A transformative supply chain response to COVID-19
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A transformative supply chain Transformative
supply chain
response to COVID-19 response
Diane A. Mollenkopf and Lucie K. Ozanne
Department of Management, Marketing and Entrepreneurship,
University of Canterbury, Christchurch, New Zealand, and
Hannah J. Stolze Received 7 May 2020
Wheaton College, Wheaton, Illinois, USA Revised 13 June 2020
24 June 2020
Accepted 25 June 2020
Abstract
Purpose – This research employs a transformative service lens to examine the role of the supply chain
ecosystem in ensuring the health and safety of employees and customers as a well-being outcome during the
coronavirus disease of 2019 (COVID-19) pandemic.
Design/methodology/approach – This is a conceptual paper examining the response of the supply chain to
the current food crisis caused by the pandemic.
Findings – Based on the service-dominant logic (SDL) paradigm, the COVID-19 examination of the supply
chain ecosystem provides a foundation for further research employing a transformative lens.
Research limitations/implications – The COVID-19 situation is primarily explored from a Western,
educated, industrialised, rich and democratic (WEIRD) societies’ context. Future research should explore the
applicability of the transformative service lens to other societies.
Practical implications – The conceptual discussion and research agenda provide direction for researchers,
practitioners and policymakers towards a transformative supply chain ecosystem.
Originality/value – This research includes the well-being of employees and customers in the service supply
chain outcome measures, draws supply chain management into the TSR domain, while also solidifies a service
ecosystem perspective of supply chain management.
Keywords Service ecosystems, Food supply chain, COVID-19, Transformative service research, Well-being
Paper type Research paper
Introduction
The coronavirus disease of 2019 (COVID-19) crisis has drawn attention towards both the
capability as well as the fragility of the food supply chain in meeting consumers’ needs.
Disruptions in the supply chain and sudden changes in consumers’ behaviour suggest the
need for renewed attention to the underlying processes involved in food production and
distribution. The service-dominant logic (SDL) perspective provides an appropriate
paradigm for supply chain scholars and practitioners to move past a traditional focus on
goods, to understanding supply chain activities as processes with which to co-create value
with customers (Lusch, 2011), which may be particularly relevant in these uncertain times.
Supply chain management scholars increasingly perceive supply chains as networks or
systems that form a service ecosystem of resource integrators in the value co-creation process
(Ketchen et al., 2014; Stolze et al., 2016). This evolving perspective comes as scholars and
business practitioners address social and environmental concerns related to long-term
sustainability. The instrumental logic of 20th century economic primacy is now coming to
terms with the broader role of business in creating social and environmental outcomes
(Aksoy et al., 2019).
Simultaneously, scholars have identified improved well-being through transformative
service as a key priority for service organisations and service researchers alike as well as the
need to protect vulnerable consumers in the service setting (Ostrom et al., 2010, 2015).
Transformative service research (TSR) traces its origin to the transformative consumer Journal of Service Management
research (TCR) movement (Rosenbaum et al., 2011) which challenges consumer researchers © Emerald Publishing Limited
1757-5818
to focus on enhancing the well-being of individuals (e.g. consumers and employees), families, DOI 10.1108/JOSM-05-2020-0143JOSM communities and ecosystems (Mick, 2006; Pettigrew et al., 2014; Prothero et al., 2011). Well-
being is defined as “a state of flourishing that involves health, happiness and prosperity”
across physical, emotional, social, economic, spiritual, environmental and political
dimensions (Mick et al., 2012, p. 6). TSR extends the TCR agenda by pointing to the
ubiquitous nature of services in consumers’ lives and the potential of service entities to
impact well-being (Anderson et al., 2013; Rosenbaum, 2015). While traditional service
research focusses on outcomes such as customers’ satisfaction and loyalty as a means
towards improved firm profitability, TSR focusses on the role that services play in affecting
individual and collective well-being (Rosenbaum et al., 2011).
TSR scholars have explored a myriad of topics, including the adoption, impacts and
design of transformative services (Anderson et al., 2018; Alkire et al., 2019; Black and Gallan,
2015; Edgar et al., 2017; Leo et al., 2019; Mende and van Doorn, 2015), but have yet to fully
address the role of the supply chain in bringing about enhanced individual and collective
well-being outcomes (Ostrom et al., 2010). This gap is important to remedy in light of the
COVID-19 pandemic, which has revealed the importance of supply chains in delivering vital
goods and services within society. Of most relevance to the current research study, Nasr and
Fisk (2019) challenged service researchers to explore real-world problems, while
Finsterwalder et al. (2017) argued for an ecosystem approach. Employing a TSR lens, the
purpose of the current research study is to examine the role of the supply chain ecosystem in
enabling the safe provision of food during the pandemic. The key to this provision is ensuring
the health and safety (i.e. protection from viral infection) of employees and customers as a
well-being outcome. In doing so, this research includes the well-being of both employees and
customers in the service outcome measures, draws supply chain management research into
the TSR domain, while also solidifies a service ecosystem perspective of supply chain
management.
Supply chains as service ecosystems
While supply chain management has traditionally resided within the goods-dominant realm,
logistics operations and outcomes address service management issues (e.g. Mentzer et al.,
2001). Logistics operations focus on creating value through the integration of products and
services (Bouzaabia, et al., 2013; Heaslip et al., 2018). As organisations work to enhance
service offerings, third-party logistics (3PL) providers play a liaison role amongst supply
chain organisations, orchestrating resources between manufacturers, retailers and
consumers (Zacharia et al., 2011). The integration of products and service offerings has
also been critical in the e-commerce and omnichannel retail environments. For example, an
Amazom.com shopping cart includes a product and logistics service such as delivery offered
on an online retail service platform. Retailers operating in omnichannel environments
increasingly compete on services that transcend their traditional focus on the provision of
goods (Peinkofer et al., 2016).
The field of humanitarian logistics and crisis recovery also demonstrates a strong focus on
service management as well as the potential for collaboration between resource integrators in
the supply chain to bring about successful responses to a crisis. Logistics service operations
account for 80% of humanitarian aid costs tied to distribution of emergency relief goods such
as water, food and shelter (Jahre et al., 2015). The current trend in international humanitarian
service organisations is to develop shared logistics services that can be offered to each other
within the disaster recovery ecosystem (Heaslip et al., 2018). This demands a shift from the
traditional, reductionist supply chain management perspective (e.g. goods delivered
efficiently) to a more holistic service supply ecosystem perspective.
Thus, the service ecosystem view of supply chains, supported through the SDL
perspective, provides an appropriate base for exploration of the food supply chain response
to the COVID-19 crisis. One important aspect of the service ecosystem is the recognition thatconsumers are an integral part of the ecosystem along with the various organisations that Transformative
make up the supply chain network, especially due to the emphasis on value co-creation supply chain
(Gr€onroos, 2011). The supply chain network has been in flux as multiple organisations have
had to work together in new ways to ensure the provision of food amidst disruptive forces.
response
Fundamentally, the supply chain ecosystem concept builds on systems thinking, in which
a service system acts as a dynamic network of exchange consisting of interactions between
actors (Barile et al., 2016; Finsterwalder et al., 2017; Vargo and Lusch, 2016; Spohrer et al.,
2007; Stolze et al., 2016). However, supply chain researchers have traditionally focussed on
economic performance as the outcome of the ecosystem. Shifts towards social and
environmental sustainability (Montabon et al., 2016) provide evidence of additional outcomes
that should be considered. This shift can be accelerated by adopting the TSR focus on well-
being outcomes (Anderson et al., 2013; Anderson and Ostrom, 2015). A transformative
approach recognises the potential for supply chains to provide access to goods and services
that improve individual and collective well-being. This shift aligns the supply chain
ecosystem concept with the approach advocated by Finsterwalder et al. (2017) in the TSR
literature. A transformative supply chain ecosystem captures the network of organisations
that interact to coordinate information and exchange resources to source and distribute
supply to meet demand with the well-being of organisations, individuals and society as end
goals. Sustainable food production and availability play a pivotal role in the well-being of
people, individuals and organisations as well as the well-being of the planet and the natural
environment. Thus, food supply chains are uniquely poised to have a transformative effect on
the collective well-being of both people and the planet.
The supply chain service ecosystem response to the coronavirus disease of 2019
crisis
Although the COVID-19 pandemic is seen first and foremost as a health crisis, it is also a food
crisis. In the USA, the food supply system has evolved over decades from being locally and
regionally based, to becoming a global network of relatively few large multinational
companies (Roth et al., 2008). Although research has addressed environmental and social
sustainability within the food supply chain, the underlying focus of cost performance has
predominated (e.g. Pullman et al., 2009) with emphasis on efficiency, predictability and tight
control of inventories (Charles, 2020). The magnitude of the COVID-19 crisis exposes the
fragility of the entire food supply system, providing a rare opportunity for researchers to
explore this system and its underlying dynamics in real time.
COVID-19 has brought the food supply chain into the public arena as consumers and
supply chain organisations react to the crisis. Consumers have reacted by hoarding products
in the face of real and anticipated food shortages (Hall et al., 2020; Venuto, 2020). They have
dramatically shifted their shopping behaviour to online purchase/delivery options, far
outstripping the supply chain’s immediate ability to cope (Dunkley, 2020; Smith, 2020). Many
consumers are struggling to afford food, given the sudden loss of employment and shifting
demand to food pantries (Charles, 2020). Within the supply chain, the sudden shifts in
demand and health-related regulations have caused profound disruptions such as
farmworkers not being available to harvest crops, the collapse of the food service/
restaurant sector and changing working conditions in food processing plants inhibiting
productivity (Cagle, 2020; Corkery and Yaffe-Bellany, 2020a; Hall et al., 2020; Yaffe-Bellany
and Corkery, 2020).
The COVID-19 crisis has provided an opportunity for transformation in the food supply
chain towards well-being outcomes. Much of what is known about the food crisis comes from
media reports documenting the food-related effects of the pandemic, which have been
distilled into four themes, as depicted in Figure 1. The new normal of food supply chains is yet
to be achieved or understood but can be anticipated by understanding these key themesJOSM Figure 1. Interrelated supply chain themes identified during the coronavirus disease of 2019 pandemic
underlying the current situation. Hindsight evaluation will certainly be able to cast a more Transformative
reflective light on the food crisis. supply chain
response
The crisis response through changed service operations
Particular attention now turns to changes in the supply chain ecosystem related to a
well-being outcome that has suddenly become paramount that of employees’ and customers’
health and safety. Across the supply chain, significant challenges must be overcome to keep
employees at safe distances from each other to minimise disease transmission (Tuzovic and
Kabadayi, 2020). While some work occurs in traditional production environments such as
meat processing facilities (Parshina-Kottas et al., 2020), much food supply chain work also
occurs in service operations such as distribution centres or call centres. Organisations have
responded with changed work routines, flexible hours and work locations (work-from-home
options), protective barriers between employees, to name a few operational changes.
The food retail environment represents a particularly important context due to the
intersection of employees and consumers in the same servicescape (Bitner, 1992). Thus, safety
and health become especially important as outcomes of such service operations, as previously
established in hospital (Parish et al., 2008), airport (Jeon and Kim, 2012) and other service
settings (Kuppelweiser and Finsterwalder, 2011). Retail operational processes, or retail
logistics, have moved from a focus on store image, satisfaction and loyalty intentions
(Bouzaabia et al., 2013) to minimising exposure risk, from shifting shelf-restocking to
off-hours; managing flow through a retail store in terms of volume of customers at a time and
directional movement throughout the stores; tangibilising safety measures through floor
markings, in-store signage and sanitation stations throughout the store (Bove and Benoit,
2020); checkingout sneeze guards separating employees from customers; contactless
payment options. Store operating procedures such as opening hours and dedicated
shopping hours for vulnerable consumers have also been enacted to protect both employees
and consumers (Ostrom et al., 2015; Dietrck et al., 2017). Technological solutions also allow
shoppers to shop online but pick-up their pre-packed orders with minimal contact (either in
designated locker locations or at kerbside), with concomitant changes in workers’
responsibilities and customers’ engagement in the food shopping experience. Shoppers’
behaviours have also changed with mask-wearing, contactless payment procedures or store
navigation behaviours. Both shoppers and store employees are taking on co-creation
responsibilities to protect their health during the shopping experience (Vargo and
Lusch, 2008).
With the growth of e-commerce, home delivery logistics services have grown rapidly in
the past decade (Jara et al., 2018). Food retailers have been developing online presence with
home deliveries for years (Cairns, 1996; Heim and Sinah, 2001) but with the COVID-19 crisis
have been suddenly hit with a level of demand that has proved difficult to fulfil (Bhattarai,
2020). Scholars have been documenting the customers’ expectations of last mile logistics
services since the early days of e-commerce (Esper et al., 2003; Mentzer et al., 2001) as well as
operational service challenges that increasingly include managing crowdsourced delivery
services (Castillo et al., 2018). The COVID-19 crisis has created a new set of challenges to
which supply chain managers must respond. As demand for home delivery services has
surged, supply chain organisations have had to adapt their own supply replenishment
processes, their order fulfilment processes and hire new employees to be trained in the
specifics of order picking and home delivery (Dodds, 2020). While retailers have faced the
majority of this demand, other supply chain organisations that are traditionally further
upstream, such as wholesalers or even farmers, are also now providing home delivery service
provision (Criddle, 2020; Peyton, 2020; Rao, 2020). Some retailers have adapted quickly to the
increased demand and have innovated new operational approaches to serve customersJOSM through the development of “dark-warehouses”, which are essential distribution centres with
retail store layouts catering solely to online customers with no physical customers present
(Broughton, 2020).
Employees’ and consumers’ safety and health issues have become important elements of
the last mile service provision. Customer service expectations now include the desire to stay
safe and healthy during the shopping experience (Esper, 2020). Thus, contactless delivery
becomes an important service attribute in addition to traditional measures of timeliness and
order accuracy (Wolfe, 2020). Work environments that foster healthier and more protective
situations for both employees and customers will need to be incorporated into measures
systems that have focussed on traditional measures of order fulfilment efficiency and quality.
The crisis response involving other stakeholders
The food supply chain ecosystem involves other stakeholders as well, whose roles have also
become much more visible during the pandemic. One important stakeholder includes the
government. The food industry tends to be highly regulated in many nations, with a safe and
secure food supply considered to be a “primary tenet underlying social stability” (Whipple
et al., 2009, p. 575). Food contamination or adulteration that might occur along the supply
chain can result in social impacts of illness or loss of life, while also creating negative
economic impacts for firms or even entire industrial sectors (Bell et al., 2016). For these
reasons, agencies such as the Food and Drug Administration (FDA) or the United States
Department of Agriculture (USDA) regulate the handling and processing of food throughout
the supply chain and hold companies responsible for safe operating practices. But current
regulation focusses on pathogen-related food safety within the supply chain, not pathogen-
related human safety. The COVID-19 pathogen presents a new arena for considering the role
of government regulations within the food industry that may be focussed on employees’ and
customers’ health and safety. Concern over workers’ safety has hindered organisations’
ability to move product to market, resulting in temporary shortages in some nations
(Esper, 2020). Government agencies are also facilitating exchange between non-traditional
partners (e.g. farmers and food pantries), acting as resource integrators to ensure the supply
of food to those in need (Corkery and Yaffe-Bellany, 2020b).
Government liaison activities between producers and organisations that cater to food-
insecure communities – e.g. food pantries and shelters – highlight another important
stakeholder group in the food supply chain ecosystem, whose role has been elevated by
COVID-19. These organisations have played a significant role during the pandemic, as
demand for food has risen sharply due to sudden rises in unemployment. Food pantries have
felt a double-hit during the crisis, as usual sources of supply suddenly dried up when
restaurants and food service operations closed, forcing new supplier arrangements with food
service wholesalers and even farmers (Corkery and Yaffe-Bellany, 2020b). Simultaneously,
preparing and serving available food became challenging due to these organisations’ reliance
on volunteer labour – a labour pool now concerned about health and safety while
volunteering. Managing to secure food and keeping workers and recipients safe while
distributing food to those in need have become a logistical service challenge for these
organisations. While emergency food provision may be similar to disaster recovery or
humanitarian crisis situations, food pantries are not temporary solutions in a confined
geographical area, as might be seen in a hurricane-ravaged area. Instead, food pantries seem
to play a more permanent role in many societies and that role has taken on increased
importance as the pandemic has evolved. Logistical service solutions will be needed to meet
demand under new conditions of both food and labour supply shortages.The transformative supply chain service ecosystem Transformative
The previous discussion has highlighted service operations’ issues relating to health and supply chain
safety outcomes of workers and customers in the food supply chain ecosystem. There are two
important points to address from the previous discussion. First, individual actors have been
response
the focus in highlighting service-related issues for various actors due to the COVID-19 supply
chain disruption. Each of these actor groups constitutes an element within the ecosystem. But
ecosystems, by their nature, are characterised as much by the interactions between actors as
by the individual actors’ actions themselves. It has been important to first establish the
changing service landscape for actors within the food supply chain ecosystem, whether they
be organisations, government or non-government agencies or consumers. But equally
important will be consideration of the interactions between ecosystem’s participants. New
exchange or information-sharing relationships between ecosystem’s members will be
particularly important to address. Equally important will be consideration of the ways in
which consumers interact with various providers, whether they be organisational employees,
volunteers or more faceless interactions with organisations/agencies. Table 1 begins to
highlight important research directions for scholars addressing food supply chain issues,
whether in response to COVID-19 or any other potential supply chain disruption, particularly
within an ecosystem approach. The COVID-19 pandemic has highlighted the importance of
how perceptions of value can change rapidly. The SDL ecosystem approach adopted in this
research provides paradigmatic grounding for considering value creation and its evolution
within the food sector.
Second, COVID-19 has not only revealed the fragility of the food supply chain but also its
latent capacity and resiliency to adapt and protect consumers’ and employees’ health and
safety when confronted with a disruption. While supply chain researchers will need to
address issues of traditional concern, such as capacity management within the system,
efficiencies of production and distribution, store and delivery operational productivity and
service quality, the focus on health and safety outcomes for employees and customers
emphasises the opportunity for the supply chain ecosystem to also be considered part of the
transformative service movement. The focus on health and safety as a well-being outcome
has received sudden and significant attention by companies, policymakers and consumers
alike. To that end, Table 1 highlights important research directions for scholars to develop a
transformative focus around health and safety. Given the service ecosystem perspective
provided by the SDL paradigm, the research directions suggested in Table 1 not only address
new forms of service operations to enhance health/safety but also suggest the need for new
measures of health/safety well-being outcomes as part of supply chain performance metrics.
It must be recognised that health and safety represent only one well-being outcome of the
food supply chain ecosystem. As discussed within this paper, health and safety have been
primarily presented as individual-level outcomes. But a transformative agenda suggests that
not only do scholars, organisations and policymakers need to consider individual-level
outcomes but also outcomes at organisational, community and societal levels. Such
discussions are beyond the scope of this initial foray into transformative supply chain
ecosystems but will enrich the literature, and practice by considering the outcomes of health
and safety at broader levels of analysis. Particularly with a COVID-19 type of disruptive
force, how can the food supply chain ecosystem’s efforts to protect individual-level health and
safety create outcomes at broader community and society levels? What are organisational,
community or societal perceptions of value when considering the food system’s role in
community-level protection from a viral disease, for example? Beyond the health and safety
outcome, what other well-being outcomes should food supply chain ecosystem participants
address in their own business activities or in interactions with each other? These remain
important directions for future research that have been beyond the scope of the current
research study.JOSM Health and safety
well-being Research opportunities
Food production and distribution
(1) Keeping employees (1) What are the operational risks of existing or proposed operating processes
at safe distances to ensure employees’ health?
and/or providing (2) How should employees’ health/safety be measured?
protective (3) What operational changes need to be implemented in order to ensure higher
equipment to levels of employees’ health/safety? What are the impacts on productivity?
minimise disease (4) What are consumers’ reactions to organisations’ efforts to improve
transmission risk employees’ health/safety?
The retail servicescape and retail logistics
(1) New operational (1) How have operational changes impacted store operations and productivity?
procedures to (2) What is the customers’ response to retailer efforts to protect their health/
manage safety?
–flow of customers (3) How do consumers respond to changes in service provision, in terms of
–employees’ activities retailers’ loyalty and customers’ satisfaction? How do customers’
–interactions between satisfaction measures need to change to capture new perceptions of how
customers and employees customers evaluate their shopping experiences?
(2) New operational (4) How have perceptions of value co-creation changed in light of these
procedures to protect operational changes?
vulnerable
customers
–special operating
hours
–locker pickups
–kerbside pickups
Last mile service operations
(1) New operational (1) How do dark warehouses or other operational solutions impact firms’
fulfilment services performance and employees’ work environments?
through dark (2) How do retailer-based operant resources related to special order fulfilment
warehouses processes support social distancing, sanitising or contactless interactions
(2) Home deliveries between employees and customers?
provide enhanced (3) How do customers and employees respond to this form of shopping/
safety protection of delivery?
contactless delivery (4) How does value co-creation occur?
(5) How are perceptions of value changing for consumers (and retailers) with
this new form of shopping?
Government agencies
(1) Local or national (1) How do changing regulations impact productivity as well as employees’ and
government customers’ health throughout the supply chain?
agencies impact food (2) How does the government influence value co-creation processes?
production and
distribution services
Table 1. through regulatory
Transformative supply actions
chain research
opportunities (continued )Health and safety
Transformative
well-being Research opportunities supply chain
response
Food pantries
(1) Finding new sources (1) How do food pantries fulfil customers’ needs? Consider the societal role in the
of supply, changing food supply chain ecosystem
operational practices (2) What does value co-creation look like in this community segment? And how
to accommodate have perceptions of value changed in the face of the pandemic?
changed sourcing
and lot sizes
(2) Scaling service
operations to
accommodate higher
demand, often with
limited staff
(3) Engaging with other
stakeholders to
facilitate the ability
to serve needy
communities
(4) Ensuring health and
safety of volunteer
workers and
customers
Food supply chain ecosystem
(1) Inter-organisational (1) How do the different ecosystem actors interact to coordinate information
processes and and exchange resources to source and distribute food supply and to meet
interactions demand?
(2) What are the well-being outcomes for organisations, communities and
society as a whole?
(3) What other well-being outcomes should be incorporated into the food supply
chain ecosystem? Table 1.
Finally, the COVID-19 pandemic not only reveals the fragility of the food supply chain
ecosystem but also its inherent potential to adapt to meet societal needs and protect and
enhance the well-being of individuals and ultimately society. The representation of the
COVID-19 food supply chain response presented in this paper is probably most true for
Western, educated, industrialised, rich and democratic (WEIRD) societies (Henrich et al.,
2010). Future researchers are encouraged to move beyond this context to highlight issues and
solutions for transformative food supply chains to support individual and collective well-
being across a broader spectrum of social contexts.
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Corresponding author
Lucie K. Ozanne can be contacted at: lucie.ozanne@canterbury.ac.nz
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