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Transformation of Global Supply Chains in the Manufacturing Industry as a Result of the Coronavirus Pandemic

Author

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  • Róbert Hausmann

    (Magyar Nemzeti Bank)

Abstract

This essay seeks to find out how the coronavirus pandemic may change the international organisation of economic value creation and promote its ongoing transformation. Today’s production and service activities are built on international outsourcing and low stocks. Global production organisation has extended supply chains, with different production functions being performed on different continents, and supply chains have also become strongly exposed to Chinese imports. Industries where safety stocks last shorter are hit harder by the economic crisis that has emerged on the back of the pandemic. This poses serious challenges to business models built on the just-in-time system and the lean approach. In response to the current problems, global supply chains may become shorter and more regional during the economic recovery, and they may use multi-sourcing and increase safety stocks. Digitalisation and automation may accelerate, since supply chains will need more data, faster decisions and feedback to ensure a more flexible safety stock policy and more automated production and warehousing. Automation also transforms jobs, making it crucial to develop the skills of workers and to retrain them.

Suggested Citation

  • Róbert Hausmann, 2020. "Transformation of Global Supply Chains in the Manufacturing Industry as a Result of the Coronavirus Pandemic," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 19(3), pages 130-153.
    • Handle: RePEc:mnb:finrev:v:19:y:2020:i:3:p:130-153
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    File URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-19-3-e1-hausmann.pdf
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    References listed on IDEAS

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    1. Nir Jaimovich & Henry E. Siu, 2020. "Job Polarization and Jobless Recoveries," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 129-147, March.
    2. Bruno Casella & Richard Bolwijn & Daniel Moran & Keiichiro Kanemoto, . "Improving the analysis of global value chains: the UNCTAD-Eora Database," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    3. Michael E. Porter, 1991. "Towards a dynamic theory of strategy," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 95-117, December.
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    Cited by:

    1. Dariusz Milewski, 2022. "Managerial and Economical Aspects of the Just-In-Time System “Lean Management in the Time of Pandemic”," Sustainability, MDPI, vol. 14(3), pages 1-19, January.
    2. Mate Voros & Zsofia Asvanyi & Diana Ivett Furesz, 2022. "Evaluating Part-Time and Fixed-Term Employment Schemes by Employees Using the Example of a Financial Insurance Company," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 21(2), pages 94-124.

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    More about this item

    Keywords

    global supply chains; digitalisation; robotisation and automation; business economics; coronavirus pandemic;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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