1. Introduction
COVID-19 impacts a new normal way of life, including social activities, health, education, economic activities in the business sector, medicine, transportation, and telecommunications. The manufacturing industry is also vulnerable to the impacts of COVID-19 [
1]. Since the manufacturing sector is a contributor to Malaysia’s economic development, the negative effects of COVID-19 have impacted the nation’s economic growth, for example, supply chain disruptions, demand uncertainty, country border restrictions, and others [
2]. The impact of economic disruptions caused by lockdowns such as Movement Control Order (MCO) during this period weighed heavily on Malaysian manufacturers’ businesses during the first half of 2020. The COVID-19 pandemic and subsequent lockdowns have resulted in major disruptions to business activities, the global supply chain, and world trade. Lockdown reduces the spread of the virus. However, simultaneously, the country’s economy was also affected by the move. Malaysia’s former Prime Minister, Tan Sri Muhyiddin Yassin, stated that the government has suffered a total loss of MYR64.6 billion in the first 14 days of MCO since 18 March 2020 [
3]. If the MCO is continued, the potential losses will be higher, and more people will lose their jobs. The situation faced by the government right now is likened between the devil and the deep sea. Thus, it can be avoided by implementing a good strategy in company management, especially in supply chain management. One of the strategies is to determine which viable supply chain management factors will impact the company’s sustainability. As a result, the business can be sustained and survive during this pandemic.
The Purchasing Managers’ Index (PMI) is a useful tool for determining the direction of economic trends in manufacturing and for providing information about present and future business conditions to firm executives, analysts, and investors. The PMI is a numeric number between 0 and 100. A PMI value greater than 50 indicates that the economy has grown in comparison to the previous month, while a value less than 50 indicates that the economy has contracted. The more one deviates from 50, the bigger the magnitude of change [
4]. The PMI is intended to give an advanced signal of what is really happening in the economy. The PMI is based on responses from manufacturers about new orders from customers, production rate, employment rate, supplier deliveries, inventories, and import and export activities. Malaysia’s PMI continues to decline, falling to 48.4 points in March 2020 from 48.5 points in February 2020. The greatest slump was in April 2020, which was 31.3 from 48.4 in March 2020. The sector is contracting as a result of the negative economic impact of the COVID-19 outbreak. The PMI for the majority of countries involved in the MCO of COVID-19 is below 50. The fall in PMI can be attributed to a lack of new demand (new orders) from importing countries, a shortage of supply, and a slowdown in export and import activity [
5]. In Malaysia, the movement control order implementation at the end of March 2020 contributed to a negative impact on demand, buying levels shrank the most on record and employment declined modestly [
6]. Problems related to the supply chain have occurred again due to the emergence of new variants of COVID-19. In January 2021, Malaysian manufacturers reported more drops as the Omicron variant hit manufacturers all over the world, hurting demand and making supply chain delays worse than ever before. Malaysia’s PMI eased to 50.5 in January from 52.8 recorded in December 2021 [
7].
There is a lack of research on the relationship between VSCM practices and business sustainability in developing countries [
8,
9]. The studies on COVID-19’s impact on supply chain management and sustainability are also very limited [
10], especially in the manufacturing industry in Malaysia during the COVID-19 pandemic [
11]. In the published studies on the COVID-19 pandemic, however, little is known about the effectiveness of any particular supply chain reconfiguration and the severity of the negative impact of the COVID-19 pandemic on supply chain operations [
12]. Moreover, most of COVID-19 is focused on the medical science perspective, while the sustainable supply chain perspective is absent [
13]. The literature on viability and adaptation, on the other hand, is still fragmented, and little has been done to standardize current methods and adaptation strategies [
14]. Therefore, this study will help ascertain the practices of VSCM that contribute to the long-term viability of the business during the COVID-19 pandemic in Malaysia. Moreover, this study is expected to increase the number of studies regarding the impact of COVID-19 on supply chain management and company sustainability, since most of the COVID-19 studies right now are more focused on a medical science perspective.
According to [
14], the pandemic situation is unique in several ways. To begin, a pandemic is defined as a long-term disturbance whose dynamics must be anticipated. It entails not just preparing the supply chain for a pandemic but also rethinking supply chain operations for an extended period. Second, pandemic features include simultaneous interruptions at many supply chain echelons, as well as concurrent and sequential supplier, facility, and market openings and closures. Finally, in the event of an interruption, recovery procedures must be developed and implemented. As a result, supply chain management requires a more effective strategy to ensure that all aspects of its management can resist all threats and hence survive for an incredibly long time. Therefore, this study will look into the viability of supply chain management.
For now, the topic related to a viable supply chain is still new but has attracted the interest of researchers and academics to explore it in more depth. According to a study by [
15], he has assessed the impact of the COVID-19 pandemic on environmental sustainability and social sustainability in Brazil and Portugal. To measure these sustainability indicators, three dependent variables are used: environmental awareness, sustainable consumption, and social responsibility. However, this study focuses exclusively on the impact of COVID-19 with little emphasis on strategies or methods for improving supply chain management’s resilience toward company sustainability. A study by [
16] discusses only a few ways for strengthening supply chain viability through the combination of agility, resilience, and a sustainability viewpoint. However, this model has not been validated in practice, and the resulting consequences have not been seen and must be validated in real-time. This study has not yet been validated empirically, and this paradigm has not yet demonstrated its efficacy. Additionally, these five recommended variables have not been demonstrated to be associated with corporate sustainability. Although the author mentions the importance of paying special attention to these five variables to promote agility, viability, and resilience, their relevance to the company’s sustainability is not explored in detail or explicitly. Ref. [
17] has also identified 13 sustainable supply chain drivers based on the findings of 30 experts in the process of selecting sustainable supply chains. The limitations of this study include the acquisition of only 13 sustainable supply chain drivers, and this validation may be biased. This research also recommended that this theoretical framework be examined in further detail, employing statistical approaches like structural equation modeling and focusing on the sustainability of companies. [
18] has identified the main parameters that contribute to the survivability of SSCs. However, the factors affecting the supply chain are evaluated by a decision panel comprised of experts who may be biased. Additionally, only 18 experts are picked, which is insufficient to generalize the results to the entire population. This study advises using sensitivity analysis to determine the results’ robustness. Customers were excluded from this investigation under this scope. Thus, the expert group’s legitimacy might be questioned, as the customer is the primary party in the supply chain system. As a result of the current COVID-19 epidemic, practically all supply chains have been severely damaged, highlighting the need for stronger supply chain resilience techniques. There is still a need for more investigation into the effectiveness of prior studies’ COVID-19-related methods as well as the best mix of tactics to combat the pandemic’s negative impacts [
19]. Other studies have identified a variety of risk-reduction methods that may be used in the supply chain. However, the measures are more narrowly focused on a single party, namely the supplier or manufacturer, than on the entire supply chain. Moreover, single disruptions were more common than multiple disruptions in these studies, such as supply or demand, production, or transportation [
20]. Even though these steps are being taken, they are still considered insufficient because a complete supply chain involves three dominant parties: suppliers, manufacturers, and customers.
This study contributes to empirical research on the value of VSCM in Malaysia’s manufacturing industries. The primary contribution of this study is to provide management researchers with a ground-breaking idea for dealing with a pandemic situation in the current business environment. Furthermore, the goal of this research is to identify VSCM practices that contribute to company sustainability to control and revamp such future events. Also, the study recommended a VSCM framework that would enhance supply chain resilience and sustainability. This study also aims to persuade organizations and managers to invest time and resources in developing and implementing effective VSCM practices such as top management support, integration, digital technologies, information sharing, and customer focus. Effective VSCM implementation will contribute to the company’s sustainability, including social, economic, and environmental performance during the COVID-19 pandemic. Similarly, this study will assist businesses in enhancing the resilience and viability of their supply chains to ensure long-term survival during a pandemic.
5. Discussion
The findings of this study have demonstrated that viable supply chain management has a positive impact on the sustainability of companies. The direct relationship between VSCM and company sustainability has demonstrated a significant positive effect. The critical values for one-tailed
t-tests are 1.645 at the 5 percent significance level [
73]. If the
t-value of the hypothesis is larger than 1.64 at a significance level of 5%, the hypothesis is accepted. The t-value is 22.447, which is greater than 1.645, and the
p-value is 0.000, which is lower than 0.05. Thus, the hypothesis is supported and can be interpreted as saying that companies with VSCM practices will have better company sustainability during the COVID-19 pandemic.
A supply chain that can continue operating normally after a disturbance like the COVID-19 pandemic is an indicator of a viable supply chain. Based on the findings of this study, the results obtained are significant and are in line with previous studies. According to [
16], viability is the capacity to endure environmental change. It adds additional characteristics to the behavior and performance of the supply chain. The supply chain’s resilience to interruptions demonstrates its ability to prevent market collapse and continue supplying products and services. It assists the supply chain in maintaining itself and surviving a calamity of this nature [
14]. This study is in line with the findings of the study by [
75], who also stated that the supply chain in the pandemic era indeed needs elements of agility, resilience, and viability to ensure that company sustainability can be achieved. According to research findings from [
76] implementing viable and resilient supply chain strategies can help avoid long-term repercussions while coping with pandemic threats. This will help the business remain sustainable and last for a very long time. [
25] claims that supply chain viability is crucial for preserving and boosting regional industrial competitiveness in the wake of the COVID-19 epidemic. Companies that were able to quickly change the shares of trade with their suppliers and customers across borders had greater business outcomes even during the first year of the COVID-19 outbreak. This demonstrates that companies with a higher probability of survival were those that showed their viability and flexibility in the face of the COVID-19 crisis.
Because this viable supply chain is a subset of the new supply chain field, there are not many empirical studies on it. According to earlier studies, less attention is placed on the three sustainability-related factors. Most studies only focus on one or two of the three sustainability factors [
46,
47]. Moreover, according to [
77], issues with supply chain management will worsen during the pandemic due to factors such as forced production halts, erratic demand, inventory issues, increased logistics costs, postponed industrial operations, and issues with imports and exports. The sustainability of companies will be affected by all of these issues. In this research, five viable supply chain management practices influence the company’s sustainability during the COVID-19 pandemic, which are top management support, integration/partnership, digital technologies, information sharing, and customer focus. This study also shows that the five factors of VSCM have a positive impact on company sustainability.
The responsibility of top management in ensuring the company’s continued viability is critical. COVID-19 has compelled several companies to leave their comfort zones. Top management of the companies had to run the company despite limits in manpower, resources, and safety standards, such as the implementation of SOP [
78]. Ref. [
24] stated that the top management needs to put more effort into operational planning, such as manpower planning and production planning, by incorporating principles of agility and viability. This is due to how drastically different supply chain management was during the COVID-19 pandemic outbreak compared to supply chain management prior to the occurrence of this disruption. [
22] agreed that due to the fluctuating global economic climate and the unpredictability of client demand, they must make critical decisions more quickly based on actual information. To build resilience against potential threats, they also need to maximize the use of technology, such as virtual meetings, robotics, information technology, and so on [
55]. According to [
79], if the top management does not really implement any significant improvements in supply chain management, there is a very high likelihood that the business will fail. This is due to the company’s inability to attain sustainability. For example, the business encountered significant financial difficulties, a failure to control unpredictable customer demand, a shortage of raw resources, and workforce issues.
According to [
80], supply chain integration will enable operations to be flexible, allowing the participating supply chain partners to quickly and easily adapt to changing conditions with minimal cost. This integration is important to share accurate and detailed information with all supply chain partners [
9]. Ref. [
81] in their research, they stated that collaboration in the supply chain can reduce the bullwhip effect, since it increases visibility, which impacts inventory levels and company performance. To plan a more flexible and profitable supply chain management, effective integration must be done directly with suppliers, customers, and other stakeholders while considering the current constraints that impose pressure on manufacturers. Moreover, due to the fact that stakeholder groups either directly or indirectly impact the sustainability of a company, it is considered corporate suicide for a company to neglect sustainability [
82]. It is supported by the research findings of [
18], who identified integration as a significant tool to enhance the sustainability of the companies and the survivability of the supply chain. [
32] concluded that supply chain integration can give businesses access to particular resources that will help them become more resilient and ultimately perform better. To put it another way, companies must use their integration to promote resilience rather than solely concentrating on performance development if they want to succeed in the dynamic business environment of today. Eventually, this will give companies a competitive edge by enabling businesses to keep up their performance standards even during times of market uncertainty.
Ref. [
19] claimed that digital technology, in the pandemic era, has a very significant role to play in the execution of recovery strategies and plans. For instance, data analytics and blockchain can be utilized to gain real-time data analysis to enhance supply chain operations. As a result, these data enable top management to put the developed recovery strategy into action. Recent empirical research conducted by [
83] lends support to the idea that boosting recovery capabilities in the recovery window can be accomplished with the use of digital technologies such as Industry 4.0, blockchain, the Internet of Things (IoT), and digital manufacturing. Digital technologies play a critical role in helping businesses become more resilient and agile, in assisting businesses in surviving, shortening the recovery phase, and assisting businesses in returning to normal operations as quickly as possible [
33]. According to [
84], firms that use new digital technology quickly, as well as their employees’ flexibility and ingenuity, might come out of the crisis with safer, more productive, and more viable manufacturing processes, thus improving the company’s sustainability.
The integration of the supply chain is made possible through the sharing of information, which is crucial to the continued existence of businesses. These days, information sharing is more feasible than ever thanks to developments in information and communication technology [
85]. According to [
37], velocity, visibility, and flexibility in the supply chain can be increased by sharing information among all key members of the organization. Due to the possibility of suppliers and customers being located all over the world, especially during pandemics where travel restrictions are in place, it is absolutely necessary to integrate all activities in organizations [
86]. Realizing how important information sharing is, [
14] has listed this factor as one of the important factors in a viable supply chain management practice.
Almost all companies have had supply chain problems due to unexpectedly high or low demand. To face and conquer these obstacles, demand planning is essential. Companies are scrambling to figure out how to predict consumer demand in the wake of the epidemic, and they are searching for a more sophisticated approach to sales forecasting. According to a study by [
87], customer focus is an important element in supply chain management because it determines the level of sustainability of a company. Customer focus refers to efforts that are made to align and integrate a company’s supply chain with its most important customers. These efforts include things like integrating market information and developing common ordering processes via an existing shared network or information system [
55].
This study previously identified the Resource-Based View theory as the fundamental underpinning theory to reinforce a better understanding of viable supply chain management practices. According to the Resource-Based View (RBV) theory, a business must possess valuable, unique, and non-substitutable resources to achieve competitive advantages. RBV emphasizes the importance of internal and external resources such as knowledge, assets, capabilities, firm operations, firm attributes, and information in determining an organization’s performance. This study employs the following VSCM practices as internal and external resources: top management support, integration/partnership, digital technology, information sharing, customer focus, and CPFR. These practices, enhanced with the elements of agility, resilience, and viability, will become the company’s competitive advantage, especially during the COVID-19 pandemic. The coordination of these factors has the potential to significantly improve the performance and sustainability of the company. The underpinning theory in this study also provides a new contribution, especially when the results of this study can be seen in the context of the COVID-19 pandemic.
6. Conclusions
This research focuses on two key constructs: viable supply chain management and company sustainability. The measurement of VSCM is based on five dimensions: top management support, integration/partnership, digital technologies, information sharing, and customer focus. In the meantime, the sustainability of a company is assessed across three dimensions: economic performance, social performance, and environmental performance. To meet the challenge of COVID-19, supply chain management must undergo severe adjustments. COVID-19 has introduced a new dimension in which this supply chain must be enhanced by incorporating aspects of viability and durability into all supply chain management practices. There is always the risk that raw material supplies could abruptly decrease or that product demand will spike dramatically. Due to these disruptions, planning has become increasingly challenging. Supply chains need to be viable and robust so that they can withstand unexpected changes and adapt quickly to new circumstances. This study will continue by examining structural modeling in order to investigate the relationship between VSCM and company sustainability. The findings of this structural modeling investigation will assist the Malaysian manufacturing industry in fending off challenges such as COVID-19 and others.
Managers can decide on new solutions and conduct frequent evaluations of supply chain management’s resilience. These evaluations enable more effective and well-planned solutions for risk management. Additionally, they must be more sensitive to the most recent scenario and capable of making quicker and more precise decisions. In addition, they must develop a more complete strategy for dealing with issues such as lack of raw materials, production disruptions, limited workforce issues, lack of demand, etc. The majority of companies that incur losses do so due to a failure to structure their strategies and a reluctance to make decisions. In addition, they do not develop an alternative plan of action in case the initial strategy fails. So, this study has shown that there are a number of important supply chain management factors that need more attention if the company is to be more sustainable.
These five practices also include the SCM system’s three most crucial parties: suppliers, manufacturers, and customers. This study also answers the question of which supply chain management factors should be prioritized to increase the survivability and sustainability of companies during pandemics such as COVID-19. Moreover, this study is needed to determine the extent to which and how the strategies provided in previous studies aided supply chains in addressing COVID-19-related issues such as the bullwhip effect, increased demand, labor shortages, supply constraints, rapid technology transition, and global logistic constraints, as well as the optimal combination of strategies to address the pandemic’s effects. By using quantitative techniques to analyze the data, this study has also been empirically conducted. This empirical research on supply chain resilience and viability is done to better understand how businesses confronted with COVID-19 threats develop survival mechanisms to mitigate the pandemic’s threat. By incorporating viable supply chain management practices, this study will aid in mitigating the impact of COVID-19 disruptions on supply chain viability and resilience.
The reviewed literature has confirmed that past studies over the period have seen the important relationship that exists between these factors: viable supply chain management practices (top management support, integration/partnership, digital technologies, information sharing, and customer focus), collaborative planning (flexibility and responsiveness), and company sustainability (social, economic, and environmental) in the manufacturing industry during the COVID-19 pandemic. Previous studies have also demonstrated that the majority of studies conducted assessed these elements independently or individually in their research. To the best of the researcher’s knowledge, no research has been done on the interaction of these variables because the idea of VSCM is still relatively new, particularly in Malaysia’s manufacturing industry. To close this identified gap in the current literature, the researcher understudied by integrating all of the aforementioned factors to examine how they can work in one model. Hence, this piece of work adds to existing knowledge by positively validating the effect of VSCM practices on company sustainability in the manufacturing industry in Malaysia. The contribution has emphasized VSCM practices as a very important factor that could significantly influence company sustainability in the manufacturing industry.
The Resource-Based View Theory was chosen as the fundamental theory for this study to strengthen our grasp of the model for viable supply chain management practices. The resource-based view (RBV) idea states that for a company to have a competitive advantage, its resources must be valuable, unique, and non-replaceable. RBV emphasizes the significance of both internal and external resources in determining an organization’s success, including knowledge, assets, capabilities, firm operations, firm attributes, and information. As both internal and external resources, this study makes use of the VSCM practices of top management support, integration/partnership, digital technology, information sharing, and customer focus. In particular, during the COVID-19 pandemic, these practices, strengthened with the components of agility, resilience, and viability, will become the company’s competitive advantage. The performance and the company’s sustainability could be greatly enhanced via the coordination of these elements. The use of RBV theory in this study also provides a new contribution, especially when the results of this study can be seen in the context of the COVID-19 pandemic. The contribution refers to the theoretical grounding of the study within the RBV theory to better appreciate the viable supply chain management methods within the industry as well as the related behaviors of the variables participating in the study.
The limitation of this study is that the scale proposed in this study was only investigated in the context of supply chain management in the manufacturing industries, since the current scenario calls for unprecedented approaches to address the supply chain management issues caused by COVID-19. If this study is conducted in other industries, such as service, construction, or retail, the results will undoubtedly differ. Since the idea of effective supply chain management is fairly new in relation to the COVID-19 epidemic, more research is needed in this area so that more strategies can be used to deal with long-term interruptions.