SUPPLY CHAIN RESILIENCE STRATEGY TO GENERATE BUSINESS PERFORMANCE IN DYNAMIC ENVIRONMENTAL CHANGE

Abstract

The COVID-19 pandemic has resulted in substantial and fluid environmental shifts, presenting notable obstacles for the continuity of business operations. The pharmaceutical industry has experienced a decline in performance due to the changing industrial landscape caused by the pandemic. The objective of this study was to examine the influence of supply chain management resilience on corporate performance in the face of ongoing environmental changes. Furthermore, the study aimed to investigate the impact of knowledge management capabilities, strategic agility, and supply chain integration on the development of resilience in the supply chain management process within the pharmaceutical sector of Indonesia. The research employed quantitative methods, specifically descriptive and explanatory studies. The statistical model used was the Structural Equation Model (SEM), specifically PLS-SEM. The study included a sample of supply chain and operations managers or directors from 243 pharmaceutical companies in Indonesia. The findings of the study indicate that both supply chain resilience and strategic agility have a positive and significant impact on business performance. However, the study presents a counterargument to prevailing assumptions by suggesting that the mere presence of knowledge management capability does not have a direct influence on business performance. On the contrary, it becomes evident as a vital facilitator, greatly augmenting both strategic agility and supply chain resilience. Furthermore, the study reveals a mediating role for supply chain resilience, emphasizing its ability to amplify the positive impacts of supply chain integration on business performance. The interplay between knowledge management capability, strategic agility, and supply chain integration underscores the intricate dynamics shaping resilience. It is worth noting that, despite the anticipation that dynamic environmental changes would impact supply chain resilience and business performance, the study did not find any significant moderation effect. Given these insights, it is important for the pharmaceutical industry to reassess the significance of knowledge management capabilities as a means of strategic improvement rather than a direct influencer. Embracing this nuanced perspective can promote resilience in the face of ever-changing environmental conditions, ultimately leading to the industry's strong growth.