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Running head: An Overview of Supply Chain Structures and Relationships
An Overview of Supply Chain Structures and Relationships: The Impact of COVID-19 on
Supply Chain Evolution and Integration
Shirley Green
School of Business, Liberty University
Author Note
Shirley Green
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Shirley Green.
Email: [email protected]
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Running head: An Overview of Supply Chain Structures and Relationships
Abstract
Supply chain structures and relationships have faced many challenges over the last few years,
encountering disruptions, inflation, political conflicts, and global economic uncertainty, all
brought on by the recent global pandemic that rattled the world. The supply chain field has
evolved through these challenges, becoming highly modernized with technological tools such as
artificial intelligence, robotics, and the Internet of Things. Supply chain structures can be very
complex, with a strong interdependence of elements within itself and outside factors that impact
the uncertainty and direction of the industry. This paper will study and review the previous and
current literature on supply chain structures and relationships to understand the direction the field
is taking. A deep dive into the supply chain structure and relationships will be conducted and
broken down into parts, looking at the structure makeup and integration. For example, supply
chain structures can take many forms: agile, linear, continuous flow, fast chain, efficient chain,
and others with slight variations. Supply chain relationships have several ranges and influences
that impact the supply chain's resiliency and efficiency, directly affecting its success. The
research will show that though there have been many studies conducted on the impacts of
COVID-19, there are still many more aspects of the pandemic that need to be studied for further
understanding of supply chain management and the various strategic plans businesses will need
to utilize to maintain sustainability and overall optimization.
Keywords: supply chain, supply chain management, supply chain relationships, collaboration,
COVID-19, technology
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Running head: An Overview of Supply Chain Structures and Relationships
Literature Review Outline
I. TITLE PAGE
II. ABSTRACT
III. INTRODUCTION
IV. LITERATURE REVIEW FINDINGS
A. Supply Chain Structures
1. Linear vs. Circular
2. Agile
B. Supply Chain Integration
1. Vertical Integration
2. Horizontal Integration
C. Supply Chain Relationship Range
1. Collaboration
2. Co-opetition
D. Relationships Within a Supply Chain
1. Supplier – Manufacturer
2. Manufacturer – Retailer
3. Retailer – Consumer
E. Influences on Supply Chain Relationships
F. Supply Chain Cost Management
G. Supply Chain Challenges
1. COVID-19 Impact on Supply Chain Management
a. Disruptions
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Running head: An Overview of Supply Chain Structures and Relationships
b. Global Economic Uncertainty
H. Supply Chain Evolution
1. Technological Advancements
a. Fourth Industrial Revolution (Industry 4.0)
2. Environmental Social and Governance (ESG) Requirements
V. CONCLUSIONS
VI. RESEARCH SUGGESTIONS AND RECOMMENDATIONS
VII. REFERENCES
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Running head: An Overview of Supply Chain Structures and Relationships
Introduction
There is a vast literature about supply chain management, structures, and relationships
today. Supply chains (SCs) can be composed of various structures and integrated in multiple
ways. SC structures have several relationship dynamics that can alter the operation's
functionality and influence its effectiveness. The costs associated with SCs have numerous
components and can be challenging to manage, but they can be successfully managed with
careful planning and strategic decision-making.
More recently, supply chain management (SCM) has undergone a technological
revolution characterized by digitization, lean and sustainable practices, customer awareness, and
changing customer expectations (Jolbauer et al., 2023). With this revolution came many
economic and competitive changes that required organizations to approach SCM differently and
innovate operations. Environmental, social, and governance (ESG) requirements have also
contributed to the evolution of SCs, with more light being shed on how businesses operate
regarding investors' prioritization of these issues.
COVID-19 emphasized many vulnerabilities within SCs and forced several businesses to
implement new strategies to remain sustainable. Though many studies have examined the
evolution of SCs following the impact COVID-19 had on this industry and the strategies
organizations should utilize to remain sustainable and optimal in today’s uncertain economic
environment, several unanswered questions remain regarding the disruptions caused by the
global pandemic. This study thematically reviews the current literature on SC relationships and
structures and identifies literature gaps regarding COVID-19 aftershocks to SCM operations.
This study suggests that utilizing different strategic partnerships in SCM can help
minimize COVID-19 impacts and be preventative for unforeseen future events and challenges.
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Running head: An Overview of Supply Chain Structures and Relationships
Traditional and modern SC structures are discussed and compared, leading to the two main types
of integration used in SC operations amongst organizations: vertical and horizontal. These two
integration types are discussed and compared, giving an overview of why companies would
utilize each.
The two central strategic partnerships discussed in this study are collaboration and co-
opetition, emphasizing the need for businesses to do one or both for more optimality and
operational success. This study also evaluates supplier, manufacturer, retailer, and consumer
relationships, diving into their interconnectivity and impacts on one another within the SC. SC
costs, challenges, and impacts are also researched and discussed, highlighting the importance of
innovation and technology to combat these challenges. The evolution of SCs through Industry
4.0 technologies is also discussed in this study, along with environmental, social, and governance
requirements. The study also provides further research recommendations into sustainability
practices and long-term COVID-19 impacts on SCM.
Literature Review Findings
Supply Chain Structures
This section discusses some of the most popular SC structures in industries today,
highlighting their impacts and usefulness in managing sustainability and responses to uncertain
environments.
Linear vs. Circular
Linear supply chain structures are more traditional for manufacturing companies,
focusing on constantly making and disposing of goods. These structures catered to the initial rise
of globalization and economic development, triggering a cost deduction in manufacturing
industries and increased consumer purchasing power, which led to a cycle of constant
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Running head: An Overview of Supply Chain Structures and Relationships
purchasing, using, and disposing of goods (Roy et al., 2022). This has triggered a demand for
natural resources, leading to significant waste and emissions. With populations steadily growing,
the demand for these resources is increasing along with the need to measure them (Roy et al.,
2022).
Circular economies have recently become more prevalent in various industries, governments,
and academia. They involve a circular flow of materials and products that reduces waste and
environmental impacts overall by organizations in their SCs (Roy et al., 2022). Restoring
materials to an organization requires innovative thinking and reconstructing traditional supply
chain practices.
The circular process includes multiple partners in the supply chain to reuse, repair, and
recycle. Collaboration (which we will discuss in later sections) is a key component to the success
of the circular structure, wherein symbiotic relationships would lead to more sustainability and
waste reduction. An example would be McDonald’s cooking oil being redistributed and used for
biodiesel to power supply delivery trucks rather than discarded as waste (Roy et al., 2022).
Many companies struggle to transition their operations from linear to circular supply
chain structures, despite the circular concept having a strong focus on environmental and
economic performance through efficiently using resources and eliminating operational leakages
(Sudusinghe & Seuring, 2022). It is nearly impossible for a single manufacturer to redesign their
value chain to implement circular economy practices because many other players are involved in
the production, distribution, and consumption processes (Roy et al., 2022). This concept's
challenges are critical to creating strategies to mitigate the risks of transitioning from traditional
linear supply chain frameworks to circular ones.
Agile
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Running head: An Overview of Supply Chain Structures and Relationships
Agility and its associated practices stem from software development in the 20th century,
emphasizing rapid iteration, collaboration, and strong customer focus (Sadikoglu & Demirkesen,
2024). The connection between software development agility practices and physical goods was
how quickly and effectively an organization could respond to change (Sadikoglu & Demirkesen,
2024). Though agility is commonly interchanged with flexibility, adaptability, and resilience, it
is primarily focused on time and speed of response, often facing unpredictability (Sadikoglu &
Demirkesen, 2024).
Many organizations have become challenged by the dynamics of operations, product
variety, and the shortened life cycles of products. COVID-19 has contributed to supply chain
disruption and material shortages, leading to unstable prices. Facing instability, change, and
uncertain environments, agility has become essential for SC operations, with a strong focus on
healthy interrelations between partners to maintain a competitive advantage (Sadikoglu &
Demirkesen, 2024). This is mainly because SCs are units of competition rather than one singular
organization.
Supply chain agility is mainly used in the manufacturing industry but has the potential to
be applied to many others. Mutambik’s research study found that digital transformation
strengthened partnerships by promoting collaboration and communication, leading to significant
advancements in SCs (2024). Strategic alliances and digital advancements are crucial for
achieving agility (Mutambik, 2024). It can also improve the competitive advantages and enhance
the overall functionality of SCs (Mutambik, 2024).
Supply Chain Integration
This section discusses vertical and horizontal integration within SCs, highlighting the
benefits and challenges of implementing both strategies.
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Running head: An Overview of Supply Chain Structures and Relationships
Vertical Integration
Vertical integration refers to a business's control of the SC and several stages of its
production processes, reducing the use of third-party dependency (Messina, 2022). Vertical
integration can range from zero integration, typically when a company purchases a completed
product to resell, to fully integrated, where a company does not rely on outside help (Messina,
2022). The process allows companies to consolidate by taking more ownership in the SC rather
than relying on it.
Vertical integration can be implemented whenever a business wants to use it and gain the
upper hand strategically (Messina, 2022). A company’s level of integration affects the freedom it
has to control design, the quality used, and costs. This all ties back into customer satisfaction,
where customers will always have access to quality products at more competitive costs to
guarantee satisfaction (Messina, 2022). Vertical integration means more commitment to a
specific company or technology that could lead to less flexibility when market trends change
(Messina, 2022).
Horizontal Integration
Horizontal integration involves the acquisition of a competitor or a similar business to
expand a customer base and capture more of the market (Messina, 2022). This would benefit a
company because more market share and customers lead to more profits at a higher scale of
economy while diversifying the organization’s portfolio and reducing competitors in the market
(Messina, 2022). Companies implementing horizontal integration could face the challenges of a
failing merger due to company cultures not mixing. (Messina, 2022). Vertical integration means
more commitment to a specific company or technology that could lead to less flexibility when
market trends change (Messina, 2022).
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Running head: An Overview of Supply Chain Structures and Relationships
Supply Chain Relationship Range
SC relationships are crucial for providing customers with quality products. By
maintaining a steady flow of goods and services, strong connections can help businesses better
anticipate challenges and prevent disruptions. This section will discuss the two types of SC
relationship ranges related to the research topic.
Collaboration
SC collaboration can improve sustainability performance, with organizations working
together to achieve shared goals to combat changing environments (Sudusinghe & Seuring,
2022). Companies can implement many collaborative practices, including knowledge sharing,
incentives and penalties, responsibility sharing, risk sharing, and joint product design
(Sudusinghe & Seuring, 2022). All collaboration can help significantly improve economic and
environmental performance. Collaboration is the gateway to businesses developing circular
products and processes that promote sustainability and flexibility (Roy et al., 2022).
Many collaborations among competitors typically occur before mergers, uniting common
goals and leveraging SC capabilities (Katsaliaki et al., 2024). These partnerships have become
more popular because single companies lack the capabilities to develop, produce, and deliver
customized products, which customers today demand more (Jodlbauer et al., 2023). Many supply
chain operations are working to eliminate barriers so all partners can communicate and
collaborate, leading to more innovation and the development of value-added practices (Jodlbauer
et al., 2023).
Co-opetition
Co-opetition is a collaborative business strategy used amongst rival manufacturers to
leverage supply chain functions and achieve a larger goal or get ahead by generating more
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Running head: An Overview of Supply Chain Structures and Relationships
significant business that captures more market share (Katsaliaki et al., 2024). Katsaliaki et al. use
the co-opetition between Samsung and Apple in 2017 as an example, highlighting Apple’s
proposal to use the Samsung’s Super Retina OLED screen for the iPhone X, which had a large
customer base (2024). If Samsung had turned Apple down, they could have gone to one of the
company’s competitors instead, which ultimately led to the collaboration of the two companies,
even though the two companies had an ongoing billion-dollar legal battle taking place during this
time (Katsaliaki et al., 2024).
Apple and Samsung speak to the power of co-opetition and how beneficial it can be for
many related businesses. By sharing or combining supply chain parts, rival companies can
produce and distribute merchandise while minimizing costs and improving customer service
(Katsaliaki et al., 2024). Jaguar and BMW have jointly designed and developed next-gen electric
drive units for other car companies that will be available this year while still manufacturing their
electric cars (Katsaliaki et al., 2024). Co-opetition requires trust and an understanding of the
value and benefits of the relationship amongst the partners (Katsaliaki et al., 2024).
Relationships Within a Supply Chain
This section overviews common SC relationships, their interconnectivity, and
performance impacts. Suppliers, manufacturers, retailers, and consumers have important roles
regarding SCs and their optimality. SC relationship management has gained much more
attention in recent years, with the topic being critical for the success of SCs in the global market
(Li, 2022). According to the theory-driven model study by Ling Li, three successive stages of
supply chain relationships influence an organization’s performance (2022). Whether
organizations have strong and effective SC relationships can make or break the success and
overall performance outcomes.
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Running head: An Overview of Supply Chain Structures and Relationships
Supplier – Manufacturer
Manufacturer-supplier relationships involve a company producing goods and another
company supplying the materials needed to produce those goods. The supplier provides the
materials and resources, and the manufacturer produces the goods, creating a critical link in the
SC operation. Strong relationships between manufacturers and suppliers entail open
communication, trust, and achieving set standards.
Joshi’s (2023) research argues that manufacturers can positively impact supplier
relationships by incentivizing and investing. Incentives can influence a supplier’s
instrumentality, encouraging the belief that their resources will bring more benefits and improve
their performance (Joshi, 2023). Investing enhances suppliers' expectancy, encouraging the belief
that their resources are required to meet performance targets, which drives increased supplier
performance (Joshi, 2023).
Joshi notes that it is important to understand that technological dynamism and diversity
impact the effectiveness of incentives and supplier investments, moderating manufacturers'
efforts (2023). Technological dynamism is the pace at which an existing piece of technology
changes, shortening the cycle of technology innovation (Joshi, 2023). Technological diversity is
the environment embodied by heterogenous technologies that become the industry standard and
make others obsolete (Joshi, 2023).
Manufacturer – Retailer
Manufacturer-retailer relationships are critical for product distribution. They are complex
and involve continuous power shifts. Retailers focus strongly on customer loyalty and retention,
while manufacturers control product availability and development. The two rely on each other.
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Bowen Luo’s study looks at how manufacturer-retailer relationships impact the distribution of
new products, focusing on the U.S. hard cider industry as the foundation of his research (2023).
This literature found that the relationships between retailers and manufacturers boosted
product availability, even with prevalent constraints and regulations (Luo, 2023). It also revealed
that strong coordination led to increased profits for manufacturers and retailers and that data
analysis of past sales made tracking distribution needs easy, presenting a strategic advantage
(Luo, 2023). Ultimately, this study highlighted the interconnectivity of manufacturer and retailer
actions and the importance of having coordinated operational strategies to achieve individual
goals.
Retailer – Consumer
Retailers build relationships with consumers over time, creating loyalty to achieve
repeated business. More recently, retailers have been striving to give consumers more
personalized products and experiences while maintaining open communication and building
trust. Baldi et al.’s article examines the evolution of the consumer’s role within SCs, moving
through SCM operations and the customer journey phases (2024).
Modern SC operations have become more customer-focused, with much of the power
being in the hands of consumers. Baldi et al.’s study leads to developing a framework that
highlights the elements affecting consumer-focused SCM, the outcomes, and the retail SC
structures (2024). Organizations prioritize the customer experience and consider this in all SC
decisions, enhancing business strategies to align with consumer wants and needs (Baldi et al.,
2024).
Influences on Supply Chain Relationships
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Running head: An Overview of Supply Chain Structures and Relationships
Many factors influence SC relationships and impact organizational dynamics within an
SC operation. These factors include customer satisfaction, forecasting, environmental
uncertainty, collaboration, and improvement needs. Mao and Yang focus their study on how the
changes in supply chain relationships impact internationalization efforts among enterprises,
precisely the scale, boundary, and depth (2024).
This literature points out the deterioration of finances and decreased innovation as key
influences on the climate shift of relationships within an SC, hindering the internationalization of
enterprises. Many organizations take on diversified business strategies to combat the risks faced
when SC relationship changes arise, which helps weaken the dependence on larger suppliers and
customers (Mao & Yang, 2024). Maintaining a reasonable asset structure and debt ratio, along
with smart investments in research and development, can help stabilize an organization’s
financial situation and create sound financial and technical support (Mao & Yang, 2024).
Supply Chain Cost Management
Managing SC costs requires actively monitoring and optimizing all costs associated with
moving and holding goods throughout all levels of an SC. Production and disruption costs and
the reliability of an SC can be complex. However, Dou et al.’s (2024) research study into these
conflicting objectives found that prioritizing reliability and embracing a holistic approach to
order allocation helps minimize disruption risks and enhances applicability. The need for
sustainability and resiliency amongst supply chain practices is growing, especially with
globalization being on the rise and introducing more complexity.
Managing costs in a global SC operation can be challenging with the varying economies
and geopolitical issues. Adaptability is a key component for successfully maneuvering these
challenges. Nnaji et al. explored sustainable practices, including strategic sourcing, Just-In-Time
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systems, and technology and automation (2024). They found that flexibility and technology use
were some of the best ways to manage risks associated with global SCs, especially those
regarding market changes (Nnaji et al., 2024).
Globalization and its complexity have driven many organizations to streamline operations
and find ways to cut costs. As mentioned earlier, a holistic approach helps minimize disruption
risks (Dou et al., 2024), which is also emphasized by an Expert Panel with the Forbes Business
Council. The panel of 14 members shared many effective ways businesses could reduce costs
while improving efficiency and achieving more growth. Some key takeaways discussed were
analyzing data on key metrics, utilizing circular SC models, leveraging technology, collaborating
with strategic partners, and conducting a cost-benefit and SWOT analysis (2023). These are all
beneficial ways businesses can identify waste, errors, and inefficiencies within their SC
operations and revitalize their strategies to implement these effective processes.
Supply Chain Challenges
This section focuses on SC challenges related to COVID-19 and the impacts they had/are having
on SCM.
COVID-19 Impact on Supply Chain Management
Disruptions. COVID-19 disrupted supply chains everywhere due to government
lockdowns, manufacturing closures, and transportation issues. Due to the lockdowns, many
manufacturing businesses were slowing down, while some stopped working. This slowed down
the flow of materials and finished products. The global pandemic interrupted global trade and
social activities, with social distancing and confinements being put into place to manage the
spread of the virus (Yu et al., 2022). The government restrictions created disruptions with
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deliveries, impacting the transportation of goods. When COVID-19 hit, there were massive staff
shortages and losses due to business shutdowns and closures.
Adana et al. (2024) discuss the impact COVID-19 had on SC operations and how
decentralized decision-making and SC orientation could contribute to the resiliency of
organizations that face disruptions similar to the global pandemic. In this study, collaboration,
agility, and situational awareness are all examined in terms of resilience and sustainability,
urging businesses to be more open to decentralized structures (Adana et al., 2024). This work
contributes to the importance of contingency plans for uncertain future environments and
outcomes.
Global Economic Uncertainty. COVID-19 shocked economies, driving 40-60 million
people into poverty due to unemployment (Yu et al., 2022). In addition, agriculture prices
shrunk by 20% and the chemical industry by 1.2%, the worst growth the industry has seen since
2008 (Yu et al., 2022). These examples are just a tiny fraction of the impact COVID-19 has had
on global economies. However, there is a lack of recent research explaining those impacts on
the economy and how they have shaped SC strategies in organizations today.
Though there were significant economic impacts, Yu et al. point out some positive
environmental impacts that stemmed from the global pandemic. With decreased CO2 emissions
from the shutdowns that closed factories and restricted travel, the air quality improved
worldwide, with the ozone in many parts of the world repairing from less air pollution (Yu et al.,
2022). Most of the waste seen during this time was from the medical field, with medical staff
having to increase PE dresses and mask disposals (Yu et al., 2022).
Supply Chain Evolution
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Running head: An Overview of Supply Chain Structures and Relationships
Many SCs have evolved from traditional linear operations that consisted of simple
systems, becoming more complex with global networks that utilize innovative technologies.
Though globalization is a key contributor to SC evolution, customer preferences, sustainability,
and technological advancements are also contributing factors. This section will discuss some of
the more significant technological advancements that SCM has undergone.
Technological Advancements
Fourth Industrial Revolution (Industry 4.0). Industry 4.0 is not just one thing; it is an
entire ecosystem of interconnected technology for manufacturing systems with many moving
pieces that make it work. Some machines talk to each other through the innovation of the
Internet of Things (IoT), which are brains in the cloud with incredible data storage and
processing power. Big data analytics also sifts through mountains of data to uncover hidden
insights. There is also 3-D printing, robots that can think for themselves, and tiny sensors that
can gather information much quicker than humans.
According to a 2023 article from the Business Process Management Journal, which used
data from Turkish manufacturing firms to examine the impacts of Industry 4.0, the technological
tools could help with SC costs and operational flexibility. An example would be a plant manager
at a manufacturing facility drowning in material costs who suddenly has accurate data on every
gram of raw materials, allowing more optimization on how the materials are used (Erboz &
Hüseyinoğlu, 2023). The literature highlighted that Industry 4.0 can also predict demand
fluctuations, allowing companies to adjust their production and minimize waste, creating lean
operations (Erboz & Hüseyinoğlu, 2023).
It is a common misconception that businesses can make one part of their SC flexible with
Industry 4.0 and then suddenly the rest bends to their will, but it takes multiple partners moving
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together (Erboz & Hüseyinoğlu, 2023). Suppliers, distributors, and retailers all impact each
other, so having a holistic approach is necessary for the SC to achieve maximum sustainability
and flexibility (Erboz & Hüseyinoğlu, 2023). This literature also brings out the importance and
benefits of customer integration. The research found that working closely with customers and
collaborating helped maximize cost savings, creating true partnerships and ensuring the
technology businesses used met their needs (Erboz & Hüseyinoğlu, 2023). Constantly
communicating with customers and getting feedback can help businesses navigate the most cost-
effective routes.
COVID-19 exposed how fragile the just-in-time inventory model of having just enough
stock is, but it is also not feasible to hoard stock using a just-in-case inventory strategy. Jonathan
Colehower dives into this, using the apparel industry as an example. He explains how businesses
place these large orders for peak seasons but do not consider what happens when people do not
buy as much and become stuck with the inventory (2023). Cole presents a modern responsive SC
platform and dives into the concept of unified commerce, where instead of looking at online and
in-stores as separate things, they are looked at as one complete unit (2023).
Collaborative sales and operations planning is needed to create a unified shared plan
based on shared data that is agile and responsive to unpredicted changes and market trends.
Managing this data through SaaS systems with open cloud architecture can revolutionize SC
operations, allowing all chain members to share data in real time (Cole, 2023). This is especially
helpful among global SC operations. This literature also highlights flexible cloud architecture
that consists of individual components that can be reconfigured to a business’s liking, giving
them much more flexibility (Cole, 2023). New Balance built a central content library that feeds
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Running head: An Overview of Supply Chain Structures and Relationships
all of their systems, pulling from the same source and creating much more efficiency, which is
increasingly important today (Cole, 2023).
AI and machine learning (AI/ML) are used in SCM to improve demand forecasting,
optimize inventory levels, and streamline logistics. AI/ML is a super-smart assistant that
analyzes data and predicts future outcomes (Cole, 2023). It takes all the desk work out of
managing inventory and replaces it with data-driven decisions, leading to powerful results. With
all this data, it is also important to invest in strong cybersecurity, with cybersecurity attacks
against SCs having increased by 200% in 2022 (Cole, 2023). Modern technology platforms are
the best defense against these attacks, built with sophisticated security features that are
constantly updated.
Environmental Social and Governance (ESG) Requirements
Environmental, social, and governance (ESG) requirements are best described as a
company’s relationship with the planet and how ethically it is run, emphasizing the impact of the
business’s entire SC and how it is run. A systematic literature review by Truant et al. highlights
the importance of transparency, the impact of ESG on economic performance, and the role that
policymakers play in the process (2024). One of the studies mentioned in this review was Exxon
Mobil, which claimed reduced greenhouse gas emissions. However, the company was shifting
polluting operations over to its suppliers, emphasizing the importance of looking at the entire
supply chain and not just the company itself (Truant et al., 2024).
ESG is more than a company’s internal operations, and with COVID-19 exposing how
fragile many global operations are, more attention is being placed on where things are coming
from and how they are getting to where they need to be. We are now seeing things like the EU’s
Corporate Sustainability Reporting Directive, which requires large companies to disclose their
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Running head: An Overview of Supply Chain Structures and Relationships
social and environmental impact, including their SCs (Truant et al., 2024). These regulations and
practices are becoming much more important, making companies think more responsibly about
how they are operating.
Truant et al.’s research suggested transparency in SC operations leads to better
communication with stakeholders, reputation, and profits (2024). There is a clear link between
ESG and managing risk, but seeing the link between profitability is much more complex. A
strong ESG focus can help companies mitigate risks, become more resilient, and contribute to
more profitable and sustainable business models. Policymakers incentivize companies to adopt
sustainable practices, set standards for ESG disclosures, and even promote new technologies and
solutions (Truant et al., 2024). Another example of the evolution of ESG SC initiatives is green
securities, which are financial instruments specifically funding environmentally friendly projects
(Truant et al., 2024). ESG is about much more than following the rules; it is about integrating
sustainability into businesses' core.
Conclusions
Using a systematic framework, this literature review goes beyond the mechanics of SCs.
It explores the connections and the relationships between the players, the hurdles they face, and
the trends shaping their future. The evolution of SC is a constant dance of adaptation and
innovation. It was found that traditional linear SC models significantly impact resource use and
waste. This constant cycle of buying, using, and tossing strains resources and the environment,
and with a growing global population, this only intensifies. Circular SCs keep products in use as
long as possible, creating a loop to minimize waste. Circular SC models can be complex to shift
to, as pointed out by McDonald’s, which has to find ways to gather used cooking oil and turn it
into biodiesel for their delivery fleet. This required upfront costs, but the long-term benefit
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outweighed the initial investment, reducing waste disposal costs and reliance on traditional fuels
and ultimately enhancing the brand image by demonstrating a commitment to sustainability.
Though the circular model is a better option for SCs, it requires collaboration on all
levels, including among all chain members and competitors. This literature review found that SC
integration, precisely vertical and horizontal, drove businesses to become interconnected pieces
of a larger puzzle instead of single entities. Vertical integration is about controlling multiple
stages of production, while horizontal integration is about acquiring or merging with a
competitor or similar business to increase market share and reduce competition. The key benefits
of vertical integration are that it reduces the dependence on third parties and could increase
customer satisfaction. The downsides are that massive investments of resources and expertise are
needed for this integration strategy, limiting flexibility. The risks associated with this strategy are
cultural clashes, integration challenges, and antitrust. The key takeaway is that there is no one-
size-fits-all, but the right strategic choice lies in the business’s goals, resources, and specific
industry landscape.
It was found that having successful relationships between the supply chain players
requires strong collaboration. Collaboration is a key factor in several articles on sustainable SC
operations. Getting businesses, even competitors, to work together can help minimize the
lingering impacts of COVID-19. Collaborative practices like knowledge sharing, supportive
product designs, and pooling resources can lead to better performance and sustainability for SCs.
A company’s success in achieving a circular model depends on the actions of others within the
SC, emphasizing the need for collaboration to shift from a linear model successfully. The
literature also revealed that competitors could find common groups through co-opetition. This
was highlighted through the example of Apple and Samsung, who, despite legal battles, worked
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together to share technology so that both companies could reap the benefits. The literature about
SC relationships and structures strongly echoes strategic collaboration, highlighting how it drives
innovation and helps navigate complex challenges like sustainability and technological
disruption. This is a necessary evolution given the world's increasing interconnectivity and
interdependency.
Relationships between suppliers, manufacturers, retailers, and consumers require more
collaboration for beneficial results. Technology and data sharing are key elements in the success
of these relationships within an SC. Each is linked to the other in more ways than one, with the
digital landscape providing more access and changing the power dynamic. Personalization is
emphasized in the literature, with many SCs focusing on customer-centered operations. The
relationships within SCs are steadily evolving with the use of technology leverage.
This research revealed how the pandemic exposed the vulnerabilities of global SCs, with
lockdowns and closures creating ripple effects that caused shortages, delays, and economic
uncertainty. Global poverty is a key piece of how COVID-19 impacted global economies.
Though the pandemic caused much chaos and disruption, it was found that the lockdowns did
contribute to positive environmental impacts, with increased air quality and reduced CO2
emissions. The pandemic ultimately catalyzed change, forcing companies to face system
vulnerabilities and explore new approaches prioritizing resilience, flexibility, and sustainability.
The literature revealed that Industry 4.0 encompasses technologies like AI, robotics, IoT,
and big data that revolutionize all aspects of SCM. This evolution of SCM is helping companies
make more informed decisions about demand forecasting, inventory, and logistics. The reliance
on technology increases cyber security attacks, but having more modernized technology is the
best way to combat this.
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Running head: An Overview of Supply Chain Structures and Relationships
This study found that ESG requirements have become increasingly important for SCs.
They are no longer nice to have, but they have become a requirement for companies, with
consumers demanding more transparency, investors prioritizing ESG factors, and increasing
regulatory pressures regarding ESG reporting. Ignoring ESG could damage brand image, cause
loss of investments, and have legal repercussions.
Supply chains are ultimately human systems driven by relationships, values, and the
shared responsibility of creating a better future. The literature found that embracing
sustainability could increase profits and business growth. The interconnectivity of the factors
affecting SCs is challenging and complex. However, businesses can better achieve sustainability
through collaboration and the adaptation of innovative technological tools by embracing a
holistic approach to consider the connectivity of consumer awareness, investor scrutiny of ESG
efforts, and government regulations.
Research Suggestions and Recommendations
The research suggests that collaboration is a key factor in businesses achieving
sustainability regarding the impacts of COVID-19. Frameworks or models that help minimize
collaboration risks and boost the effectiveness of collaboration post-COVID need to be explored
more deeply. A guidebook that covers everything from partner selection and due diligence to
communication protocols and conflict resolution mechanisms for strategic partnerships would be
practical for SCM operations. This could help companies navigate the complexities of
collaboration and ensure that the partnerships formed are mutually beneficial and sustainable.
There is a lack of recent research into the ongoing effects of COVID-19 regarding
inflation and the links to consumer spending power. Companies are still piecing together the
puzzle of the pandemic’s long-term impact on SC operations and strategies. The impacts of
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Running head: An Overview of Supply Chain Structures and Relationships
diversification on SCM need to be further studied to assess the risk minimization presented by
the strategy. COVID-19 brought environmental impacts to light, highlighting the need to
examine the possibility of supply chain delays or pauses to help overcome environmental
challenges. More recent research into creating more sustainable systems should be done, looking
into whether the air quality is still improved or is being reversed now that the lockdowns are
done. Rethinking approaches to consumption and production need to be assessed.
Research suggests that more products must be designed for durability, shifting from a
mindset of disposability to longevity and resource preservation. The financial viability of
sustainable solutions needs to be further researched. Exploration needs to be done into how
sustainable practices can be incentivized, environmental costs can be internalized, and new
business models that prioritize circularity and research efficiency can be created.
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