lockdown and global border closures.
The sector that is severely affected and under great pressure with this outbreak is the healthcare sector that is highly relevant in providing treatment to patients. According to the WHO, in December 2020, approximately 1.7 billion US dollars has been spent on improving health systems and providing medical materials and equipment (Xuanlong et al., 2021). The shortages of personal protective equipment (PPE) and other medical-surgical products remain a challenge for industry and policymakers to increase public health spending (HE). For instant in China in January 2020, disruptions of the PPE supplies have been a serious problem of the downstream impact of the supply chain of medical products (Francis, 2020). The United States (US) is experiencing disruptions in the provision of resources such as ventilators and medicines, as are other countries such as Italy and Spain. The shortage of the supply chain is due to an unprecedented increase in demand for some drugs (Lakshmi & Suresh, 2020) and caused by the slow production in drug production in countries like China and India that are also infected with the virus (American Society of Health-System Pharmacists, 2020; Coustasse et al., 2020).
The aviation industry, on the other hand, is not left behind in facing this COVID-19 threat. This largest industry is particularly affected by global border closures and restrictions on domestic movement. Experts believe that the now paralyzed aviation sector will fully recover in at least another six years (Belhadi et al., 2021). The airline industry is not only involved with the aviation sector alone but in close ties with other sectors such as aircraft manufacturing, manufacturing of goods, automobile sales, and tourism (Belobaba et al., 2015). For instance, Airports which consist of many shop lots, booths, and restaurants and many maintenance staff including technicians, also face the same challenge of being laid off because the airport operates relatively slowly. According to Bloomberg, declining sales and growing uncertainty have seen significant job losses of nearly 400,000 airline employees; meanwhile, British Airways, Deutsche Lufthansa AG, American Airlines, Delta Airlines, Emirates Airlines, and Qantas Airways Ltd have announced job cuts and unpaid leave (Kotoky et al., 2020). With fewer trips and more virtual encounters, the impact on airline recovery is prolonged (Schwab & Malleret, 2020), which in turn reduces consumption and requires huge losses due to their diverse supply chains. Furthermore, the aerospace industry also faces the effect of canceling or suspending orders for new aircraft and changing the choice of certain models.
During this outbreak that disrupted the global supply chain, large manufacturing businesses also faced severe chain processes and had to delay and change outsource channels to adapt to new conditions and reduce losses incurred for not fulfilling all orders. Companies need to modify all aspects in the supply chain from upstream to downstream successfully with regards to inventories, subcontracting capacities, backup supply and logistics, flexible technologies used, and visibility system for any company risk during a pandemic (Ivanov & Dolgui, 2020). Online shopping is starting to bring more interest among consumers with more people working from home and rarely out. Most people are more comfortable shopping online and bringing food and other items to their doorsteps. Therefore, to some extent, it can overcome supply chain problems as companies can produce goods and increase supply due to increased demand from online consumers even if they do not go to the store. With the continued use of electronic money such as credit cards, debit cards, and electronic cash nowadays, the demand for e-commerce is very encouraging as a tool at the convenience of payment systems.
The pandemic has transformed payment systems from cash to e-commerce and focused on digital solutions (Ketchen & Craighead, 2020). Consumers turn to online sources of goods and services, make orders and payment via online platforms that are seen to have limited manpower needs to a certain extent, called human-less technology, which in turns reducing wage costs for them (National Academies of Sciences and Medicine, 2019; Kashyap & Raghuvanshi, 2020). In addition, Artificial Intelligence (AI) and Internet of Things (IoT) technologies are relatively cheap and viable to shorten product cycles. The use of QR code (i.e., MySejahtera in Malaysia) and contactless temperature detection software are used globally and they can transfer information to users using block chain transparency and traceability (Sarkis, 2020). However, these apps have some drawbacks which are not secure in term of its application. On top of these risk vulnerabilities, large organizations are able to provide cybersecurity solutions as a preventative measure (Birkel & Hartmann, 2020) as these networks gain an advantage in managing supply chain risk and increasing productivity.
6. Some Sectoral Policy and Economic Responses and Business Intervention
In corresponding to the above statement, the analysis of policy and economic responses as depicted in Table 1 above, utilized various tools, including the fuzzy-best worst methodology (F-BWM), text analytic tool based on baseline analysis and archival data, Fuzzy Linguistic Order Weighted Aggregation (FLQOWA), systematic literature review method, supply risk management model, case study methodology, grey-based diagraph-matrix method, principles of Theory of Constraints, Behavioural Decision Theory (BDT), field discussions and interaction with experts, the latest global trade modelling framework, multi-criteria decision making method, dynamic models of GMM and FGLS, optimistic and pessimistic scenario analysis, Time-to-Recovery (TTR) and Financial Impact (FI) analysis. These studies cover different continents and various sectoral economic systems global and national economy sector (perishable food supply, entrepreneurship, healthcare equipment, NASDAQ 100 firms, agriculture, supply chain entities – employee, product, facility sanitization protocols, and transport, container port logistics capacity, companies with a high share of suppliers located abroad and are embedded in an international network of suppliers located in Central European Region, Mexican agri-food focal SMEs, readymade garment (RMG), public procurement effectiveness, presentation and disclosure of information in financial statements by economic entities, various industrial sectors, strategic products, manufacturing, retail outlets, agri-food, automobile and airline industries). In-depth case studies, the multiple-countries comparative analyses and conceptual assessment about the impact of COVID-19 pandemic showed this fragility has brought tremendous effect as companies’ sources of supplies are disrupted, aggravated by temporary suspension of support services. Nonetheless, some sectors were resistant, proving how critical strategic planning is. For example, PPE supplies, household products, transportation, meat processing facilities, and hygiene tissue were among the most affected in their supply chain, either by increased demand or by shutting businesses due to the virus. Other sectors as pharmaceuticals, technology, paper packaging were least affected (Marques et al, 2021). Even though studies are predominantly focusing on central governments, some analyze regional, subnational or nongovernmental responses. These studies, in sum, capture an early pandemic responses by countries and regions, discuss some of the key intervention taken by policymakers, public financial managers and economists and suggest anticipated policy and governance challenges in the post-COVID-19 era.
A few key themes emerge out of these studies. First, countries have sought to mitigate the COVID-19 disruptions, by severely limiting travel and in-person business activities through the lockdown and imposing travels ban, and stay-at-home orders. Second, the magnitude of policy and economic responses measured by their individual sector varies significantly across countries and regions. Therefore, flexibility and resilience to manage the perpetuated risks are vital for mitigating the impact. Also, it is difficult to determine a common set of factors that influenced the magnitude, policy scope and impact of each responses, as performance of the supply chain management is strongly influenced by the multi criteria decision making (Francis, 2020; Alkahtani et al., 2020).
While the COVID-19 pandemic impact appeared to be swiftly responded by the magnitude of policy and economic responses in many countries (Qin et al., 2020; Francis, 2020; Márquez et al., 2020; Xu et al., 2020), the domestic theoretical space for businesses to rethinking the conventional supply chain management strategies (Handfield et al., 2020; Russel et al., 2020; al-Mansour et al., 2020; Sharma et al., 2020) and the anticipated policy instruments and long-term economic capacity to develop and support a more resilient supply chain of the future (Sharma et al, 2020; Rohit et al., 2020; López-Santos et al, 2020; Xu et al., 2020; Coluccia et al., 2021; Alikhani et al., 2021; Márquez et al., 2021) seemed to matter more in some countries than others. In facing the adversity of the recent pandemic and to maintain resiliency and even be immune to the COVID-19 shockwaves, companies and governments should look for strategical plans that is critically importance for companies, businesses and countries worldwide.
Meantime, there are some similarities pertaining to policy tools used by different countries (de Jong and Ho, 2020). Many governments adopted “risk mitigation strategies” for reducing the impact of pandemics on socio-economic wellbeing of the people. Policy and economic intervention is used to address specific challenges in real times, in terms of technology and development, demand-supply mismatch, aims to a more resilient supply chain. Most governments offered an immediate policy and economic stimulus package to “cushion” the consequent impact from the COVID-19, i.e., providing loans, loan guarantees and debt relief for companies and specific industrial sectors, tax relief for individuals, workers, households and businesses, as well as, promoting incentives to leveraging private investments (Grossi et al., 2020).
Because of these measures may have not considered such extreme adverse impact brought by COVID-19 of virtually all manufacturers, retailers and wholesalers throughout the supply value chain, many countries, including those that had strong risk and contingency plans act as benchmark for supply chain industry stakeholders to efficiently minimizing the disruptions. Nonetheless, this will only bear fruit when these plans are kept updated in anticipation of a significant effect on both upstream and downstream supply chain. This development has led to rising the importance about businesses need to reevaluate their strategies during current COVID-19 crises. For instance, to navigate uncertainties driven by a range of factors such as socioeconomic factors and changing supply chain strategies in response to market dynamics, enabling flexibility in port logistics is critically important (Russell et al, 2020); “manufacturing flexibility”, “diversify the source of supply”, and “develop backup suppliers” have brought significant positive consequences for managing the impacts of the COVID-19 pandemic in the ready-made garment (RMG) supply chain (Taqi et al., 2020). In addition, applying “synchronicity management” as a novel supply risk management strategy that “synchronizes the supply chain with customer demand” (Schiele et al., 2020); fiscal sustainability, especially among developing countries (Adhikari et al., 2021; Bashir and Ashfaq; Demirag et al., 2020; de Villiers et al., 2020; Dzigbede & Pathak, 2020, Ejiogu et al., 2020; Elkhashen et al., 2020; Jose et al., 2020); and effective provision of government services through the centrality of public sector procurement professionals (Atkinson et al., 2020) are also possible options.
The COVID-19 global pandemic has created a lot of existing inequalities. As seen, COVID-19 has brought grave impact to global supply chains (GSCs) throughout conceivable aspects in manufacturing, processing, transport, and logistics, as well as significant crash in demand. This has the potential to further aggravate these problems and the importance of “interjurisdictional governance” (Andrew et al., 2020). Across regions, there were different degrees of suffering among people as significant income, health and racial inequalities persist. Central banks’ abilities to provide “free money” to address economic, social and public health needs across countries are varies due to huge inequality in access to capital (Ejiogu et al., 2020). In dealing with this issue, the strategy of “ambiguity-coping mechanisms” are also deployed as both individual and organisational initiatives (Gunessee & Subraniam, 2020). A more logical strategy of containment was proposed under the concept of the “Shutting-down Transmission of Pandemic” (STOP COVID-19). This is the plan proposed to halt the pandemic, mitigate its economic impact, and boost public confidence. The implementation of four strategies over 90 days are required: (a) stop all international, domestic passenger air and intercity bus/train travel; (b) create administrative zones of about 1 million people; (c) stop all non-emergency cross-zonal travel except for transportation of goods, and (d) deploy an information-driven service value chain to control the spread of the pandemic within a zone (Baveja, et al., 2020). By identifying and classifying the impacts and strategies required to manage the major supply chain disturbances caused by the COVID-19 pandemic, resources can be pooled from different countries to bail out struggling sectors and maintain recover from supply chain disruptions. Ultimately, countries are positioning better to address unexpected disasters, and thereby reduce the inequalities in societies and economies.
Finally, the COVID-19 pandemic also highlights the critical policy and economic intervention to promote “supply chain resiliency”. These include initiatives such as the need to have a “transparency and real-time access to material status and location” for receiving and distributing materials (Handfield et al., 2020), to apply “differentiation strategy than with a cost leadership strategy” as this is more feasible and compatible to achieve sustainability (López-Santos et al., 2020), the restrictions in terms of reflecting adjusting and non-adjusting events adopted by the authorities to control the spread of coronavirus and through the actions of financial reporting compilers (Derevyankina & Yankovskaya, 2020) and effective and forward-looking strategies that must comprise of multiple facets of the supply chain variables including people, processes, and technology towards next generation supply chain (Sharma et al., 2020). In addition, various studies also show how businesses can steer the COVID-19 pandemic via moves “spanning entrepreneurship, supply chain management, and strategic management” (Ketchen & Craighead, 2020), including “supporting human resources financial commitment, forming cross functional teams” and doubling down efforts with regard to partnerships, as well as investing in corporate social responsibility while connecting with their supply chains (Al-Mansour, & A. Al-Ajmi, 2020). Revamped strategies by focusing more and more on relocations and back-shoring for controlling the risks and their impacts for charting the path towards the new normal, i.e. (Xu et al., 2020) through the adoption of industry 4.0 technologies (that can enhance agile processing and supply chain ecosystem for meeting the dynamic demand), rapid adjustment, and collaboration and shared responsibility for sustainable future (Sharma et al., 2020; Belhadi et al., 2021) are also called for. Additionally, governments should formulate smart lockdown strategies. This means that policymakers must take suitable policy actions to react quickly and to deal with this unprecedented pandemic driven economic crises. In other words, the cross-border trading activities should not be stopped (Qin et al., 2021); instead focusing more on `go-slow’ approach to lifting restrictions that demand collective efforts and support to lower capacity countries (Guan et al., 2020). All these show the synergistic impact of the cost efficiency and resilience and the importance of reactive and proactive policies to contribute to the overall improvement as well as the resiliency of supply chain aftermath the pandemic (Alikhani et al., 2021; Xu et al., 2021).

7. Points of Reflection

Since the COVID-19 pandemic is still has no definite end date and the ensuing economic wide impact are getting even more difficult than any catastrophe that countries and businesses have ever faced, that no region of the globe is being spared, its permanent and long-term consequences on the value chain of supply chain governance are not fully known. Global supply chains (GSCs), which was characterized by a high level of robustness and resiliency against several disruptions in recent decades, are adversely hit. Most Government announced various forms of economic stimulus package to “cushion” the consequent impact from the COVID-19 outbreak, as well as “reinvigorate” the growth of their economy. Taking into account that the impact of COVID-19 can be generated by different causes across industry sectors, the latter define the “nuance” of the disruption and lead to the proper recovery strategies. It is almost impossible to confirm when this pandemic will be contained; any single infected point in the globe is the source for a high-risk area for a new outbreak that brings ripple effect on policy and economic stimulus on the overall supply value chain.
COVID-19 will invariably impact highly leveraged businesses and those with low cash buffers already facing tight trading conditions. The supply chain network is impacted by liquidity tightening across the markets that will eventually cascading from business to business. Also, the COVID-19 pandemic challenges the existing political, social and budgetary institutions and status quo may thereby create fiscal and economic hardship (Poterba, 1994). This review of literature on a sustainable supply chain and its relationship with policy and economic intervention policies are topic of global and regional interest. The study recognizes the implementation of swift responses as an essential intervention tool by organizations to achieve a more resilient growth. This Chapter also reflected on different existing quantitative and qualitative modeling approaches, which enlightened the concept of sustainable supply chain. This is needed to assess the impact of this pandemic and uncover different research gaps in the existing literature. From 2021 onward, policy and economic responses found to be more concerned about more risk mitigation approach. We found that there are new methodologies/tools/technologies being proposed towards making the current supply chain more sustainable. Initially, there are sporadic articles which have identified the gaps in existing practices of existing supply chains and sustainability goals for supply chain resilience and develop an evaluation system for their sustainable performance. Researchers and organizers have focused on traditional supply chain management that was about “simplicity, efficiency and the minimization of moving parts to remove friction from the whole process” (Anonymous, 2020). The theme of supply chain disruptions have sparked interest and research in the areas of policy and economic intervention and sustainability. In sum, policy and economic intervention forced different businesses to develop sustainable supply chains strategies by continuously evaluate their strategic and tactical positions to address required critical supply. In this regard, enhancing the supply chain resilience is the main key driver to reducing vulnerability in disruptive times. From a business point of view, the organization’s primary goal is to maximize their profit. However, we witness regarding resilience of the supply chain and its relationship with performance that building in resilience to disruptions and their potentially damaging ripple effects can also be an effective strategy, but it is not moderated by supply chain complexity. As a matter of fact, while resilience will benefit performance, supply chain complexity is not totally dependent on the extent to which it benefits a businesses. In future research, the focus should be more on the sustainability aspect of the businesses.

8. Conclusion and future research direction

The Chapter has revealed that how governments in different countries are supporting their industries by considering different the key attributes for pandemic plan renewal: “flexibility, traceability and transparency, persistence and responsiveness, global independence, and equitable access” (Handfield et al., 2020). COVID-19 also created immense uncertainties in demands and disruptions in supply chains, and researchers should also all these scenarios. All these questions will have to be examined carefully reflecting on its long-term impacts, to understand the long-term implications to the existing institutions of different countries of this exogenous shock. Currently, the policy instrument interventions seem too skewed to domestic economic growth and focus primarily on short-term output measures instead of long-term impacts (Al-Mansour & A. Al-Ajmi, 2020). The case studies and comparative analyses in this Chapter also show that countries do not lack ideas or policy tools to address the short-term concerns of a pandemic. However, they may lack the necessary capacity to execute these tools cost-effectively or fast enough, and the suitable strategies to address various needs proactively, inclusively and flexibly, especially from the perspective of a longer time horizon. These observations suggest that the government is becoming increasingly aware of the criticality of a supply chain but may not be fully aware of the risks and opportunities to avoid the next crisis.
Equally important will be the research on policy and economic intervention should consider wider resilient strategies, which are not just stopping the cross-border trading activities but also utilizing multi-criteria decision making through the optimal utilization of the resources and controllable production rate during the pandemic crisis (Alkahtani, et al., 2020). Despite many harms and challenges posed by this global pandemic, it has provided a much-needed stimulus for scholars and practitioners to reconsider the role of policy and economic instruments to create the synergistic effect with resilient capabilities in the face of adversity.
The present study limitations are that it draws a conclusion based on limited journal articles
constrained by the Scopus database. We evaluated only 28 most recent and relevant papers that may overlook more profound dimensions of the issue. There is also the scope from a research methodology perspective, as the methodology adopted could be extended through large-scale surveys or secondary data with other decision-making tools and empirical research. Finally, it would be interesting to examine the impact of the COVID-19 and the intensifying US-China trade disputes risk judgment and thus produce different policy and economic responses. We hope that the present study provides a starting point for further investigations that will deepen our understanding of the impact of COVID-19. Moving forward, it is certainly imperative to review the experiences in 2020–2021 and generate lessons from different countries about policy and economic intervention, particularly risk mitigation and supply resiliency strategies so that countries as much as businesses will be more equipped to handle the next impending catastrophe.

9. Acknowledgment

We wish to acknowledge the Office of the Deputy Vice Chancellor (Research & Innovation), particularly, the Research Management Centre (RMC), Universiti Teknologi MARA (UiTM), UiTM’s Faculty of Administrative Science & Policy Studies, Faculty of Business & Management, Arshad Ayub Graduate Business School (AAGBS), and UiTM Johor for enabling this study to be carried out. We also thank the anonymous reviewers whose their invaluable critiques and suggestions are very helpful in improving this manuscript.


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