Study Says: Manufacturers Must Rethink Global Operations Due to COVID-19
BIRMINGHAM, UK — Researchers at the University of Birmingham say that manufacturers must redesign and reform their global supply chains or global production networks if they want to survive and prosper in the wake of the COVID-19 pandemic. They recommend manufacturers switch from large production sites in a single location, such as China, to numerous smaller facilities around the world to reduce business risk.
The researchers used a database of 91 American companies to show that the current dominant account of globalization cannot explain the international strategies of 25 percent of these firms. However, they found coronavirus highlights that the most effective GPNs balance cost control against risk, by balancing production facilities in core markets against over-reliance on facilities located in lower-cost locations.