Artificial intelligence for supply chain resilience: learning from Covid-19

Key determinants to supply chain resilience to face pandemic disruption: An interpretive triple helix framework

Today, supply chain (SC) networks are facing more disruptions compared to the past. While disruptions are rare, they can have catastrophic long-term economic or societal repercussions, and the recovery processes can be lengthy. These can tremendously affect the SC and make it vulnerable, as observed during the COVID-19 pandemic. The identification of these concerns has prompted the demand for improved disruption management by developing resilient, agile, and adaptive SC. The aim of this study is to introduce an assessment framework for prioritizing and evaluating the determinants to supply chain resilience (SCR). To analyze the empirical data, fuzzy criteria importance through intercriteria correlation (fuzzy CRITIC) and fuzzy technique for order of preference by similarity to ideal solution (fuzzy TOPSIS) have been incorporated. Fuzzy CRITIC method was used to identify the critical determinants and fuzzy TOPSIS method was applied for determining relative ranking of some real-world companies. Finally, by developing propositions an interpretive triple helix framework was proposed to achieve SCR. This research stands out for its originality in both methodology and implications. By introducing the novel combination of Fuzzy CRITIC and Fuzzy TOPSIS in the assessment of determinants to SCR and applying these determinants with the help of interpretive triple helix framework to establish a resilient SC, this study offers a unique and valuable contribution to the field of SCR. The key findings suggest that 'Responsiveness' followed by 'Managerial coordination and information integration' are the most significant determinant to achieve SCR. The outcome of this work can assist the managers to achieve SCR with improved agility and adaptivity.

Predicting the effects of supply chain resilience and robustness on COVID-19 impacts and performance: Empirical investigation through resources orchestration perspective

This study investigates the effects of supply chain (SCRE) and robustness (SCRO) on COVID-19 super disruption impacts and firm's financial performance by mobilizing the resources orchestration theory (ROT) as the main theoretical framework. We adopt structural equation modeling analysis of data collected from 289 French companies. The findings reveal the significantly positive influence of resources orchestration on SCRE and SCRO and the role of the latter in mitigating the pandemic disruption impacts. Notwithstanding, depending on whether the measures are objective or subjective, the effects of SCRE and SCRO on financial performance vary. Overall, this paper presents empirical evidence of the influence of both of SCRE and SCRO on pandemic disruption impacts and financial performance. Furthermore, this research provides insights to guide practitioners and decision makers regarding resources orchestration and the deployment of SCRE and SCRO.

Lessons on employees' digital resilience from COVID-19-induced transitions to remote work – a mixed methods study

Purpose

In response to the COVID-19 pandemic, many employees had to switch to remote work. While some adjusted successfully to this transition, others have struggled. Leveraging information systems (IS) to adjust to major exogenous shocks is called digital resilience. The purpose of this paper is to understand what we can learn about employees' digital resilience from externally enforced transitions to remote work.

Design/methodology/approach

As digital resilience is challenging to measure, this study uses an embedded mixed methods approach. The authors conducted a qualitative analysis of 40 employees' statements on their remote work experience during the first six months of the pandemic and complemented these findings with scale-based digital resilience scores.

Findings

The authors find that employees' digital resilience largely depends on the amount of technical equipment and support they receive from their organizations as well as their ability and willingness to learn how to adequately use and communicate through information and communication technologies. Being self-disciplined and self-responsible positively affects digital resilience, while social isolation threatens it. Organizations can foster digital resilience building by encouraging digital networking, building a digital culture and netiquette, and treating digital resilience as a sociotechnical phenomenon.

Originality/value

This is one of the first empirical studies of digital resilience on a human level. It sheds light on the missing link between IS-enabled resilience and transitions to remote work. Specifically, it provides original insights into its development and manifestation in a remote work context during the COVID-19 pandemic. For researchers, it provides novel guidance on choosing appropriate measurement instruments to capture digital resilience.

Intelligent Process Automation and Business Continuity: Areas for Future Research

Robotic process automation and intelligent process automation have gained a foothold in the automation of business processes, using blocks of software (bots). These agents interact with systems through interfaces, replacing human intervention with the aim of improving efficiency, reducing costs and mitigating risks by ensuring and enforcing compliance measures. However, there are aspects of the incorporation of this new reality within the business continuity lifecycle that are still unclear, and which need to be evaluated. This study provides a multivocal literature review of robotic process automation and intelligent process automation correlated with business continuity, to identify the level of awareness of these two emerging forms of automation within the business continuity management lifecycle. Based on the reviewed literature, the study develops a discussion of the main research areas for investigation, identifying what is attracting the attention of practitioners and researchers and which areas they highlight as promising for future research. Numerous sources from relevant backgrounds reveal an interest in these interrelated topics but there as yet is little or no information available on the direct connection between them.

Dynamic capabilities for digital procurement transformation: a systematic literature review

Purpose

The purpose of this paper is to achieve a collective understanding of the capabilities required for digital procurement transformation (DPT).

Design/methodology/approach

The authors contextualize theory about dynamic capabilities (DCs) to integrate the fragmented body of literature on procurement digitalization by means of a systematic literature review (SLR). By extracting and clustering capabilities, as well as proven performance outcomes from existing literature in the field, the authors develop a conceptual model of the DCs required for DPT.

Findings

The authors first introduce and define DPT and the corresponding motivations that trigger firms to invest in advanced digital technologies. Second, by adopting the DC lens, the authors provide an overview of nine microfoundations required for DPT and highlight the strategic options procurement leaders can use when strategizing about adopting combinations of digital technologies. Third, the authors present a future research agenda on DCs for DPT.

Research limitations/implications

The developed conceptual model must be verified and enhanced through further empirical research.

Practical implications

The conceptual model can be used by procurement leaders as a starting point and framework when strategizing about digitally transforming the procurement organization.

Originality/value

The study is the first to synthesize previous research findings on procurement digitalization through an SLR in order to develop a fine-grained conceptual model that supports practitioners and researchers alike in better understanding the capabilities required for and potential performance outcomes of DPT.

COVID-19 pandemic: Supply chain risk management by integrating Interpretive Structural Modeling and Bayesian belief network

The paper proposes a theoretical framework, based on a literature review, that analyzes the links between COVID-19 impacts and supply chain risk mitigation strategies, investigating the role of digitalization as a potential key resource to improve the effectiveness of supply chain resilience. Then, the paper empirically tests the framework through a hybrid causal mapping technique using the frameworks of Interpretive Structural Modelling and Bayesian Belief Networks methods to support supply chain decision making approaches. The findings of this paper can support managers in developing simple and traciable models for assessing interdependences among supply chain disruption sources and to invest effectively in resilience strategies.

Service supply chain resilience: a social-ecological perspective on last-mile delivery operations

Purpose

Considering the last-mile delivery service supply chain as a social-ecological system rather than just a firm-based service system, this research exploit the COVID-19 pandemic disruption to investigate how the supply chain develops resilience from a viewpoint that integrates a social-ecological perspective with the traditional engineering one.

Design/methodology/approach

This research adopt a multi-case study approach using qualitative data collected via semi-structured interviews with executive-level managers from nine leading UK last-mile delivery companies. Data analysis is guided by a research framework which is developed by combining the social-ecological perspective with the structure–conduct–performance paradigm. This framework aids the investigation of the impacts of external challenges on companies' resilience strategies and practices, as well as performance, in response to disruptions.

Findings

The research identifies three distinct pathways to resilience development: stabilization, focussing on bouncing back to the original normal; adaptation, involving evolutionary changes to a new normal; transformation, involving revolutionary changes in pursuit of a new normal-plus. Three strategic orientations are identified as operating across these pathways: people orientation, digital orientation, and learning orientation.

Originality/value

In contrast to the manufacturing supply chain focus of most current research, this research concentrates on the service supply chain, investigating its resilience with a social-ecological perspective alongside the traditional engineering one.

Strategic drivers to overcome the impacts of the COVID-19 pandemic: implications for ensuring resilience in supply chains

The recent coronavirus (COVID-19) pandemic has affected the manufacturing industry’s entire supply chain system. It is important to investigate the strategic drivers to deal with the impacts of COVID-19 in the manufacturing industry. Accordingly, this study aims to identify the strategic drivers to overcome the impacts of the COVID-19 pandemic and improve the resiliency of the Bangladeshi footwear industry, an emerging economy. The strategic drivers are identified after reviewing research papers, reports, blogs, and discussions on social media platforms. The main drivers and their respective sub-drivers are finalized by discussing with domain experts. To offer strategic plans for building resiliency, it is crucial to know the importance of the main drivers and sub-drivers; therefore, the best–worst method is applied to determine the priority importance of the strategic drivers. The findings indicate that the top five drivers to defeat the impacts of COVID-19 are “high capability of reconfigurability,” “enhance the relationship with suppliers,” “develop health protocols to continue manufacturing,” “government support through incentives, subsidy, tax rebate, etc.,” and “set a policy to stable material supply”. Based on the findings, this study also provides practical implications with proposed research themes for policymakers and operations managers towards mitigating the impacts of the COVID-19 pandemic. The study’s contribution is unique and important for the footwear supply chain as the research on COVID-19 in the context of resiliency focusing on the footwear supply chain is non-existent.

Extending the Frontiers of Electronic Commerce Knowledge through Cybersecurity

As technology becomes more sophisticated so do cyber-attacks. The resilience of electronic commerce organisations represents a critical point nowadays because it influences consumer and digital business behaviour. In this context, the cybersecurity and electronic commerce knowledge were reviewed as a unit. The main aim of this paper is to support researchers and managers in understanding the theoretical framework and to provide a knowledge-based model. To achieve this aim, the authors performed an analysis of 14,585 papers from the Web of Science Core Collection that generated two visualized networks, analyzed with the metrics mean silhouette, modularity, betweenness centrality, and citation bursts in the context of digital resilience. The mapping process results show that the human factor represents the central junction with the fear of cyber-attacks and the perception of online shopping as risky. The adoption of electronic commerce and mobile commerce are two challenging research lines in the global economic resilience. Their adoption enabled by big data, artificial intelligence, machine learning, and even blockchain technology can strengthen resilience even when cybersecurity education is needed.

Resilience in healthcare supply chains: a review of the UK’s response to the COVID19 pandemic

Purpose

The purpose of this explorative research is to analyse the resilience of the United Kingdom's (UK) healthcare supply chains from a customer’s perspective in the light of the coronavirus pandemic.

Design/methodology/approach

Using the capabilities of preparedness, robustness, recovery and adaptability as the foundational percept for supply chain resilience, 22 healthcare professionals in 17 of the UK's National Health Scheme (NHS) Trusts were interviewed to explore their personal and organisational approaches adopted relative to the provision of eye protection, gloves, gowns, aprons, masks and respirators. The Dynamic Capabilities View is mapped to the resilience capabilities and used to analyse the data from a transformational supply chain research perspective.

Findings

The supply chains were largely unprepared, which was not particularly surprising even though the availability of gloves was significantly better compared to the other personal protective equipment (PPE). Techniques adopted to ensure robustness and recovery revealed the use of unsanctioned methods such as extended use of PPE beyond recommended use, redefinition of guidelines, protocols and procedures by infection control and the use of expired PPE – all of which compromised customer well-being.

Research limitations/implications

As the paper views resilience through the lens of customers, it does not provide the perspectives of the supply chain practitioners as to the reasons for the findings and the challenges within these supply chains.

Practical implications

The compromise of the well-being of healthcare workers due to the vulnerabilities of healthcare supply chains is highlighted to managers and prescriptions for post-disruption adaptability are made.

Originality/value

This paper introduces transformative research to supply chain resilience research by uniquely looking at resilience from the customers' well-being perspective.

P, Rao KV. Post-COVID-19 strategic sourcing decisions for escorting stakeholders’ expectations and supplier performance in construction project works

Purpose

The occurrence of COVID-19 has impacted the wide-reaching dimensions of manufacturing, materials, procurement, management, etc., and has loaded disruptions in the wide range of supply chain (SC) activities. The impact of COVID-19 has twisted supplier performance and influenced stakeholders’ thinking towards selecting supplier sources and making strategic sourcing decision for convinced arrangement of construction management (CM) resources. Nowadays, suppliers are intently evaluated by stakeholders in post-COVID-19 phase to induce agile availability of CM resources. Accordingly, this paper aims to demonstrate competent CM dimensions under post COVID-19 scenario for ease managing construction projects by the stakeholders.

Design/methodology/approach

The authors have implicated Grey Sets Theory along with decision-making trial and evaluation laboratory (DEMATEL) technique for understanding significant outcomes. Varieties of diverse decision aspects responsible for strategically influencing supplier sourcing decision is projected under post COVID-19 scenario for handling construction projects by the stakeholders.

Findings

This study investigated sustainable construction management dimensions (SCMD) at the stage of resource deliveries and client aspirations under post COVID-19 situation. The study demonstrated “Lead time” as the most crucial, “Product Range” as the second and “Customers dealings and relationship” as the third crucial aspect considering by the stakeholders for selecting supplier sources based on the attainment of performance score of 0.1338, 0.1273 and 0.1268, respectively. It is found that high lead time stimulates the stakeholders to divert their orders to other competent supplier sources holding a low degree of lead time as compared.

Research limitations/implications

The present study rollovers its existence by serving critical thinking, conceptual modelling, criteria identification and evaluation under CM domain for drafting effectual strategies by the suppliers. The study investigated the impact of COVID-19 on stakeholders’ decision-making and enlisted SCMD that strategically stimulated them in choosing supplier sourcing decision.

Originality/value

The present study realizes the insights of stakeholders in the post COVID-19 scenario related to the supplier sources based on performance score. The study quantified sustainable supplier attribute for construction work and practices. The study analysed the expectations of the stakeholders purchasing different varieties of construction materials from supplier sources for civil works in the post COVID-19 scenario.

Mapping the key challenges and managing the opportunities in supply chain distribution during COVID-19: a case of Myanmar pharmaceutical company

Purpose

This study aims to present a study on the supply chain process of a Myanmar-based pharmaceutical company (named ABC Pvt. Ltd. in this study) that produces pharmaceutical products across Myanmar and aims of bringing quality medical products and best care for Myanmar people’s health. The study aims to identify the key supply chain challenges and manage the opportunities executed by this pharmaceutical company to improve the supply chain process during the COVID-19 outbreak.

Design/methodology/approach

This work used a case study and conducted semistructured interviews with the manager, senior managers and senior staff of the ABC Company to improve the supply chain process and develop a comprehensive structural relationship to rank them to streamline the uncertainties, real-time information and agility in a digital supply chain using grey relational analysis (GRA) method.

Findings

From the data analysis and results, “Impact of political factor,” “Delay in import process” and “Weak internet connection,” and “Weak knowledge of the use of digital platform,” “Poor information sharing in online by employees” and “Information flow from top management to operational level” have been identified as top and bottom three key challenges, respectively. “Inventory management,” “Selection of transport method” and “Operational cost”, and “Marketing and brand Innovation,” “Online delivery of products” and “E-commerce enablement (Launching applications, tracking system)” are identified as the top and bottom three managing the opportunities, respectively.

Research limitations/implications

The findings of the study help to supply chain decision-makers of the company in their establishment of key challenges and opportunities during the COVID-19 era. As a leading company, it always tries to add value to its product through a supply chain system, effective management teams and working with skillful decision-making toward satisfying the demand on time and monitoring the supplier performance.

Originality/value

The novelty of this study is to identify the key supply chain challenges and opportunities by the GRA method to rank them, considering the case of Myanmar pharmaceutical manufacturing company as a case-based approach to measuring its performance during the COVID-19 outbreak era. This work will assist managers and practitioners help to the company to provide optimal services to its consumers on time in this critical situation.

Putting head-worn displays to use for order picking: a most-similar comparative case study

Purpose

This paper aims to identify why warehouses do or do not succeed in putting to use digital technologies for order picking.

Design/methodology/approach

Building on structuration theory, the authors investigate the situated use of one such a digital technology, more particularly the head-worn display (HWD). Based on a most-similar comparative case study of two Belgian warehouses pioneering HWDs, the authors focus on whether and how order pickers and their manager interact to modify the properties, functionalities, and the context in which the HWD is used.

Findings

In one warehouse, using the HWD was discontinued after implementation. In the other, order pickers and the order pickers' manager succeeded in implementing the HWD into their work. The authors find that the prime explanation for these opposite findings lies in the extent to which order pickers were given room to improve the properties and functionalities of the HWD as well as the conditions that unfold in the HWD's use context. In the latter warehouse, pressing issues were overcome and improvement suggestions were implemented, both regarding the HWD itself as well as regarding the job-related and person-related conditions.

Originality/value

Theoretically, the authors contribute to the situated use of technology stating that (1) giving room to alter the use of digital technologies, and (2) fostering continuous employee participation regarding conditions stemming from the use context are necessary to realize the promising and unexploited potential of digital technology in practice. Empirically, this paper exposes distinct types of interactions that explain whether and how digital technologies, in particular HWDs, are put to use for order picking practices.

Supply chain management practices, retail outlets attributes and organisational performance: a case of organised food retailers in India

Purpose

The aim of this study is to examine the impact of supply chain management (SCM) practices and retail outlet attributes on the performance of organised food retailers in India during COVID-19 pandemic.

Design/methodology/approach

Authors conducted empirical research with SCM practices and retail outlet attributes to evaluate the retailers’ performance. The authors present the results from 321 valid responses from the Indian food retailers. The study used structured equation modeling to present the analysis and the results.

Findings

The findings of this study reveal that most of the SCM practices (i.e. information technology, level of information sharing, customer relationship, supplier relationship and goal congruence) have a positive impact on performance except the quality of information sharing. The results show that in the time of the pandemic, the retail outlet attributes (image, service quality and convenience) have no significant relationship with the food retailer’s performance while SCM practices are necessary to achieve better performance of the food retailers.

Research limitations/implications

A proactive approach is needed from retailers at the time of pandemic situations to manage the supply chains. The retailers must be extra careful in screening the suppliers for the short and long run. The reason being that in the situation of pandemic, customers might be more demanding and hence, food retailers need to pay special attention to gain growth. It is also required that the policymakers should give importance to the implementation of these SCM practices to be positioned differently.

Originality/value

The research can be valued in terms of its original contribution towards companies in overcoming the disruption caused by COVID-19 to maintain a balance between demand and supply and proposes a completely new theoretical framework. The proposed theoretical model would add value to the existing literature to help the retailers in process of their performance improvement. The study has provided insights for retail organisations, suppliers and government departments to manage their SCs more effectively and efficiently during the pandemic.

Robotic process automation in Maersk procurement–applicability of action principles and research opportunities

Purpose

The authors share a real-world case study of a multiple-year adoption process of robotic process automation (RPA) in procurement to add to the limited empirical research base on RPA in supply chain management. The Maersk case offers hard evidence of the value of RPA that can be used as a benchmark for decision-making in companies and as a basis for further research in key areas such as change management and behavioral aspects as well as return on investment on RPA and the need for RPA capability development.

Design/methodology/approach

Together with the co-author from Maersk, the authors cover a multiple year RPA program in procurements, to capture lessons learned and develop research questions for the future. The authors consider 39 generic action principles for RPA adoption in a specific procurement context.

Findings

The authors find RPA for procurement to be an enabler of strategic progress and of advancing the concept of triple values (enterprise, customer and employee) in a supply chain setting. The authors offer RPA adoption scoping guidance and show how, with growth and maturity of the program, conditions such as predictability of volume become less relevant as a scoping criterium. The authors also find that RPA augments work rather than replace staff. Maersk utilizes staff time freed up by automation to focus employees on more strategic priorities. The authors consider 39 generic action principles for RPA adoption in a procurement-specific context and develop additional action principles based upon the Maersk case.

Originality/value

The authors study both a unique and rich case to complement limited empirical research on RPA in procurement and supply chain management and the limited research into RPA past early stage adoptions. The authors address Hofmann et al.'s (2019) questions about the change management involved in RPA and consider generic RPA action principles from literature in this specific procurement setting. The authors extend those action principles and develop a rich set of research opportunities.

Innovational duality and sustainable development: finding optima amidst socio-ecological policy trade-off in post-COVID-19 era

Purpose

This study aims to analyze the socio-ecological policy trade-off caused by technological innovations in the post-COVID-19 era. The study outcomes are utilized to design a comprehensive policy framework for attaining sustainable development goals (SDGs).

Design/methodology/approach

Study is done for 100 countries over 1991–2019. Second-generation estimation method is used. Innovation is measured by total factor productivity, environmental quality is measured by carbon dioxide (CO2) emissions and social dimension is captured by unemployment.

Findings

Innovation–CO2 emissions association is found to be inverted U-shaped and innovation–unemployment association is found to be U-shaped.

Research limitations/implications

The study outcomes show the conflicting impact of technological innovation leading to policy trade-off. This dual impact of innovation is considered during policy recommendation.

Practical implications

The policy framework recommended in the study shows a way to address the objectives of SDG 8, 9 and 13 during post-COVID-19 period.

Social implications

Policy recommendations in the study show a way to internalize the negative social externality exerted by innovation.

Originality/value

This study contributes to the literature by considering the policy trade-off caused by innovation and recommending an SDG-oriented policy framework for the post-COVID-19 era.

Does a retailer's performance depend on CSR practices? A stakeholder theory perspective from developing economy

Purpose

The study aims to examine the relationship between retailer's performance and corporate social responsibility (CSR) practices in Indian context. The article introduces a new conceptual model considering the parameters as per the stakeholder theory perspective.

Design/methodology/approach

The authors conducted empirical research with CSR practices (CSRP) and other parameters to evaluate the retailers' performance using stakeholder theory. The authors present the results from 292 valid responses from the Indian retailers. The study used structured equation modeling (SEM) to present the analysis and the results.

Findings

Findings indicate that CSRP along with additional constructs loyalty (L), reputation (R), customer satisfaction (CS) and competitive advantage (CA) have positive and significant impact on organizational performance (OP).

Practical implications

The framework will serve as a guiding tool to the management of the retail outlets to examine carefully the link among CSRP with other variables presented in the study and subsequently to the retail outlet performance. The retailers must be more focused on the expectations and demands of the customers concerning products and services for better growth of the firms.

Originality/value

The uniqueness of the study lies in “CSR practices enabled integrated model” to examine the performance of the organizations. The proposed theoretical model would add value to the existing literature to help the retailers in process of their performance improvement.

Critical Success Factors and Traceability Technologies for Establishing a Safe Pharmaceutical Supply Chain

Drug counterfeits have been an international issue for almost two decades, and the latest statistics show that fake medications will continue to penetrate legitimate pharmaceutical supply chains (PSCs). Therefore, identifying the issues faced by PSCs is essential to combat the counterfeit drug problem, which will require the implementation of technologies in various phases of the PSC to gain better visibility. In this regard, a literature review was conducted to fulfill the following objectives: (i) review the application of traceability technologies in various PSC phases to detect counterfeits; (ii) analyze the various barriers affecting the establishment of a safe PSC and the critical success factors used to overcome those barriers; and (iii) develop a conceptual framework and guidelines to demonstrate the influence of traceability technologies and success factors on overcoming the various barriers in different phases of the PSC. The major finding of this review was that traceability technologies and the critical success factors have a significant influence on overcoming the barriers to establishing a safe PSC.

The role of operations and supply chains in mitigating social disruptions caused by COVID-19: a stakeholder dynamic capabilities view

Purpose

The disruption caused by COVID-19 exhorts to reiterate the role of operations and supply chain management (OSCM) in achieving social sustainability. Therefore, the present study aims to develop a conceptual understanding of the OSCM ecosystem's role in enabling the world to accelerate towards social sustainability.

Design/methodology/approach

The study uses the integrative review method to achieve the stated objectives. The study first identifies the societal disruptions caused by COVID-19. Then based on dynamic capabilities (DC) theory, stakeholder theory and real-life examples, the study puts forward the stakeholder dynamic capabilities (SDC) view as an approach to overcome these social challenges.

Findings

Taking the SDC view, the study identified ten social challenges aggravated by the COVID-19. Response actions for OSCM have been proposed to mitigate these challenges.

Research limitations/implications

The pandemic has brought new challenges to the OSCM to achieve social sustainability. Therefore, the study's proposed response actions aim to assist OSCM managers in leveraging their expertise to do good for society and create a better world. Moreover, the study also provides avenues for future research on the topic.

Originality/value

Based on the SDC view, the study attempts to conceptualise social sustainability for OSCM during a pandemic. The SDC view helps capture internal and external social challenges emerging due to COVID-19 and utilise firms' capabilities to overcome these challenges.

Financially distressed suppliers: exit, neglect, voice or loyalty?

Purpose

Major crises such as the global financial crisis 2007–08 or the COVID-19 crisis increase the level and likelihood of supplier financial distress. This research expands the understanding of how cooperatively, respectively, uncooperatively buying firms might respond to suppliers who suffer from financial distress in the course of major crises.

Design/methodology/approach

The authors build on a collaborative project with a German automotive OEM, analyze OEM internal “financial quick check data”, questionnaire data and longitudinal supplier financial data and apply regression, mediation and difference-in-difference estimation analyses.

Findings

The results show that the stronger the dependence on the distressed supplier, the more cooperative the buying firm's response. Furthermore, a more cooperative response of the buying firm has a strong positive influence on the suppliers' financial performance and hence recovery from the distress situation. Insights from supplier financial distress in the course of the financial crisis 2007–2008 can serve as learnings for the COVID-19 crisis.

Research limitations/implications

The study fills a gap in the scholarly literature on “response to risk incidents” and response formation. Resource dependence theory and resource dependence dynamics offer a strong rationale for the type of response buying firms are likely to choose.

Practical implications

Besides offering the first menu of response options, this study can help practitioners in figuring out the most appropriate response to distressed suppliers. The findings can assist buying firms in their decisions how to deal with suppliers during major economic and financial crises.

Originality/value

This research is the first to conceptualize buying firms' response options to financially distressed suppliers, to investigate the influence of dependence on buying firm's response and to reveal the consequences of the buying firm's response for the supplier's financial recovery.