School of Industrial and Information Engineering

Master of Science in Management Engineering

Implications of COVID-19 on fast-moving consumer

goods and electronics supply chains: a systematic
review of secondary materials

Supervisor: prof.ssa Margherita Pero

Co-supervisor: Jinou Xu

Author
Michele Meotto 925249

Academic Year 2019/2020

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Table of Contents

1. Introduction ................................................................................................... 16

1.1 Overview of the thesis structure ..................................................................................... 18

1.2 The research context: the FMCG and Electronics industry ......................................... 18
1.2.1 Fast-moving consumer goods industry ................................................................... 18
1.2.2 Electronics industry .................................................................................................. 21

2. Research background ..................................................................................... 26

2.1 Supply Chain Management and Supply Chain Strategy ................................................ 26

2.2 The Uncertainty Framework for Supply Chain Strategy .................................................... 31
2.3 Development of epidemics ............................................................................................. 35
2.4 Impact of COVID-19 on Supply Chains ....................................................................... 37

3. Research Objectives and Questions................................................................ 42

4. Methodology .................................................................................................. 46

4.1 Systematic Literature Review in Supply Chain Management ....................................... 46

4.2 Adapting the SLR methodology to the review of secondary materials ....................... 48
4.2.1 Initial framework choice and research question definition ................................... 48
4.2.2 Identification of primary studies characteristics ..................................................... 50
4.2.3 Baseline sample gathering ........................................................................................ 52
4.2.4 Material selection ...................................................................................................... 58
4.2.5 Review and synthesis ................................................................................................ 62
4.2.6 Findings reporting .................................................................................................... 65

5. Findings ......................................................................................................... 66

5.1 Descriptive analysis .......................................................................................................... 66

5.1.1 Overview of selected materials ................................................................................ 66
5.1.2 Research methodology ............................................................................................. 69
5.1.3 Context of the studies .............................................................................................. 71

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 5.2 Thematic analysis ............................................................................................................. 76
5.3 Findings on fast-moving consumer goods supply chains ............................................. 79
5.3.1 Impact of COVID-19 on supply chain uncertainty ............................................... 79
5.3.2 Response measures by SC partners ......................................................................... 84
5.3.3 Expected long-lasting changes and future actions by SC partners ....................... 88
5.4 Findings on electronics supply chains ............................................................................ 92
5.4.1 Impact of COVID-19 on SC uncertainty ............................................................... 92
5.4.2 Response measures by SC partners ....................................................................... 100
5.4.3 Expected long-lasting changes and future actions by SC partners ..................... 102
5.5 Answers to the research questions ............................................................................... 106

6. Discussion ..................................................................................................... 110

6.1 Discussion of the findings against the Uncertainty Framework ..................................... 110
6.1.1 Discussion on the findings in FMCGs SC ........................................................... 111
6.1.1 Discussion on the findings in Electronics SC ...................................................... 116
6.2 Future research directions ............................................................................................. 120

7. Conclusion ................................................................................................... 122

7.1 Contribution to Supply Chain Management ................................................................ 123

7.2 Scope of future research ................................................................................................ 123
7.3 Limitation of the Study .................................................................................................. 124

8. References .................................................................................................... 126

9. Appendix ...................................................................................................... 138

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List of Figures

Figure 1.1 - Electronics SC timeline.......................................................................................... 24

Figure 2.1 - An overview of Supply Chain Strategy Perspective ............................................ 30

Figure 2.3 - Demand characteristics.......................................................................................... 32

Figure 2.2 - Supply characteristics ............................................................................................. 32

Figure 2.4 - The Uncertainty Framework: examples ............................................................... 32

Figure 2.5 - The uncertainty reduction strategies..................................................................... 33

Figure 2.6 - Four strategy archetypes ........................................................................................ 34

Figure 3.1 - Research framework based on WHO pandemic stages ...................................... 44

Figure 4.1 - GS search interface on Publish or Perish software ............................................. 56

Figure 4.2 - "Funneling process" by material macro-category ................................................ 61

Figure 5.1 - Cumulative distribution of publication date by materials sources ..................... 69

Figure 5.2 - Academic materials authors' keywords treemap .................................................. 77

Figure 5.3 - Common supply chain-related themes by resource type .................................... 78

Figure 6.1 - FMCGs path amidst the COVID-19 pandemic within the Uncertainty
Framework ................................................................................................................................ 115

Figure 6.2 - Electronics SCs path amidst the COVID-19 pandemic within the Uncertainty
Framework ................................................................................................................................ 119

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List of Tables

Table 2.1 - Definition of Supply Chain..................................................................................... 27

Table 2.2 - Definition of Supply Chain Management.............................................................. 28

Table 2.3 - Supply uncertainty reduction strategies description ............................................. 33

Table 2.4 - Epidemic phases and Response Interventions ..................................................... 36

Table 2.5 - Summary of the SLRs by Queiroz et al. (2020) and Chowdhury et al. (2021) ... 39

Table 4.1 - Framework constructs descriptions ....................................................................... 49

Table 4.2 - Inclusion and exclusion criteria .............................................................................. 51

Table 4.3 - Research sources...................................................................................................... 53

Table 4.4 - Search concepts and terms ..................................................................................... 54

Table 4.5 - Search string #1 (FMCG) ....................................................................................... 55

Table 4.6 - Search string #2 (electronics) ................................................................................. 55

Table 4.7 - Categories used in extracting and analyzing data in the systematic review ......... 63

Table 4.8 - Findings thematic analysis structure ...................................................................... 65

Table 5.1 - Academic materials by source title ......................................................................... 67

Table 5.2 - Non-academic materials by source title ................................................................. 68

Table 5.3 - Research methodologies used in the reviewed articles ......................................... 70

Table 5.4 - The national contexts on which the reviewed articles focused ........................... 72

Table 5.5 - Industry sectors in the reviewed articles ................................................................ 74

Table 5.6 - Industry sector in the reviewed non-academic materials ..................................... 75

Table 5.7 - Summary of the impacts of COVID-19 on FMCG supply chain ....................... 82

Table 5.8 - Uncertainty management strategies by FMCG companies .................................. 86

Table 5.9 - Long-lasting changes and future actions in the FMCG SC ................................. 90

Table 5.10 - Summary of the impacts of COVID-19 on the electronics supply chain......... 96

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Table 5.11 - Uncertainty management strategies by electronics companies ........................ 101

Table 5.12 - Long-lasting changes and future actions in the electronics SC ....................... 104

Table 6.1 - Classification of impacts on the FMCGs SC into demand and supply uncertainty
.................................................................................................................................................... 112

Table 6.2 - FMCGs supply chains’ uncertainty management strategies classification ........ 114

Table 6.3 - Classification of impacts on the electronics SC into demand and supply
uncertainty ................................................................................................................................. 117

Table 6.4 - Electronics SC's uncertainty management strategies classification ................... 119

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List of Symbols and Abbreviations
CLM Council of Logistics Management
COVID-19 Coronavirus Disease 2019 (WHO, 2020a)
CPGs Consumer Packaged Goods
CSCMP Council of Supply Chain Management Professionals
DURS Demand Uncertainty Reduction Strategy
EMS Electronics Manufacturing Services
FMCGs Fast-Moving Consumer Goods
GS Google Scholar
IC Integrated Circuits
IDM Integrated Device Manufacturers
SC Supply Chain
SCM Supply Chain Management
SCS Supply Chain Strategy
SLR Systematic Literature Review
SURS Supply Uncertainty Reduction Strategy
TITLE-ABS-KEY Titles, abstracts, keywords
WFH Work-From-Home

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Abstract
The outbreak of COVID-19 has demonstrated multifaceted implications on the management
of global supply chains. Earlier than it became clear that the pandemic was wracking havoc
in supply chains functioning, scholars were already investigating the phenomenon leveraging
the extant knowledge on supply chain disruptions and the implications of previous epidemics
on supply chain management. However, the impacts of COVID-19 on industry-specific
supply chains have not been analyzed yet. By focusing on the fast-moving consumer goods
and the electronics industry, this study aims at assessing the impact in the short and medium-
term of COVID-19 on the FMCGs and electronics supply chains and the responses taken
by these industries in terms of supply chain strategy, as well as clarifying the long-lasting
changes introduced as the “new norm”. Through a rigorous and systematic search within
academic and non-academic sources, 106 relevant materials published on or before 26
February 2021 have been reviewed. The synthesis of the findings has been performed
through the Uncertainty Framework for supply chain strategy developed by Stanford’s professor
Hau Lee. The synthesis has revealed that the spread of the coronavirus disease and even
more the prevention and control measures enforced by countries across the globe have
created a more uncertain environment for these supply chains in which to operate. However,
the two industries have been unevenly affected especially as regards the duration and the
extent of such uncertainty increases. Diverse have been the responses implemented by the
partners belonging to the two supply chains, both in terms of time and scope. If firefighting
actions took precedence when issues arose, later on, companies developed and put into
practice more strategic measures as they figured out the seriousness of their supply chain
situation. Looking ahead at the “new norm”, both the two industries will be shaped by some
pre-existing trends that the pandemic has fostered, as well as by new trends that have
emerged as a consequence of the crisis. This thesis offers a solid foundation for future studies
on the topic that could leverage the transparency and replicability of this study’s research
protocol to conduct a longitudinal analysis.

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Sintesi del lavoro
La diffusione del COVID-19 ha avuto molteplici implicazioni sulla gestione delle catene di
approvvigionamento globali. Anche prima che i devastanti effetti della pandemia sul
funzionamento delle “supply chain” fossero chiari, gli studiosi stavano già indagando sul
fenomeno sfruttando le conoscenze esistenti sul tema della “supply chain disruption” e sulle
implicazioni delle precedenti epidemie. Tuttavia, non sono stati ancora analizzati gli impatti
che il COVID-19 ha avuto sulle supply chain di uno specifico settore. Questo studio mira a
valutare l'impatto a breve e medio termine del COVID-19 focalizzandosi sulle catene di
fornitura dei beni di largo consumo e dell'elettronica, oltre a studiare le misure prese da queste
industrie in termini di “supply chain strategy” e a chiarire i cambiamenti di lunga durata che
ne definiranno la “nuova norma”. Attraverso una revisione sistematica di fonti accademiche
e non accademiche, sono stati esaminati 106 materiali pubblicati entro il 26 febbraio 2021.
La sintesi dei risultati è stata eseguita attraverso l' “Uncertainty Framework” sviluppato dal
professore di Stanford Hau Lee. I risultati hanno rivelato che la diffusione della pandemia e
ancor di più le misure di prevenzione e controllo applicate dai paesi di tutto il mondo hanno
creato un ambiente più incerto per queste filiere. Tuttavia, le due industrie sono state colpite
in modo disomogeneo soprattutto per quanto riguarda la durata e l’entità di tale incertezza.
Diverse sono state le risposte attuate dai partner appartenenti alle due filiere, sia in termini
di tempo che di estensione. Se le azioni improvvisate hanno avuto la precedenza quando
sono emersi i problemi, in seguito le aziende hanno sviluppato e messo in pratica misure più
strategiche. Guardando verso la “nuova norma”, entrambe le due industrie saranno plasmate
da alcune tendenze preesistenti che sono state favorite dalla pandemia, nonché da nuove
tendenze emerse a seguito della crisi. Questa tesi offre una solida base per studi futuri
sull'argomento che potrebbero sfruttare la trasparenza e la replicabilità del protocollo di
ricerca di questo studio per condurre un'analisi longitudinale

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1. Introduction

The outbreak of COVID-19 has demonstrated multifaceted implications on the management

of global supply chains. Even before the official declaration of COVID-19 as a “global
pandemic” by the WHO Director-General on 11 March (WHO, 2020c), early signs of a
potential supply chain (SC) disruption were casting a shadow on many supply networks. As
reported by the corporate data analytics firm Dun & Bradstreet, 51,000 companies around
the world have one or more direct suppliers in Wuhan – the capital of Hubei Province in
Mainland China where the first COVID-19 outbreaks were reported – and at least 5 Million
companies around the globe have one or more tier-two suppliers in the Wuhan region.
Moreover, 938 of the Fortune 1000 companies have tier-one or tier-two suppliers in such a
region. (Dun & Bradstreet, 2020). Of the same 1000 companies, 94% have been reported
seeing coronavirus-driven SC disruptions (Sherman, 2020). About a year after the start of the
pandemic, the SCs of many industries are still licking their wounds. To lay the foundations
of the recovery, it is necessary to get a comprehensive understanding of the cause-effect
relationships that broke the fine-tuned supply chains that had worked until shortly before.

Earlier than it became clear that the pandemic was wracking havoc in SCs’ functioning,
scholars were already investigating the phenomenon leveraging the extant knowledge on SC
disruptions and on the implications of previous epidemics on supply chain management
(SCM). However, the sudden occurrence and huge impact of the novel coronavirus
pandemic, and the limited time that researchers had to collect and analyze relevant data have
meant that the majority of peer-reviewed publications relied on researchers’ opinions as the
main method of investigation (Chowdhury et al., 2021). The most recent systematic literature
review (SLR) on the COVID-19 pandemic-related supply chain studies by Chowdhury et al.
(ivi) has indeed highlighted the need to assess the impacts of COVID-19 on specific supply
chains by means of the collection and analysis of real-world information through SCM
theory.

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Acknowledging the crucial importance that the development and implementation of the right
supply chain strategy (SCS) have on the performances of the SC itself, the understanding of
how the SCSs designed for the time of “normality” have been challenged under the new
circumstances is worthy of studying. At the same time, the need to assess the impacts of
COVID-19 on supply chains makes a generalized approach ill-suited to capture the
multifaceted implications on the vast range of industries adversely affected. Hence the need
to narrow the scope of the study to a limited set of industries to be analyzed in high detail.
In particular, this research focuses on two industries that play a crucial role in the everyday
life of people worldwide, namely the fast-moving consumer goods (FMCGs) and the
electronics industry. The rationale behind the choice of FMCGs is linked to the large part
they play in the economy, as they are inelastic products that touch every part of consumer
life, and which have notoriously experienced strong demand fluctuations since the early days
of the pandemic. The electronics industry, for its part, is at the root of not only consumer
electronics, but of cars, medical diagnostic equipment, and much more. And more
importantly, the electronics industry has been one of the first to be threatened by the early
spread of the coronavirus in Asian countries, given the high concentration of major suppliers
in the Far East.

In view of all this, this study aims at assessing the explicit impact in the short and medium-
term of COVID-19 on the FMCG and electronics supply chains and the responses taken by
these industries in terms of SC strategy, as well as clarifying the long-lasting changes
introduced as the “new norm”. The optimal research method to achieve this objective has
been identified to be a systematic review of secondary material coming from academic and
non-academic sources. The ever-growing attention that the phenomena under study have
received by both scholars and SC practitioners, as well as the willingness to time-effectively
collect the most comprehensive information has led to the choice of this methodology over
primary material collection through case studies or surveys. The structuring of the research
protocol has followed the most recent guidelines on SLR in SCM provided by Durach et al.
(2020) to enhance transparency and replicability of the research, thus, allowing for the
conduct of a future longitudinal analysis on the phenomena of interest. The underpinning
theoretical lens of the study is the Uncertainty Framework for SCS developed by Lee (2002) –
also known as the Hau Lee matrix – which is adopted to discuss the review findings and to
ultimately achieve the research objective.

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1.1 Overview of the thesis structure
The introduction of the study is completed by a brief overview of the research context, i.e.,
the FMCGs and electronics industries will be presented to provide a basic understanding of
their characteristics from a SC perspective. In Chapter two the research background is
presented by reviewing the literature on the concepts of Supply Chain Management and
Supply Chain Strategy, to which follows a detailed presentation of the theoretical framework
of reference, namely the Uncertainty Framework. The second Chapter is complemented by the
WHO’s classification of the epidemics phases that acts as a support for the discussion of the
review findings, and by the presentation of two SLRs conducted on COVID-19 and supply
chain-related literature. In Chapter three the research objective and the research questions
are explicitly formulated. The fourth Chapter starts with the most recent guidelines on SLR
in the SCM field and develops by adapting the SLR methodology to the systematic review of
secondary materials. In doing so, an in-depth look is given to each of the review steps.
Chapter five is dedicated to the presentation of the review findings through a detailed
narrative of the impacts, reactions, and long-lasting changes reported for each of the two
industries of interest. The findings are then discussed and analyzed through the theoretical
framework of reference in Chapter six, where directions of future research are suggested.
Lastly, Chapter seven concludes the thesis by illustrating its implications for SCM, as well as
proposing the scope of future research and assessing the limitations of the study. Additional
parts of this thesis are its References and Appendix, where useful tables and figures from the
reviewed materials are collected.

1.2 The research context: the FMCG and Electronics industry

1.2.1 Fast-moving consumer goods industry

Fast-moving consumer goods (FMCGs) are products that sell quickly at a relatively low cost
(Kenton, 2021). These goods are also known as consumer-packaged goods (CPGs) and as
the name implies, CPGs are traditionally packaged in easily recognizable wrapping that allows
for quick and convenient identification by consumers. Differently from durable goods and,
in particular, from slow-moving consumer goods (e.g., furniture and appliances), FMCGs
have a shorter shelf life (usually less than one year) because of: (1) the high volume of
consumer demand (e.g., soft drinks and confections) or (2) their perishability (e.g., meat, fish,
dairy products, baked goods). These products are defined as “fast-moving” since the

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traditional purchase pattern is characterized by a high frequency and relative quick
consumption.

FMCGs can be divided into several different categories (Kenton, 2021), including:

• Processed foods: Cheese products, cereals, and boxed pasta

• Prepared meals: Ready-to-eat meals
• Beverages: Bottled water, energy drinks, and juices
• Baked goods: Cookies, croissants, and bagels
• Fresh, frozen foods, and dry goods: Fruits, vegetables, frozen peas and carrots, and
raisins and nuts
• Cleaning products: Baking soda, oven cleaner, and window and glass cleaner
• Cosmetics and toiletries: Haircare products, concealers, toothpaste, and soap

Despite falling into the FMCGs family, the product categories listed above demonstrate
some differences in terms of SC uncertainty. If from a demand-side all the categories can be
classified as “functional” given their stable and predictable demand, as well as their low profit
margins, some food products present higher supply uncertainties compared to others. This
is the case of fresh foods that are characterized by the perishability of raw materials, the
seasonality/variability of harvest, the influence by weather and environment condition, the
variability of product size, and the inverted bill-of-material structure (single raw material
consisting of co-products with different demand) (Chaudhuri et al., 2014). For example, fish
supply is highly uncertain due to several factors: (1) quantity is highly uncertain due to the
high catch variety from year to year and from the same month for different years (Hameri &
Pálsson, 2003), (2) quality depends on periods and biology and is temperature-sensitive, (3)
supply lead-time can vary between four to 13 weeks. Meat supply lead-time is even longer
and can range from 24 to 30 months (D. H. Taylor, 2006). Fruits and vegetables are
characterized by crop yield uncertainty due to weather conditions and contagious bacterial
diseases (Kazaz & Webster, 2011); moreover, the product value deteriorates exponentially
post-harvest (Blackburn & Scudder, 2009). Against this background, For the purposes of this
study the FMCGs categories in the bulleted list will not include fresh, frozen foods, and dry
goods.

Despite experiencing a slow-down in growth over recent years, the FMCGs industry is still
one of the largest sectors in all countries, accounting for more than half of all consumer

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spending (Kenton, 2021). This highly competitive market is led by some of the worlds’ largest
companies including Unilever, Proctor & Gamble (P&G), Tyson Foods, Coca-Cola,
PepsiCo, Nestlé, Danone. The harsh competition and the greater demands from consumers
have meant that these companies have often been pioneers in the development and
implementation of cutting-edge SC solutions. An example of this has been the partnership
that P&G began, as early as 1985, with Wal-Mart to deploy a vendor-managed inventory (VMI)
system. This and further similar agreements with other giant retailers have been
acknowledged to dramatically improve P&G’s performances in terms of on-time deliveries
to customers and increased inventory turnovers (Mahmood et al., 2003).

The retail market for FMCGs consists of various retail channels. The International Standard
Industry Classification (ISIC, 4th revision) (Department of Economic and Social Affairs of
the United Nations, 2008) classifies retail channels in seven categories at the 4-digit level:
ISIC 4711 retail sale in non-specialized stores with food, beverage, or tobacco
predominating, ISIC 4719 other retail sale in non-specialized stores, ISIC 4721 retail sale of
food in specialized stores, ISIC 4722 retail sale of beverages in specialized stores, ISIC 4722
retail of pharmaceutical and medical goods, cosmetic and toilet articles in specialized stores,
ISIC 4791 retail sale via mail order houses or via Internet, ISIC 4799 other retail sale not in
stores, stalls or markets.

According to a recent study by the consulting McKinsey & Company (Kopka et al., 2020),
the financial outperformance that since the seventies had characterized the CPG industry,
started to lose momentum after the global financial crisis of 2007-2008. The aforementioned
study pointed out that the causes behind this phenomenon are attributable to the stagnant
growth of large FMCG companies compared to SMEs and private labels. The old success
model that drove massive growth has been undermined, according to Kopka and colleagues
(ivi), by 12 disruptive trends over the last decade. The most impactful are the increased
customers’ price sensitivity, conscious eating and living, the explosion of small brands, the
steady rise of discounters, and the meteoric rise of e-marketplaces. This systematic review
will investigate whether these trends have been fostered or weakened by the advent of the
novel coronavirus.

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1.2.2 Electronics industry

The electronics sector produces electronic equipment and consumer electronics and
manufactures electrical components for a variety of products (Beers, 2020). Consumer
electronics devices include those used for:

• entertainment (e.g., television screens, hi-fi sound system)

• communications (e.g., smartphones, tablets, desktop computers, laptops, printers)
• recreation (e.g., digital cameras, video game consoles, drones)

These products are sold by retailers, which can be multi-channel (e.g., Walmart, Best Buy,
Media Markt, Euronics) or pure on-line players (e.g., Amazon, Alibaba), or directly to
consumers by OEMs (Original Equipment Manufacturers, e.g., Apple, Sony, Huawei,
Samsung) through their own e-commerce or mono-brand stores. The B2B electronics
market is extremely large, and the output of the SC is delivered in the form of components
or assembly modules to suit the need of the automotive industry, of computing and storage
services, IoT and industrial applications, network & communication, and many other
industries.

The electronics SC has undergone rapid mutations in the last decades to keep up with the
frantic technological development, going through a specialization process that split
responsibilities and profits among numerous actors. The original equipment manufacturers
(OEM) may either market complete “turnkey” products or just certain sub-systems or
components, which are re-sold by another company as part of its end product. However,
OEMs that actually “manufacture” their products are increasingly fewer, with most of them
limiting to the R&D and marketing activities. This has been made possible by the emergence
of Electronics Manufacturing Services (EMS) or Electronics Contract Manufacturing (ECM)
companies, which not only make products for OEMs but offer a wide range of value-added
services, including design collaboration, “design for manufacturing”, supply-chain-
management configure-to-order, outbound logistics and components repair (Mayes, 2020).
The EMS industry took off in the eighties by offering flexibility and variabilization of costs
to OEMs, leveraging on large economies of scale in manufacturing, raw materials
procurement, and low-cost labor. Since then, EMSs have been focusing on two different
market:

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 • Low Mix High Volume (LMHV), in which few numbers of assemblies are produced
in large quantities, with efficiency as the main goal to be achieved through
minimization of changeovers and exploitation of resources.
• High Mix Low Volume (HMLV), where products assembled vary in application, lot
size, and production processes. In this environment, the flexibility of assembly lines
is crucial to ensure fast changeovers and optimal managing of volume fluctuations.

The former market is dominated by the global colosseum Hon Hai Technology Group
(Foxconn), which supplies major customers such as Apple Inc., Microsoft Corp., Alphabet
Inc., Huawei Technologies Co. Ltd., and Sony Corp., and operates in 19 facilities worldwide
generating revenues of 178 Billion dollars in 2019. The HMLV market is instead less
concentrated and has recently gained the attention of the so-called Tier-1 EMSs (revenue >
$5 Billion) because of the attractiveness of higher profit-margins and higher negotiation
power with customers compared to LMHV.

The semiconductor supply chain should be included in the electronics SC to get a more
comprehensive overview. Continuous changing has shaped this SC as well since the early
days when integrated circuits’ complexity was low. At that time, semiconductor companies,
being called Integrated Device Manufacturers (IDM or pure play, of which Intel Corp. is an
example), were vertically integrated and used to design, manufacture, and sell integrated
circuits (ICs) in-house. This early model has been questioned when the high level of
complexity of the ICs made impractical and cost-prohibitive for one company to handle all
the processes. A de-verticalization of the supply chain followed and gave origin to an
ecosystem of companies, each specialized and focused on its expertise. Among these SC
actors, one can distinguish:

• Intellectual property (IP) designers: companies designing and owning the IP on a

core (or block), which is a reusable unit of integrated circuit, that ICs designers can
use as a “building block”. The most widely licensed IP cores are from Arm Holdings.
• Fabless semiconductor companies: companies that design, verify, and sell ICs under
their own brands, but that do not own a semiconductor foundry, hence do not take
part in the fabrication of the product (“fabless”). Companies such as Qualcomm,
Nvidia Corp., Apple Inc. are fabless. By outsourcing the manufacturing processes,
these players avoid high capital and resource investments relying on the IDMs’ excess
capacity, but primarily on “pure-play” semiconductors foundries.

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 • Pure-play semiconductors foundries: companies focusing solely on manufacturing
customer’s products. Taiwan Semiconductor Manufacturing Company (TSMC) is the
first and largest foundry that since 1987 satisfies the worldwide needs of fabless
companies which, using industry-standard Electronic Design Automation (EDA),
can retain complete control over the design process while leveraging third-party
production capacity.
• Outsourced Semiconductor Assembly and Test (OSAT): vendors that provide third-
party IC-packaging and test services. They mainly focus on offering innovative and
cost-effective packaging solutions to deliver higher performance, processing speeds,
and functionality with a reduction in space in an electronic device. OSATs such as
ASE, AMKOR, and Siliconware Precision Industries are less known but are expected
to witness a considerable surge in demand from the consumer electronics and
automotive applications, given the rising packaging costs (Mordor Intelligence,
2021).

The interplays of these actors occur on a global scale thanks to an intertwined logistics
network that ensure the flow of goods, which is pulled by customers’ demand.

The highest degree of SC uncertainty is embedded in the manufacturing process of devices

and components, in particular that of integrated circuits. There can be up to 1,400 process
steps in the overall manufacturing of the semiconductor wafers (i.e., a thin slice of
semiconductor substance) alone (Ramsey, 2020). Moreover, transistors are formed on the
lowest layer, but the process is repeated as numerous layers of circuits are formed to create
the final product. Upon completion of the fabrication, the semiconductors on the silicon
wafer must undergo through assembly, test, and packaging stages of production, leading to
an aggregated cycle time of 18-26 weeks. Moreover, added uncertainty is driven by the
presence of extremely variable yield rates (% of devices on the wafer found to perform
properly), which can range from 90% down to 30% when dealing with larger size dies.
Further uncertainty is due to the limited supply sources for what regards foundries, and the
constrained capacity of these last. Moving to the demand-side, electronics SC products are
“innovative” par excellence since they feature high-demand uncertainties, a variable demand
that is difficult to forecast, high-profit margins but high inventory, stockouts, and
obsolescence costs.

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According to a recent study by the consulting Bain & Company (Guarraia & Hanbury, 2020),
the disaggregation of the various steps of the value chain, and the concentration of each step
with a limited number of companies and geographies in pursuit of economies of scale,
together with inventory reductions, has made technology SCs extremely efficient in a normal
economic climate. However, when unpredictable events occur, the chain gets disrupted.
Figure 1.1 illustrates the most recent breakdowns that uncovered the vulnerability of the
global electronics SC, which is due to its reliance on limited supply sources such as China for
motherboards and EMSs, and the dependence on the US for semiconductor equipment,
central processing units (CPUs) and graphic cards (Guarraia & Hanbury, ivi). According to
the aforementioned study, electronics firms find it hard to make their SC more resilient since
some key components can be sourced from a limited niche of suppliers that survive in a
“winner-takes-most” model where sustaining enormous capital and R&D expenses is not
enough to thrive. The industry has entered the pandemic period in a seriously vulnerable
condition, threatened by the increased cyber-attacks but most importantly by the US-China
trade war that has been causing havoc in the last two years.

Figure 1.1 - Electronics SC timeline, source: Guarraia and Hanbury (2020)

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2. Research background

This chapter aims at summarizing the extant literature on the concepts that are relevant for
the preparation of the systematic review developed in this thesis. At first, a presentation of
supply chain (SC), supply chain management (SCM), and supply chain strategy (SCS)
concepts will be provided. Secondly, the theoretical framework of reference for this study
will be presented. The third section will present the WHO’s classification of pandemics
development phases, so as to time both the impacts and the responses to COVID-19 to
capture the dynamics of the phenomenon of interest. Lastly, the fourth section will be shed
light on how the researchers have so far framed the impact of COVID-19 on supply chains
by presenting the results of two systematic literature reviews (SLRs).

2.1 Supply Chain Management and Supply Chain Strategy

In the sixteenth edition of the APICS Dictionary (Association for Supply Chain Management
(ASCM), 2019), a supply chain (SC) is defined as “the global network used to deliver products
and services from raw materials to end customers through an engineered flow of
information, physical distribution and cash”. The review of SC definitions across authors
during the last three decades has revealed a decent consensus (Mentzer, Dewitt, et al., 2001).
In light of the definitions presented in Table 2.1, Mentzer and colleagues have defined a
supply chain as “a set of three or more entities (organizations or individuals) directly involved
in the upstream and downstream flows of products, services, finances, and/or information
from a source to a customer” (p. 4). Within this definition, the authors identified three
degrees of SC complexity: (1) a “direct supply chain”, consisting of a company, a supplier,
and a customer committed to the flow of products, services, finances, and/or information
from the upstream to the downstream stages; (2) an “extended supply chain”, which adds
tier-two suppliers and customers-of-customers involved in the aforementioned flow; (3) an

26
“ultimate supply chain” that pushes the boundaries of the entity to include all the
organizations (e.g. financial providers, third-party logistics suppliers, market research firms,
etc.) involved in all the upstream and downstream flows from the ultimate supplier to the
ultimate customer (Mentzer, DeWitt, et al., 2001). For this thesis’s purposes, the definition
provided by Mentzer and colleagues (ivi) will be used as a reference.

Table 2.1 - Definition of Supply Chain, source: author elaboration from Mentzer et al. (2001)

Reference Definition
La Londe and Masters (1994) A set of firms that pass materials forward. Normally, several independent firms
are involved in manufacturing a product and placing it in the hands of the end
user in a supply chain—raw material and component producers, product
assemblers, wholesalers, retailer merchants and transportation companies are
all members of a supply chain.
Aitken (1998) A network of connected and interdependent organizations mutually and co-
operatively working together to control, manage and improve the flow of
materials and information from suppliers to end users.

Lambert et al. (1998) The alignment of firms that bring products or services to market.

Christopher (2011) A network of connected and interdependent organizations mutually and co-
operatively working together to control, manage and improve the flow of
materials and information from suppliers to end users.

Diverging views instead characterize the concept of Supply Chain Management (SCM). In
their journal article “Supply Chain Management: the pursuit of a consensus definition” Gibson et. al
(2005) have reviewed many academics’ efforts to provide some structure through the re-
examination of previous SCM definitions. These feature Bechtel and Jayaram (1997), who
classified more than 50 existing SCM definitions into five schools of thought and developed
a useful framework for SCM analysis; Cooper, Lambert, and Pagh (1997) who reviewed 13
early SCM definitions and developed a conceptual framework for SCM built on three
constructs, namely processes, management components, and supply chain structure; Mentzer
et al. (2001) classified more than 20 SCM definitions in three categories: a management
philosophy, implementation of a management philosophy, and a set of management
processes. This last contribution has moreover highlighted that the literature had been trying
to define two concepts with the SCM term: (1) “Supply Chain Orientation, defined as the
recognition by of an organization of the systematic, strategic implications of the tactical
activities involved in managing the various flow in a supply chain”, and (2) Supply Chain

27
Table 2.2 - Definition of Supply Chain Management, source: author's elaboration from Mentzer, DeWitt, et al. (2001)

Authors Definition

Houlihan (1988) Differences between supply chain management and classical materials and
manufacturing control: “1) The supply chain is viewed as a single process.
Responsibility for the various segments in the chain is not fragmented and
relegated to functional areas such as manufacturing, purchasing, distribution,
and sales. 2) Supply chain management calls for, and in the end depends on,
strategic decision making. “Supply” is a shared objective of practically every
function in the chain and is of particular strategic significance because of its
impact on overall costs and market share. 3) Supply chain management calls
for a different perspective on inventories which are used as a balancing
mechanism of last, not first, resort. 4) A new approach to systems is required—
integration rather than interfacing.”

Monczka, Trent, and Handfield SCM requires traditionally separate materials functions to report to an
(1998) executive responsible for coordinating the entire materials process, and also
requires joint relationships with suppliers across multiple tiers. SCM is a
concept, “whose primary objective is to integrate and manage the sourcing,
flow, and control of materials using a total systems perspective across multiple
functions and multiple tiers of suppliers.”
Stevens (1989) “The objective of managing the supply chain is to synchronize the
requirements of the customer with the flow of materials from suppliers in
order to effect a balance between what are often seen as conflicting goals of
high customer service, low inventory management, and low unit cost.”
La Londe and Masters (1994) Supply chain strategy includes: “... two or more firms in a supply chain entering
into a long-term agreement; ... the development of trust and commitment to
the relationship; ... the integration of logistics activities involving the sharing
of demand and sales data; ... the potential for a shift in the locus of control of
the logistics process.”

Cooper, Lambert and Pagh Supply chain management is the integration of business processes from end
(1997) user through original suppliers that provides products, services and
information that add value for customers.

Larson and Rogers, D. S. (1998) Supply chain management (SCM) is the coordination of activities, within and
between vertically linked firms, for the purpose of serving end customers at a
profit.

Council of Logistics Management “Supply Chain Management encompasses the planning and management of
(2003) all activities involved in sourcing and procurement, conversion, demand
creation and fulfillment, and all Logistics Management activities. Thus, it also
includes coordination and collaboration with channel partners, which can be
suppliers, intermediaries, third-party service providers, and customers. In
essence, Supply Chain Management integrates supply and demand
management within and across companies.”

Management which is “the actual implementation of this orientation, across various

companies in the supply chain” (Mentzer et al., 2001, p. 11). Despite these efforts, Gibson
and colleagues (op. cit.) believe that no consensus had been reached regarding a definition of
SCM to their own time and justified it with the relative novelty of the discipline. Their belief
was proved by the survey conducted by the Council of Supply Chain Management
Professionals (CSCMP, formerly the Council of Logistics Management) as an initiative to

28
formalize their definition of SCM (Management Council of Logistics, 2003). In fact, no clear
winner emerged from the two definition proposals, and actually the Council adopted the
alternative who received slightly less support from professionals. This last definition,
together with the ones deemed as a representative sample of the extant literature by Mentzer
and colleagues (op. cit.) is presented in Table 2.2.

The SCM definition adopted by the CLM in 2003 underwent further revisions that have led
to the definition provided in the 2013 “SCM Terms and Glossary” (Council of Supply Chain
Management Professionals, 2013), which is the most updated one at the time of this study.
The fact that in the last eight years no changes have been made to it can suggest that a
consensus has been achieved. In light of this, the official definition provided by the Council
of Supply Chain Management Professionals (2013, p. 187) has been chosen as reference for
the purposes of this study:

Supply Chain Management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and collaboration with channel
partners, which can be suppliers, intermediaries, third-party service providers, and
customers. In essence, supply chain management integrates supply and demand
management within and across companies. Supply Chain Management is an integrating
function with primary responsibility for linking major business functions and business
processes within and across companies into a cohesive and high-performing business
model. It includes all of the logistics management activities noted above, as well as
manufacturing operations, and it drives coordination of processes and activities with and
across marketing, sales, product design, finance and information technology.

As a result of the divergent views on SCM, there is not a jointly agreed definition of what is
a Supply Chain Strategy (SCS) (Sillanpää & Sillanpää, 2014). Rose et al. (2012) has synthesized
the literature on SCS to assess the state of academic research at that time. After a review of
the strategy literature, Rose and colleagues made use of the definition provided by Mintzberg
and Lampel (1999, p. 27): “Strategy formation is judgmental designing, intuitive visioning,
and emergent learning: it is about transformation as well as perpetuation; it must involve
individual cognition and social interaction, cooperative as well as conflictive; it has to include
analyzing before and programming after as well as negotiation during; and all this must be in

29
response to what may be a demanding environment”. This definition is enhanced by Rose et
al. (op. cit.) by referencing to the internal capabilities analysis aimed at the deliberate strategy
formulation, which in the case of SCs would include the capabilities of the SC actors and the
desired synergies between them. Moving to SCS, the definition adopted for the purposed of
this study is the one proposed by Rose et al. (2012., p. 9) as an outcome of their review on
extant literature:

A Supply Chain Strategy is the deliberate and/or emergent conceptual framework by

which a company involves its supply chain and supply chain members in its efforts to
reach its own corporate strategic objectives. This broad definition allows the inclusion of
policies related to tactical efforts, such as reducing the inventory levels of a focal firm,
and strategic actions such as deciding to partner with, and invest in, a company in a
distant country to enable access to a new market or resources.”

Later in their study Rose et al. provide an overview of the perspectives from which SCS can
be studied and that will act as the backbone of the developed taxonomy (Figure 2.1). The
“SCM Perspective” founds its foundations on the well-known SCOR model (Association for
Supply Chain Management (ASCM), 2021); the “Marketing Perspective” is subdivided into
“Cost versus Value” strategies, “Product-Based Strategies” (Fisher, 1997), and “Demand-
Based Strategies”; the “Operations Management Perspective” is characterized by the cost
and responsiveness trade-off where “Lean” and “Agile” are firstly seen as conflicting and
then combined in the “Leagile” strategy (Christopher et al., 2006); the “Organizational
Theory Perspective” is built upon the constructs of “Structure”, “Ownership”, and
“Integration”; the “Financial and Legal Perspective” deals with the contractual relationship
that binds the SC partners. Each perspective has been articulated to encompass the

Figure 2.1 - An overview of Supply Chain Strategy Perspective, source: Rose et al. (2012)

30
numerous facets of SCS literature Rose and colleagues, but this lower-level analysis will be
omitted for the sake of synthesis.

The background provided on SCM and SCS has been useful to gain an impression on the
different theoretical lenses that could be adopted to frame this research. In fact, as will be
explained in section 4.1 about Systematic Literature Review in SCM, there is the need to
identify a theoretical framework to be refined through the review of the literature. The
theoretical framework chosen for this study will be presented in the following section.

2.2 The Uncertainty Framework for Supply Chain Strategy

This section aims at presenting the theoretical lens that has been chosen to frame the topic
of interest and that will be refined in light of the SLR. The choice has been based on: (1) the
objectives of the study which will be detailed in Chapter 3, (2) the pre-knowledge of the
author stemming from his academic background, and (3) from the research background
presented previously.

The chosen framework is the Uncertainty Framework, which has been developed by Hau L.
Lee and presented in his paper “Aligning Supply Chain Strategies with Product Uncertainties” (H.
L. Lee, 2002). It takes its root from the famous HBR article “What Is the Right Supply Chain
for Your Product?” (Fisher, 1997), where Fisher argues that when analyzing potential supply
chain strategies, a company should first categorize its products and markets according to
types. According to Fisher (op. cit.), the pattern of demand for a product is the most important
variable to consider when categorizing products and markets served by a supply chain.
According to this notion, product demand patterns determine what type of product the
supply chain is dealing with and allows the product to be classified as either a functional or an
innovative product. Figure 2.3 summarizes some of the differences between functional and
innovative products. However, Lee draws attention to the fact that supply chains can also
face challenges from unpredictability in supply. According to Lee (op. cit.), different sets of
strategies are required when uncertainties falter in supply. Figure 2.2 summarizes some of
the differences between the two types of supply processes depicted by Lee, namely stable and
evolving. By combining the demand and supply uncertainty, Lee gives birth to the Uncertainty
Framework, also known the “Hau Lee matrix” (Figure 2.4).

31
 Figure 2.3 - Demand characteristics, source: Lee (2002) Figure 2.2 - Supply characteristics, source: Lee (2002)

Figure 2.4 - The Uncertainty Framework: examples, source: Lee (2002)

Lee states that it is more challenging to operate a SC that is in the right column of Figure 2.4
than in the left column, and similarly it is more challenging to operate a SC that is in the
lower row of Figure 2.4 than in the upper row. For these reasons, before setting up a SCS, it
is necessary to understand the sources of the underlying uncertainties and explore ways to
reduce these uncertainties.

Assuming that it is possible to move the uncertainty characteristics of the product from the
right and column to the left, or from the lower row to the upper one, a SC able to do so will
obtain better performances. The initiatives to steer such shifts along the two matrix axes are
respectively named by Lee as demand uncertainty reduction strategies (DURS) and supply uncertainty
reduction strategies (SURS). Figure 2.5 illustrates the two kinds of strategies that improve SC
performance through uncertainty reduction. Lee (op. cit.) makes the example of demand

32
information sharing and synchronized planning as DURS capable of solving the bullwhip effect,
which is an amplification of order variability as one moves upstream along a supply chain
(H. L. Lee et al., 1997). For what regards SURS, Table 2.3 reports Lee’s findings.

Figure 2.5 - The uncertainty reduction strategies, source: Lee (2002)

Table 2.3 - Supply uncertainty reduction strategies description, source: author's elaboration from Lee (2002)

SURS Uncertainty tackled References

Free exchange of information Risk of supplier failure T.A. Austin and H.L. Lee (1998)
throughout the whole product
life cycle

Sharing product rollover plans Risks of product transitions C. Billington, H.L. Lee, C.S. Tang
with suppliers (1998); E. Johnson and H. Lee
(2000)

Early design collaboration Supply uncertainty transmission to B. Isaacson (1994)

downstream actors

Supplier hubs Supply risk of manufacturing lines See L.R. Kopczak (1996)

33
Figure 2.6 - Four strategy archetypes, source: Lee (2002)

Lee (op. cit.) has proposed four archetypes of SC strategy that can allow companies to achieve
a competitive edge when applied in the correct “uncertainty quadrant” (Figure 2.6).

• Efficient Supply Chains – The aim is to create the highest cost efficiencies in the
SC, by getting rid of non-value-added activities and expanding the Lean
manufacturing principles with a cross-firm perspective. These SCs should pursue
scale economies and deploy optimization techniques to achieve the best capacity
utilization in production and distribution. Information sharing among SC partners
must be ensured in the most efficient, accurate, and cost-effective way.
• Risk-Hedging Supply Chains – These SCs face high supply uncertainties by
pooling and sharing resources with partners so that the risks in supply disruption
can also be shared. Backup strategies in terms of stocks and supply base inventory,
together with pooling strategies, are common SURS adopted. ICT enables the
success of these SCs by allowing real-time monitoring of stocks and demand, and
the dynamic allocation of stocks and demand between partners who share the same
warehouse stocks.
• Responsive Supply Chains – The strategy adopted by these SCs is based on
reactivity and flexibility to cope with customers’ needs variety and variability. Build-
to-order and mass customization approaches can be suitable to satisfy the specific
market demand, with a strong focus on KPI such as Time-to-market and order
accuracy.

34
 • Agile Supply Chains – These SCs bring together the capacity of response and
flexibility to the market needs and the “risk-hedging strategies”. Agile means that
the SC can face variable demand (outbound perspective) minimizing at the same
time the risk of supply interruption (inbound perspective).

The just presented framework has been chosen since it allows the author to:
• include many of the supply chain’s areas impacted by COVID-19 listed by
Chowdhury et al. (2021), from supply and relationship management to demand
management
• merge the “Supply Chain Management perspective” with the “Marketing
perspective” and the “Operations Management Perspective” presented by Rose et
al. (2012) in their SCS taxonomy
• adopt a product-based perspective that enables to distinguish the impact on the two
industries of interest and further on the relative product categories
• time the impacts (in terms of supply and demand uncertainty) and reactions (in
terms of SURS and DURS) by tracing the movement along the framework axes.
The analysis of the ontological aspects and its constructs will be detailed in Section 4.2.1.

2.3 Development of epidemics

This section aims at presenting how epidemics are time-framed in subsequent stages by the
World Health Organization (WHO). The aim is to time both the impacts and the responses
to COVID-19 to capture the dynamics of the phenomenon of interest. As illustrated in Table
2.4, according to the WHO (2018), the dynamics of epidemic and pandemic diseases, with
these last defined as “epidemics occurring worldwide, or a very wide area, crossing
international boundaries and usually affecting a large number of people” (Last et al., 2001),
typically occur in four phases, although not all epidemic diseases necessarily go through each
phase. The first phase is the introduction or emergence in a community, which in the case
of COVID-19 started on 31 December 2019, when the WHO China Country Office was
informed of cases of pneumonia of unknown cause detected in Wuhan City, Hubei Province
of China (WHO, 2020b). The second phase is an outbreak with a localized transmission,
where sporadic infections with the pathogen occur; the beginning of this phase can be
identified on the 9 January 2020, when China’s CDC (Center for Disease Control and

35
Table 2.4 - Epidemic phases and Response Interventions, source: author's elaboration from WHO (2018)

Epidemic Response interventions

Description
phases phases
Introduction 1. Anticipation Emergence cannot be predicted but can certainly be anticipated.
or emergence Anticipation encompasses forecasting the most likely diseases to
emerge, and the quick identification of the drivers that will worsen
the impact or facilitate the spread. Preparedness plans, based on
lessons learned from past experiences, should contain a variety of
scenarios to allow for reactive response to the unexpected. At this
stage, SCs should be aware of and thus enable preparedness
measures.
2. Early detection Early detection allows the rapid implementation of containment
measures, which are the key to reducing the risk of amplification and
potential international spread. Early detection begins at the health
care setting, so health care workers must be trained to recognize
potential epidemic disease, report quickly an unusual event (such as
an unusual cluster of cases or deaths) . . . Once a new disease is
recognized by the health system, early laboratory confirmation is
essential. At this stage, SCs should be aware of and thus enable
preparedness measures.

Localized 3. Containment Rapid containment should start as soon as the first case is detected
transmission regardless of the etiology, which is most likely to be unknown. It
requires skilled professionals to safely implement the necessary
countermeasures. Pre-training of these professionals is essential to
guarantee the safety and efficiency of the operations. At the
containment stage, the environment becomes increasingly
vulnerable following periods of quarantine, interruption of logistics
due to variations in containment timing, and scaling in different
geographical areas, as well as certain lockdowns.
(Continued)
At this stage, SCs are experiencing initial misbalances in supply and
demand due to longer lead times, demand drops, and supply
unavailability due to facility closures.
Amplification 4. Control and Once the infectious disease threat reaches an epidemic or pandemic
mitigation level, the goal of the response is to mitigate its impact and reduce its
incidence, morbidity, and mortality as well as disruptions to
economic, political, and social systems. Amid the control and
mitigation stage, SCs must adapt to a “new normal” and start
preparing for recovery.

Reduced 5. Elimination or Control of a disease may lead to its elimination, which means that is
transmission eradication sufficiently controlled to prevent an epidemic from occurring in a
defined geographical area. Elimination means that the disease is no
longer considered a major public health issue. However, intervention
measures (surveillance and control) should continue to prevent its
re-emergence. Eradication of a disease – much more difficult and
rarely achieved - involves the permanent elimination of its incidence
worldwide. There is no longer a need for intervention measures.
Three criteria need to be met in order to eradicate a disease: there
must be an available intervention to interrupt its transmission; there
must be available efficient diagnostic tools to detect cases that could
lead to transmission; humans must be the only reservoir. During the
elimination stage, SCs must be recovered and adapted to new post-
pandemic realities.

36
Prevention) reported that a novel coronavirus (later named SARS-CoV-2, the virus causing
COVID-19) had been detected as the causative agent for 15 of the 59 cases of pneumonia
(Zhang, 2020). In the third phase, the outbreak amplifies into an epidemic or pandemic,
meaning that the pathogen is able to transmit from human to human and causes a sustained
outbreak in the community, threatening to spread beyond it. This phase started on 30 January
2020, when the WHO declared for the first time the outbreak of novel coronavirus a “public
health emergency of international concern” (WHO, 2020d), which anticipated the official
declaration of COVID-19 as a “global pandemic” by the WHO Director-General on 11
March (WHO, 2020c). The fourth phase is reduced transmission when human-to-human
transmission of the pathogen decreases, owing to acquired population immunity or effective
interventions to control the disease. This phase cannot be said to be started yet, since, as of
16 March 2021, 338 thousand new cases were reported worldwide, leading to a total of 120
million global cases; however, the inoculation of COVID-19 vaccines has started and fully
reached 90 million people, tracing the path to the elimination of the disease. The dynamics
of epidemics, as described above, define the response and the sequence interventions that
then become necessary. In Table 2.4, each response intervention is described in detail, with
the SCM-related measures in bold. The five response intervention phases will be useful in
the particularization of the research objective in Chapter 3.

2.4 Impact of COVID-19 on Supply Chains

Since the early stages of the pandemic, scientists raced to share their work on COVID-19
and the SARS-CoV-2 virus, often through preprints, i.e. articles posted online before peer
review (Else, 2020). On 14th March 2021, 226.993 publications were present on the global
COVID-19 research database (WHO, 2021), where the WHO is gathering the latest
international multilingual scientific findings and knowledge on the novel coronavirus. As
documented in the last issue of 2020 of Nature (Else, op. cit.) there was a sharp increase in
articles on all subjects submitted to scientific journals in the year that just ended, with 4% of
the world’s research output devoted to the coronavirus. Moreover, according to Else, the
urgent topic forced journals to rush to get COVID-19 through peer review achieving an
average acceptance time of 20 days (versus the 90 days in 2019), but at the expense of
publishing other research more slowly.

The unforeseen and unparalleled impacts of the novel coronavirus on life and businesses
have stimulated extraordinary research efforts. Focusing on the research on COVID-19

37
impact on SCs and SCM, what stands out is the remarkable interest that this issue has aroused
in researchers and practitioners compared to the previous pandemics. This trend has been
identified analyzing two SLR conducted in 2020 that have been summarized in Table 2.5. As
emerges from the SLR by Queiroz et al. (2020) on the impacts of epidemic outbreaks on
SCs, Influenza was the most visible epidemic outbreak reported as of March 2020, followed
by Cholera and Ebola. COVID-19 was listed only in the fourth place since only three papers
out of 32 were devoted to it. Moving to the search methods used by the selected papers by
Queiroz and colleagues (ivi, p.10), optimization models for resource allocations (e.g.,
“medicaments and vaccines distribution, vaccine procurement contracts, patient allocation,
facilities allocation, etc.”) were the most present. Therefore, different mathematical models
and approaches were reported to be used, including mixed-integer linear programming, linear
programming, game theory, case study, simulation (Queiroz et al., ivi). Regarding the
implications on supply chains, the aforementioned authors listed the key role played by
logistics and SCs in coordinating and integrating multiple members activities by citing
Mamani et al. (2013) and the impact of the SC to control epidemic outbreaks through the
supply of medicaments and other products to avoid materials shortage (Paul &
Venkateswaran, 2020). From the few studies on COVID-19 included in the SLR by Queiroz
and colleagues (op. cit.), the devastating impact of the novel coronavirus on global SCs was
though already emerging.

As pointed out earlier, the number of papers published regarding COVID-19 and the supply
chain has reached unparalleled levels compared to prior pandemics. This is proved by the
recent SLR by Chowdhury et al. (2021) on the COVID-19 pandemic-related supply chain
studies. In fact, the keywords string “supply chain” AND (COVID-19 OR SARS-COV-2
OR coronavirus) yielded, as of 28 September 2020, 198 results from several electronic
databases, that have been filtered to include 74 articles for the analysis. Different from the
review by Queiroz et al. (op. cit.), the largest number of articles (31 out of 74) were reported
to rely on researchers’ opinions as to the main method of investigation. Chowdhury and
colleagues explained this dominance with “the sudden occurrence and huge impact of the
pandemic, and also the limited time that researchers had to collect and analyze relevant data”
(ivi, p. 5).

38
Table 2.5 - Summary of the SLRs by Queiroz et al. (2020) and Chowdhury et al. (2021), source: author’s elaboration of
the two reviews
Queiroz et al. (2020) Chowdhury et al. (2021)
Publication Date 16 June 2020 13 February 2021
Topic of interest Impacts of epidemic outbreaks on supply COVID-19 pandemic in supply chain
chains disciplines
Search terms (“outbreak*” OR “pandemic*” OR “epidemic*” “supply chain” AND (“COVID-19” OR
OR “disease*” AND “humanitarian operati*” “SARS-COV-2” OR
OR “humanitarian relief*” OR “suppl* Chain*” “coronavirus”)
OR “logistic*”)

Search fields Titles, abstracts, and keywords Keywords

Accessed databases Scopus Database, ScienceDirect (Elsevier), Scopus, Google Scholar, Web of Science
Emeraldinsight (Emerald), Wiley Online Library
(Wiley), Taylor & Francis Online (Taylor &
Francis), Springer Link (Springer), Inderscience,
and Informs PubsOnline

Publication type Peer-review journals articles (indexed by Research articles, opinion pieces, short
Scopus) notes, discussion papers, review articles,
and letters to the editor published in
scholarly journals

Data range 2003 - March 2020 2020 (until 28 September)

Language English English
Inclusion criteria Papers that presented some outbreak in a (i) Articles focused on the supply chain in
logistics/ SC context relation to the COVID-19 pandemic
(ii) Both the search terms “supply chain”
and “COVID-19”, “coronavirus”, or “SARS-
COV-2” appeared in the body text

Exclusion criteria Papers that presented outbreak discussion One or more keywords only appearing in
purely without protagonism of the logistics/SC, reference lists without being discussed in
and review papers the body text

Number of papers 32 74
reviewed
Classification of • Outbreak/Disease reported • Impacts of the COVID-19 pandemic on
findings • Purpose supply chains
• Main method/Theoretical approach • Resilience strategies for managing the
• Supply chain/Logistics/Operations impacts of the COVID-19 pandemic.
implications • Dimensions and issues of sustainability
in relation to the COVID-19 pandemic.

Future research Preparedness focus, Digital focus, Adaptation Impact focus, Resilience focus,
agenda and recovery focus, Ripple effect focus, Technology focus, Sustainability focus
Sustainability focus

39
This pattern has moreover suggested to the authors that further research backed up with
real-world data is required. Quantitative methods, literature reviews, and empirical studies
followed in this order. About this last cluster of studies, the authors have seen in the lack of
empirical studies the confirmation that “researchers, thus far, have had limited opportunities
to collect and analyze real-world data” (Chowdhury et al., op. cit., p. 6). From an industry
context perspective, it was revealed that the major focus of existing research was on the food
and healthcare supply chain, given the severe disruptions and imbalance between supply and
demand in the former industry, and the major surge in demand in the latter. Less literature
adopted a multiple-industry point of view, and only four articles out of the 74 reviewed
addressed issues faced by SMEs. Moving to the thematic analysis performed by Chowdhury
and colleagues, the majority of the reviewed articles discussed the impacts of COVID-19 on
supply chains in several areas such as demand management, supply management, production
management, transportation and logistics, relationship management, supply chain-wide
operations, financial management, and sustainability management. Many of these articles also
discussed and reported potential resilience strategies to reduce the impacts and to enable
affected firms to make a quick recovery (Chowdhury et al., op. cit.), which were classified into
three resilience dimensions, namely “preparedness”, “response”, and “recovery”. A minor
stream of the literature suggested the use of a number of technologies, such as digital twins,
industry 4.0, 3-D printing technology, artificial intelligence, and mobile service operations, in
implementing the resilient strategies. Last but not least, seventeen of the studies review by
Chowdhury and colleagues dealt with supply chain sustainability considering some or all the
dimensions of the “Triple Bottom Line” (Elkington, 1994), namely social, environmental,
and financial. In conclusion to their SLR, Chowdhury et al. provided a rich body of research
questions and opportunities in different areas that, in their opinion, still need to be
investigated. In addition to these, the aforementioned authors listed “other suggestions for
future research”, which encompass:

• Methodology, with the use of empirical methods by collecting real-world data.

• Context, with the use of diverse context and comparative analysis of countries with
different socio-economical contexts.
• Theory, with the use of theory in the conceptualization of the research, in the design,
measurement, and analysis of the studies, and in the discussion of the findings.

40
41
3. Research Objectives and Questions

The research background has provided an overview of the extant literature on COVID-19
and the supply chain, which despite being rapidly grown since the beginning of the outbreak,
still has gaps to be filled. If the studies on previous epidemics were mainly related to
optimization models for resource allocation (Queiroz et al., 2020), the stream of literature
that has treated COVID-19 and SCs was found to rely on researchers’ opinions as to their
main method of investigation (Chowdhury et al., 2021). Regarding this methodological
aspect, Chowdhury and colleagues (op. cit.) expressed the need for further research that can
understand the pandemic’s impacts in different contexts and formulate strategies to address
them by leveraging on real-world data. Moreover, moving to the theme of future studies, the
aforementioned authors have put on top of the list the opportunity to understand what “are
the potential short-term, medium-term, and long-term impacts of the COVID-19 pandemic
on a particular supply chain” (Chowdhury et al., op. cit., p. 17). Moreover, Chowdhury et al.
(op. cit.) emphasized the use of theory in the conceptualization of the research and in the
design, measurement, and analysis of the studies, as well as the discussion of the findings.
Relating to the theoretical perspective, the research background on Supply Chain
Management and Supply Chain Strategy (Section 2.1) has revealed the numerous facets of
these concepts and the wide variety of frameworks developed to explain them over time.

Therefore, this study aims at filling the gap highlighted by the most comprehensive and
recent systematic literature reviews on COVID-19 and SCs and therefore has the objective
of this study has been decided…

42
 … to assess the explicit impact in the short and medium-term of COVID-19 on the
FMCG and electronics supply chains and the responses taken by these industries in
terms of SC strategy, as well as clarifying the long-lasting changes introduced as the
“new norm”.

The presentation of the theoretical framework of reference (i.e., the Uncertainty Framework) in
Section 2.2, together with the rationale behind the choice and the highlighting of its potential,
have allowed a proper structuring of this study according to the SLR in SCM guidelines that
will be illustrated in Section 4.1. The relevance of the SCs of interest, namely the fast-moving
consumer goods and the electronics SC, has been demonstrated in Chapter 1 and has implied
the need for the industries overviews provided in Section 1.2.

The specified objective of this study has also introduced three well-defined research
questions, that have been purposely formulated with a strong reference to the theoretical
framework of reference so to ensure adherence to it throughout the whole research process.
The research objective has been deconstructed into three research questions, each with their
own sub-sections, which are:

RQ1: Impact on SC uncertainty

RQ1a: “How has COVID-19 affected the SC uncertainty in FMCG SCs?

RQ1b: “How has COVID-19 affected the SC uncertainty in electronics SCs?”

RQ2: SC uncertainty management strategies

RQ2a: “What are the uncertainty management strategies reported by the FMCG SCs
in facing COVID-19?”

RQ2b: “What are the uncertainty management strategies reported by the electronic
SCs in facing COVID-19?”

RQ3: Long-lasting changes

RQ3: “What are long-lasting changes that shape the future of FMCG and electronic
SCs?

This study intends to catch the suggestions and opportunities provided by extant SLRs on
this topic, and in particular, will follow a rigorous and systematic review of not only academic
literature but of “grey literature” and real-world news reported by a wide range of trustworthy

43
and quality sources. During the definition of the criteria of primary studies, the collection of
valid data was given the most priority. The source of information has always been verified
and it has been ensured throughout the study that used pieces of information are always
coming from experts or practitioners in the associated field. This has been necessitated by
the widening of sources to non-peer-reviewed material. The methodology adopted to answer
the above-mentioned RQs will be discussed in detail in Chapter 4.

The will to time the impacts of the novel coronavirus and the responses adopted by the
FMCG and electronics SCs has been made possible by the use of the WHO five pandemics
phases illustrated in Section 2.3. More specifically, each RQ has been timed with reference
to the aforementioned phases, to capture the dynamics of the phenomenon of interest, as
illustrated Figure 3.1.

Figure 3.1 - Research framework based on WHO pandemic stages, source: author

The answers to the RQs will be discussed in Section 5.5.

44
45
4. Methodology

This chapter will be shedding light on the details of how the total research has been
conducted by providing a detailed description of the steps executed. In doing so, the data
gathering techniques and software adopted will be presented.

The research process of this thesis has been developed by adapting the guidelines described
in section 4.1 to the systematic review of secondary materials, and has been structured in the
following steps:

1. Initial framework choice and research question definition

2. Identification of primary studies characteristics
3. Baseline sample gathering
4. Pertinent material selection
5. Extraction and synthesis
6. Findings reporting

Steps 2, 3, and 4 can be considered the most critical parts as they are associated with the
identification of acceptable documents related to the topic of interest. Specific keywords and
searching protocols were maintained throughout the information collection to ensure
credibility and replicability. Each of the six steps will be described in detail in Section 4.2.

4.1 Systematic Literature Review in Supply Chain Management

A systematic literature review (SLR) identifies, selects and critically appraises research in
order to answer a clearly formulated question (Dewey & Drahota, 2016). The backbone of a
SLR is its search protocol or plan, which clearly states the search criteria before the review is
conducted. The drafting of this document marks the difference between SRL and traditional
narrative review. Contrary to this, SLR must adopt a replicable, scientific, and transparent

46
process, in other words, a detailed technology that aims to minimize bias through exhaustive
literature searches of published and unpublished studies and by providing an audit trail of
the reviewers’ decisions, procedures and conclusions (Cook et al., 1997).

A successful SLR must take into consideration the peculiarities of the subject of study. This
is more than necessary when conducting SLR in SCM, given the ontological and
epistemological idiosyncrasies of supply chain management research (Durach et al., 2017).
Durach and colleagues have proposed a new paradigm for SLRs in the SC domain that is
based on both best practice and the unique attributes of doing SCM research. The novel
approach proposed by the study involves exploring existing studies with attention to
theoretical boundaries, units of analysis, sources of data, study contexts, definitions, and the
operationalization of constructs, as well as research methods, with the goal of refining or
revising existing theory. Starting from the common steps followed by SLR (1. defining the
research question, 2. determining the required characteristics of primary studies, 3. retrieving
a sample of potentially relevant literature, 4. selecting the pertinent literature, 5. synthesizing
the literature, and 6. reporting the results), Durach and colleagues have revised the procedure
by taking into account the challenges and peculiarities of SCM. The first step involves the
development (or reference) of an initial theoretical framework regarding the phenomenon
under study, with the aim of refining it in light of the SLR literature. The framework of
reference must specify limitations regarding the units of analysis (e.g. dyad vs inter-twined
supply network (Ivanov & Dolgui, 2020)), study context (e.g. culture, industry, geographical
region, time), and construct definitions (e.g. firm resilience vs supply chain resilience). The
second step, aiming at defining the required characteristics of primary studies, must provide
a set of criteria for determining whether a publication can provide relevant information
regarding the theoretical framework. This translates into the assessment of the contribution
to the initial framework, including the unit of analysis, study context, definitions, and
operationalization of constructs. At the third step, the retrieval of the sample of potentially
relevant literature (“baseline sample”) should be the output of structured and rigorous
searches to mitigate the risks of sampling bias. Multiple searches may be needed to identify
literature on all aspects of the theoretical framework, while the construction of search terms
must consider the breadth of definitions and terminologies in SCM research. The search
strategy should be reported in detail sufficient to ensure that the search could be replicated.
Searches should not only be conducted in published journals and listed in bibliographic
databases, but also comprise unpublished studies, conference proceedings, industry trials,

47
and the Internet (Tranfield et al., 2003). The fourth step consists of the selection of pertinent
literature to obtain the “synthesis sample”. The researcher must conduct a theoretically
driven selection of literature to identify relevant studies according to the inclusion/exclusion
criteria. In doing so, a detailed relevance test should be conducted by going beyond what is
stated in titles and abstracts. The selection bias risk (composed of inclusion criteria bias and
selector bias) should be mitigated by the expertise, honesty, and transparency of the
researcher, and minimized by the involvement of multiple researchers in a blind process.
During the fifth step, the selected studies are synthesized employing two parallel coding
structures: one to cover each aspect of the framework, extracting the study findings regarding
the relationship between variables in the initial framework; and one for the ontological and
epistemological characteristics, such as the unit of analysis, source of data and research
method, study context, definitions and construct measures. The definition of these structures
can be performed a priori, but also developed and refined along the process. In practical
terms, the synthesis process should aim at refining the initial theoretical framework by
identifying “in what circumstances, “when”, or “for whom” the relationship in the theory
works (Durach et al., op. cit.)

4.2 Adapting the SLR methodology to the review of secondary

materials

4.2.1 Initial framework choice and research question definition

The planning phase has involved the choice of the theoretical framework of reference and
the definition of the research questions. The tight link between these two steps stems from
a twofold need: (1) to identify a theoretical lens able to frame at best the topic of interest,
and (2) to structure the research questions so that the review aims at understanding how such
theories work in the context of interest.

The choice of the reference theoretical framework is a crucial step since different frameworks
will provide different theoretical lenses on the phenomenon of interest. For this reason, SLRs
in the SCM context may benefit from considering a limited number (one or two) of
theoretical perspectives, as multiple perspectives can impede putting forth coherent

48
Table 4.1 - Framework constructs descriptions, source: author's elaboration from Lee (2002)

Framework Constructs Description

Supply uncertainty (SU) is tightly linked to the supply process complexity. SU is low
in a "stable" supply process, where the manufacturing process and the underlying
technology are mature, and the supply base is well established. SU is high in an
Supply Uncertainty
"evolving" supply process, where the manufacturing process and the underlying
technology are still under early development and are rapidly changing and as a
result the supply base may be limited in both size and experience.

Demand uncertainty is linked to the predictability of the demand for the product.
Functional products have long product life cycles and therefore stable demand,
Demand Uncertainty while innovative products are products that have short life cycles with high
innovation and fashion contents—and which, as a result, have highly
unpredictable demand (Fisher, 1997).

Set of SCM levers and strategies aimed at reducing supply uncertainty. With
Supply Uncertainty
reference to the Uncertainty Framework, these strategies represent efforts of
Reduction Strategy
shifting, wherever possible, a supply process from the "evolving" to the "stable"
(SURS)
category.

Set of SCM levers and strategies aimed at reducing demand uncertainty. With
Demand Uncertainty
reference to the Uncertainty Framework, these strategies represent efforts of
Reduction Strategy
shifting, wherever possible, the demand for a product from the "innovative" to the
(DURS)
"functional" category.

arguments (Durach et al., 2017). For the reasons explained in Section 2.2, the author has
chosen the Uncertainty Framework (H. L. Lee, 2002). It has been necessary to investigate the
model’s units of analysis, study context, and construct definitions to sequentially determine
the required characteristics of the primary studies. The units of analysis of the framework are
two: (1) the final product delivered by a SC and (2) the SC strategy to match the supply and
demand uncertainty of the product. In fact, by studying the demand and supply characteristics
specific to a certain product, Lee is firstly able to locate (theoretically speaking) a SC in the
right spot of the Uncertainty Framework. Secondly, he points out that before setting up a SCS,
it is necessary to understand the sources of the underlying uncertainties and explore ways to
reduce them. This because the deployment of wrong managerial policies could have altered
the uncertainty level perceived by a firm making it higher than the one intrinsic in the
product. After having reduced as much as possible the aforementioned uncertainties, it is
time to define the most suitable SCS. Focusing on the context of the study, this last can be
defined as cross-sectoral, considering the variety of industrial applications given as examples
within the paper. The framework has been developed in the early two thousand when the
Internet had contributed to both the increasing needs and opportunities from improved

49
supply chain management (H. L. Lee, op. cit.). The framework’s constructs and their
descriptions provided by Lee (op. cit.) are presented in Table 4.1.

The research questions were defined by the author through discussion with the thesis co-
supervisor. They are purposely formulated with a strong reference to the framework
constructs so to ensure adherence to it during the following stages of the research process.

The research questions are:

RQ1: Impact on SC uncertainty

RQ1a: “How has COVID-19 affected the SC uncertainty in FMCG SCs?

RQ1b: “How has COVID-19 affected the SC uncertainty in electronics SCs?”

RQ2: SC uncertainty management strategies

RQ2a: “What are the uncertainty management strategies reported by the FMCG SCs
in facing COVID-19?”

RQ2b: “What are the uncertainty management strategies reported by the electronic
SCs in facing COVID-19?”

RQ3: Long-lasting changes

RQ3: “What are long-lasting changes that shape the future of FMCG and electronic
SCs?

4.2.2 Identification of primary studies characteristics

The searching method was guided by the process outlined by Durach et al. (op. cit.). In this
step, the required characteristics of primary studies are defined by crafting inclusion and
exclusion criteria. These criteria commonly reflect various aspects of the research purpose
and research question(s) and focus on the content and quality of the primary studies
(Tranfield et al., op. cit.). In the SCM field, inclusion/exclusion criteria are used to assess the
extent to which a primary study can inform one or more aspects of the initial theoretical
frame-work, including units of analysis, study contexts, and definitions, and the
operationalization of constructs (Durach et al., op. cit.).

50
Table 4.2 - Inclusion and exclusion criteria, source: author

Rationale

Inclusion criteria
1. Publication in peer-reviewed Peer-reviewed journals are likely to be of higher quality than other non-
journals peer-reviewed documents such as conference papers, working papers,
etc.

2. Resources from SC thematic They represent the most updated source of information for making early
websites and business magazines analysis on a fast-evolving topic like the one of interest

3. Whitepapers and news from They are at the frontier of studies about how the future of the SCs of
consulting firms' websites interest will look like and which should be the strategies to thrive in the
"new norm"

4. Theoretical, empirical studies Different approaches have contributed to the research area
and review papers, either
qualitative or quantitative papers
5. Year of publication from 2020 To ensure that resources do cover only the COVID-19 pandemic period

6. Geographical context open to To achieve a comprehensive overview of the impact of COVID-19 on a

any region global scale

Exclusion criteria
1. All studies or publications in To ensure a direct understanding of the content by the review author
any language other than English without the need for translations
and Italian
2. Resources where the focus is A vast body of literature includes COVID-19 in keywords but treats it as
not on COVID-19 impact on SCs an application context rather than a SC disruption agent
3. Resources with no information A significant part of resources provides only economic figures about the
about neither supply nor demand impact of COVID-19 on SCs and businesses
uncertainty

4. Resources with no specific A large part of resources uses a cross-sectoral point of view that is not
information about neither FMCG able to give industry-specific insights
nor electronics SCs

This activity has taken into consideration the novelty of the topic of interest and has therefore
followed an inclusive approach aimed at overcoming the potential scarcity of pertinent
material. The inclusion and exclusion criteria detailed in Table 4.2 have been crafted with the
idea of broadening the traditional concept of SLR to include further secondary materials
from non-peer-reviewed sources, in what can be called a “systematic review of secondary
materials”. For what regards the inclusion criterion on the research method of the primary
studies, the rationale behind is supported by Durach et al. (op. cit.). The authors suggest that
that SLR in SCM can benefit from both empirical qualitative and empirical quantitative
studies and from modeling research, stating that

51
 SLRs in SCM thus provide a unique opportunity to bring the findings of these primary
studies together, and the decision to exclude a primary study should only relate to its
lack of contribution to the theoretical framework. (op. cit., p. 74)

During the definition of the criteria, the collection of valid data was given the most priority.
The source of information has always been verified and it has been ensured throughout the
study that used pieces of information are always coming from experts or practitioners in the
associated field. This has been necessitated by the widening of sources to non-peer-reviewed
material, aimed at overcoming the scarcity of journal publications due to the novelty of the
scenario.

The implementation of the exclusion criteria will be discussed at step “Pertinent material
selection” (Section 4.2.4).

4.2.3 Baseline sample gathering

The third step of the research process is to retrieve a “baseline sample” of potentially relevant
material. This activity starts from the identification of sources to search. According to the
inclusion criteria, this review has drawn from multiple sources to collect a satisfactory
amount of material despite the newness of the topic of interest. This is fundamental if one
considers that the initial sample of material will then go through the selection process by
means of the exclusion criteria. If the baseline sample is small, the risk of ending up with
insufficient material for the synthesis increases.

These considerations have been kept in mind during both the listing of sources to access and
the definition of the search terms (keywords) to be used. The former has been carried out by
dividing the sources into two macro-categories: (1) Academic electronic databases and (2)
Google searches. The first category is made up of two different solutions:

• Elsevier’s Scopus, the largest abstract and citation database of peer-reviewed

literature. It is available under a subscription and has been accessed courtesy of
Politecnico di Milano. This electronic database allows to search and filter results in
different fields of the documents in a precise and effective way, thanks to a structured
search interface. Scopus users can save the desired searches and freely combine them
to create complex search strings. The replicability of a search is supported by a
function that updates it by showing the new results since the last run.

52
 • Google Scholar (GS), an online, freely accessible search engine that lets users look
for both physical and digital copies of articles. Differently from Scopus, GS searches
scholarly works from a variety of sources, including academic publishers and
universities looking for peer-reviewed articles, theses, books, technical reports,
abstracts, reprints. GS’s search interface is not as structured as that of Scopus and
allows users to look for keywords in title or “anywhere in the article”, with the option
to filter results by author, publication, and date.

Table 4.3 - Research sources, source: author

Detail description

Research Electronic databases (2) Scopus, Google Scholar (GS)

database
Supply chain thematic websites Inbound Logistics, Supply Chain Digital, Supply Chain
(13) Brain, Supply Chain Management Review, Logistics
Management, Supply Chain 24/7, DC Velocity, Supply
Chain Dive, Spend Matters, Electronics Purchasing
Strategies, Logistics Viewpoint, Supply Chain Matters,
Supply Management
Business magazines (3) The Economist, The Financial Times, Bloomberg

Consulting firms’ reports (13) McKinsey & Company, Bain & Company, Boston
Consulting Group, Deloitte, PwC, KPMG, EY, Accenture,
Gartner, Maine Pointe, Capgemini, Infosys, Tata
Consultancy Services

Publication type Peer-reviewed literature, grey literature (annual reports, working papers, white papers,
master thesis), articles and news from online SC websites, business magazines, interviews,
etc. which has been developed by researchers or practitioners of supply chain based on
information provided by experts on the said field

Language English, Italian

Data Range 1st January 2020 to 26th February 2021 cut-off date

The second macro-category of sources originates from the run of structured searches via
Google on a predefined list of web domains. This list has been structured in three categories:

• Supply chain thematic websites: these are web domains that provide SC-related
journalism and insights, covering topics such as logistics, freight, operations,
procurement, regulation, technology, etc. They often publish companies’ executives
and SC managers interviews, offering valuable information coming from the field.

53
 • Business magazines: weekly and monthly magazines that provide accurate and
trustworthy material on topics such as management and leadership, marketing and
organization, long-term strategies, business and economics, technology, etc. They are
available under a subscription, but free-access material is sometimes present.
• Consulting firms’ whitepapers and articles: free-access material published by
consulting firms deriving from their services to companies. These resources provide
excellent insights across a variety of industries from top-level experts.

The selection of the above-mentioned sources has been performed by triangulating different
lists (Bronwen, 2014; Delbridge, 2019; Dill, 2016; Galea-Pace, 2020; K. Lee, 2016; Victor,
2020) of the SC thematic websites, business magazines, and consulting firms deemed as best
in their respective category. This process has led to the creation of a research database that
is described in detail in Table 4.3.

These resources have been accessed from 1 October, 2020 to 26 February, 2021 by using
structured search strings that will now be discussed in detail.

The structuring of the search strings has been performed by accounting for the breadth of
definitions and terminology in the SCM discipline, with an inclusive rather than exclusive
approach (Durach et al., op. cit.). This activity has been based on the identification of four
base concepts, each of which has been described by multiple terms as shown in Table 4.4

Table 4.4 - Search concepts and terms, source: author

Concept 1 Concept 2 Concept 3 Concept 4

Supply Chain COVID-19 FMCG Electronics

supply chain coronavirus fast moving consumer goods electronics
supply network COVID-19 consumer goods semiconductor
supply management SARS-CoV-2 FMCG consumer
electronics
supply chain management consumer packaged goods hi-tech
CPG

For what regards the academic electronic databases, multiple searches have been tested by
varying the fields in which each concept’s terms were looked for. This task has been firstly
performed on Scopus, given its superior search interface compared to GS, by using two
combinations of the aforementioned concepts: #1 to search for FMCG-related papers and
#2 to search for electronics-related ones. The rationale behind this split has been the

54
willingness to assess the number of results for each of the two industries of interest. The
decision regarding the combination of keywords has involved a trade-off between the
volume of primary studies and the adherence to the inclusion criteria, thus to the research
questions. After numerous tests, two search strings have been defined and are presented in
Table 4.5 and Table 4.6.

Table 4.5 - Search string #1 (FMCG), source: author

Concept 1 Concept 2 Concept 3

PUBLICATION YEAR
Supply Chain COVID-19 FMCG

TITLE-ABS-KEY( TITLE-ABS-KEY( ALL(

AND PUBYEAR > 2019
"fast moving consumer
"supply chain" OR coronavirus OR
goods" OR
"supply network" OR AND “COVID-19” OR AND "consumer goods" OR

"supply management" OR “SARS-CoV-2”) FMCG OR

"supply chain "consumer packaged
management") goods" OR

CPG)

Table 4.6 - Search string #2 (electronics), source: author

Concept 1 Concept 2 Concept 4

PUBLICATION YEAR
Supply Chain COVID-19 Electronics

TITLE-ABS-KEY( TITLE-ABS-KEY( ALL(

AND PUBYEAR > 2019
"supply chain" OR coronavirus OR electronics OR

"supply network" OR AND “COVID-19” OR AND "semiconductor" OR

"consumer electronics"
"supply management" OR “SARS-CoV-2”)
OR
"supply chain
hi-tech”)
management")

It can be noticed that the queries related to the first two concepts have been searched in
“title, abstract, keywords” (TITLE-ABS-KEY), while the concepts regarding the industry of
reference have been searched in all fields (ALL). The reason for this has been the need to
overcome the scarcity of results when the industry’s terms were searched in TITLE-ABS-
KEY. The publication date inclusion criteria have been respected by means of Scopus’s filter
“PUBYEAR”.

55
To ensure consistency in the implementation of the search strings across Scopus and GS,
the author had to address the differences between their search interfaces. If the former allows
to effectively complete the task, the latter lacks the ability to search in “titles, abstracts,
keywords”. In GS it is not allowed to differentiate each term’s search field, forcing the user
to look for all of them either “in the title of the article” or “anywhere in the article”. Given
also that the two data sources have their own unique syntax, two issues about GS needed to
be tackled: (1) the inability to search for keywords in the title and abstract combined and (2)
the risk that full-text search can lead to many irrelevant results.

A good solution was found in Publish or Perish (Harzing, 2007), a software program that
retrieves and analyzes academic citations. It uses a variety of data sources (including Google
Scholar) to obtain the raw citations, then analyzes these and presents a range of metrics: total
number of papers and the total number of citations, average citations per paper, citations per
author, papers per author, and citations per year, Hirsch's h-index and related parameters,
etc. The Google Scholar search pane in Publish or Perish has allowed looking for keywords in
the title and all fields combined, thus increasing the consistency between Scopus and GS
searches. Figure 4.1 shows in detail the software interface for the research applied to search
string #2.
Figure 4.1 - GS search interface on Publish or Perish software, source: author

It can be noticed that the output of the research is a list of results, which can be sorted by
“Cites” (number of citations), by “Rank” (the order in which Google Scholar returned them),
or by other descriptive fields. The results summary displayed on the left provides the total
number of results and the metrics aforementioned and enables the export of the results in

56
numerous formats, such as BibTex, CSV, JSON, RIS. This last is a standardized tag format
developed by Research Information Systems, Incorporated to enable citation programs to exchange
data. RIS format has been chosen since many digital libraries, including Scopus, can export
citations in this format.

The searches have gathered a total of 127 resources, of which 71 from Scopus and 56 from
Google Scholar. This difference can be explained by the different syntax used by the two
databases, with GS looking for keywords exact match only. Disaggregating results by the
search string, 42 stemmed from string #1 (FMCG) and 85 from string #2 (electronics). To
consolidate the four lists of results (strings #1 and #2 from Scopus and strings #1 and #2
from GS), Mendeley (Mendeley, 2021) has been used. Mendeley is a free web and desktop
reference management application owned by Elsevier that allows storing, organizing, and
searching references coming from different databases by collecting them in a single cloud-
based library. This solution has noticeably simplified the resources analysis during the
selection and synthesis phases, which will be described in detail in the following sections.

The search within the second macro-category of sources (SC thematic websites, business
magazines, and consulting firms’ whitepapers) has been conducted via Google searches. The
advanced search tool has allowed using the queries specified in Table 4.5 and Table 4.6 but
could not provide the same flexibility in terms of search fields. Following an inclusive
approach, keywords have been searched anywhere on the web page. To limit the research to
a specific domain the query “site:” followed by each source domain has been inserted. The
inclusion criteria regarding the date have been implemented with the query “after: 2019”, to
include only the webpages published from 2020 onwards. For example purposes, the search
string used to look for FMCG related material within the Bloomberg website follows:

“site:www.bloomberg.com ("supply chain" OR "supply network" OR "supply management" OR "supply chain

management" ) AND ("coronavirus" OR "COVID-19" OR "SARS-CoV-2") AND ("fast moving consumer goods" OR
"consumer goods" OR "fmcg" OR "consumer packaged goods" OR "cpg") after:2019”

Performing structured and consistent research through Google has proved to be a

burdensome task. Having to deal with 29 web domains and two different albeit specific
search strings, the results obtained by each of the 58 individual searches can be in the
hundreds. In light of this, the activity has been performed with the aid of a web-scraping
tool, namely Octoparse (Octoparse, 2021). Octoparse is freemium modern visual web data
extraction software, that allows users to bulk extract information from websites with little if
none need to code. This information can be exported as clean structured data set in various

57
output formats including XLSX, JSON, CSV, and HTML. In the present case the software
has been loaded with the Google searches URLs and run to extract three pieces of
information from the search results:

1. Web page title

2. Web page URL
3. Web page date

After having tuned the software parameters so that Google policies were respected, the
algorithm has iterated the data extraction process for all the results pages. After the removal
of duplicates pages, each of the 58 search results has been then exported in XLSX format to
be further cleaned using Microsoft Excel. At this stage, web pages whose date was not been
extracted correctly have been discarded since these are always websites menu pages.

At the end of this articulated process, the total number of web pages satisfying the inclusion
criteria were: 3986, of which 1708 from SC thematic websites, 854 from business magazines,
and 1424 from consulting firms. The huge number of results obtained from these sources
can be explained by the search strings being not very restrictive and by the massive amount
of content now available on the Internet. As stated during the definition of search criteria, a
top priority was given to the validity and quality of data gathered. With this purpose, the
application of exclusion criteria and the assessment of the relevance of the material coming
from these sources for the review have been carried out with a highly selective approach.

4.2.4 Material selection

In the fourth step, the inclusion/exclusion criteria defined in step two are applied to reduce
the sample of primary studies to a subset, which can be referred to as the “synthesis sample.”
Ideally, this sample includes all relevant studies and excludes irrelevant studies. As pointed
out by Durach and colleagues (op. cit.), SLR in SCM lacks specific guidelines regarding where
(i.e., title, abstract, keywords, full text) the inclusion/exclusion criteria need to be applied. In
their study, they highlight the importance of going beyond what is stated in a study’s and
abstract when assessing its relevance for refining the theoretical framework. Moreover, they
state

Thus, SLRs in SCM benefit from shifting from the inclusivity idea and be exclusive
in step 4 to accumulate a literature base that can help in refining the initial theoretical
framework. Such an approach can result in small samples, but the contribution is

58
 strengthened by enabling a comparison between primary studies on certain aspects of the
theoretical framework and singling out the factors that may explain differences in study
findings. (Durach et al., op. cit., p. 75)

Therefore, this step has been performed with an exclusive approach and implemented taking
into account the heterogeneity of the primary studies’ sources. A detailed description of the
activities involved when dealing with the two macro-categories of resources follows.

Primary studies retrieved from Scopus and GS have been imported and managed through
Mendeley. The documents have been downloaded either directly from the two databases or
the publisher’s website. Regarding this, the first exclusion has involved the resources which
could not be consulted by the author, due to restricted access. Out of 127 resources, nine
could not be accessed and were therefore excluded from the sample. The screening has then
considered the presence of duplicate entries: by using the “Check for duplicates” tool
embedded in the Mendeley application, it has been possible to merge the duplicates
documents after checking the actual match of their details. 25 entries were confirmed as
duplicates and subsequently merged, leading to an adjusted baseline sample of 93 resources.

The next step has consisted of the application of exclusion criteria to the documents’
abstracts: materials that proved compliant to such conditions for exclusion were discarded
and collected in a specific folder. This task has been performed by strictly enforcing the
second exclusion criterion (“Resources where the focus is not on COVID-19 impact on
SCs”), while the last two criteria (“Resources with no information about neither supply nor
demand uncertainty” and “Resources with no specific information about neither FMCG nor
electronics SCs”) have been checked with a more inclusive approach, to reserve the option
of excluding them after a full-text assessment. A clear example of this is the exclusion of the
abstract of one systematic review on the blockchain applications for SCM (Sangeetha et al.,
2020) which was among the results of the electronics-related papers in Scopus given that the
terms “supply chain” and “SARS-CoV-2” appeared on the abstract. Given its lack of focus
on COVID-19 impact on SCs, it was excluded from the sample. Another example of
exclusion involved the abstract of a case study pre-print (Mitchell et al., 2020) that despite its
clear focus on the impacts and response of SC to COVID-19, focused on the UK fresh fruit
and vegetable food SC which cannot be considered as FMCGs as defined in section 1.2.1.
On the other hand, a publication that successfully passed the abstract assessment even
though lacking explicit information about the two industries of interest is a secondary

59
materials analysis on ten US-based companies and the impacts and the risk mitigation
strategies used during the pandemic crisis (Nelissen, 2021). By keeping this abstract within
the full-text review sample, it was possible to assess the actual presence of some companies
that belong to the FMCGs and electronics industries within the sample.

By means of this activity, 48 documents have been discarded, narrowing the sample to 45.
The remained literature has gone through the second round of relevance assessment which
has been carried out by considering the full text. Having reduced the baseline sample to half
of its original size has allowed completing this task in a reasonable amount of time.
Documents have been discarded if satisfying the exclusion criteria and thus if not providing
any relevant information for the refinement of the initial framework with regards to the
industries of interest. During this assessment, special attention has been given to the presence
of information about the supply and demand Uncertainty Framework constructs, as well as the
reporting of SURS and DURS. If the adherence to the Uncertainty Framework has been at first
purposely overlooked to overcome the scarcity of primary studies due to the novelty of the
scenario, it has now been enforced when going through the full-texts. 13 documents have
been excluded upon completion of this step. The synthesis sample partition stemming from
the structured searches on Scopus and GS has been eventually crafted and it contains 32 out
of the 127 results initially obtained from the two academic electronic databases.

The results obtained from the Google searches within the second macro-category of sources
have undergone a parallel process, likewise, aimed at the selection of pertinent material. As
stated in the previous sections, a top priority was given to the validity and quality of the data
gathered. With this purpose, the application of exclusion criteria and the assessment of the
relevance of the material coming from these sources for the review have been carried out
with a highly selective approach. Moreover, the numerosity of the results has made it
necessary to streamline the process to carry it through in a relatively short time. Going deeper
into detail, all the XSLX files obtained from the extraction of Google search results via
Octoparse have been merged into three distinct databases through Excel spreadsheets, one
for each source sub-category. The first step has been to check for web pages’ titles that satisfy
the exclusion criteria and that must therefore be removed from the sample. The pages whose
title was deemed eligible for inclusion have then been accessed to perform a full-text
assessment.

60
 Figure 4.2 - "Funneling process" by material macro-category, source: author

61
When dealing with SC thematic websites and business magazine articles, special attention has
been given to the presence of companies’ interviews transcripts and conference proceedings,
together with the testimonials of trusted and qualified SC experts. The lack of these kinds of
information in an article resulted in its exclusion from the sample. For what concerns
consulting firms’ whitepapers, it has been ensured that these documents provide detailed
insights about the future strategies to be adopted by firms belonging to the SCs of interest
(i.e., FMCGs and electronics). Upon completion of the selection process, the number of
documents deemed as relevant for the review and therefore eligible for the extraction and
synthesis step has been 19, 31, and 24 respectively from SC thematic websites, business
magazines, and consulting firms’ whitepapers. This leads to a total of 74 materials, that
together with the academic publications amount to 106. A summary of the first four steps of
the process is shown in Figure 4.2

4.2.5 Review and synthesis

The fifth step is concerned with study synthesis. As suggested by Durach et al. (op. cit.), it can
be divided into two subsequent phases: (1) the coding of relevant data from primary studies
and (2) the analysis and integration of primary study findings.

The first phase must start from the definition of a coding structure to extract relevant study
details. This structure can be a priori-defined on different levels: “general information (title,
author, publication details), study features, and specific information (details and methods)”
(Tranfield et al., 2003, p. 217). Durach et al. (op. cit.) suggest the use of two parallel coding
structures, which can be a priori-defined as well as shaped during the process itself: “(1) one
to cover each aspect of the framework, extracting the study findings regarding the
relationships between variables in the initial framework; and (2) one for extracting the
ontological and epistemological study artifacts, such as the unit of analysis, source of data,
study context, definitions and construct measures, and research methods” (p. 75). Pilbeam
et al. (2012) in their SLR on “The governance of supply networks” have developed an articulated
coding structure that complies with the proposal of Durach and colleagues, and that has been
taken as reference for this review. The categories used in extracting and analyzing data are
presented in Table 4.7. A remark must be made for the thematic categories, and in particular
for the four ones relative to the constructs of the framework of reference (Table 4.1). Like
all the other categories, they have been a priori defined. However, during the extraction

62
process, it has been realized that the concept of uncertainty was made explicit only by a very
limited number of resources. In fact, some of the terms used by the authors to describe the

Table 4.7 - Categories used in extracting and analyzing data in the systematic review, source: author

Area Category Information

Descriptive Date Date of publication, of access, and of reading

Cites Number of citations
Timestamp Time frame of the study
Source Journal in which it was published or indication of book section,
Conference proceedings if applicable
Phase(s) Pandemic phase(s) of reference: 1. Anticipation, 2. Early detection,
3. Containment), 4. Control & Mitigation, 5. Elimination

Title Complete title of the resource

Author List of authors of the resource

Methodology Unit of analysis Distinguishes the unit of analysis used in the study such as
individuals, firm, teams, networks, or sub-networks
Source of data Identifies the sources of data analyzed by the resource

Research method Identify if the paper is a secondary data analysis, a survey research,
a case study, a literature review, a simulation
Study context Geographical region analyzed by the resource
Definitions and construct Identify the theoretical paradigm present in the study and from
measures which the analysis of the data has been executed, together with its
constructs and definitions

Thematic Supply uncertainty Information from the resource that provides insights about an
increase/decrease in supply uncertainty
Demand uncertainty Information from the resource that provides insights about an
increase/decrease in demand uncertainty
Supply uncertainty Information from the resource that provides insights about a
reduction strategies company/SC effort to reduce supply uncertainty

Demand uncertainty Information from the resource that provides insights about a
reduction strategies company/SC effort to reduce demand uncertainty

Long-lasting changes Information from the resource that provides insights about a future
trend or a suggested action

Industry Industry the resource is writing about: FMCG, Electronics, Other,

General

Examples Companies the resource is giving as examples

SC theme A common SC theme the resource is referring to: short of supply,

short in labor force, part of SC in China, SC complexity, SC visibility,
SC digitalization, SC mapping, deglobalization, change in demand

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impact of COVID-19 on the supply and demand sides of SCs were: “unpredictability”,
“variability”, “risk”, “shock”, “surge”, “drop”, “breakdown”, etc. Similarly, supply and
demand uncertainty reduction strategies were hardly ever explicitly defined as such. In light
of this, it appeared necessary to reshape the boundaries of these extraction categories and
take account of the breadth of terminology in SCM, going for what Durach et al. define as
“emerging coding” (op. cit., p. 75). This dynamic approach has been also adopted to the
definition of the “SC theme” category, which has been gradually populated resource after
resource and then reviewed once all the material has been analyzed. The extraction of
information from the different publication types composing the synthesis sample has been
performed by using the same coding structure to increase the consistency of the synthesis.
Four Excel spreadsheets (one for Scopus and GS, one for SC thematic websites, one for
business magazines, one for consulting firms’ whitepapers) were organized under the
descriptive, methodological, and thematic categories, and filled with the information
contained in each resource. The gathering of the pieces of information has been performed
by highlighting words, sentences, and paragraphs on the documents displayed on the
Mendeley application and reporting them under the categories in the relative spreadsheet.
This has implied web pages to be exported as PDFs from the web browser, to be then
imported on Mendeley, where descriptive details have been compiled. The extraction phase
has been carried out firstly on the synthesis sample coming from Scopus and GS searches,
analyzing the documents starting from those with the highest number of citations. The
rationale behind these choices has been (1) to firstly assess the contribution from academic
literature to the topic on interest to approach web pages content with a more solid
background and (2) the desire to start gathering information from material that very likely
has made a significant impact on the field. The extraction of information from the selected
results retrieved on the web has followed and the findings have subsequently been integrated.

The second phase of step five involves the synthesis of primary study findings. Tranfield et
al. (op. cit., p.217), defines research synthesis as “the collective term for a family of methods
for summarizing, integrating, and, where possible, cumulating the findings of different
studies on a topic or research question (Mulrow, 1994)”. In performing this step, an effort
has been made to go beyond the narrative review that attempts to identify what has been
written on a subject or topic. In fact, as highlighted by Durach et al. (op. cit., p. 75), “SLRs in
the SCM field call for the refinement or revision of the initial theoretical framework,
developing explanations for contingent causalities.”. To achieve this goal, the synthesis of

64
findings has followed the structure of the RQ and thus of the Uncertainty Framework and has
been split between FMCG and electronics SCs. The synthesis phase has also taken into
account the different findings’ sources. As mentioned above, the resources from Scopus and
GS included in the review have been firstly analyzed, followed by those coming from Google
searches. This has allowed the discrimination of the findings between the two macro-
categories of sources and to perform an intermediate synthesis based on the first one solely.
The reason for this has been the will to assess the contribution of scholarly to highlight
possible gaps to be potentially filled by non-academic contributions.

4.2.6 Findings reporting

The sixth and last step involves reporting the results of the SLR. Here the goal is to present
the findings in a comprehensive yet convenient way so that practitioners and readers can
successfully understand the research by means of the synthesis of the primary studies.
Tranfield et al. (op. cit.), suggest a two-step presentation of the research findings: (1) a
“descriptive analysis” of the primary studies stemming from the extraction of documents’
details (e.g., who are the authors, where do the contributions are from both in terms of the
type of resource and geographical region, what is the age profile of the articles, etc.) and (2)
a “thematic analysis”, that is an outline of the knowledge derived from the study synthesis
(Durach et al., op. cit.). The findings reporting will follow these guidelines, with a first part
providing a snapshot of the studies analyzed, followed by the presentation (structured as
shown in Table 4.8) of the insights deemed as relevant for the answer to the research
questions.

Table 4.8 - Findings thematic analysis structure, source: author

RQ
Industry Category Section
related
FMCG Supply and demand uncertainty 5.3.1 Impact of COVID-19 on supply chain RQ1a
uncertainty
Uncertainty management 5.3.2 Response measures by SC partners RQ2a
strategies
Long-lasting changes 5.3.3 Expected long-lasting changes and future RQ3
actions by SC partners

Electronics Supply and demand uncertainty 5.4.1 Impact of COVID-19 on supply chain RQ1b
uncertainty
Uncertainty management 5.3.2 Response measures by SC partners RQ2b
strategies
Long-lasting changes 5.4.3 Expected long-lasting changes and future RQ3
actions by SC partners

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5. Findings

In this chapter the research findings will be presented by first describing the characteristics
of the primary studies reviewed such as articles’ sources, methodology adopted, theory used,
national and industrial context on which the articles focused, and authors’ keywords.
Secondly, the thematic findings will be illustrated by following the structure illustrated in
Table 4.8.

5.1 Descriptive analysis

This section provides a general landscape of the selected articles by aggregating the
information gathered through the descriptive and methodological extraction forms.

5.1.1 Overview of selected materials

Table 5.1 shows that a wide variety of journals contributed to the literature on the topic of
interest and that the selected “grey literature” comes from conference proceedings, preprints,
and master theses. In particular, the 32 academic materials come from 26 different sources,
of which 24 feature a single contribution, while IEEE Engineering Management Review and
Sustainability (Switzerland) are the sources of five and three articles respectively. It can be
therefore claimed that the academic materials sample is poorly concentrated in terms of
sources.

On the contrary, the 74 non-academic materials reviewed come from a more concentrated
pool of sources. Initially, these included 13 SC thematic websites, 3 business magazines, and
13 consulting firms, but, as it can be seen in Table 5.2, the selected articles and whitepapers
come from only a subset of the baseline list of sources. This subset includes six SC thematic
websites, two business magazines, and six consulting firms’ companies. Therefore, the

66
exclusion of non-pertinent materials has most reduced the first and the last source categories
by more than halving their numerosity.

Despite the strict application of the exclusion criteria and the priority given to the quality of
material, the overall sources’ list features 40 different ones. Their heterogeneity has been key
to get a broad range of perspectives on the topic.

Table 5.1 - Academic materials by source title, source: author

Source Title Number of articles

IEEE Engineering Management Review 5

Sustainability (Switzerland) 3
5th NA International Conference on Industrial Engineering and Operations Management 1
Asia Business and Management 1
Canadian Journal of Agricultural Economics 1
European Journal of Business and Management 1
European Journal of Operational Research 1
Helyion 1
International Journal of Operations & Production Management 1
International Research Journal of Engineering and Technology 1
International Journal of Integrated Supply Management 1
International Journal of Organizational Analysis 1
International Journal of Production Research 1
International Journal of Supply Chain Management 1
Journal of Shanghai Jiaotong University (Science) 1
Logistics 1
Nature Human Behaviour 1
Problems and Perspectives in Management 1
Resources, Conservation and Recycling 1
Revista Ciencia e Ingeniería 1
Social Science Research Network 1
Tampere University 1
Transportation Research Interdisciplinary Perspectives 1
University of Pisa - Sant'Anna School of Advanced Studies 1
University of Twente 1
Vivekanand Education Society of Arts Science and commerce 1
Total 32

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Table 5.2 - Non-academic materials by source title, source: author

Source Category Source Title Number of articles

SC thematic websites
Electronics Purchasing Strategies 5
Supply Chain Dive 5
Supply Management 4
DC Velocity 2
Spend Matters 1
Supply Chain Management Review 2
Sub-total 19
Business Magazines
Bloomberg 18
Financial Times 13
Sub-total 31
Consulting Firms
McKinsey & Company 10
Bain & Company 5
Accenture 4
Boston Consulting Group 3
Deloitte 1
EY 1
Sub-total 24
Total 74

For what regards the data range of the reviewed materials, Figure 5.1 provides a visualization
of the cumulative distribution of the materials’ publication colored by source category. The
x-axis measures the time expressed in months, while the y-axis measures the cumulative
number of published materials until a specific month. The different sources are
distinguishable thanks to the different colors illustrated in the legend. Thanks to this
visualization, one can understand how the contribution of each source category has grown
over time, other than tracing the total number of materials reviewed. It can be observed that
until April 2020, all the materials come from non-academic resources, and for the most part
from business magazines. As the months went by, scholarly publications became available,
and the spreading orange area illustrates the increasing share of academic materials among
the review sample. It can then be noticed that between September and October 2020,
academic materials overcame the other categories that had kept growing at a lower rate. At
the closing of the year 2020, the whole body of materials amounts to 98 documents. The
collection of material performed in the latest months has made it possible to include in the

68
sample the studies, news, and whitepapers published until 26 February 2021 as well, leading
to a total of 106 resources.

Figure 5.1 - Cumulative distribution of publication date by materials sources, source: author

5.1.2 Research methodology

This section analyzes the academic materials in terms of the methodologies adopted by their
authors. The decision about not involving the non-academic material in this analysis is driven
by the fact that these last resources were not backed up by a proper research methodology,
with SC thematic websites and business magazines characterized by a journalistic style and
consulting firms’ whitepapers adopting a mixed approach of primary and secondary data
analysis. For the purposes of this analysis, the articles have been divided into six categories:
1. Case study, 2. Delphi method 3. Literature review 4. Secondary data analysis 5. Simulation
6. Survey research. These have allowed for a specific though synthetic categorization of the
studies and for a proper understanding of the types of research that compose the sample.
The methods adopted by each academic material are detailed below (Table 5.3).

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 Table 5.3 - Research methodologies used in the reviewed articles, source: author

70
The analysis reveals that half of the articles (16 out of 32) rely on secondary data analysis as
their main method of investigation. More specifically, these studies analyze through
qualitative and/or quantitative methods information coming from companies such as open-
access whitepapers, news portals, websites (Cai & Luo, 2020; Cavallo et al., 2020; Cinti et al.,
2020; Gupta, 2020; Kudale, 2020; Tiwari, 2020; Tran et al., 2020; Xu et al., 2020), prices and
sales data (Cariappa et al., 2020), and pandemic-related data (Nikolopoulos et al., 2021). Five
are the survey research that directly gather real-world data and information from managers
(Bhattacharyya & Thakre, 2021; Hoek, 2020; Veselovská, 2020), companies’ owners (Grida
et al., 2020), and supply chain professionals (Rashad & Nedelko, 2020). A third stream
composed of five studies analyzes peer-reviewed literature both through systematic (Zunk et
al., 2020) and non-systematic reviews (Končar et al., 2020; Márquez et al., 2021; Singh et al.,
2020; Tasnim, 2020). A minor body of literature adopts simulation methods to simulate the
impact of COVID-19 on logistics systems (Singh et al., 2020), of pandemic control measures
on global supply chains (Guan et al., 2020), and of the “ripple effect” caused by a global
pandemic (Ivanov & Das, 2020). Three studies are based on a case study research
methodology that is supported by single (Demirci, 2021) or multiple cases (Garlick et al.,
2020; Ishida, 2020). The master thesis by Gupta (2020) is the only resource to adopt a Delphi
Method with the involvement of 25 SC experts. As shown in the Table above, five studies
adopt a mixed method, combining primary data coming from surveys with secondary data
analysis (Bhattacharyya & Thakre, 2021; Gupta, 2020; Gurbuz & Ozkan, 2020), and
simulation models to demonstrate the findings of a literature review (Singh et al., 2020).

5.1.3 Context of the studies

This section analyzes the contexts brought into focus by the primary studies included in the
synthesis sample. A first analysis has been centered on the national contexts on which the
reviewed articles focused (Table 5.4). Given that the inclusion criteria regarding this point
had been opened to any geographical region to achieve a comprehensive overview of the
impact of COVID-19 on a global scale, this analysis became necessary to take into account
the different timing and levels of severity of the outbreaks, as well as of the diverse control
and mitigation strategies adopted. The largest group of studies (8 out of 32) adopted a generic
viewpoint that stemmed from the analysis of secondary data (Althaf & Babbitt, 2020;
Borsellino et al., 2020; Cinti et al., 2020; Gupta, 2020; Kudale, 2020; Xu et al., 2020) or review

71
of literature (Tasnim, 2020; Zunk et al., 2020) coming from heterogeneous geographical
contexts.

Table 5.4 - The national contexts on which the reviewed articles focused, source: author

Country Number of Articles References

India 5 Bhattacharyya and Thakre (2020); Cariappa
(2020); Singh et al. (2020); Tiwari (2020)

USA 2 Garlick et al. (2020); Márquez et al. (2020)

Multiple countries from various continents 3 Graham (2020); Hoek (2020); Ishida (2020);
Nikolopoulos et al. (2020)
Netherlands 2 Demirci (2021); Schiele et al. (2020)
1
Asian countries 1 Liu et al. (2020)
Canada 1 Hobbs (2020)
2
Central European countries 1 Veselovská et al. (2020)
China 1 Cai and Luo (2020)
Egypt 1 Grida et al. (2020)
Germany 1 Schiele et al. (2020)
Italy 1 Cavallo et al. (2020)
Turkey 1 Gurbuz and Ozkan (2020)
Vietnam 1 Tran et al. (2020)
3
Western Balkans countries 1 Končar et al. (2020)
Global 3 Guan et al. (2020); Ivanov and Das (2020);
Rashad and Nedelko (2020)
(continued)
Generic 8 Althaf and Babbit (2020); Borsellino et al.
(2020); Cinti et al. (2020); Gupta (2020);
Kudale (2020); Tasnim (2020); Zunk (2020); Xu
et al. (2020)

1: China, South Korea, Japan

2: Slovakia, Czechia, Poland, Hungary.
3: Bosnia, Serbia, Montenegro, Albania, Kosovo, Macedonia

A global perspective has instead been chosen by two simulation studies (Guan et al., 2020;
Ivanov & Das, 2020) and by one very large survey research (Rashad & Nedelko, 2020). Three
studies out of the 32 included in the review restrict their scope to a particular region: one
focuses on Asian countries, such as China, South Korea, and Singapore (Y. Liu et al., 2020),
a second one on Central Europeans countries, such as Slovakia, Czech Republic, Poland and
Hungary (Veselovská, 2020), and a third one on Western Balkans countries, including Bosnia,
Montenegro, Albania, Kosovo, and Macedonia (Končar et al., 2020). Other three studies
assess the impacts of the effects of COVID-19 on multiple countries from various continents
to demonstrate the global scale of the phenomenon: comparisons includes companies from
the USA, Middle East, Europe and Latin America (Hoek, 2020); USA, India, UK, Germany

72
and Singapore (Nikolopoulos et al., 2021); and again USA and UK (Graham et al., 2020).
One study focused on a couples of European countries, namely Germany and the
Netherlands (Schiele et al., 2020). For what concerns the studies that focus on a single
country, five of them center on India, two on the United States, and one each on the
Netherlands, Canada, China, Egypt, Italy, Turkey, and Vietnam.

Moving to the industrial context, the analysis has been aimed at identifying the studies that
focus on the FMCGs and electronics industries. Table 5.5 reports the industrial sectors on
which the academic studies provide specific information. Dwelling on the two contexts of
interest, 20 studies out of 32 provide at least a brief though specific piece of information
regarding the FMCGs (or CPGs), while 15 are found to deal with the electronics or
technology industry. However, the enforcement of the exclusion criteria for what concerns
resources with no specific information about none of the two industries of interest has not
prevented the inclusion of articles that treat other sectors in addition the two just mentioned.
In particular, seven studies focus on the food supply chain alongside the FMCGs one
(Borsellino et al., 2020; Demirci, 2021; Gurbuz & Ozkan, 2020; Hobbs, 2020; Singh et al.,
2020; Tasnim, 2020; Veselovská, 2020). Seven are also the studies that provide information
on the automotive industry (Cai & Luo, 2020; Graham et al., 2020; Guan et al., 2020; Ishida,
2020; Ivanov & Das, 2020; Y. Liu et al., 2020; Tiwari, 2020; Xu et al., 2020). Other articles
give insights about a wide range of industries aside from the ones already mentioned,
including aerospace, industrial components, musical instruments (Garlick et al., 2020), earth-
moving equipment (Graham et al., 2020), pharmaceutical and textile (Grida et al., 2020), tools
and DIY, fitness, aerospace, flooring and vision (Hoek, 2020), furniture (Ishida, 2020; Ivanov
& Das, 2020), constructions (Veselovská, 2020), and medical, airline, textile and apparel (Xu
et al., 2020). Ten studies provide a general perspective besides the focal one, and three of
them are deemed as pertinent for the review even though lacking explicit mentioning of the
two industries of interest. In particular, Rashad and colleagues (Rashad & Nedelko, 2020)
develop a framework that can support lean, agile, and leagile supply chain strategies to work
better in severe conditions such that of COVID-19; a second study propose a set of
uncertainty management strategies based on 26 interviews on supply management
implications during the coronavirus crisis with companies in a Central European region
(Schiele et al., 2020); lastly, an article provide an overview of perspectives and trends in the
management of critical lower-tier suppliers in GSCs in the post-COVID-19 business world
(Zunk et al., 2020).

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 Table 5.5 - Industry sectors in the reviewed articles, source: author

74
Table 5.6 - Industry sector in the reviewed non-academic materials, source: author

Industry Number of
Resource Type References
Sector Resources
FMCG
SC thematic website 9 Ames (2020); Berman (2020); Cosgrove
(2020a; 2020b; 2020c; 2021); Devenyns
(2020); Kickham (2020); Taylor et al. (2020)
Business magazines' articles 6 Evans (2020; 2021); Gray (2020); Ha (2020);
Patton and Deaux (2021)
Consulting firms' whitepapers 18 Adams et al. (2020); Bill et al. (2020); Brown
et al. (2020); Buck et al. (2020); Chugani et al.
(2020); De Montgolfier et al. (2020); Fabius et
al. (2020); Felix et al (2021); Gergele (2021);
Huang et al. (2020); Idserda et al. (2020);
Kopka et al. (2020); Manly et al. (2020);
Ramantha et al. (2020); Rasmus et al. (2020);
Valentini et al. (2020); Vu et al. (2020)
Total 33

Electronics
SC thematic website 10 Allen (2021); Ehrmann (2021); Hart (2021);
Jorgensen (2020a; 2020b; 2021a; 2021b);
Patchett (2020; 2021); Wang (2020)

Business magazines' articles 25 Biden (2021); Culpan (2020); Hille (2021); Hille
et al. (2020a; 2020b); Jung-a (2020); Jung-a
and Hille (2021); Jung-a and White (2020); Kim
and King (2021); Kim and Kong (2020); Liu and
Tian (2021); Miller (2021); Nicholas et al.
(2021); Reed (2020); Savov (2020); Takezawa
et al. (2021); White (2020); Wu (2020); Wu et
al. (2021a; 2021b); Wu and Gao (2020)

Consulting firms' whitepapers 6 Bauer et al. (2020); Shin et al. (2020); Guarraia
and Hanbury (2020); Syed et al. (2020);
Hoecker et al. (2020); Sovie et al. (2020)
Total 41

Differently from the resources retrieved from Scopus and Google Scholar, the materials
belonging to the non-academic category revealed to be more focused on the industries of
interest, and no article was found treating them jointly (Table 5.6). Aggregating the three
resource types, the FMCG is brought into focus by 33 materials, while the electronics
industry by 41. Going more in detail, one can notice that the shares of types within the two
industries are almost opposite: the majority of resources about the electronics industry are
business magazines articles (25 out of 41) and whitepapers amount to just 6, while the
FMCGs are treated mostly by this last type of materials (18 out of 33) but show only 5
business magazines references. For what concerns the SC thematic websites, FMCGs and

75
electronics are evenly represented by 9 and 10 of them respectively. The differences
highlighted above can be explained by the technology-orientation of business magazines like
Bloomberg and the Financial Times, opposed to the consumers and retail focus of open-
access whitepapers by consulting firms such as McKinsey & Company, Bain & Company,
and BCG. Overall, the two industries are numerically evenly represented, and this is
evidenced by the aggregate sum of academic and non-academic materials on FMCGs and on
the electronics industry, which is 53 and 56 respectively.

5.2 Thematic analysis

This section aims at reporting and synthesizing the results of the review with the ultimate
goal of supporting the answers to the research questions. To provide a first overview of the
topics tackled by the primary studies, a treemap visualization has been developed using the
list of keywords specified by the academic studies’ authors. This first outlook has been
complemented by the data coming from the most common supply chain themes extraction
form and they will be presented to highlight both the most recurrent topics and the disparities
about them between academic and non-academic materials. The findings will then be
reported and synthesized by following the structure presented in Table 4.8

Figure 5.2 displays a treemap based on the keywords given by the academic materials’ authors
to capture the essence of their papers while at the same time ensuring its searchability within
the electronics databases. This visualization nests rectangles in hierarchies so that the viewer
can compare different dimension combinations across two measures (one for size; one for
color) and quickly interpret their respective contribution to the whole. In this case, the 128
unique keywords identified have been grouped into 13 semantic groups so to aggregate
synonyms and related terms. The size of each rectangle is proportional to the frequency of
that keyword in the sample of studies reviewed (32 resources), while the color emphasizes
the membership to a certain group. It can be effortlessly noticed that the COVID-19 group
rectangle is the widest, and that the specific keyword “COVID-19” is by far the most
frequent with 17 occurrences. The grey rectangle is composed of the terms that could not be
included in any of the existing group and neither justified the formation of a new one. Terms
like “supply chain(s)”, “global supply chain”, “global value chain”, “product supply chain”,
“supply chain management”, and five other similar terms form the second largest group,
which is followed by keywords related to the industries the studies focused on.

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 Figure 5.2 - Academic materials authors' keywords treemap, source: author

77
Smaller groups were formed around topics such as research methods adopted, economics,
demand, supply, geographical context, disruption, resilience, risk, and technology. From this
analysis, it can be drawn that the four concepts at the root of the research process (i.e.,
“supply chain”, “covid-19”, “fmcg”, and “electronics”) are the most represented by the
authors’ keywords of the selected primary studies, thus the research protocol has worked
properly and delivered a potentially relevant body of literature.

A second analysis has regarded the common supply chain-related themes the resources are
referring to, and of which has been kept record thanks to the extraction form detailed in
Table 4.7. Differently from the previous analysis, at this stage also the non-academic
materials could be included so to provide a comprehensive overview and discover potential
differences between the two macro-categories of resources. As previously mentioned in
Section 4.2.5, a dynamic approach has been adopted in the definition of the SC themes list,
which has been gradually populated resource after resource and then reviewed once all the
material had been analyzed. The rationale behind the definition of a theme has been the
willingness to keep track of how which authors had tackled a certain topic to streamline the
identification and comparisons of materials. The listing of the themes is cross-industry to
suit both the FMCGs and the electronics-related material to highlight potential similarities
between the two industries. The ten topics have been grouped in three clusters: (1) “supply”,
including “short of supply”, “short of labor force”, and “part of SC in China”, (2) “demand”,
which features “change in demand” and “panic buying”, and (3) “process”, which comprises
“SC digitalization”, “deglobalization”, “SC visibility”, “SC mapping”, and “SC complexity”.
Figure 5.3 illustrates the frequencies of the above-mentioned themes by resource categories
and places the academic and non-academic results side by side (the former on the left, the
latter on the right).
Figure 5.3 - Common supply chain-related themes by resource type, source: author

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It can be noticed that more than half of the academic resources (22 out of 32) has brought
into attention the short of supply, and the witnesses of a short in labor force are just as
numerous with 20 references; a considerable amount (18) of scholarly materials has treated
the case of companies whose SC includes at least a firm in Mainland China. Moving to the
demand-side, strong reference has been made to panic buying, defined as a reaction to times
of fear and uncertainty, leading to the accumulation of basic (rational) goods or an
accumulation of unnecessary (irrational) goods (Sterman & Dogan, 2015), which overcomes
in numerosity the references to a more general change in demand either on volume or on
mix. Regarding the “process” category, the most common ones are SC digitalization,
deglobalization, and either the lack or improvement of SC visibility. Shifting to the non-
academic resources, the most prominent differences are related to the change in the demand,
which in this case leads the ranking with 28 references. If one takes into consideration that
the non-academic documents are 73, it can be noticed that the number of themes mentioned
by each material is on average 1.72 themes/document, which is much smaller compared to
the 4.25 themes/document obtained considering the academic material. The explanation of
this disparity can be twofold: (1) academic documents have, on average including abstract
and references, 4 times the number of words of non-academic ones, and (2) the non-
academic papers focus solely on one of the two industries of interest at a time, limiting the
span of themes tackled by each document.

This thematic overview has served as an introduction to the reporting and synthesis of the
finding that will be performed in the following sections.

5.3 Findings on fast-moving consumer goods supply chains

In this section, the findings stemming from the whole body of material reviewed will be used
to develop a narrative of the impact of COVID-19 in terms of supply chain uncertainties,
uncertainty management strategies and long-lasting changes regarding the FMCGs industry.

5.3.1 Impact of COVID-19 on supply chain uncertainty

Wuhan, the capital of Hubei Province in Mainland China, was the first location hit by the
novel coronavirus outbreak. Cai and Luo (2020) have thoroughly documented the early
impact of COVID-19 on Chinese manufacturing industries including the FMCGs (Appendix
Figure 1). The aforementioned authors analyzed the impacts on both the supply and the
demand of four products families belonging to the FMCGs to assess the influence of the

79
pandemic on their supply-demand equilibrium. They detected a dramatic increase in the
demand for products used for COVID-19 protection (e.g., masks, disinfectant) and food
with a long quality-guarantee period (e.g., tinned and frozen food). Although increased, the
supply of such products was not able to keep up with the strong demand, resulting in a
supply shortage in almost every channel. About this, it was reported that due to the restriction
of outside activities, daily purchases mainly relied on online channels or one-stop shopping
from time to time. The phenomenon of panic buying was reported as well. A product family
that experienced an even worse supply shortage was that of daily necessities sourced from
overseas markets (e.g., infant milk powder, diapers), which saw a simultaneous cut in inbound
flows and stockpiling behavior by consumers. Moreover, Cai and Luo (op. cit.) reported that
the supply-demand matching of daily necessities sourced from local suppliers was not
affected, while the consumption of products used for social activities (e.g., wines and
beverages) decreased significantly. A second study (Xu et al., 2020) confirmed the leap in
demand for functional products such as masks and disinfectants, which eventually turned
from functional into innovative products due to the volatile demand and the supply, as well
as the panic behavior that prompted people to do “forward buying” for basics products such
as toilet paper and dry goods. The same events have been witnessed in other countries.
Hobbs (2020) reported panic buying and hoarding behaviors by consumers, which created
short-run stockouts in a Canadian food distribution system built around just-in-time
manufacturing and delivery. This study brought into focus a second reason for additional
pressure on grocery retailers, which is the closure of restaurants, cafés, bars, and hotels, and
the adoption of work-from-home policies. The sudden shift of purchases to the retailing
sector caused troubles to supply chains geared up to supply the Ho.Re.Ca. channels, which
struggled in supplying the retailing sector in terms of package size and distribution
infrastructure in a reasonable time. For what concerns the supply flow of FMCG in Canada,
the above-mentioned author listed labor shortages, disruptions to transportation networks,
and “thickening” of the Canada-U.S. border with respect to the movement of goods (Hobbs,
op. cit.). The slowdown of logistics was also attributable to the reduced productivity of
distributions because of all the measures taken to ensure distance was kept between
employees (Demirci, 2021). Logistics constraints regarding FMCGs were reported in India
as well, where major challenges have been faced to ensure the continued supply of essential
commodities (Tiwari, 2020), whose consumption pattern has been affected by the closing of
complex malls. A detailed analysis of the changes in consumption patterns has been carried

80
out by Cavallo et al. (2020) on the basis of secondary data coming from the Italian market.
Due to the constrained time spent out-of-home and the reduction in shopping occasions,
the Italian consumers slightly increased their purchases in supermarkets, resulting in what
the authors call “resilience buying”. By analyzing the spatial distribution of increased sales,
the study came to the conclusion that there was no direct connection between the
geographical spread of the virus and the increase in grocery sales, thus that the behaviors
changed according more to the perception of risk than the risk itself. Moreover, Cavallo and
colleagues (op. cit.) also reported the dramatically decrease in demand for producers that had
Ho.Re.Ca. as the exclusive sale channel and their struggle in repurposing their supply chain.
Insights on the upstream actors of the FMCGs SC have been provided by the case study
research by Garlick et al. (2020), which involved a cleaning supplies manufacturing company
headquartered in California (United States). The company, whose SC includes a significant
number of manufacturing facilities in China, had stocked up on critical supplies in
anticipation of the Chinese New Year factories shutdown – from 24 January 2020 to 30
January 2020. This build-up allowed it to continue production even though new supplies
could not be shipped from China since the COVID-19 outbreak. However, the
aforementioned company expressed concerns about the ability to fulfill customers’ orders if
lockdown measures persist since this could cause shortages of raw materials. A direct witness
of the supply uncertainty faced by global FMCGs companies come from the British health,
hygiene and nutrition products manufacturer Reckitt Benckiser. Evans (2020), a Financial
Times journalist, reported the words of the Mr. Gao, site manager of Reckitt’s second-largest
Dettol – a cleaning supplies and disinfectant brand – plant worldwide in the city of Jingzhou,
located 200km from Wuhan. Mr. Gao revealed that “due to the city lockdown, the plant lost
hundreds if not thousands of suppliers.” Logistics breakdown was identified as a major driver
of uncertainty, given that each day full trucks of supplies were trying to reach the Dettol
factory but were often delayed by bureaucratic problems in crossing provincial boundaries
(Evans, 2021). Cargo ships were not spared as well by the restrictions imposed by countries
to prevent the spread of the coronavirus. As reported by Bloomberg (Ha, 2020), some of the
biggest FMCGs global companies including Unilever Plc, Procter & Gamble Co., Mondelez
International Inc., Heineken NV, and the retailer Carrefour SA have signed an open letter
asking governments to designate seafarers as “key workers”, given that since the unfold of
the pandemic, over 300,000 of them had been stuck on commercial vessels, where forced

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Table 5.7 - Summary of the impacts of COVID-19 on FMCG supply chain, source: author

Impacted Area Impacted Stage Specific Impact References

Demand Retailers Demand spikes for essential Cai and Luo (2020); De
management products Montgolfier et al. (2020); Demirci
(2021); Evans (2020); Hobbs
(2020); Gupta (2020); Taylor et al.
(2020); Xu et al. (2020)
Panic buying Cariappa et al., 2020; Cavallo et
al., 2020; Demirci, 2021; Gupta,
2020; Liu and Tian, 2021;
Márquez et al., 2021; Schiele et
al., 2020; Veselovska, 2020)
Shortage of essential products Cai and Luo (2020); Demirci
(2021); Hobbs (2020); Xu et al.
(2020)
Declining demand for non- Cai and Luo (2020); De
essential products Montgolfier et al. (2020)
Consumers' stockpiling behavior Cavallo et al. (2020); De
Montgolfier et al. (2020); Hobbs
(2020); Taylor et al. (2020)
Change in consumption patterns Cavallo et al. (2020); Tiwari
(2020)
All Ambiguity or difficulty in Evans (2020); Gupta (2020);
forecasting Taylor et al. (2020)
Supply management Manufacturers Shortage of material Garlick et al. (2020); De
supply/supply-side shock/supply Montgolfier et al. (2020); Taylor
disruption et al. (2020)
Suppliers and upstream partners Evans (2020)
leaving the chain
Internal operations All Workforce shortage Hobbs (2020); De Montgolfier et
management al. (2020); Graham (2020)
Transportation and All Delays in transportation and Evans (2021); De Montgolfier et
logistics distribution al. (2020); Demirci (2021); Ha
management (2020); Hobbs (2020); Tiwari
(2020)
Shift of distribution and logistics Taylor et al. (2020)
pattern (offline to online or
blended)
Increased bureaucratic burden in Evans (2021); Hobbs (2020)
the management of customs
Reduced productivity of DCs due Demirci (2021)
to safety measures
Supply chain-wide All Demand channel-shift from B2B to Cavallo et al. (2020); Graham
impact (causing B2C (2020); Hobbs (2020); Taylor et al.
impact on internal; (2020)
upstream and
downstream
operations)
Bullwhip effect for products with Graham (2020)
down turning demand
Ripple effect due to the buildup of Demirci (2020)
safety stock for products in high
demand
Financial Materials Cashflow issue for SMEs De Montgolfier et al. (2020)
Management suppliers

82
labor and deteriorating working conditions threatened to disrupt the global SC. The same
Unilever has moreover witnessed strong demand fluctuations which the industry players
were not used to (Evans, 2020). Unilever’s CEO Alan Jope reported to the Financial Times
that product categories whose growth rates used to range between 2 and 5 per cent were
then ranging from -40 to +25 over the second and third quarter of 2020, defining the
situation as “unprecedented” (Evans, ivi.). The consulting firm Bain & Company deepened
the analysis of the pandemic impact on different FMCGs categories. Based on the
observations in China, Italy, and the UK, four main category archetypes have emerged
according to Bain (De Montgolfier et al., 2020): (1) panic-buying of disaster-preparedness
categories, including disinfectants, masks, hand sanitizers, and instant meals, whose demand
spiked rapidly, leading to frequent stockouts across channels; (2) pantry-loading of daily
essentials (e.g., infant food, shelf-stable groceries, daily hygiene products, and bottled water),
which faced constrained supply and below-average stock levels; (3) short-term declines in
household discretionary products, such as traditional dairy, soft drinks, snack foods, personal
care, and pet care; (4) intense declines in nonessential and luxury products, including
cosmetics, luxury beauty, and alcoholic beverages, with these last being heavily affected by
the reliance on on-trade sales (De Montgolfier et al., ivi). Further along in the aforementioned
whitepaper, the authors dwelled on the supply uncertainty faced by FMCGs manufacturing
plants in China, in particular those with major raw material suppliers based in proximity of
the outbreaks, mentioning the extension of the Chinese New Year holidays, and the high
number of quarantined workers as causes of the shortage of labor. Additional supply
uncertainty was driven by the cashflow issues experienced by smaller suppliers, such as
packaging companies, whose lean operations were at risk of collapse (De Montgolfier et al.,
ivi). The logistics breakdown caused by restrictions on travel networks only worsened the
situation by disrupting both inbound and outbound flows of goods (De Montgolfier et al.,
ivi). According to the aforementioned Bain’s whitepaper, local transportation challenges were
experienced by Italian wholesalers, which struggled in finding carriers willing to transport
into warehouses within “red zones”, as well as delivering to retailers the stocks held in such
areas. All these challenges made companies unable to meet the surge in demand and resulted
in empty shelves, which, according to Bain, fueled more panic-buying creating a vicious cycle.
A further taxonomy of the sources of stockouts of FMCGs good on grocery shelves has
been developed by Taylor et al. (2020) (Appendix Figure 2), which distinguished between:
(1) irrational panic buying (e.g., bottled water, with consumers rushes based on the

83
unfounded fears of potential water scarcity); (2) direct pandemic-related demand disruptions
(e.g., hand sanitizers, which are not typically purchased in large quantities by grocery stores
and went out-of-stock until shelves filled up again within ten weeks of the first shortage, and
sanitizing wipes, which has proven to be very difficult to supply in adequate quantities given
the more complicated production process); (3) pandemic-related channel-based demand
disruptions, including demand channel-shift from the workplace to home (e.g., toilet paper,
whose early stockout was caused by panic buying, but whose sustained shortage was due to
the difficulty in shifting the papers’ mills configuration from the commercial to the retail
channel requirements), increased demand across channels (e.g., yeast, whose demand
increased because of the home baking revive and the risen demand for retail baking
commodities), and demand channel-shift from hospitality and food service (e.g., spaghetti,
whose multi-channel producers switched to the retail packaging during the closing of the
foodservice industry, and that once the Ho.Re.Ca. restarted, managed with difficulty the
channel-based competition between off-trade and on-trade customers), and direct-to-store
delivery (e.g., beers and soda, which are interchangeable and often identical across channels,
allowed local distributors to quickly react to demand fluctuations); and lastly (4) pandemic-
related supply disruptions, including both tier-1(e.g., toilet papers manufacturers) and tier-2
(e.g., glass jars) supply shortages. Moreover, Taylor and colleagues (ivi) highlighted that the
unpredictability of COVID-19 hot spots has made forecasting consumer demand “nearly
impossible”. Another contribution in this regard comes from Graham et al. (2020), which
denoted a unique “bullwhip effect” for those product categories that experienced a downturn
in demand, with consumers buying less from retailers, retailers ordering less from
wholesalers, wholesalers ordering less from manufacturers and manufacturers ordering less
from their suppliers. Moreover, Graham et al. (ivi) highlighted the inability of the on-trade
supply chain to repurpose itself due to its rigid efficiency-driven cos structures and supply
network. A summary of the findings regarding the impact of COVID-19 on FMCG supply
chain is illustrated in Table 5.7.

5.3.2 Response measures by SC partners

The materials reviewed have as well provided relevant information for what regards the
responses that FMCG supply chains’ firms adopted to manage their business in such a highly
uncertain scenario. One of the first short-term measures implemented by retailers to
accommodate the surges in demand has been the reallocation of their shelves space to the

84
most demanded items (e.g., toilet paper and hand sanitizers), while others switched selected
stores entirely to click-and-collect formats to protect both customers and employees (Aull et
al., 2020). Other short-run strategies included the imposition of purchase limits on key items
and dedicated grocery shopping hours for elderly or vulnerable customers (Hobbs, 2020).
According to Hobbs (ivi), an obvious response would be to use price as a rationing
mechanism, even though at the time of his publication the extent to which retailers
responded by increasing prices was not clear yet. Whit this regard, a later pre-print study by
Cariappa et al. (2020) that triangulated an interrupted time series analysis on daily wholesale
and retail prices of 284 major commodities in India, with survey research involving 729
consumers and 225 farmers, concluded that no evidence of a structural break in prices due
to lockdown was found, even though 75 percent of consumers reported an increase in
FMCGs and food prices during the lockdown. Another survey research (Veselovská, 2020)
conducted among 51 companies belonging to the groceries sector in the Western Balkans
region highlighted that 100% of such companies implemented changes in both product mix
and marketing activity, 47 of them had to apply changes in operating volume, and half of
them had to recruit additional personnel. A more collaborative solution that tried to mitigate
the channel-based demand disruption has been the partnership signed between the
International Foodservice Distributors Association (IFDA) and FMI-Food Industry
Association with the aim of matching foodservice distribution companies that have an excess
of product, warehouse space, and transportation capacity to food retailers and wholesalers
in need of assistance (Kickham, 2020). Collaboration with suppliers has been deemed crucial
by the American CPGs producer Conagra Brands Inc., whose CFO reported that working
closely with the upstream firms to get visibility on the supply lead times of critical ingredients
and packaging has been key to keep up with the surge in demand for final products
(Cosgrove, 2020c). Moreover, collaborative decision-making was reported to occur between
a Dutch FMCGs retailer and its suppliers to formulate an offer to the final customers based
on supplier’s SKUs availability (Demirci, 2021). Shifting the focus to the outbound flows of
finished goods, CPGs manufacturers have been reported to remove cross-docks and any
unnecessary stop between manufacturing and retailers to eliminate the risk of delay, other
than scheduling larger and less frequent deliveries to simplify operation (Cosgrove, 2020a).
Some producers went beyond this and realized long-held ambitions to sell directly to
consumers in the pandemic, using coronavirus disruption to sidestep retailers (Gray, 2020).
The Financial Times (Gray, op. cit.) reported that PepsiCo, Inc. started selling its products

85
Table 5.8 - Uncertainty management strategies by FMCG companies, source: author

Measure Area Stage implementation Specific Measure References

Demand management Retailers Reallocation of shelves space Aull et al. (2020)
Purchase limits on key items Hobbs (2020)
Price rationing Hobbs (2020)
Introduction of new products to Demirci (2012)
meet demand for scarce products
Change in product mix marketing Veselovska (2020)
activities
Manufactures Sell direct-to-consumer to gather Gray (2020)
sales data

Supply management Manufacturers Change operating volume Demirci (2021);

Veselovska (2020)
Enhanced visibility on upstream Cosgrove (2020c)
supply lead time
Stockpiling of input ingredients Devenyns (2020);
Patton and Deaux
(2021)
Retailers Increase of safety-stock of long shelf- Demirci (2021)
life products in high demand
Obtaining backup suppliers Demirci (2021)
Integrated automated order system Demirci (2021)
with real-time data
Global sourcing of small batches to Demirci (2021)
offer substitute products
Internal operations All Additional personnel recruitment Demirci (2021);
management Veselovska (2020)

Transportation and Retailers Dedicate stores to e-commerce Aull et al. (2020)

logistics management orders fulfillment
Rent of additional storage, Demirci (2021)
transportation
Manufacturers Removal of cross-docks and Cosgrove (2020a)
intermediate fulfillment nodes
Consolidation of deliveries Cosgrove (2020a)
Relationship Retailers, Manufacturers Collaborative decision making on Demirci (2021)
management retailer offer based on supplier’s
availability
Supply chain-wide impact Wholesalers, retailers Resource pooling, including stocks, Kickham (2020);
(causing impact on warehouses, and transportation Singh (2020)
internal, upstream and
downstream operations)
Manufacturers Shortening of the chain, with Gray (2020)
manufacturers selling Direct-to-
consumer
Manufacturers, retailers Product portfolio rationalization Cosgrove (2020a;
2020b; 2021),
Evans (2021),
Demirci (2021)

86
on its PantryShop site, shipping parcels to consumer’s houses in the contiguous US and that
in the UK, Kraft Heinz began delivering bundles of canned food and sauces since mid-April.
According to the FT, these initiatives have not been implemented to increase companies’
sale by replacing retailers on a substantial scale, but rather to grasp first-hand insights on
what works and does not work in e-commerce, and to capture valuable data about customers
that are normally retailers’ apanage (Gray, op. cit.). Another opportunity has been brought by
the unprecedented uncertainty of consumer demand, which turned into an assist to review
the vast product portfolio that big FMCGs companies had increasingly enlarged in pursuit
of additional revenue (Cosgrove, 2020a). Mondelez’s CEO informed that during the first
quarter of 2020 they have reduced the total SKUs count in search of greater simplicity so
that they could focus on the most important ones and ultimately satisfy the increased demand
in developed countries (Cosgrove, ivi). This process lasted over in Q2 2020 as well, at the
end of which the American snacks company revealed the plan to reduce its net SKU count
by 25% - which accounts for just 2% of the total sales - with the aim of reducing cost,
complexity, and inventories while attempting to solidify the achieved gains beyond the
pandemic (Cosgrove, 2021). An analogous path has been followed by the Coca-Cola
Company, whose CEO admitted the company’s goal of “ruthlessly prioritize core brands and
SKUs to strengthen the resilience” of their supply chain at the outset of the pandemic
(Cosgrove, 2020b). “The learnings from the last several months and the insights from our
already accelerated SKU rationalization have convinced us to go even deeper on this
opportunity by streamlining brands”, the beverages giant chief executive added (Cosgrove,
ivi). Moreover, according to Coca-Cola’s CFO, the incentives behind this process may go
beyond internal operations too, since retailers are more focused on core, familiar SKUs to
meet the customers’ need for a more convenient shopping experience (Cosgrove, ivi.). To
these two companies is added Procter & Gamble (P&G), which narrowed production focus
on core SKUs to ensure supply despite a surge in demand, and whose CFO said that these
efforts may have lasting effects and result in a cutting of “the long tail” of inefficient SKUs
and brands within the portfolio (Cosgrove, 2020a). A massive cut of about 80% of the
Dettol’s products range has been made at Reckitt Benckiser’s plant in Jingzhou, in an effort
to produce key items quickly at the beginning of the pandemic despite the procurement
challenges previously described in this section (Evans, 2021). Another measure adopted by
FMCG producers has been the stockpiling of ingredients through the investment of cash
reserves in raw materials (Devenyns, 2020). With this regard, Bloomberg (Patton & Deaux,

87
2021) reported that Campbell Soup Co., an American processed food and snack company,
was buying much more ingredients amid a surge in demand for pantry staples during Q1
2020. This behavior was described by the Bloomberg’s author as a striking shift in strategy
for a company that for years built up just-in-time inventories to minimize holding costs. An
increase in safety stock has been reported by the logistics manager of a FMCGs Dutch retailer
as well, who pointed out the effectiveness of such measure in avoiding the stock-out of long-
shelf life products such as toilet paper and soaps (Demirci, 2021). Amid the pandemic, the
same retailer rented additional storage and transportation capacity to handle the increase in
volume, other than increasing personnel in distribution centers and points of sale (Demirci,
ivi). Some of the retailer’s managers listed the use of global souring of small batches, the
attraction of multiple new external suppliers, and the use of substitute products and
packaging material as solutions adopted to meet demand as much as possible. Table 5.8
provides a summary of the findings about the uncertainty management strategies.

5.3.3 Expected long-lasting changes and future actions by SC partners

Some of the resources reviewed, in particular consulting firms’ whitepapers, focused on the
long-lasting changes that are expected to characterize the “new norm” of the FMCG
industry. Two McKinsey’s studies agree on the ongoing changes in consumer preferences,
driven by the likeliness of people to spend a significant amount of time at home, the desire
to save money and reduce the risk of infection, other than a newfound pleasure in nesting
(Brown et al., 2020; Fabius et al., 2020). These changes have resulted in boosting some
existing disruptive trends, including the digital ubiquity of the interactions between
consumers and brands, the importance of value and the price sensitivity triggered by the
economic downturn, and the rise of e-marketplaces, all of which have been already
undermining the CPGs’ old model (Kopka et al., 2020). Adding to these the steady rise of
discounters such as ALDI and LIDL, Kopka and colleagues (ivi) highlight the likeliness of
ongoing diminishing profits for grocers and other omnichannel mass merchants. Under such
pressure, these retailers may squeeze their supply chain for cost efficiencies that, given the
low-margin of the industry, could create major challenges for the many suppliers with inferior
bargaining power (Hobbs, 2020). In this regard, Hobbs (ivi) stresses the importance of
building strong collaborative buyer-supplier relationships, even in the face of evident market
power asymmetries, because in this case, suppliers are more likely “to go the extra mile”
through, for example, priority restocking. According to a whitepaper by Boston Consulting

88
Group (Chugani et al., 2020), retailers should pursuit operational efficiencies by means of a
simplification of the offer, a process that has been previously mentioned in this section
regarding CPGs producers. Too much variety, both external (in the offer) and especially
internal (in components and processes), negatively affects numerous cost items, including
purchasing costs, inventory holding costs, store operations costs, and marketing costs, and
should therefore be avoided. By striving for simplicity, FMCGs retailers could achieve an
optimized SKUs portfolio that benefits both stores, in terms of reduction of non-value-
added activities such as items repricing and shelves replenishment, and customers, in terms
of shopping convenience; they could free space in warehouses and release cash resources
previously tied up in “slow-moving” inventory to be invested in long-term Capex for
network expansion; they could strengthen the partnerships with suppliers by joining efforts
on the most popular core items (Chugani et al., ivi). Further in the aforementioned BCG’s
whitepaper, the authors suggest the application of three perspectives to maximize the
effectiveness of the initiative: (1) the customer, whose data, gathered through deep analytics
and loyalty metrics, should form the basis of the redesigned offer to be validated through
trials; (2) the offer, that should not be standardized but rather simplified as required to
maintain a product line-up that satisfies regional and local tastes; (3) suppliers, to discuss
plans and share performance data from test stores, giving them insights into what consumers
are buying, but ultimately regain control of merchandising decisions, including the placement
of both suppliers’ and private label’s products. Private label brands have been also deemed
by BCG (Valentini et al., 2020). as an imperative for the revival of grocers, especially the
American ones that have been laggards in terms of share of sales from private-label products
up to date. In this other whitepaper, the aforementioned consulting firm has deepened this
topic starting from some successful examples, including Aldi, Lidl, Walmart, H-E-B Grocery,
and the partnership between Tesco and Carrefour, and then moving to the structuring of an
approach to build private brands. Within such structure, a supply chain-related task is the
strengthening of the supplier network from retailers, which should build a mutually beneficial
partnership with upstream firms, rather than just making transactions, to jointly invest in
innovation and deliver high-quality products at the right cost to consumers (Valentini, ivi).
CPGs producers should follow as well the successful examples of Coca-Cola, Mondelez, and
P&G in terms of supply chain simplification, according to a whitepaper by McKinsey
(Adams et al., 2020). The whitepaper’s authors have illustrated four ways for producers to
address complexity: (1) assortment optimization, which involves the elimination of SKUs

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Table 5.9 - Long-lasting changes and future actions in the FMCG SC, source: author
Impacted
Impacted area Specific phenomenon References
stage

Demand management Retailers, Changing consumer preferences Brown et al. (2020); Fabius et al.
manufactures (2020)
Retailers Increase of consumer's price Brown et al. (2020); Fabius et al.
sensitivity (2020); Kopka et al. (2020)
Digital ubiquity of interactions with Kopka et al. (2020)
customers

Private label development Valentini et al. (2020)

Growth of online sales Manly et al. (2020)

Transportation and Retailers Collaboration with hyperlocal Ramantha et al. (2020)

logistics management delivery services
Relationship Retailers, Building of strong collaborative Hobbs (2020)
management manufacturers buyer-supplier relationships

Retailers Partnership and collaboration with e- Manly et al. (2020)

commerce experts

Supply chain-wide Retailers, Product portfolio simplification Adams et al. (2020), Chugani et
impact (causing impact manufacturers al. (2020)
on internal, upstream
and downstream
operations)
Manufacturers Shortening of the chain, with Ramantha et al. (2020)
manufacturers selling Direct-to-
consumer

Development of a bi-directional SC to Ramantha et al. (2020)

manage return of DTC orders

All Collaboration in product design Adams (2020), Rasmus et al.

(2020)
Increase in SC resilience Brown et al. (2020); Buck et al.
(2020); De Montgolfier et al.
(2020); Felix et al. (2021);
Gergele (2021); Idserda et al.
(2020); Kopka et al. (2020);
Ramantha et al. (2020); Rasmus
et al. (2020); Vu et al. (2020)
Building of a SC control tower Aull et al. (2020); Buck et al.
(2020); De Montgolfier et al.
(2020); Gergele (2021); Vu et al.
(2020)

Financial Management Retailers Diminishing profits for grocers and Kopka et al. (2020)
traditional mass merchants

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that erode margins and redirect resources towards portfolio gaps, (2) simplification of design,
by the product development team jointly with procurement, manufacturing, and
merchandising, to pursue common sourcing and shared packaging chassis, (3) design to
value, aimed at eliminating waste, raw ingredients, and excessive labor that do not bring value
to the customer (Adams et al., op. cit.) An analogous new product development process has
been defined as “design to margin” by the consulting firm Accenture (Rasmus et al., 2020).
A structural shift that could change the FMCGs supply chain, according to Deloitte
(Ramanatha et al., ivi), is the shortening of the chain by producers willing to sidestep the
intermediaries between them and the final customer. According to the whitepaper’s authors,
the FMCGs SC will be characterized by a significant increase in the “Direct to Customer”
model, driven by the increasing digital spend by millennials, growing in-home consumptions,
and by the customers’ expectations of an omnichannel experience with a multitude of
fulfillment options to choose from (e.g., ship from store, pickup at store, same-day delivery,
and digital delivery) with, to add complexity, the possibility to change it while the product is
in transit. This new model would then require the planning and running of a “bi-directional”
supply chain, i.e., a reverse SC that is visible and sufficiently robust to sustain the additional
costs and complexity related to the return of products by customers, which could even go
through a different channel than what was considered for ordering (Ramantha et al., ivi).
Further in the study, Deloitte reported the increasing focus on hyperlocal and regionalization
by distributors and dealers. Amid the pandemic, partnerships with technology platforms and
last-mile deliveries players were made, resulting in a significant increase of hyperlocal delivery
of essential items, such as groceries, fruits, and hygiene. Consumers who turned to
marketplaces offering delivery at doorsteps may consider their convenience even beyond the
pandemic (Ramantha et al., ivi). Online sales of FMCGs has been reported to have spiked to
as high as 15% of total retail sales according to a detailed analysis by Boston Consulting
Group. (Manly et al., 2020). A whitepaper of the American consulting firm expects that figure
to settle at about 6% to 8% by 2022, considering it an important level, given that, by their
reckoning, a 5% to 7% is threshold that has successfully foreshadowed an e-commerce take-
off in many other large product segments such as toys, auto parts, and electronics. According
to BCG (Manly et. al, ivi), the process of implementing an e-commerce strategy by CPGs
companies will imply the need to join with partners and ecosystems such as e-commerce
marketers, data analytics solutions, content and omnichannel management firms, to
efficiently acquire the expertise and capabilities needed for an online sales environment.

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According to a vast amount of whitepapers, running the FMCGs supply chain in the “new
normal” would require the building of a more resilient network (Brown et al., 2020; Buck et
al., 2020; De Montgolfier et al., 2020; Felix et al., 2021; Gergele, 2021; Idserda et al., 2020;
Kopka et al., 2020; Ramanatha et al., 2020; Rasmus et al., 2020; Vu et al., 2020). One of the
most common solution to be adopted in this regard is the building of a “control tower” (Aull
et al., 2020; Buck et al., 2020; De Montgolfier et al., 2020; Gergele, 2021; Vu et al., 2020) to
monitor in real-time the SC from “end to end”, improve visibility and allow predictive and
prescriptive analytics. A summary of the findings regarding the “new norm” of the FMCGs
industry and the suggested future actions is presented in Table 5.9.

5.4 Findings on electronics supply chains

In this section, the findings stemming from the whole body of material reviewed will be used
to develop a narrative of the impact of COVID-19 in terms of supply chain uncertainties,
uncertainty management strategies and long-lasting changes regarding the electronics
industry.

5.4.1 Impact of COVID-19 on SC uncertainty

When the novel coronavirus outbreak occurred in Wuhan on 31 December 2019, the
absolute-response-time (ART), which is defined as the time between the appearance of the
first coronavirus case and the mandatory restrictions imposed by governments, was
measured of 23 days (Xu et al., 2020). This value, which is the smallest observed among all
countries, is important because when lockdowns are adopted, the flow of the logistics and
travel of the workers is under unpredictable constraints. Xu and colleagues (ivi, p. 157)
highlight that “the timing of the first case and the first lockdown in a country are of great
importance for firms, because they determine the time left for the firms to prepare to cope
with more stringent restriction.”. The short ART observed in China means that the global
supply chains affected by the restrictions in Wuhan ad very little time to avoid disruptions.
The impact of COVID-19 control measures on SC performances has been studied by Guan
and et al. (2020) adopting the latest global trade modelling framework. The aforementioned
authors found out that the strictness (measured by the percentage by which labor availability
and transportation capacity are reduced relative to pre-pandemic levels) and the duration
(measured in number of months that lockdown measures are in place) determine the
domestic production, through labor supply, and the transportation capacity that links SC

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actors. As reported by the Financial Times (Hille, Ruehl, et al., 2020), the early sign of a
potential SC disruption came when the governments of six Chinese provinces, which include
some crucial manufacturing hubs of the electronics global supply chains (e.g., Shanghai,
Jiangsu, Guangdong, and Chongqing) mandated that the return to work after the New Year
holidays would be delayed by a week to 10 February 2020 for all but essential industries.
Major Electronics Manufacturing Services (EMS), including Hon Hai Technology Group
(Foxconn), were running at about 10 to 20 percent of capacity due to labor shortages, with
many workers that still had to return to work (Jorgensen, 2020). The dramatic slowdown of
China-based contract manufacturers raised serious concerns for several electronics retailers
about the supply of consumer electronics, whose replenishment lead-time was told to take
up to three times (Hille, Gray, et al., 2020). In a case study research, Garlick et al. (2020)
analyzed the case of a midsized consumer electronics company comprised of 105 employees
in central California and the European Union. The company’s manufacturing was almost
completely based in China, with a bit in Taiwan and Vietnam, but the increase in tariffs
focused its effort on diversifying its supply chain. Even though the company had stockpiled
inventory during November and December in preparation for the Chinese New Year
Shutdowns, and despite the traditional weakening of the demand in Q1, stocks were not
replenished and at the end of April the company reported a significant loss in business due
to the stockouts issues, showing that the magnitude of the supply disruption overcame even
the worst forecasts and uncovering the ineffectiveness of such proactive measure when
dealing with this scale of supply uncertainty (Garlick, ivi). Moreover, the seal of Chinese
borders made it impossible for the company’s employees based in Taiwan to conduct the
traditional quality checks for manufacturing in China until April. Workforce issues did not
even spare the semiconductors supply chain. If the highly automated foundries located in
China continued the production at high-capacity rates, many OSAT (Outsourced
Semiconductor Assembly and Test) vendors’ plants have reduced or even stopped the
production since the early days of the pandemic outbreak (Jorgensen, op. cit.), creating
bottlenecks for chip companies that rely on such back-end packaging and testing capacity.
On the other hand, fabless companies were threatened by the logistics breakdown that could
hamper their intense import and export flow, but whose impact was nonetheless mitigated
by the natural slowdown that traditionally happens in the global electronics business during
Q1 (Jorgensen, op. cit.). With Chinese contract manufacturers struggling to return to full
capacity throughout February 2020, supply uncertainty rose for all the downstream actors of

93
the chain, which reported delays in shipment of components, spares, and finish products
(Cai & Luo, 2020; Hille, Gray, et al., 2020; Jorgensen, 2020; Y. Liu et al., 2020), and a sharp
increase in components prices (Liu et al., ivi), including those of commoditized parts whose
market was temporarily thin (Ishida, 2020). An article on the Logistics journal (Hoek, 2020)
analyzed the case study of an electronics distributor operating in the Middle East that
suffered from a lack of transportation capacity out of China and that as a result faced
airfreight at up to four times more expensive tariffs than normal. The same company
reported that the pandemic did drive an unplanned increase in supply risk and that suppliers
from China became more of a bottleneck or even strategic concern with supply uncertainty
increasing (Hoek, ivi). These supply uncertainties have developed into real difficulty for
Vietnamese companies’ plants that, as they resumed operations after the Tet Lunar New
Year holiday at the beginning of February, found the border with China closed and restricted
for trade in both directions (Reed, 2020). Given that some companies source a substantial
share of smartphones’ components from China, they had to find alternatives way to avoid
supply disruptions. This has been the case of Samsung, which flew electronic components
for its latest Galaxy phones from China to its factory in Vietnam to sidestep the land routes
blocking (Reed, ivi). As the virus spread to contiguous countries such as South Korea,
Taiwan, Philippines and Malaysia, global electronics companies realized their supply chains
might be in far worse troubles than thought (Jorgensen, op. cit.). As documented by the
Financial Times (Jung-a & White, 2020), Samsung was forced to pause production at its
Gumi plant in South Korea at the end of February 2020 after a single worker had tested
positive for the virus. Even though the plant at issue was mainly dedicated to the production
of smartphones for the local market, the fact that some key parts used in all of their high-
end phones, such as OLED screens and ultra-thin glass were still produced solely in South
Korea casted shadows on the potential havoc wrecked by additional production stops (Jung-
a & White, ivi). These threats materialized when the rapid spread of the outbreaks eventually
forced frequent shutdowns of Samsung’s home plant, causing disruption to the premium
smartphone manufacturing for the local market, and forcing the company to shift such
production to Vietnam (Jung-a, 2020). When the Philippines government announced the
lockdown measures on 12 March 2020, it arose uncertainty related to the supply of multilayer
ceramic capacitors (MLCC) from Murata Manufacturing Company’s and Samsung
Electronics’ manufacturing plants (Wang, 2020), which are mainly used in high-end markets
such as smartphones, automotive, industrial applications and medical equipment. A two-

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weeks lockdown in Malaysia from 17 March 2020 stopped resistors manufacturing at
Japanese and Taiwanese companies’ plants located in the country (Wang, ivi), as well as the
operations of several key suppliers including Murata, Renesas Electronics Corp., and Ibiden
Co., which make chips and circuit boards for Apple Inc. (Gurman & Wu, 2020). On 24
March, the Indian government imposed restrictions that limited the intense logistics flows
both inbound and outbound of EMS’s plants including Foxconn’s and Winstron’s (Wang,
op. cit.). However, the magnitude of shortage has been buffered by the decrease of the
demand for final products. According to a survey research conducted by Guan et al. (2020)
with an electronics company’s owner, the suspension of international and domestic
transportation by air and by train was ranked as the most negatively influencing COVID-19
prevention policies on supply chain performances in terms of supply, logistics, and demand.
As reported by a research director at International Data Corporation (IDC) to Bloomberg
(Savov, 2020) on 1 May 2020, “what started as primarily a supply-side problem initially
limited to China has grown into a global pandemic crisis with the demand-side impact
starting to show by the end of the quarter”. In a previously mentioned article about COVID-
19’s impacts on supply and demand of different industries, Cai and Luo (op. cit.) agree that in
China, for what regards consumer electronics products such as smartphones and computers,
the pandemic caused a demand drop greater than the decrease in supply, resulting in a net
consumption decrease (Appendix Figure 1). Moving to the B2B market, the same authors
reported instead a supply shortage of semiconductors stemmed from a supply drop that left
companies unable to satisfy even the slightly decreased demand. Such decrease in orders was
mainly associated with a slump in final demand for the automotive industry, which prompted
auto suppliers to cut their purchase orders for the computer chips that manage everything
from car’s brakes and steering to its electric windows and distance sensors (Ehrmann, 2021;
Miller, 2021; Wu, Coppola, et al., 2021; Wu, Kim, et al., 2021; Wu, Savov, et al., 2021).
Additional demand uncertainty for chipmakers has been caused by the stay-at-home
restrictions protractedly adopted by almost all countries. Lockdowns spurred growth in sales
of laptops to its highest in a decade, other than creating demand for home-networking gear,
webcams, and monitors as office work moved inside houses and education left school (Hart,
2021; Wu, Kim, et al., 2021). All such products, together with TV screens and the air
purifiers, now come with customized chips (Wu, Savov, et al., 2021), hence drove

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Table 5.10 - Summary of the impacts of COVID-19 on the electronics supply chain, source: author

Impacted Area Impacted Stage Specific Impact References

Demand Semiconductor Shortage of semiconductors Cai and Luo (2020
management foundries
Orders cancelling by automotive (Ehrmann (2021); Miller
OEMs (2021); Wu, Coppola, et al.
(2021); Wu, Kim, et al.
(2021); Wu, Savov, et al.
(2021)
Foundries' direct customer Hille (2021); Wu, Kim, et
stockpiling behavior al. (2021); Wu, Savov, et
al. (2021)
Spike in demand for gadget chips Wu, Coppola, et al. (2021)
Unforeseen bounce back of cars' Hille (2021); Jorgensen
demand (2021b); Miller (2021)
Retailers and Spike in demand of laptops and Hart (2021); Wu, Kim, et
components suppliers WFH equipment al. (2021); Wu, Savov, et
al. (2021)
All Ambiguity or difficulty in forecasting Garlick (2020), Hart (2021)
Supply EMS Shortage of material supply/supply- Cai and Luo (2020);
management side shock/supply disruption Dimensional Research
(2020); Garlick (2020);
Hille, Gray, et al. (2020);
Heok (2020); Jorgensen
(2020, 2021a); Jung-a and
Hille (2021) Y. Liu et al.
(2020); Wu, Savov, et al.
(2021)
Increase in components prices Ishida (2020); Liu et al.
(2020)
OEM Expensive spot buys because of Dimensional Research
availability issues (2020)
Carmakers' shortage of Nicholas et al. (2021);
semiconductors Takezawa et al. (2021)
Cannibalization of common Ehrmann (2021)
components between industrial
sectors
Internal EMS, OSAT Workforce shortage Hille, Ruehl, et al. (2020);
operations Jorgensen (2020)
management
Reduced production capacity Jorgensen (2020)
Production disruption Gurman and Wu (2020);
Jung-a (2020); Jung-a and
White (2020); Wang
(2020)
Semiconductor Increased production changeovers Jung-a and Hille (2021)
foundries due to shifting priorities among
customers

Relationship OEM Inability to conduct traditional Garlick (2020)

management quality checks

Transportation Retailers Delays in transportation and Cai & Luo (2020); Hille,
and logistics distribution Gray, et al. (2020);
management Jorgensen (2020); Y. Liu et
al. (2020)

96
 Logistics breakdown Jorgensen (2020); Hoeck
(2020)
Trade restrictions due to borders Hoeck (2020); Reed
seal (2020), Wang (2020)
(continued)
Supply chain- OEM Delays in product launches Culpan (2020),
wide impact Dimensional Research
(2020)
Competition between industrial Hille (2021)
sector for common components

dependent demand for electronics components that not only exceeded industry forecasts but
has also surpassed the level of supply available in the supply chain (Hart, op. cit.). While Asian
electronics manufacturers were recovering from the workforce issues, another wave of
uncertainty was hitting the semiconductors supply chain. As reported by Bloomberg (Wu,
Kim, et al., op. cit.) and the Financial Times (Hille, 2021), since Q1 2020 the executives of the
world’s largest pure-play foundry Taiwan Semiconductor Manufacturing Company (TSMC)
had been telling investors that customers had been accumulating more inventory than
seasonal averages to shield themselves from uncertainty. According to the article’s authors,
the stockpiling began after PC makers began warning about tight supply of semiconductors
early in 2020. Then during summer, Huawei Technologies Co. - a major Chinese smartphone
and networking gear manufacturer - began hoarding components to ensure its survival amid
the trade war from U.S. sanction that threatened to cut it off from its primary suppliers (Wu,
Kim, et al., op. cit.). Led by Huawei, Chinese imports of chips of all kinds climbed to almost
$380 Billion in 2020, making up almost a fifth of the country’s overall imports for the year
(Wu, Savov, et al., op. cit.). At the same time, foundries received a surge in purchase orders
for gadget chips after Apple, Inc., Samsung Electronics Co. and other smartphones
manufacturers prepared to launch an avalanche of 5G devices including the iPhone 12, which
requires as much as 40% more silicon content than 4G headsets (Wu, Coppola, et al., 2021).
With this regard, the fact that Apple Inc., did not release the new version of its flagship
iPhone in September - for the first time since 2011 - broke the traditional practice shared
with suppliers of ramp-up, reveal, and release in Q3, followed by momentum and holiday-
season demand in Q4 (Culpan, 2020). According to Bloomberg (Culpan, ivi), the late launch
in November jeopardized the supply chain’s “well-oiled machine” and pushed suppliers to
the overload. Apple was not the only one, as one survey research sponsored by Supplyframe
and carried out by Dimensional Research (Dimensional Research, 2020) proved. Out of the

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217 OEM companies with 500 or more employees, 91 percent said that sourcing issues have
caused product launch delays, while 81 % have been forced to make expensive spot buys
because of availability issues. The semiconductor cycle went out of balance as a result of the
aforementioned supply and demand shocks, and this became undeniable when the demand
for cars suddenly bounced back at the end of the year (Hille, op. cit.). As previously reported,
because of carmakers’ “just-in-time” manufacturing model, when automotive OEMs sales
plummeted early in 2020 their suppliers worried about quick inventory buildups and canceled
orders originally planned for semiconductors foundries in the first half of 2020 (Wu,
Coppola, et al., op. cit.). But demand for cars jumped unexpectedly in the final three months
of 2020, as buyers became more optimistic (Jorgensen, 2021b; Miller, 2021). Quoting
Bloomberg Businessweek (Nicholas et al., 2021), “by the time auto parts suppliers realized they
were running shorts on the dozen of microprocessors needed for each car, chipmakers were
slammed making semiconductors for the cellphones, game consoles, and computers that
housebound shoppers were buying like crazy”. Carmakers themselves, having switched to
JIT manufacturing, were no longer keeping stockpiles themselves (Miller, op. cit.). According
to Nicholas and colleagues (op. cit.), the uncertainty regarding supply of semiconductors has
been exacerbated by the outsize power of TMSC, which accounted for 56% of global chips
manufacturing revenue in Q4 2020. Even though automakers rarely buy directly from TMSC,
but rather purchase most of their electronics from suppliers that often, in turn, outsource
the design and manufacturing of chips to automotive-focused shops (Nicholas et al., op. cit.).
These last make some parts in-house but turn to TMSC to handle much of their production.
As reported by the aforementioned article on Bloomberg Businessweek, the already huge
automotive requirements were topped by those of consumer electronics giants such as Apple,
Samsung, and Sony, which, are ready to pay more to ensure their latest products get to market
on time: a behavior that carmakers are less inclined to do (Nicholas et al., op. cit.). Volkswagen
AG - which incorporates brands such as Volkswagen, ŠKODA, SEAT, and Audi - was the
first to publicly announce the shortage of electronic components on 18 December 2020
(Nicholas et al., op. cit.). Production scale-back and even factory shut down announcements
rapidly follow by components makers Robert Bosch and Continental AG, then Nissan Motor
Co., Fiat Chrysler Automobiles NV, Daimler AG, Honda Motor Co., and Ford Motor Co.
(Nicholas et al., op. cit.; Takezawa et al., 2021). Part of these automotive OEMs blamed chip
foundries for the re-prioritization of capacity in favor of the rampant and more profitable
business of consumer electronics (Nicholas et al., op. cit.), while Richard Barnett, the Chief

98
Marketing Officer at Supplyframe - a provider of the Design-to-Source Intelligence (DSI)
platform for the global electronics value chain - illustrated a more holistic view of the
phenomenon. In his interview to Spend Matter (Ehrmann, 2021), he identified at the root of
the problem the sharing of numerous electronics commodity groups across multiples
industries, with “key suppliers reallocating available capacity or supply to the demand with
the highest either near-term or medium-term growth”. Bennet later added that the
cannibalization happened mostly around relatively standard components like MCUs
(microprocessors units) and some SoC (system-on-a-chip), which could go into a game
console or a computer or into an automotive system. That cannibalization caused suppliers’
stock to fall from 4-6 weeks down to 2-3 weeks, rises in prices, and an increase in lead time
of about 30 to 40 percent as supply and demand shifted across sectors of destination
(Ehrmann, 2021; Jorgensen, 2021a). Wu, Coppola et al. (op. cit.), and Lapatchett (2021) have
added another facet of the issue, highlighting the sharp rise in the amount and the complexity
of chip requirements due to the technological advancements in car entertainment and
autonomous-driving systems. The Financial Times (Jung-a & Hille, 2021) reported the
statement by Samsung Electronics Co. on 21 January 2021 where the South Korean company
informed that the chip manufacturers rush to respond to the global semiconductor shortage
that had hit global carmakers could disrupt orders for memory chips, which enable
smartphones and tablets to perform multiple tasks at one. On 3 February 2021, Sony Corp.
added that it might be unable to fully satisfy demand for its new gaming console in 2021
because of production bottlenecks (Wu, Savov, et al., op. cit.). “Chip shortages are threatened
to plague even more sectors, including aviation where airlines around the world are scrapping
old aircraft to slim down their balance sheet while people’s desire to travel will explode after
the pandemic” said MinebeaMitsumi Inc. - a vital supplier to the transport and electronics
industries - to Bloomberg on 5 February 2021 (Wu, Savov, et al., op. cit.). A recent article in
the Financial Times (Hille, 2021) tried to show the “big picture” of the current situation of
the electronics industry taking into account the uncertainty caused by the trade war already
underway for a while, and the collision of needs, business models, and supply chains of
industries not previously connected to each other. “The carmakers operate on a just-in-time
model which disincentives inventory. That is just the opposite of the close and carefully
managed relationships between fabless chipmakers and foundries. The more that kind of
things happens, the more it will disrupt things inside our industry as well” said an executive
at a Taiwanese contract chipmaker to the article’s author (Hille, op. cit.). A summary of the

99
findings regarding the impact of COVID-19 on the electronics supply chain is illustrated in
Table 5.10.

5.4.2 Response measures by SC partners

If the reviewed articles provided accurate and comprehensive information regarding the
COVID-19 impact on the electronics SC, less attention has been brought to the uncertainty
management strategies adopted by companies. One of the most prompt reactions to the early
shutdown of Chinese factories and borders seal has been reported to be the air freight of
electronic components from China to Vietnam by Samsung (Reed, 2020). Among the
measures put in place by the South Korean corporation to cope with the spread of the virus
within its workforce, there has been the shift of more than half of the smartphone production
from its home plant in Gumi (South Korea) to Vietnam while maintaining the manufacturing
of its premium models for the local market at the Gumi complex (Jung-a, 2020; Kim &
Kong, 2020; Patchett, 2020). The lessons learned from past experiences in dealing with large-
scale challenges, such as the 2015 MERS outbreak, proved to be useful for the preparation
of proactive plans against the uncertainties caused by COVID-19 (Patchett, ivi). In fact, the
quick implementation of such measures was made possible by the early formation of an
internal task force made busy as soon as South Korea reported its first case of COVID-19
on 20 January 2020, even while the government had maintained that the threat was low and
business should have focused on growth (White, 2020). Later on, with the help of the
government bodies, Samsung obtained special travel exemptions from foreign embassies to
arrange charter flights to get its engineers to factories around the world (White, ivi). A key
measure developed by the same South Korean corporation to keep its suppliers afloat has
been the “co-prosperity program”, which encompassed the issuing of business operation
funds at derisory interest rates for a total amount of $830 million, and the advance payments
of purchase orders to the value of $1.3 Billion (Patchett, op. cit.). According to Geoff Pollak,
managing director of the professional services firm Alvarez & Marsal, the availability of cash
on hand to pay suppliers in advance has been a distinctive feature of technology companies
that coped with the supply disruption better than the others (Hille, Gray, et al., 2020).
Regarding this, the Supply Management website (Allen, 2021) reported the results of the
survey conducted by ASCM and the Economist Intelligence Unit (EIU), where eight in 10
(80%) consumer electronics companies sized greater than $1bn had revealed to have directly
helped suppliers to remain solvent during the COVID-19 crisis, compared with the cross-

100
sectoral average of 54.9 percent. But Samsung’s backing to its upstream partners went
beyond financial support. Speaking at Gartner’s Virtual Supply Chain Symposium (Patchett, op.
cit.) Karan Seth, senior manager at Samsung Electronics, added: “Additionally, we provided
support for logistics costs, especially in the case where air freight delivery was required. We
also provided support by simplifying parts approval processes and providing consulting
Stage
Measure Area Specific Measure References
implementation

Demand management OEM Purchase limits on key products Gurman and Wu (2020)

Supply management OEM Simplify components parts approval and Patchett (2020)
diversify raw materials and part
suppliers when needed
Coordination between sourcing, Dimensional Research
engineering, and SRM (2020)
Hoarding of available stocks of Wu, Savov, et al. (2020)
components

Internal operations OEM Production reallocation to operating Jung-a (2020); Kim and
management plants Kong (2020); Patchett
(2020)
Formation of an internal task force to Patchett (2020); White
develop proactive plans (2020)

Transportation and OEM Airfreight of components to sidestep Reed (2020)

logistics management land routes block
Ocean freight as a low-cost alternative Hoek (2020)
for customers with tight financials
Travel exemptions to send engineers to White (2020)
offshore plants
Support for logistics costs to suppliers Patchett (2020)
Supply chain-wide All Enhanced visibility between foundries, Jorgensen (2021b),
impact distributors, and OEMs on purchase Patchett (2020)
orders
Financial OEM Business operation funds and advance Allen (2021); Patchett
management payments of purchase orders to (2020); Hille, Gray, et al.
suppliers (2020)

when diversification of raw materials and part suppliers was needed”.

Table 5.11 - Uncertainty management strategies by electronics companies, source: author

Early and effective collaboration between teams was deemed as key to sourcing success also
by 217 decision-makers with responsibility for sourcing electronics components at OEM
companies with 500 or more employees. In this survey research (Dimensional Research, op.

101
cit.), 99% of the respondents reported direct benefits from early collaboration between
engineering and sourcing teams, 79% of them reported collaboration issues had caused
product introduction delays and 85% said that engineers selected components that could not
be effectively sourced, while 95% of the decision-makers agreed that the path to solving
component sourcing issues requires integration of engineering, sourcing, and partners
relationship management. By contrast, a much more individualistic approach has
characterized chip manufacturer’s direct customers such as Huawei and other Chinese
companies, whose attempt to surviving the crippling U.S. sanctions, materialized in the
hoarding of the available stocks (Wu, Savov, et al., op. cit.). Inventory redundancy was deemed
ill-suited for innovative products such as electronics components by the scholarly Xu et al.
(2020), given the increase in operational costs and the rise in obsolescence risk. On the other
hand, electronics distributors, whose role is that of buffering chips demand fluctuations from
OEMs, reported increased alignment and enhanced visibility along the supply chain
(Jorgensen, 2021b). Arrow Electronics Inc.’s, one of the two industry’s largest distributors,
informed during the Q4 2020 earnings call that its customers and especially the automotive
ones, were placing their orders out longer than they had had in the past, enhancing visibility
past 90 days, and allowing distributors itself to forward such data to suppliers so they can
plan manufacturing (Jorgensen, ivi., Patchett, op. cit.). Such practice was made necessary given
the dramatical stretch of outbound lead time from distributors, which explored shifting to
ocean freight for customers not willing to pay for the almost quadrupled cost of airfreight
caused by a lack of transportation capacity out of China (Hoek, 2020). A similar measure to
that applied by groceries and FMCGs retailers has been the restriction imposed by Apple
that limited iPhone purchases to two per customer on its online store in several countries
(Gurman & Wu, 2020). Table 5.11 illustrates a summary of the uncertainty management
strategies described in this paragraph.

5.4.3 Expected long-lasting changes and future actions by SC partners

The review of the selected material has led to collect information about the long-lasting
changes that are expected to shape the electronics industry in the medium-long term. Such
research findings, which will be illustrated in this paragraph, include companies’ and
governments’ testimonials about strategic actions already in place and future business plans,
other than whitepapers from first-class consulting firms and long-term outlooks from
scholarly. Starting from the recent worldwide shortage of semiconductors that halted

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production at carmakers’ plant, Bloomberg (J. Liu & Tian, 2021) reported the negative
outlook from the official who oversees the Chinese key new energy vehicle technology
development platform. According to Yuan Chengyin, general manager of the National New
Energy Vehicle Technology Innovation Center, China’s automotive-chip shortage could
persist for as long as a decade, but it has little to do with the current supply glitches that
caused production breakdowns (J. Liu & Tian, ivi). If incorrect sales forecasts and factory
disruptions because of COVID-19 are deemed as short-term factors that will resolve
naturally, Mr. Yuan expects that China’s rising demand for electric vehicles (EVs), its lack of
domestic know-how, and sustained geopolitical tensions will emerge as much more serious
issues. Yuan adds that China’s supply chain will continue to be vulnerable to global forces
until national companies build up their own manufacturing capabilities and make the
semiconductors used in EVs themselves (J. Liu & Tian, ivi). The Financial Times (Hille, op.
cit.) reported the opinion shared by many analysts including Sebastian Hou, managing
director and head of technology research at the Hong Kong brokerage and investment group
CLSA, according to which the semiconductors supply uncertainty is expected to last as long
as COVID-19 is not eliminated, and the US-China tech war continues. Consistent with this
is TSMC CEO’s opinion about customers’ inventory. Early in 2021, Dr. C.C. Wei told
investors that the corporation expects “customers to prepare higher level of inventory than
the historic seasonal average for a longer period, given that the industries continue to need
to ensure supply chain security” (Hille, op. cit.). The consulting firm Accenture developed a
detailed outlook of the medium and long-term impact of COVID-19 on demand for
semiconductors (Syed et al., 2020) (Appendix Figure 3), which is consistent with the forecasts
by McKinsey & Company (Bauer et al., 2020). According to Accenture, the coronavirus
pandemic will positively affect numerous markets such as computing & storage, consumer
electronics, IoT and industrial appliances, and network & communications, while the
automotive market is foreseen to achieve lower than expected sell-through in distribution
channels and to delay or even cancel purchase orders. Uncertainty is the keyword that
Accenture used to expresses the effect of the shifting priorities and buying patterns that are
predicted to change within the automotive, computing & storage, and consumer electronics
(Syed et al., op. cit.). A frequently mention concept has been supply chain resilience. A Bain
& Company whitepaper within the same consulting firm’s 2020 Technology Report
(Guarraia & Hanbury, 2020) has analyzed the de-verticalization and slimming path followed
by technology supply chains for the last three decades. According to the whitepaper’s

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authors, the undertaken journey has made them efficient in normal economic climate but ill-
suited for the extreme volatility that the pandemic, combined with growing trade tensions,
will spell for years to come. Even though low cost and efficiency are still deemed as crucial,
resilience is described as vitally important not only to mitigate the risk of supply disruption,

Table 5.12 - Long-lasting changes and future actions in the electronics SC, source: author

Impacted
Impacted area Specific phenomenon References
stage

Demand OEM Positive outlook for computing & storage, consumer Syed et al. (2020); Bauer
management electronics, IoT, and network & communication et al. (2020)
demand
Negative outlook for automotive demand Syed et al. (2020); Bauer
et al. (2020)
Uncertainty driven by shifting priorities and buying Syed et al. (2020)
patterns within automotive, computing & storage, and
consumer electronics

Supply Chinese Chip shortage will last until China builds a self-reliant J. Liu and Tian (2021)
management carmakers semiconductor SC
OEM Chip shortage will last until the end of COVID-19 and Hille (2021)
the US-China trade war
Hold higher levels of components inventory Hille (2021)

Supply chain- All Need to increase SC resilience Guarraia and Hanbury

wide impact (2020)
Develop a smartphone demand-based digital SC Shin et al. (2020); Xu et
al. (2020)
Enhance IP security by migrating semiconductor SC to Sovie et al. (2020)
the cloud infrastructure
Regionalization of SCs Kim and King (2021);
Hille (2020); Hoecker et
al. (2020); Leonard and
Jacobs (2021); Wu
(2020); Xu et al. (2020)

but to provide and sustain a competitive advantage by means of product flows continuity
when the next shock will hit (Guarraia & Hanbury, op. cit.). Within the numerous facets of
supply chain resilience, two main processes have been addressed by the reviewed material:
SC digitalization and SC regionalization. About the former, a second Bain’s whitepaper (Shin
et al., 2020) focused on the need for the smartphone SC to develop a demand-based digital
supply chain by leveraging on digital technologies such as the Internet of Things (IoT), big
data analytics, and cloud computing that can help phone manufacturers and component
suppliers in better understanding and monitoring the SC. The migration to the cloud has
been depicted as imperative also for the semiconductor industry by the consultancy

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Accenture (Sovie et al., 2020), which highlighted how the enhanced security and the
automation technologies that today’s cloud offer, unlike the on-premise systems, make the
cloud a better option for preventing intellectual property (IP) theft. In their peer-reviewed
secondary data analysis, Xu and colleagues (op. cit.) agreed on the importance of digitalization
for enhancing SC performance in the medium-long term and highlighted the crucial role that
local sourcing plays for global SCs dealing with innovative products, such that of electronics.
Besides the havoc caused by COVID-19, supply chain regionalization has a lot to do with
the US-China trade war as well, as reported by companies’ executives, government bodies,
and consulting firms. Starting from these last, Bain & Company (Hoecker et al., 2020) reports
the efforts of Chinese companies aimed at securing a self-reliant SC in light of the stricter
US export regulations, as well as those of US companies adding redundancy in order to
reduce dependence on Chinese suppliers. Some other companies are instead pursuing a
“China-plus-one” model. It’s the case of several Apple’s manufacturing partners, including
Winstron Corp., which said to Bloomberg that half of its capacity could reside outside China
within a year, Invetec Corp., Pegatron Corp., and Foxconn, namely Hon Hai Precision
Industry Co. (Wu, 2020). This last which has a workforce of close to one million in China,
expects manufacturing to fragment in to a China supply chain and several others for the rest
of the world, as reported by the Financial Times (Hille, 2020). “The past model, where
[manufacturing] is concentrated in just a few countries like a world factory will no longer
exists”, Young Liu, Foxconn chairman said at a conference in June, adding “What we think
is more likely in the future are regional production network” (Hille, ivi). This phenomenon
extends to EMS serving customers other than Apple, such as Meiloon Industries Inc., which
makes speakers and counts Harman International Industries Inc. and Xiaomi Corp. among
its clients. Bloomberg (Wu, op. cit.) reported the words of Meillon’s spokesperson Eva Kuo,
who said the company is seeking alternatives to China-based production and speeding up a
move of capacity to places like Taiwan and Indonesia. However, according to the Financial
Times (Hille, op. cit.; Wu, op. cit.), it is unlikely that China will fully give up its place as the
world’s electronics workshop in the near future, mainly because it is difficult to replicate the
intricated network of suppliers, competent workers, efficient distribution system, and large
home market that the country offers. The FT backed this statement with the words of Apple
CEO Time Cook, who said early in 2020 that the company was not looking to make any
quick moves out of China in light of the virus-related supply chain interruptions (Wu, op. cit.).
Regionalization initiatives have been reported to be taken by semiconductor foundries as

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well, with Samsung Electronics Co. considering spending more than $10 Billion building its
most advanced logic chipmaking plant in Texas (U.S.) with the aim of winning more
American clients and catch up with the industry leader TSMC, which is already on track to
build its own $12 Billion chip plant in Arizona (U.S.) by 2024 (Kim & King, 2021). On top
of this, governments are trying to take advantage of these historic shifts (Hille, op. cit.). “Some
countries are starting to hand out incentives for companies to come home”, said Ku-hyun
Jung, an economist and professor emeritus at Yonsei University in Seoul to the Financial
Times. According to Jung, the scope of reshoring will be limited, and instead three large
supply chain systems will form: the largest on in Asia, including China but reaching down to
south-east Asia, and two smaller ones centered on the US and Germany (Hille, op. cit.). One
of the strongest statements from governments about the need to strengthen the electronics
and semiconductor supply chain has been the remarks by US President Biden at the signing
of an executive order to identify policy recommendations aimed at fortifying American
supply chains (Leonard & Jacobs, 2021). Before signing the order long-term review of a 100-
day review of four vital products, including semiconductors, key minerals and materials,
pharmaceuticals, and advanced battery, on 24 February 2020 the President (Biden, 2021)
stated

“In some cases, building resilience will mean increasing our production of certain types
of elements here at home. In others, it’ll mean working more closely with our trusted
friends and partners, nations that share our values, so that our supply chains can’t be
used against us as leverage. It will mean identifying and building surge capacity that
can quickly be turned into a ramped up production in times of emergency. And it will
mean investing in research and development, like we did in the 60’s, to ensure long-
term competitiveness in our manufacturing base in the decades ahead”.

A summary of the medium-long-term changes expected to shape the electronics SC is

illustrated in Table 5.12.

5.5 Answers to the research questions

In light of the findings of presented in the previous sections, it is possible to give answers to
the research questions by tackling each sub-question to perform the ultimate step towards
the research objective.

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The first RQ regards the impact of COVID-19 on SC uncertainty, and its first articulation
is:

RQ1a: “How has COVID-19 affected the SC uncertainty in FMCG SCs?”

Being concise, the impact of COVID-19 on the FMCGs can be summarized in three points:

1. The perception of risk related to the infection and the employment of lockdown
measures by the national government caused a substantial, yet short-lived, increase
in consumer demand uncertainty.
2. The spread of the disease within the companies’ workforce and the respect of
contagion prevention measures in production plants and logistics hubs increased the
supply uncertainty of the SCs and put at risk their ability to fulfill retailers’ demand.
3. The forced closure of the Ho.Re.Ca. industry triggered a tremendous shift of demand
from the on-trade to the off-trade channel that caused a more solid increase of
demand uncertainty, while at the same time raising supply uncertainty because of the
need to change over the supply process to suit the B2C demand.

The second sub-question is:

RQ1b: “How has COVID-19 affected the SC uncertainty in electronics SCs?”

The answer to this question can be articulated into two main points:

1. The prevention and control measures that governments were forced to employ given
the widespread outbreaks dramatically increased the supply uncertainty by halting
production and breaking down international logistics.
2. The strong fluctuation of demand from downstream industrial sectors and the new
needs of work-from-home equipment has strongly increased the demand uncertainty,
especially for the suppliers of common electronics components.

By jointly considering the answer to the two sub-questions, it can be claimed that the
COVID-19 pandemic had and is currently having unequal impacts on the FMCGs and the
electronics SC, as one could be expected given the large differences between such two
industries.

Moving to the second RQ, the focus shifts to the SC uncertainty management strategies
reported by the two SCs in facing COVID-19. In particular, the first sub-question is:

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 RQ2a: “What are the uncertainty management strategies reported by the FMCG SCs
in facing COVID-19?”

Answering this question, three clusters have been identified:

1. Short-term measures aimed at curbing the sudden increase in demand uncertainty

(e.g., purchase limits on key items, price rationing)
2. Firm-wise risk-hedging strategies (e.g., higher level of materials stocks, back up
suppliers, increased personnel, and distribution capacity) and lean strategies (e.g.,
fulfillment streamlining, automated order systems with real-time data, product
portfolio rationalization
3. Multi-company agile strategies (e.g., resource pooling including stocks, warehouses,
and transportation, collaborative decision making on retailer offer based on
suppliers’ availability)

For what concerns the electronics SC, the second sub-question is:

RQ2b: “What are the uncertainty management strategies reported by the electronic
SCs in facing COVID-19?”

With this regard, two different groups of measures have been identified:

1. Firm-wise supply uncertainty containment measures e.g. (production reallocation,

workarounds to logistics restrictions) and demand uncertainty containment measure
(e.g., purchase limits on key products)
2. Multi-company risk-hedging strategies (e.g., logistics and financial support to
suppliers, diversification of the supply base, increase visibility on partners purchase
orders, regionalization of the SC)

By comparing the reactions of the two industries, it can be claimed that the FMCGs supply
chain proved more capable of reducing the uncertainty brought by the pandemic. A more
collaborative approach has proven more effective in bringing back the industry to its original
position within the Uncertainty Framework prior to the pandemic. On the contrary, electronics
SCs are still struggling in restoring the less uncertain environment that surrounded the
industry before the pandemic. This is attributable to the individualistic behavior that pushed
many electronics companies to hoard the available stocks of components that ended up
increasing the supply uncertainty for the industry as a whole.

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The third and final RQ is:

RQ3: “What are long-lasting changes that shape the future of FMCG and electronic
SCs?

The answer to this question can be provided by highlighting the common role that COVID-
19 has played for the two industries despite their intrinsic differences and the uneven impacts
they have witnessed. Indeed, the pandemic has fostered the development of several trends
that were underway before the coronavirus outbreak and that were already questioning the
supply chain strategy and configuration employed until then. And in addition, the pandemic
posed an opportunity to reverse or set the start to some other trends. Regarding the FMCGs,
the accelerated trends include the raising consumers’ needs for a multichannel shopping
experience, the increasing price sensitivity, and the associated rise of discount retailers and
private label brands. FMCGs producers, instead, took the opportunity not only to shorten
the chain by going direct-to-consumer but also to rethink their broad product portfolio by
cutting the “long tail”: two processes that are foreseen to continue beyond the pandemic.
The electronics SCs, instead, will experience a boost in their regionalization process that the
US-China trade war had necessitated, and that will continue to necessitate. An emergent issue
is the collision of needs, business models, and supply chains of industries not previously
connected, and whose growing demand for common electronics components will aggravate
the electronics supply chains’ uncertainty.

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6. Discussion

This chapter stands as a discussion of the review findings against the theoretical framework
of reference to highlight the key takeaways of this research and to bring light to future
research directions.

6.1 Discussion of the findings against the Uncertainty Framework

Before analyzing the findings through the chosen theoretical framework, it is worth
reminding its main features that, at the time of the choice, have been deemed of value. These
include the potential to: (1) comprise several of the supply chain areas used to summarize
findings (e.g., Table 5.7), (2) encompass a mix of supply chain strategies perspectives, (3)
adopt a product-based viewpoint to distinguish the findings on the two industries of interest
and further on product families, and (4) time the impacts and reactions of industries through
their dynamic positioning along the framework axes. These last measure two dimensions,
namely demand uncertainty and supply uncertainty, which have been mentioned more than once
by the reviewed materials. The majority of findings, however, have not explicitly used such
specific terminology. This makes it necessary to interpret such findings within the Uncertainty
Framework and time them relative to the five pandemic phases, so to properly formulate the
answers to the research questions. It is important to note that in the first place, Hau L. Lee
(2002) - the author of the Uncertainty Framework - focused on the intrinsic uncertainty of a
product’s by analyzing the characteristics of its demand and supply process respectively
(Section 2.2, Figure 2.3, and Figure 2.2). At a later stage, Lee considered the additional
extrinsic uncertainty driven by the misalignment of the SC actors and the implementation of
flawed managerial actions. What Lee did not consider is the potential impact of risk events
such as the COVID-19 pandemic on the aforementioned uncertainties, as well as the
influence of the contingent prevention and control measures implemented by national

110
governments and political unions. That said, it is evident that nearly all the authors that
pointed out an increase of uncertainty of either demand or supply have done so by listing
influencing factors that reside outside of the product itself. Looking at the relatively short
timeframe under analysis, the electronics industry products and the FMCGs, with the rare
exceptions of infection control products, could not but preserve their intrinsic demand and
supply characteristics. Against this background, the discussion of the findings against the
Uncertainty Framework should start from the peculiarities of each industry’s products but look
beyond them to identify the exogenous uncertainty drivers that the reviewed materials have
brought to light. In the following two subsections, the findings related to each of the two
industries of interest will be discussed and ultimately exploited to trace the potential shifts of
such industries within the Uncertainty Framework. Moreover, the epidemics response phases
classified in Table 2.4 have been adopted to introduce the time dimension that allows a
dynamical assessment of SC uncertainty. A qualitative rating of the severity of the impacts in
terms of uncertainty increase and of the effect of the response measures has been also provided
to understand the industry positioning within the Uncertainty Framework more easily.

6.1.1 Discussion on the findings in FMCGs SC

Surprisingly, most of the information about the challenges faced in managing the SC comes
from academic materials, rather than from sources closer to the business world (e.g., SC
thematic websites and business magazines). Such rich contribution of literature is attributable
to the large presence of survey and case studies research within the reviewed sample.

Literature has contributed to depicting a highly uncertain environment within the FMCGs
industry, and especially around retailers. Being in the most downstream of the supply chain,
these players faced the erratic behavior of consumers firsthand. Demand forecasting has
become extremely challenging (Evans, 2021; Gupta, 2020; D. Taylor et al., 2020) due to
rational and irrational panic buying (Cariappa et al., 2020; Cavallo et al., 2020; Demirci, 2021;
Gupta, 2020; J. Liu & Tian, 2021; Márquez et al., 2021; Schiele et al., 2020; Veselovská, 2020),
stockpiling behaviors (Cavallo et al., 2020; De Montgolfier et al., 2020; Hobbs, 2020; D.
Taylor et al., 2020), and change in consumptions patterns (Cavallo et al., 2020; Tiwari, 2020).
Products whose demand usually varies of few percentage points suddenly spiked or dropped
to unprecedented levels (Evans, op. cit.) taking most retailers by surprise (Cai & Luo, 2020;
Demirci, 2021; Hobbs, 2020; Xu et al., 2020). Product categories suffering a downturn in
demand were ordered less and less moving towards the upstream stages, creating a unique

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bullwhip effect (Graham et al., 2020). An opposite behavior was adopted by the SC partners to
deal with the sudden demand increase of other products, whose safety stocks increased
throughout the distribution network driving costs up and jeopardizing the well-functioning
of the lean FMCGs supply chain (Demirci, op. cit.).

Table 6.1 - Classification of impacts on the FMCGs SC into demand and supply uncertainty, source: author

Focal phase of
Impacted side Severity rating Specific Impact
occurrence
Demand-side 2 High Panic buying

2 to 3 High Consumers' stockpiling behavior

2 to 3 High Demand spikes for essential products

2 to 3 Medium Bullwhip effect for products with down turning

demand
2 to 4 Medium Declining demand for non-essential products

3 to 5 Medium Change in consumption patterns

Supply-side 2 to 4 Medium Delays in transportation and distribution

3 to 4 Low Increased bureaucratic burden in the

management of customs
3 to 5 Medium Shift of distribution and logistics pattern (offline
to online or blended)
3 to 4 Medium Reduced productivity of DCs due to safety
measures
3 to 4 Medium Workforce shortage

3 to 4 High Shortage of material supply/supply-side

shock/supply disruption
3 to 4 High Suppliers and upstream partners leaving the
chain
Two fronts 3 to 5 High Demand channel-shift from B2B to B2C

The uncertainty regarding if and when the Ho.Re.Ca. would be back up and running made
the picture worse, especially for those SCs equipped for serving exclusively the on-trade
channel (Cavallo et al., 2020; Graham et al., 2020; Hobbs, 2020; D. Taylor et al., 2020).
FMCGs and grocery retailers, on the other hand, struggled in understanding the pattern of
demand fluctuations, given that there was no direct connection between the geographical
spread of the virus and the increase in sales (Cavallo, op. cit.). These phenomena rapidly
overturned the stable and predictable context for which the FMCGs supply chains have been
optimized under the “efficient” SC strategy archetype defined by Lee (op. cit.). It can be
therefore claimed that that the demand uncertainty increased, although not evenly, for the vast
majority of FMCGs products. If one tries to trace their shift along the demand uncertainty

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axis, he will immediately understand the ambiguity of the distance of such movement. If it
can be said that some infection control products such as masks and disinfectants turned from
functional into innovative products (Xu et al., 2020), claiming the same when referring to
essentials products such as bottled water, toilet paper, and pasta could be overstated. The
order in which such phenomena drove up demand uncertainty can be tackled with fewer
difficulties, thanks to the findings that reported the time frame of occurrence (De
Montgolfier, op. cit.; Taylor et al., op. cit.). Moving to the supply side, the findings provide a
list of challenges and failures that encompass all the activities involved in the process of
transforming input raw materials into finished packaged goods on retailers’ shelves. Even
though the supply process of FMCGs products is known to be stable, the evidence of
workforce shortages (De Montgolfier et al., 2020; Graham et al., 2020; Hobbs, 2020), lower
productivity of distribution (Demirci, op. cit.), logistics burdened by more complex customs
clearances (Hobbs, op. cit.), and the presence of symptoms such as shortages of material
supply (Garlick et al, op. cit.; De Montgolfier et al., op. cit.; Taylor et al, op. cit.; Evans, op. cit.),
loss of upstream partners (Evans, op. cit.), and delays in transportation and distribution
(Evans, op. cit.; De Montgolfier et al., op. cit.; Demirci, op. cit.; Ha, 2020; Hobbs, 2020; Tiwari,
op. cit.) denote an increase of supply uncertainty for the industry. This claim is supported by the
SC partners’ decision to increase the level of safety stocks to shield themselves from the
reduced reliability of the supply, which is a conflicting behavior with the strive for leanness
and efficiency that characterized the FMCGs industry until shortly before (Demirci, op. cit.,
Devenyns, 2020; Patton & Deaux, 2021). Table 6.1 briefly reports the findings classification
in terms of demand and supply uncertainty.

The just mentioned support introduces the responses adopted by the FMCGs SC partners
to prevent, control, and mitigate the negative impact caused by COVID-19. At this point,
the goal is that of interpreting such actions within the uncertainty management strategies
classification proposed by Lee (op. cit.). Amongst the measures implemented by FMCGs and
illustrated in Table 5.8, some of them can be classified as either demand uncertainty reduction
strategies or supply uncertainty reduction strategies, while some others are better described as two-
fronts uncertainty reduction strategies in light of their dual scope. In performing such classification,
the questions to be asked are: “What was the aim of this specific measure? And what were
its beneficial effects expected to be? Did this measure intend to reduce the uncertainty
coming from the demand-side or the supply-side, or both?”. The answering to these
questions has led to the classification illustrated in Table 6.2.

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Table 6.2 - FMCGs supply chains’ uncertainty management strategies classification, source: author

Focal phase of
Uncertainty side Effect rating Specific measure
occurrence
Demand-side 2 Low Purchase limits on key items
2 Low Price rationing

2 to 3 Medium Reallocation of shelves space

2 to 4 Medium Change operating volume
3 to 4 Medium Introduction of new products to meet the demand for
scarce products
3 to 4 Low Change in product mix marketing activities
Supply-side 3 to 4 Medium Stockpiling of input ingredients
3 to 4 Medium Global sourcing of small batches to offer substitute
products
3 to 4 High Resource pooling, including stocks, warehouses, and
transportation
3 to 4 Medium Removal of cross-docks and intermediate fulfillment
nodes
3 to 4 Low Consolidation of deliveries
3 to 4 High Rent of additional storage, transportation
3 to 5 High Enhanced visibility on upstream supply lead time
3 to 5 Medium Obtaining backup suppliers
3 to 5 High Integrated automated order system with real-time data
Two fronts 3 High Additional personnel recruitment
3 to 5 Medium Increase of safety-stock of long shelf-life products in high
demand
3 to 5 Low Shortening of the chain, with manufacturers selling
Direct-to-consumer
3 to 5 High Collaborative decision making on retailer offer based on
supplier’s availability
3 to 5 High Product portfolio rationalization

Contrary to the findings regarding the impact of COVID-19 on the FMCGs SC, the findings
regarding the measures adopted mainly come from non-academic resources and in particular
from SC thematic websites. The reporting of the words of companies’ executives and
managers by such sources has successfully complemented the picture depicted by scholarly
materials, making available quality insights from the field. By considering the findings
regarding the long-lasting changes that are foreseen to shape the future of the FMCGs
industry, it is possible to trace its dynamic positioning within the Uncertainty Framework (Figure
6.1). This qualitative exercise can effectively summarize the path undertaken by the CPGs
supply chains by collectively considering the impacts and the responses illustrated by the
reviewed material.

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Figure 6.1 - FMCGs path amidst the COVID-19 pandemic within the Uncertainty Framework, source: author

The FMCGs industry entered the pandemic (Phase 1, Anticipation) with an extremely
efficient SC configuration that well-matched the stable and predictable environment in which
it used to operate. Since the last decade, some trends (e.g., the meteoric rise of e-
marketplaces, the explosion of small brands, the changing consumer preferences in terms of
price sensitivity and attention to sustainability) had been slowing down the growth
momentum of traditional CPGs companies (Kopka et al., op. cit.). The gray slipstream
illustrates the underway shift of the industry towards a more uncertain environment because
of such trends. As soon as the perception of risk regarding the novel coronavirus spread
within consumers (Phase 2, Early detection), panic buying, and stockpiling behaviors caused
unpredictable and massive fluctuations of demand. Retailers’ firefighting slowed down to a
small extent such phenomena which were already losing momentum, per se. The spread of
the virus among the population and the infection prevention and control measures put in
place by governments (Phase 3, Containment) brought a much solid and severe increase of
uncertainty, both demand, and supply-wise. This time, the development and implementation
of substantial reactive measures, as well as the collaboration among SCs partners, reversed
the trend. However, with the coming of the second and third “waves” of COVID-19
infection, most countries’ governments were forced to reestablish the control and mitigation
measures that had they shortly before eased. At this stage (Phase 4, Control and Mitigation),

115
a not insignificant layer of uncertainty is still present, and the continuation of several
uncertainty reduction measures testifies that. Looking further ahead, when the vaccination
that is already underway will eliminate the COVID-19 (Phase 5, Elimination), the FMCGs
industry is expected to come back different, influenced by the acceleration of some pre-
existing trends (e.g., the increase of consumers’ price sensitivity, the digital ubiquity of
interactions with customers, the growth of online sales) and the emerging of new ones (e.g.,
the foodservice challenges).

6.1.1 Discussion on the findings in Electronics SC

The findings regarding the electronics SCs mainly come from the words of SC partners’
executives collected either directly or indirectly by SC websites and in particular by business
magazines’ authors. Such a skewed findings’ distribution towards the journalistic style
material entails a greater effort to interpret the review results within the theoretical
framework of reference. The almost absence of contributions from scholarly means that very
little information has undergone the analysis utilizing a supply chain-related theoretical lens
yet. Despite this, the put in chronological order of the numerous findings regarding the
impacts and the responses of electronics firms helps to grasp the cause-effect relationships
between them. At this stage, the narrative of findings illustrated in section 5.4 needs to be
mapped out within the Uncertainty Framework. To do so, the first step is to classify the impacts
summarized in Table 5.10 as an increase of either demand and supply uncertainty, or both, to
rate their severity, and to time them with reference to the five pandemic phases as previously
done for the FMCGs industry. Table 6.3 displays the output of these two activities.

At a first glance, one can notice the prevalence of impacts that drove an increase in supply-
side uncertainty. Looking at when such impacts had hit electronics and tech supply chains, it
can be seen that the majority of them (7 of 11) can be traced back to the early stage of the
pandemic (Phase 2, Early detection). But what started as primarily a supply-side problem
initially limited to China has grown into a global pandemic with the demand-side impact
starting to show at the end of Q1 2020 (Savov, op. cit.). At that point (Stage 3, Containment),
the work-from-home (WFH) policies adopted by many countries pushed the demand for
consumer electronics (Hart, op. cit.; Wu, Coppola, et al., op. cit.; Wu, Kim, et al., op. cit.; Wu,
Savov, et al., op. cit.), while the orders coming from the automotive SC plummeted (Ehrmann,
2021; Miller, 2021; Wu, Coppola, et al., 2021; Wu, Kim, et al., 2021; Wu, Savov, et al., 2021).

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Table 6.3 - Classification of impacts on the electronics SC into demand and supply uncertainty, source: author

Uncertainty side Occurrence Phase Severity rating Specific impact

Demand-side 3 to 4 High Foundries' direct customer stockpiling behavior

3 to 4 Medium Orders canceling by automotive OEMs

3 to 5 Medium Spike in demand for laptops and WFH equipment

4 Medium Spike in demand for gadget chips

4 High Unforeseen bounce back of cars' demand

4 to 5 Medium Shifting priorities and buying patterns within

automotive, computing & storage, and consumer
electronics
Supply-side 2 to 3 High Workforce shortage

2 to 3 Low Inability to conduct traditional quality checks

2 to 4 Medium Reduced production capacity

2 to 4 High Production disruption

2 to 4 High Logistics breakdown

2 to 4 Low Trade restrictions due to borders seal

2 to 4 Medium Delays in transportation and distribution

3 to 5 Medium Increased production changeovers due to shifting

priorities among customers
3 to 5 Medium Increase in components prices

3 to 5 High Shortage of material supply/supply-side

shock/supply disruption
Two-fronts 4 to 5 Medium Delays in product launches

4 to 5 High Cannibalization of common components between

industrial sectors

In the second half of the year (Phase 4, Control and mitigation), the uncertainty of supply
was ever more present due to the ongoing worldwide disruptions of production (Gurman
and Wu, op. cit.; Jung-a, op. cit.; Jung-a and White, op. cit.; Wang, op. cit.; Jorgensen, op. cit.;
Hoeck, op. cit.) and the breakdown of international logistics (Jorgensen, op. cit.; Hoeck, op.
cit.). At the same time, the US-China trade war already underway threatened the supply of
Chinese companies (e.g., Huawei), which began to hoard the available stocks of components

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and especially of semiconductors raising supply uncertainty among their competitors (Hille,
op. cit.; Wu, Kim, et al., op. cit.; Wu, Savov, et al., op. cit.). The unforeseen bounce back of the
automotive (Hille op. cit.; Jorgensen, op. cit.; Miller, op. cit.) highlighted the extremely uncertain
demand dependent on the needs of downstream sectors’ that share common electronic
components with the consumer electronics OEMs. The cannibalization of such components
between industrial sectors is, on the day of writing, a major issue that is forcing carmakers to
stop production because of severe shortages of chips (Ehrmann, op. cit.; Hille, op. cit.). This
conflict between industrial sectors, other than the trade war, is expected to affect the
electronics SC beyond the pandemic (Phase 5, Elimination), thus, pushing both supply and
demand uncertainty at a higher level than before.

The classification of the responses adopted by the electronics firms amidst the pandemic
have been classified into demand uncertainty reduction strategies, supply uncertainty reduction strategies,
and two-fronts uncertainty reduction strategies by answering the same questions illustrated in section
6.1.1. The output of this activity is illustrated in Table 6.4. From a numerical viewpoint, one
can easily grasp that the majority (10 out of 13) of measures were employed to reduce the
upstream sources of uncertainty. The only action against demand uncertainty was the
enforcement of purchase limits for the new iPhone 12 on Apple’s e-commerce (Gurman and
Wu, op. cit.). A much higher-level measure has been the sharing of purchase order information
among semiconductor foundries, distributors, and automotive OEMs in greater advance
than usual, so as to decrease the demand uncertainty by enhancing visibility along the chain
(Jorgensen, op. cit.). One remark must be made for the regionalization of supply chains. At
the time of the pandemic outbreak, this process was already underway and strongly urged by
the strong supply uncertainty brought by the US-China escalating tensions (Hoecker et al.,
op. cit.). Yet, multiple executives expressed the increased momentum that COVID-19 is
bringing to gear up a more regional network (Kim & King, op. cit.; Hille, op. cit.; Leonard
and Jacobs, op. cit.; Wu, op. cit.; Xu et al., op. cit.) that would be able to better operate in what
is foreseen to become a “decoupled system” with China-allied and US-allied trading blocs
and supply chains (Hoecker et al., op. cit.).

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Table 6.4 - Electronics SC's uncertainty management strategies classification, source: author

Occurrence
Uncertainty side Effect rating Specific measure
Phase
Demand-side 3 Low Purchase limits on key products

Supply-side 1 Medium Formation of an internal task force to develop

proactive plans
2 to 4 Low Production reallocation to operating plants

2 to 3 Low Airfreight of components to sidestep land routes

block
2 to 4 Low Ocean freight as a low-cost alternative for customers
with tight financials
3 to 4 Low Travel exemptions to send engineers to offshore
plants
3 to 4 Medium Simplify components parts approval and diversify raw
materials and part suppliers when needed
3 to 5 Low Hoarding of available stocks of components

3 to 5 Medium Support for logistics costs to suppliers

3 to 5 Medium Business operation funds and advance payments of

purchase orders to suppliers
3 to 5 High Coordination between sourcing, engineering, and
SRM

Two-fronts 1 to 5 High Regionalization of SCs

3 to 5 High Enhanced visibility between foundries, distributors,

and OEMs on purchase orders

Figure 6.2 - Electronics SCs path amidst the COVID-19 pandemic within the Uncertainty Framework, source: author

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In light of the two performed classifications, it is possible to trace the dynamic positioning
of the electronics SC during the five pandemic phases and within the Uncertainty Framework
(Figure 6.2). The electronics industry entered the novel coronavirus pandemic (Phase 1) in
the middle of the US-China trade war which has been putting at serious risk the de-
verticalized and concentrated global supply network raising the supply uncertainty for all SC
partners. As soon as the COVID-19 outbreaks occurred in Mainland China (Phase 2), the
country’s output slowed down drastically, and concerns rose about potential supply
disruptions. Once the virus spread worldwide (Phase 3), numerous Asian suppliers’ factories
shut down, international logistics was halted, industrial demand collapsed, while consumer
need for WFH devices (e.g., laptops, webcams, networking hardware) increased. Most
electronics giants were late and started firefighting the repeated supply disruptions besides
trying to keep their smaller suppliers afloat, while at the same time they were trying to manage
the huge fluctuations in demand. The employed measures dressed the wounds to a small
extent, but hoarding of semiconductors by Chinese players at first, and global competitors
later, drained the available stock and left carmakers empty-handed when the demand of them
bounced back (Phase 4). This highly uncertain environment is expected to persist until and
beyond the elimination of the disease (Phase 5) since the tensions between the US and China
show no signs of distress and the colliding needs of industrial sectors still need to be resolved.
The ongoing processes of SC regionalization and visibility-enhancing could play a role in
this.

6.2 Future research directions

In light of the discussion of the findings against the Uncertainty Framework, it can be claimed
that the FMCGs and electronics SCs are operating in a more uncertain environment than
before the pandemic. With this regard, a natural continuation of this study would be the
validation of this statement through direct material analysis, either via companies’ case
studies or SC executives survey research. The involvement of companies belonging to the
two industries of interest could indeed provide a solid corroboration of the findings that this
study has brought. These research methodologies could also allow to have a closer look at
the response measures taken by SC partners to get a clearer understanding of the challenges
faced in implementing such measures and the ways adopted to overcome them. Quantitative
information regarding the impact of such measures on SC performance indicators also needs

120
to be obtained. Drafting a handbook of what worked and what did not work in a specific
context could prove extremely useful to face future epidemics outbreaks more consciously.
All this would require a retrospective point of view into the events: a thing that at the time
of this study is impossible to do.

Another key point that this research has brought to light is the efforts spent by FMCGs and
electronics companies in firefighting the unexpected caused by the pandemic. What has not
been disclosed yet is the side effects that such improvised measures could have on SC
sustainability performances. For instance, the need to ensure supply continuity could have
either pushed companies to conduct stricter suppliers’ sustainability assessments or to turn
to the few suppliers with available stocks not matter their sustainability commitment. The
rethink of product portfolio by FMCGs producers and retailers could pursue consumers’
greater focus on sustainability besides the mere simplification of SKUs. The regionalization
of electronics SCs could reduce their logistics’ carbon footprint but reduced economies of
scale could increase process wastes. These aspects should be analyzed to get a more
comprehensive picture of the effects that the implemented measures had and will have on
SCs’ performances.

A third point that deserves further development is the impacts of COVID-19 on SMEs
belonging to the FMCGs and electronics SCs. If the reviewed material has indeed provided
enough data to depict the challenging situation faced by the largest corporations, very little
information has regarded the smaller players. The findings of this review suggest that small
suppliers of FMCGs and those of electronics manufacturers have experienced major
obstacles in trying to sustain their business and that some of them have been kept afloat
thanks to the help of their largest clients. However, much more needs to be understood
about these smaller realities that may have been the real victims of the pandemic crisis. The
secondary sources of information reviewed in this study could have been biased by the higher
importance that non-academic sources have given to the biggest companies. To overcome
this, the collection of primary information from SMEs’ owners and managers through case
studies and survey research could bring out new findings.

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7. Conclusion

This study aimed at assessing the impact in the short and medium-term of COVID-19 on
the FMCGs and electronics supply chains and the responses taken by these industries in
terms of SC strategy, as well as clarifying the long-lasting changes introduced as the “new
norm”. Based on the review and the qualitative analysis of academic and non-academic
contributions on the topic, it can be concluded that the spread of the coronavirus disease
and even more the prevention and control measures enforced by countries around the globe
have created a more uncertain environment for these SCs in which to operate. However, the
two industries have been unevenly affected especially as regards the duration and the extent
of such uncertainty increases. Diverse have been the responses implemented by the partners
belonging to the two SCs, both in terms of time and scope. If firefighting actions took
precedence when issues arose, later on, companies developed and put into practice more
strategic measures as they figured out the seriousness of their supply chain situation. Looking
ahead at the “new norm”, both the two industries will be shaped by some pre-existing trends
that the pandemic has fostered, as well as by new trends that have emerged as a consequence
of the crisis. To that end, this research has successfully framed the review findings within the
theoretical framework of reference. The application of the Uncertainty Framework for the
dynamical assessment of the environment and the actions of SCs has proved a concise and
effective tool for the purposes of this study. The broadening of sources to non-peer-reviewed
literature and especially to web news and whitepapers published by trusted sources has
proved a successful choice that enriched the review sample and ultimately played a significant
role in achieving the research objective. The contribution to supply chain management, the
scope of future research, and limitations of the study will be discussed in the following
sections.

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7.1 Contribution to Supply Chain Management
This study has effectively addressed some of the research questions and opportunities that
extant studies on the topic had brought out. The opportunity to assess the short-term,
medium-term, and long-term impacts of the COVID-19 pandemic on a particular supply
chain had been indeed put at the top of the list by Chowdhury et al. (op. cit.). Moreover, the
specific timeframe in which this systematic review has been carried out has meant that it has
been possible to scrutinize a fair amount of academic and non-academic sources, thus, to
overcome the scarcity of material that previous reviews had highlighted (Gupta, op. cit.,
Queiroz et al., op. cit., Chowdhury et al., op. cit.). The insights coming from SCs practitioners
has complemented the studies carried out by researchers, allowing to create a blend of theory
and practice that well represents the nature of SCM discipline.

Another key aspect is the innovative application of the Uncertainty Framework, which has been
empowered by expanding the layers of uncertainty considered to treat risk events such as the
coronavirus pandemic as uncertainty drivers. Furthermore, the use of such framework has
shown an effective way of portraying the mutability of the environment in which SCs operate
and that could be deemed as a useful SCM tool.

Most interestingly this research has brought light to the impacts and responses that SCs have
experienced and adopted in coping with an unparalleled crisis. By highlighting the SC
partners’ virtuous and flawed behaviors, it has emerged that adopting a supply chain orientation
(Mentzer, op. cit.) and developing a proper SCS are vital elements for businesses not only to
survive but to thrive in an ever-changing environment. The shared commitment of SC
partners, their involvement in the development of reactive plans, and the timely deployment
of the right supply chain uncertainty management strategy have indeed made the difference
between supply continuity and disruption, and between demand fulfillment and stockouts.

7.2 Scope of future research

The objective and scope of this research were bound within the exploration of the
implications of COVID-19 for the FMCGs and electronics industries in terms of SC
uncertainty and SC strategy. Even though the focus on these two industries has provided
food for thought on the similarities and differences between them, the most immediate

123
suggestion would be that of expanding the scope by bringing attention to other industries. A
possible way to do so could be that of applying the research protocol and theoretical
framework of this study to analyze industries lying in the other two quadrants of the
Uncertainty Framework, i.e., functional products with evolving supply process such as fresh
food and innovative products with stable supply process such as fashion clothing. In this
way, a more comprehensive picture of the topic could be obtained, and further comparisons
could be performed. A second opportunity is instead that of reassessing the impact of
COVID-19 on the FMCGs and electronics SCs once the pandemic will be eliminated.
Performing a longitudinal study would make it possible to get the full picture of the
consequence and the long-term effects of the SC strategies employed by firms, as well as to
check the validity of the long-lasting changes that this study has reviewed. Moreover, a richer
body of peer-reviewed literature will likely be available as scholarly authors develop their
research on the topic and this could benefit the review findings both in terms of quantity
and quality.

7.3 Limitation of the Study

The first limitation of this study is the sample size of academic publications on the topic.
Despite the inclusive approach adopted in the retrieval of primary studies and the selection
of pertinent literature, a rather limited sample has undergone the review process. This could
in part be related to the fact that the searches for articles have been conducted on Scopus
and Google Scholar, but not via websites maintained by individual publishers such as
Emerald and Elsevier. Other articles not included in the databases used may have been left
out. A significant part of these limitations could be solved by conducting a longitudinal study
in the future since more and more researchers will likely address the impact of COVID-19
on SCs and provide a deeper understating of the topic of interest. Secondly, the efforts to
overcome the scarcity of scholarly materials by including other sources of trusted
information have, in their turn, been limited by the material collection timeframe which ends
on 26 February 2021. As the elimination of the pandemic is yet to be finalized, it is indeed
not possible to get a complete picture of its implications, not only for the two industries of
interest but for the SCs of many other industries. The findings presented, nonetheless,
remain valid and constitute a solid background for future studies on the topic.

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9. Appendix

Figure 1 – COVID-19’s impacts on supply and demand of different industries, source: Cai and Luo (2020)

Figure 2 - COVID-19 sources of stockouts, source: Taylor et al. (2020)

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Figure 3 - Impact of COVID-19 on semiconductor demand, source: Accenture (Syed et al., 2020)

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