Global Supply Chains at a Crossroads - A multiple case study investigating the process of Volvo Cars’ & H&M Group’s reconfiguration of their global supply chains

Abstract

Globalization and falling barriers to international trade have incentivized firms to relocate activities to foreign markets in pursuit of greater returns. MNCs today often have global supply chains with high degrees of interdependence where a disruption at one end of the supply chain often affects the whole network. Recent disruptions, such as the Covid-19 pandemic have illustrated the vulnerability of such global supply chains. Both academia and business are evaluating how to best proceed in this volatile environment. Recent survey data indicates that firms are choosing different measures, with everything from relocating activities closer to the home market for greater control, to contracting more foreign suppliers in different markets to hedge against disruptions. A research gap is identified as to how this process of reconfiguration unfolds within MNCs. Therefore, this thesis investigates the underlying process of global supply chain reconfiguration following severe disruptions by employing a multiple case study of Volvo Cars and H&M Group. We find that the reconfiguration process unfolds in a continuous iterative pattern, where the role of experience is emphasized. Measures are weighed against the erosion of profits, as investments into resilience and capabilities are costly endeavors. Indications of MNCs shifting towards proactive reconfigurations through technological advancements, as opposed to reactive, are identified. Several limitations regarding the business-viability of measures to build resilience are discussed, alongside a wider discussion on the role of external stakeholders and the comfort zone of individual managers. We conclude by discussing opportunities for future research and implications for managers.