Luis Isasi-Sánchez1, Jesús Morcillo-Bellido1 and Alfonso Durán-Heras1
1 Universidad Carlos III de Madrid. Escuela Politécnica Superior. Área de Ingeniería de Orga-nización. Avenida de la Universidad nº 30, 28911 Leganés (Madrid), Spain.
Abstract. Covid 19 pandemic has clearly disrupted the whole world, and industrial activities have obviously been affected too. Due to the enormous uncertainty that the industry is facing, caused by the erratic evolution of this generalized disease, it is absolutely imperative for business people to have as much information as possible, and as much tools as possible, to quickly react to negative situations. The present research shows the results of a global survey that has been carried out on Operations Management executives of companies worldwide and highlights the operative aspects that have been affected the most by Covid 19 pandemic, depending on activity sector and location.
Keywords: Covid 19, Supply Chain, Global Value Chain, Operations Management, Pandemic, Risk Management.
1. Introduction & Motivation
Covid 19 pandemics has caused a worldwide severe negative effect in terms of public health, but also in critical aspects for our current society like unemployment or economic activities, especially on commercial operations. According to Fortune magazine the pandemic has severely affected the majority of the companies that are included in Fortune 1000 ranking [1].
The importance of operations management (OM), and more precisely supply chain management (SCM) has been continuously increasing in the last decades, since they have a key impact into business performance. Therefore, it is really important to quickly react to whatever disruption occurs [2], at one of the most important assets of the companies to afford these processes is resilience, that has been identified as one of the key success factors for supply chains management
Some researchers like [3] have proposed models to help managing supply chain disruptions, centered on quantifying and minimizing the associated risks. And by doing this, flexibility and diversification have been identified as critical aspects to decrease the economic risk. Fashion sector, as one of the most related to retail business operations, has been one of the first to perform research and applied investigation on these fields [3,4].
To properly structure the analysis of supply chains, two different approaches could be followed to achieve and maintain the resilience: proactive and reactive. It is considered a proactive approach when the main objective is to reduce the probability of risk events, and it is extremely important for normal business situations and processes. However, it is also important to be able to think reactively, since there are also critical situations that cannot be foreseen, like it has been the Covid 19 pandemic. And it is especially important for this later approach, to develop good simulation models to perform “what if” scenarios.[2,5]
A good approach, from a business point of view, has been recently issued by McKinsey Global Institute with the advice of executives about different possibilities to react the disruption that Covid 19 pandemic has created [6], clearly showing that even being the current situation really negative from a global perspective, it has forced the majority of the companies to think “out of the box”, and to implement highly creative measures and plans to react this unprecedent nature pandemic, that has enormously increase their risk levels.
The main motivation for the present work is to analyze, from a global perspective, the impact that Covid 19 has meant, so far, for Operations and Supply Chains (SCs) of different sectors and different locations worldwide. Several researchers, [7–10] have clearly pointed that Covid 19 has meant a real disruption of nearly all the society stakeholders. Not only the industry has been shocked by the pandemic, but also institutions, governments, and citizens, have been severely affected.
2. Main Conclusions & Future Research
The main conclusions that can be obtained from this research work could be summarized as follows:
- When facing such an exceptional situation as the one generated by Covid 19, it is essential for industrial managers and executives to have information such as that presented in this study when defining future strategy and operative plans.
- As it can be seen from the detailed results, the situation in the different sectors, geographical areas, etc, do vary significantly.
- Since the beginning of Covid 19 pandemic, only 17 months have passed, but its impact on the world has been, is being, and will be so great, that it is really worth it to allocate resources to these types of operative researches.
The research group of the authors of this work, once verified that the results are consistent and valid for businesspeople, would concentrate in the future on the following items: increase the size of the survey, periodically repeat the survey to evaluate the evolution of the main indicators, and to analyze the correlation of the business-related indicators, of each industrial sector, towards the pandemic and the macro economical evolution.
3. References
- Fortune Lists Available online: https://fortune.com/rankings/ (accessed on Feb 13, 2021).
- Paul, S.K.; Sarker, R.; Essam, D. A reactive mitigation approach for managing supply disruption in a three-tier supply chain. J. Intell. Manuf. 2018, 29, 1581–1597, doi:10.1007/s10845-016-1200-7.
- Ivanov, D. Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case. Transp. Res. Part E Logist. Transp. Rev. 2020, 136, 101922, doi:10.1016/j.tre.2020.101922.
- Mechmech, R.; Harbi, S.; Hadj-Alouane, B.A.; Sboui, S.; Cestana, A.; Pastore, E.; Alfieri, A.; Matta, A.; Meyer, C.M.; Torres, E.L.G.; et al. A model for assessing economic and environmental sustainability dimensions of a fashion supply chain and a case study. IFAC-PapersOnLine 2019, 52, 48–53, doi:10.1016/j.ifacol.2019.11.171.
- D’Uffizi, A.; Simonetti, M.; Stecca, G.; Confessore, G. A simulation study of logistics for disaster relief operations. Procedia CIRP 2015, 33, 157–162, doi:10.1016/j.procir.2015.06.029.
- Lund, S.; Madgavkar, A.; Manyika, J.; Smit, S. What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries. 2020, 13.
- Kovács, G.; Falagara Sigala, I. Lessons learned from humanitarian logistics to manage supply chain disruptions. J. supply Chain Manag. 2021, 57, 41–49, doi:10.1111/jscm.12253.
- Kimura, F.; Thangavelu, S.M.; Narjoko, D.; Findlay, C. Pandemic (COVID‐19) Policy, Regional Cooperation and the Emerging Global Production Network. Asian Econ. J. 2020, 34, 3–27, doi:10.1111/asej.12198.
- Rouleau, L.; Hällgren, M.; Rond, M. Covid‐19 and Our Understanding of Risk, Emergencies, and Crises. J. Manag. Stud. 2021, 58, 243–246, doi:10.1111/joms.12649.
- Levy, D.L. COVID‐19 and Global Governance. J. Manag. Stud. 2021, 58, 562–566, doi:10.1111/joms.12654.