A Conceptual Paper of Supply Chain Adaptive Strategies During Covid-19 Pandemic and the Impact on Performance to
Semiconductor Industries
Suharti Ishak1*, Nor Azura Mohamed Salim1*, Nur Lyana Lazim1*, Mohd Rizaimy Shaharudin2*, Samsudin Wahab3*
1 Postgraduate Studies, Universiti Teknologi MARA, Pulau Pinang, Malaysia
2 Smart Manufacturing Research Institute (SMRI), Universiti Teknologi MARA, Shah Alam Selangor, Malaysia
3 Center For Postgraduate Studies, Universiti Teknologi MARA, Pulau Pinang, Malaysia
*Corresponding Author: [email protected], [email protected], [email protected], [email protected], [email protected]
Accepted: 15 February 2022 | Published: 1 March 2022 DOI:https://doi.org/10.55057/ajrbm.2022.4.1.1
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Abstract: This is a conceptual paper of future research based on the review of literature related to supply chain adaptive strategies and firm performance during the Covid-19 pandemic. The global chip shortage is becoming a major issue in the current manufacturing industries worldwide and potentially will drag into a few more years with the current supply chain disruptions due to the Covid-19 pandemic crisis. The objective of this study is to investigate the influence of the adaptive supply chain strategies combining robustness, agility, resilience, on the semiconductor firm performance during the Covid-19 pandemic. We analyze the issues, concepts, and objectives for the upcoming research using a variety of literature from several disciplines. The previous research advocated that there is a significant influence of the supply chain adaptive strategies to the semiconductor performance during the Covid-19 pandemic crisis. The findings of this upcoming research could help semiconductors industries on how to leverage supply chain adaptive strategies in order to maintain their firm performance during the pandemic.
Keywords: Supply chain robustness, agility, and resilience, Covid-19 pandemic phenomenon, semiconductor firm performance
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1. Introduction
It has been almost 2 years since an outbreak of Coronavirus Disease 2019 (Covid-19), was first encountered in Wuhan, China, and has spread rapidly in China and to other parts of the world.
Malaysia is not spared from the impact of this Covid-19 pandemic issue and we are suffering from this pandemic since day one when it spread in our country. None of the previous natural disasters has impacted the entire global population the way Covid-19 has. Most of the disasters and other disruptions affect a handful of industries directly and others indirectly however Covid-19’s impact is felt first-hand by all industries and markets. Even natural disasters as devastating as the tsunamis and earthquakes that struck Indonesia in 2004 and Fukushima, Japan, in 2011 take most nations only a few years to recover from and in some of the cases, the recovery can happen in a few months and even a few weeks. It is totally different from Covid- 19’s impact on global supply chains and economies which is expected to be felt for a decade
or longer because we are still not being able to find the right solution to mitigate the impact and solve the crisis.
During this Covid-19 pandemic crisis, the demand for the semiconductor components increased tremendously due to increasing demand for smartphones, computers, and tablets as the change of lifestyle were working from home, online shopping and business, as well as online learning, became a part of daily life. The surge of PC demand caught the manufacturers off guard, and it was too late to prepare and the resulting imbalance between demand and supply appears and grows.
The lockdown during the Covid-19 pandemic crisis contributed the major impact to the global chip shortage and created a chain reaction from this lockdown exercise which has been identified as the best solution at the beginning of the occurrence to mitigate the Covid-19 pandemic crisis. The chip production facilities were shut down because of this global lockdown and resulting in the depletion of the inventories. We are expecting the 2020 - 2021 global chip shortages crisis will be ongoing, which the demand for the integrated circuit (IC) is greater than supply, affecting more than 169 countries and leading to prices increases, shortages, huge backlog amongst consumers for cars, graphics cards, video games consoles, computers, home appliances, and other products that require semiconductors. Based on the literature review global is expecting the chip shortage to continue throughout 2022 into 2023.
During this pandemic crisis, the disruption of supply chain processes caused a major impact on the semiconductor shortage and affected the firm performance. There are a few main elements that we identified which give a significant impact on the semiconductor firm's performance.
How does the global supply chain work and contribute to the firm's performance? Why is it very important? The goal of global supply chain management is to ensure that the international networks of manufacturers, suppliers, warehouses, logistics companies, distributors, and retailers operate smoothly. A supply chain adaptive strategy is part of the supply chain practices that play an important role in the recent global shortage chips crisis. Businesses’ emphasis on cost savings in their global supply chain management strategies has led to them relying on single-source suppliers for all their resource needs, from raw materials to finished products.
Single sourcing all the components needed to assemble a product saves manufacturers money.
While natural disasters, extreme weather, and other events have affected the global supply chain in the past, the movement of people and goods around the world has never been impacted by a catastrophe with the breadth and scope of the Covid-19 pandemic.
The supply chain adaptive strategies required dynamic and flexible reactions against the change of environment, especially during this Covid-19 pandemic crisis. In this kind of situation, more flexible and dynamic practices may offer better matches between suppliers and customers as well as help the organization to mitigate the impact of the supply chain disruption to the firm performance. In this study, we are focusing on the semiconductor industry. Based on the previous research and study we identified three main elements of the adaptive strategies that are applicable in this research which is resilience, agility, and robustness.
2. Problem Statements and Issues
The World Health Organisation (WHO) has declared a pandemic and is of great concern for the spread and intensity of the virus. Many countries have been forced into large-scale blockades, and the proliferation of new cases every day has completely halted all economic activity in all sectors.
The research stated that this shortage was partly due to the growing consumer demand for more sophisticated chips that were driving the computer industry through Covid-19, including electronics automation, electrification, and connectivity. According to Kaur (2021), global semiconductor sales declined between 2018 and 2019 but increased by 6.5% by 2020.
According to the semiconductor industry association's trading organization, rapid growth continued until 2021, with May 2021 sales up 26% from the same period last year. However, from a demand perspective, the Covid-19 pandemic will play a key role in accelerating trends that have contributed to the surge in advanced chip demand, such as remote working, virtual learning, home entertainment, online gaming, and the transition to e-commerce. From a supply perspective, chipmakers were unable to keep up with the increase in demand due to a lack of new capacity and inadequate investment in the early stages of the pandemic. In fact, Intel predicts that semiconductors will account for more than 20% of the purchase cost of new premium cars, up from 4% in 2019 (Kaur, 2021).
Based on the report titled ‘Industrial Production: Manufacturing: Durable Goods:
Semiconductor and Other Electronic Component’ from FRED Economic Data (2021), industrial production for semiconductors and other electronic components experienced a drastic upward change starting around May 2020. The current study found that firms that implement robustness and resilience of supply chains have been seen to have led to higher performance (Todo et al., 2021). They found that supply chain robustness is demonstrated to be a major element in higher business performance under economic shocks, either in the short or long run. The ability of the firm to resume normal operations once lost due to economic shocks may not be recovered easily and firms may need extra endeavor to maintain more than intra-firm transactions; this addresses the resilience issue of supply chains. The research finding has confirmed that supply chain robustness and resilience have been linked to improved firm performance however it is recommended to re-examine similar factors as this sampling strategy may be appropriate for a global consulting company only.
Organizations have come to terms with the notion that market instability is uncontrollable and unexpected, restricting their ability to respond effectively and predictably. According to the previous research, organizations are increasingly realizing that agility is critical to their performance in the face of fierce competition, globalization, and time-to-market demands. The firm's organizational agility allows it to operate with speed and surprise while maintaining improved operational performance. In this Covid-19 pandemic crisis, lack of supply chain agility will lead to a lack of disruption plans, risk information, risk management as well as no preparation on a contingency plan.
Subsequently, there is still a notable scarcity of supply chain adaptive strategies during the Covid-19 pandemic. Hence, this research aims to address current global issues, the implications of global semiconductor chip shortage, and the effect of Covid-19 among semiconductor industries. Therefore, this research will explore the influence of robustness, agility, and resilience in supply chain adaptive strategies during the Covid-19 pandemic towards firms’
performance among semiconductor industries.
3. Purpose of Research and Research Question
The conceptual research is intended to investigate the influences of the robustness, agility, and resilience in supply chain adaptive strategies with the semiconductor firm performance during the Covid-19 crisis. Those questions that we are going to address in this paper are:
i) What is the relationship between robustness in supply chain adaptive strategies during the Covid-19 pandemic with firm performance among semiconductor industries?
ii) What is the relationship between agility in supply chain adaptive strategies during the Covid- 19 pandemic with firm performance among semiconductor industries?
iii) What is the relationship between resilience in supply chain adaptive strategies during the Covid-19 pandemic with firm performance among semiconductor industries?
4. Significance of Research
In our point of view, this research is extremely important for semiconductor industries that are looking to improve their firm performance by understanding and considering how the supply chain adaptive strategies will give them the opportunity to mitigate the impact of the supply chain disruption during the Covid-19 pandemic. Besides, this research is also important for semiconductor industries to understand the significance of supply chain robustness, agility, and resilience of supply chain adaptive strategies, especially during the Covid-19 pandemic.
5. Delimitations and Limitations
This conceptual paper is delimited by insufficient readings of literature from additional disciplines in order to gain a broader spectrum of theoretical knowledge. This conceptual study too has its own set of research limitations. For instance, this study is merely a review of previous publications, and the data has yet to be gathered. Another limitation of this study is due to the limited source of reference in Supply Chain Management (SCM) that is related to Covid-19 issues.
6. Literature Review
Supply chain disruption became a major issue that impacted our current manufacturing industries during the Covid-19 pandemic crisis. The rapid spread of Coronavirus around the world is affecting both supply and demand. In research from Brown (2020), according to MIT professor Yossi Sheffi, director of the MIT Center for Transportation and Logistics, businesses are seeing a reduction in global demand because of fear and online distancing, which could bring about a severe recession. The global supply chain affects starting from China’s factories, spreading to US factories, Japan, South East Asia and now it affected the whole world. It starts with retailers and spirals out in greater magnitude to distributors, producers, and then suppliers in the first, second, and third tiers. Upstream suppliers are likely to be severely damaged. In this study, we are trying to understand how the supply chain adaptive strategies play an important role in minimizing the supply chain disruption impact and how it will help the organization to stay standing in the business.
6.1 Supply Chain Adaptive Strategies
Adaptation theory is known as a theory that deals with the ability of a system to adapt based on what has happened before. In some areas, systems are self-aware and try to explain why theory makes decisions. Other adaptive theories try to explain how adaptive systems, which are nevertheless self-aware, choose under certain conditions. Adaptive strategy is a representation of the strategy used by anthropologist Yehudi Cohen to describe the economic production system of society. Adaptive strategy is a strategy that breaks away from static planning and is a continuous learning process of self-correction of a series of deliberate experiments. It transforms a traditional strategy into another dimension or direction of a process or strategy.
In the supply chain context, an adaptation strategy is a responsive supply chain strategy that can adapt and respond appropriately in any context. It is important to stay competitive and provide the best solutions in the manufacturing industry, especially in the semiconductor industry. Given the current problem of supply chain disruption due to the Covid-19 crisis, you must do everything you can to keep up to date.
There are many types of adaptation strategies that can help a company to achieve business sustainability in a turbulent environment. Optimal decision-making for a company depends heavily on the environment, specifically the rate of change, the predictability of change, and the degree of change required. We identified three dimensions of supply chain adaptive strategies that have a significant impact on firm performance.
6.2 Dimensions of Supply Chain Adaptive Strategies
6.2.1 Robustness. Robustness in the supply chain can be defined as the ability of the firm to maintain operations during a crisis (Miroudot, 2020). Operational robustness of supply chains refers to the robustness of the dynamic process within them supposing unchanged structures (Monostori, 2018). The most important measures are the different kinds of delivery performances or the accuracy of the performances to their anticipated/ planned values. Supply chain robustness can be classified into two categories: supply chain continuity planning and supply chain disaster recovery Sindhuja (2014). It is essential however disruption is unpredictable. A firm might have the option to keep up with its provider since it has similar steadfast clients. Building up a decent connection with clients will assist the company to keep running, this assists with dealing with changes on the inventory side. Notwithstanding this stand, an organization will in any case need to manage disturbance that isn't coming from the contenders.
Most of the manufacturers as well as the other businesses around the world are struggling to maintain their operations under restrictions mandated by the battle against the deadly Covid- 19, they need to prepare their supply chains for the post-pandemic economy. Manufacturers will be under “greater political and competitive pressures to increase their domestic production” and promote employment in their home countries. However, many aspects of the global supply chain will remain unchanged once Covid-19 is under control and we are able to live our life with it, such as competitive price pressures, customer satisfaction, and improved operational efficiencies. The first step in creating a robust global supply chain is to identify hidden vulnerabilities, which may not exist in the first or second tier of the supply chain but at lower levels that are often invisible to manufacturers. For a company to keep up with provisions it is needed to avoid interruption however they need to be prepared as much as they can to manage the disruptions. The same skills are used in avoiding a problem and are useful in handling processes for the benefit of a company.
6.2.2. Agility. Supply chain agility refers to how quickly and efficiently an e-commerce supply chain can react to changes in the market and customer demand. It also relates to the ability to anticipate, resist, and bounce back from unexpected events that cause supply chain disruption(s). It also can be described as a company's ability to quickly adjust tactics and operations within its supply chain.
The current supply chain agility for manufacturers is totally dependent on flour fundamental tenets which are understanding the external factors that shape your supply chain logistics, the value chain components that are most affected by the industry disruption, the integration of
more proactive technology and processes to address the value chain pain points as well the ongoing monitoring and analysis of new process and cross-functional collaboration.
6.2.3 Resilience. It is essential for companies to mitigate the supply chain risk by developing supply chain resilience, whereby resilience is the ability to recover quickly from change or misfortune and return to its original form (Miroudot, 2020). The critical element of supply chain resilience is being prepared and becoming better equipped to sense and respond to the various risks inherent across the ecosystem and building the capabilities to rapidly recover from such challenges (Mark Miller, 2019) The supply chain resilience also can be defined as “the ability of a supply chain to both resist disruptions and recover operational capability after disruptions occur.
In reality, it’s very hard for us to predict what actually will happen or to prevent what will happen. Every company will have or should have its own unique risk strategy to detect or assess the potential issue or loophole in their supply chain. On the other hand, Mark Miller (2019) mentioned that there are three main elements that play a major role in building the supply chain resilience:
• Mapping supply chain
• Modelling what-if scenario
• Plotting likelihood versus impact
Mapping out the whole supply chain ecosystem, including all participants and interdependencies will help the companies to understand the gap in their supply chain. Besides, the what-if scenario modeling will help to identify and evaluate vulnerabilities. On the other hand, the companies should be able to understand or identify the major threats versus the potential impact which will help the supply chain executives to determine priorities and allocate resources for mitigation strategies.
Supply Chain Resilience requires a holistic view, the commitment of our entire organization, substantial data collection, development of joint metrics, alignment of processes, and ultimately also a significant financial investment to mitigate the identified risks (Seifert &
Lücker, 2020).
6.3 Semiconductor firm performance
Supply chain is a vulnerable system of organizations, people, activities, information, and resources. This activity includes the conversion of natural resources, raw materials, and parts into finished products and delivery to end customers. Pandemic-related stagnation in demand leads to an increase in bottlenecks, and current supply chain conditions have a significant impact on the overall supply chain process. Fluctuating demand and unforeseen events have always been common problems that have had a significant impact on the global supply chain, and both factors are linked. Natural disasters, for example, are unpredictable events that add to fluctuating demand as consumers need additional supplies to recover from a disaster. The freeze caused widespread power outages in Texas, shutting down petrochemical plants, causing plastic shortages and subsequent price increases. The destructive fire was the priming of the container ship Evergreen, which caused the closure of the Suez Canal, one of the busiest waterways in the world. The blockade lasted for six days, with 350 ships stuck and seemingly overwhelming the world's supply chain and returning to normal. Congestion at major ports and a shortage of shipping containers have also added to the delay in the entire chain from production to delivery of finished products. More and more production delays due to material
shortages and the entire global supply chain are further disrupted, with average delivery delays having a major impact.
Supply chain performance is crucial to the smooth functioning of economies, and glitches can create bottlenecks with adverse implications for economic productivity and growth (Salvatore, 2020). However, there are many dimensions to supply chains, and their coordinated (often sequential) functioning is crucial to the smooth on-time delivery of products to consumers and inputs to businesses (Elekdag et al, 2015).
Another possible explanation for this, according to Chiu et al. (2018), from the productivity performance viewpoint, the main reason for the negative growth of IC packaging and testing firms and IC design companies was a backward movement in technical change, whereas the main cause for the negative growth of IC manufacturing companies was a fall in pure technical efficiency. The majority of operational firm performance research for the semiconductor industry, on the other hand, is rarely discussed.
7. Conceptual Framework and Proposition Development
Based on the research findings, it showed that the supply chain disruption gives a significant impact on the semiconductor industry's performance during the Covid-19 pandemic crisis. We can classify them into two portions which are operational performance and financial performance. However, the Covid-19 crisis not only gives us a negative impact which is supply chain disruption to the semiconductor firm's performance, but it also gives us a positive impact if we look at it from a different perspective. The below table is the summary of implications of supply chain disruption during the Covid-19 crisis to semiconductor firm performance.
Table 1: Implications of Supply Chain Disruption during Covid-19 Crisis to Semiconductor Firm Performance
Dimensions Positive Impact Negative Impact
Operational Performance ● Surge market demand
● Healthy Competitions among semiconductor industries to win new business / strategic customers
● Opportunity for the local supplier or nearest geographic to improve the supply chain lead time.
● Companies emerge stronger from the crisis by improving their resiliency.
● Production capacity constraint due to surge demand – manufacturing is not ready for sudden/spike demand.
● Manufacturing LT increased due to delivery from sources (raw material) and distributions (components or SFG)
● Raw material pricing increased
● Delivery delayed due to logistics issues and manufacturing delays.
● Customer satisfaction decreased
● Shortage of labor due to no foreign workers supply Financial Performance ● Business growth at the upper
side
● Revenue increased
● Backlog value increased due to deliveries delayed
● Gross margin reduced due to higher raw material cost, logistics cost, and labor cost
● Holding inventory increased and impacted company cash flow
● Capital holding cost increased
7.1 Supply Chain Robustness
The discussion on the supply chain robustness from a previous study described that there are 4 supply chain strategies that can improve a firm’s capability to manage supply and/or demand in a better way under regular circumstances and to enhance a firm’s capability to sustain its operations when a major disruption hits. The four supply chain techniques are postponement, strategic stock, flexible transportation, and assortment planning.
In the context of disruption recovery, the postponement strategy offers a cost-effective and time-efficient contingency plan that allows a supply chain to reconfigure the product quickly in the event of supply disruption. Another technique to improve the supply chain robustness is strategic stock. You may need to consider carrying additional “just in case” safety stock inventories of certain critical components to ensure that there is no supply issue in your production line when facing a disruption in supply. This strategy is suitable for the manufacturer to manage their situation during crisis periods such as the Covid-19 pandemic.
When a disruption occurs, these inventories will allow a firm to continue their production without any disruption while waiting for replenishment stock.
The third strategy is transportation flexibility. In supply chain management, logistics could be the bottleneck that creates a supply gap issue. As such, the company has to consider adding more flexibility in a proactive manner. The three basic approaches that should be considered are multi-modal transportation, multi-carrier transportation, and multi routes.
Lastly, the assortment planning. The manufacturer has to be flexible in their production planning. The dynamic changes during a crisis which is an unexpected situation, the flexibility in production planning will help to mitigate the impact to the customer end. The capability of the scheduler to play around with the production schedule and capacity will help to minimize the impact as well as work on recovery plans to help the deliveries and supply to end customers.
The supply chain robustness strategies enable companies to deploy the corresponding contingency plans when disruptions occur, however, these companies would become less vulnerable if they could reduce their risk exposure. While it is difficult to reduce the likelihood of most unpredictable disruptions, there are several ways to reduce the impact of disruption on the supply chain operations so that these supply chains can become more resilient such as the supply alliance network, lead time reduction, and recovery planning systems. Potentially, supply chain risk management is an important area of research to examine the underlying reasons why so many firms have been significantly affected by supply chain disruptions. This will open opportunities for us to identify the resources to mitigate supply chain risks, especially during the Covid-19 pandemic crisis.
Proposition 1: There is a positive influence of robustness in supply chain adaptive strategies on firm performance among semiconductor industries during Covid-19 pandemic.
7.2 Supply Chain Agility
The operational performance and financial performance are the key indicators to measure the firm performance. The agility of the company to react to changes in the market and customer
demand during this pandemic crisis is very crucial, especially in the supply chain. From the previous research, we learned that the supply chain disruption gives a bigger impact and significantly influences the firm performance especially industrial and supply challenges.
By having an agile supply chain, we are able to anticipate, resist, and bounce back from unexpected, disruptive events -from meeting customer expectations to optimizing operational costs. In order to build an agile supply chain, we need to have enough resources to optimize and improve operational efficiency. It will also help in implementing the latest technology and automation to solve the labor issue and improve the manufacturing LT which during this pandemic crisis, the labor shortage is one of the main issues that not only affected the production efficiency and capacity, it also caused piling up of the backlog as a manufacturer not able to meet the delivery date. Based on the previous study, there are 5 key dimensions in creating an agile supply chain which is alertness, accessibility, decisiveness, swiftness, and flexibility.
Alertness in this context refers to the ability of the firm to quickly identify changes, opportunities, and threats which is important for the Business Unit and the Sourcing team to quickly detect and react to any changes (good or bad) throughout the supply chain. Identifying changes in the market ahead of time, even how competitors are approaching the market, and keeping an eye on the industry as a whole will help the firm to protect its market and business interest. By improving your operation and shipping strategy such as offering high-demand products with quick delivery, you will create client loyalty and fulfill profit targets.
The term 'Accessibility' refers to how much information that we have about our supply chain and our level of visibility is dependent on real-time data. Having access to real-time data and insight into past historical data will give us more visibility to forecast demand, inventory optimization and find a way to improve the fulfillment and logistics process. It also will help the firm to review the priority allocation based on business interest versus the past historical data versus the logistics actual lead time.
The decisiveness dimension is the ability to make well-informed decisions is referred to as decisiveness. During critical times like what is happening now, it is very hard for companies to make informed decisions in an efficient manner. However, implementing supply chain technology that automatically records data throughout the supply chain makes it easier to proactively make good decisions based on the data. For example, using the MRP system will help us to retrieve all the required data from the moment the order is entered into the system until the production is completed and shipped to the customer door.
The previous literature also mentioned that swiftness is one of the key dimensions which refers to the ability to implement changes efficiently. It also refers to the capability to recognize changes and opportunities for improvement and being able to implement changes quickly.
When we are building our supply chain, we need to leave some room for optimization in our supply chain. By doing that, we can focus on making step-by-step improvements on an ongoing basis to reduce inefficiencies and save on overall cost.
The last dimension is a capability to modify supply chain operations based on necessary changes and decisions made as well as the ability to efficiently change and adapt operational tactics which are important to all supply chains for greater flexibility and growth.
Proposition 2: There is a positive influence of agility in supply chain adaptive strategies on firm performance among semiconductor industries during Covid-19 pandemic.
7.3 Supply Chain Resilience
It is important in managing the supply chain disruption from impacting the semiconductor performance because any stage of the supply chain description can occur at any time. From natural disasters to material shortages as well as the unpredicted event like what is happening now the Covid-19 crisis, improving the resiliency of the supply chain helps to protect an online brand from the unexpected, so both customer expectations and profitability goals are still met despite potential disruption.
How to build supply chain resilience? To build the supply chain resiliency, it's important to diversify your supply chain. Collaboration with multiple suppliers or manufacturers or storing inventory across multiple warehouses will be the best options for us to improve our resilience.
As we expand our supply chain, it’s also important to maintain full visibility into supply chain performance, including manufacturing, inventory management, fulfillment, and logistics capability.
Resilience supply chains are built by design and tailored to unique needs. It needs to be agile enough to face unexpected events at any stage from manufacturing to shipping customer orders.
The semiconductor firm should be able to meet the customer demand in the event of supply chain disruption by exploring several strategies.
Distributing inventory across multiple locations is one of the strategies that help the company maintain resilience. This strategy is required for the firm's contingency plan in the future to avoid unpredictable supply chain disruption as well as to reduce the risk of logistics delay. At this point, you can divert the stock from the nearest distribution center while waiting for the shipment to arrive at our destination
Along with implementing restructuring strategies, supply chains need to develop new supply chain partnerships to smooth the flow of products and services (Veselovská, 2020). This option ensures that you are not left at risk or without replenishment when in-house capacity or primary supplier is unable to deliver during shortages, shutdowns, or trade restrictions. Partnering with alternative suppliers as part of your company contingency or continuity plan can help lessen the risk of inventory shortages, regardless of the conditions, so you will be able to meet client demand despite any delays in acquiring fresh inventory.
Lastly, the company also should explore the alternative to leveraging different carriers. As seen during Covid-19 shipping carriers are facing capacity issues, causing major shipping delays.
This is one of the major issues to the firm performance on top of a shortage of raw material and capacity constraints. You can increase your shipment options by working with numerous shipping carriers but, partnering with many shipping carriers can be time-consuming, and it can also cause you to fall below the minimum shipping requirement to qualify for discounted rates.
Resiliency also will give an opportunity to handle the surging demand differently as well as the production capacity constraint, material LT issue, and delivery delay. Even as the pandemic slows down, there will always be a need to build resiliency in our supply chain.
Proposition 3: There is a positive influence of resilience in supply chain adaptive strategies on firm performance among semiconductor industries during Covid-19 pandemic.
This study’s research framework explains the relationship between the independent variable and dependent variable. This conceptual framework clearly stated that semiconductor firm performance was affected by robustness, agility, and resilience of supply chain adaptive strategies during the Covid-19 pandemic. The proposed conceptual framework of the study is presented in Figure 1 as below:
Figure 1: Proposed conceptual framework
8. Discussion
The Covid-19 pandemic has surfaced the importance of supply chain agility. Since the outbreak of the pandemic, all stages of the e-commerce supply chain have been disrupted.
The impact from the disruption started to contagious after a few months the Covid-19 spread all over the world, for example, sudden shortage of raw materials and components, inventories were insufficient due to changes in product demand and major shipping companies were overloaded. The semiconductor business was already on the rise, but pandemics have made it difficult for many online brands to keep up with the unexpected surge in market demand.
In this study, we have discussed the details of the relationship between the supply chain adaptive strategies and semiconductor firm performance. On top of that, this study also deliberates further on the research finding and how to improve the key dimensions of supply chain strategies.
9. Conclusions
This conceptual paper attempts to determine the relationship between supply chain adaptive strategies and firm performance during Covid-19. A study has been made on several models established by other authors. The conceptual model discussed above shows the dimension of supply chain adaptive strategies which consist of robustness, agility, and resilience. The study proposed that there is a significant impact of supply chain adaptive strategies combining robustness, agility, and resilience on firm performance during pandemic Covid-19.
The findings provide a gateway to the study of the relationship between robustness, agility, and resilience in the field of supply chain adaptive strategies during pandemic Covid-19 towards semiconductors firm performance. To move forward with empirical research, a broader range
Firm Performance Supply Chain Robustness
Strategy
Supply Chain Agility Strategy
Supply Chain Resilience Strategy
of literature must be examined in order to gain useful information. Despite the fact that this is a conceptual paper, it is envisaged that the work will serve to enrich literature for scholarly reference as well as have a substantial impact on the semiconductors industries after the research is fully completed.
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