The Economics of Resilient Global Supply Chains in the Post-COVID-19 Era

The Economics of Resilient Global Supply Chains in the Post-COVID-19 Era

Peter Enderwick
Copyright: © 2023 |Pages: 14
DOI: 10.4018/978-1-6684-3749-0.ch001
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Abstract

The global expansion of supply chains between 1990 and 2010 was characterized by efficiency-seeking through extreme specialization, task fragmentation, and geographical dispersion. Such chains, while offering cost benefits, are vulnerable to damaging disruption when operational conditions shift. The COVID-19 pandemic has initiated a reconsideration of supply chains with calls for enhanced resilience. These calls coincide with a growing fragmentation of global production and supply chains with China's increasing influence in global standards, supply of intermediate inputs, and domestic economic upgrading. This chapter examines the growth and vulnerabilities of lean global supply chains, arguments for greater resilience, and the cost implications of supply chain restructuring at a time of growing uncertainty and possible geographic fracture.
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The Development Of Contemporary Global Supply Chains

In the contemporary global economy, the terms global supply chains or global value chains are misnomers. The reality is that such chains, characteristic of linear, integrated and conceptually relatively simple production processes, began to disappear in the 1960s with the decline of large and hierarchically integrated factories such as Ford. Growing competitive pressure, the introduction of new production approaches such as Just-in-Time and increasing recognition of the contribution of specialist external suppliers brought radical change to production systems. These changes were facilitated by revolutions in communications and control technologies (lower cost air travel, digitalisation) and transport (containerisation, inter-modal hubs) that enabled an extension of specialisation or what Baldwin (2016) has termed ‘unbundling’.

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