Global Supply Chains: Globalization Research in a Changing World

• Author: Walter Zinn,Thomas J. Goldsby
• DOI: http://doi.org/10.1111/jbl.12241
• Date: 01 March 2020
• Published date: 01 March 2020

Editorial

Global Supply Chains: Globalization Research in a Changing

World

Walter Zinn

1

and Thomas J. Goldsby

2

1

The Ohio State University

2

University of Tennessee

We all know of the famous Adam Smith concept of absolute

advantage to explain the benefits of global trade. It is one of the

earliest globalization ideas. It describes how trade potentializes

the relative efficiencies of two economies. Suppose, for instance,

that English firms are more efficient producing wool and French

firms more efficient producing wine. Instead of each country pro-

ducing both goods domestically, the absolute advantage argu-

ment is that both England and France would be better off

producing what they do best and trading—wool exports to

France and wine exports to England. Adam Smith was right in

that the joint output would be greater and that both countries

would be richer as a result. However, there is also an opposite

argument in favor of market protection. Despite the overall gain

in common wealth, trade can create losers. English wine produc-

ers and French wool producers would likely be harmed by free,

open trade. Their interest stages the argument for market protec-

tions.

The clash between these two opposing arguments did not fun-

damentally change in nearly 250 years. In fact, it is as relevant

today as ever. After a prolonged push for increased global trade

following World War II, there is currently pushback in some set-

tings. Think of renegotiating the NAFTA Treaty, the “trade war”

with China, and Brexit as cases in point. Still, there are forces,

such as remaining trade agreements, China’s Belt and Road Ini-

tiative, and investment flows that continue to favor trade. As a

result, we find ourselves facing an unprecedented level of uncer-

tainty and change in global trade.

Change in global trade is principally driven by economic,

technological, political, and natural factors. On the economic

side, some countries increase/decrease their footprint either as

producers of goods and services or as markets for imports.

Technological innovation can also increase a country’s footprint

and improve the cost and service of global trade itself. Further,

the ideology espoused by governments influences trade-related

policies, from more open to more protectionist. Recently, firms

were challenged by another type of global change, the threat

posed by the spread of the coronavirus labeled COVID-19. In

this instance, a health crisis has forced businesses to reconsider

the logistics of people and freight across national boundaries in

an effort to control the spread of contagion. This challenge in

some cases made firms aware of their dependence on a single

source of supply, leading them to make radical changes to their

supply chains. Overall, these changes impose major challenges

to supply chains; whether they are directly engaged in global

trade or are, instead, a domestic supply chain affected by global

actors.

In light of these challenges, we ask:

How are supply chains affected by changes in economic,

technological, political, and natural forces taking shape

around the world? How are they affected by the related

volatility brought forth by uncertainty in the timing and

extent of these changes? How can firms manage their

effort to become more agile and responsive to customer

demands when their supply chains stretch around the

world?

Expansion or repatriation of global supply chains generally

affects their length. When longer, supply chains operate across

more legal jurisdictions and economic systems; and deal with

labor pools with different talent levels, work rules, and wages.

They also operate with transportation systems varying in effi-

ciency and cost; and face different risks in economic stability

and proclivity for natural disasters. Shorter supply chains tend to

be simpler to manage but are less capable to take advantage of

opportunities in global markets for sources of supply and cus-

tomers.

At the firm level, whenever production facilities or distribution

hubs are relocated or repurposed, issues such as network redesign

come to the fore. A change in one node requires changes in many

other nodes, whether they are directly related to global trade or

not. Location factors, in turn, impact issues such as labor manage-

ment, sustainability, transportation cost, and inventory/warehous-

ing cost. And, of course, there is the additional need to acquire

new management skills and remove outdated ones. Finally, trade

uncertainty adds risk, both operational and financial, clouding

investment decisions. These changes at the firm level clearly affect

related supply chains. As one firm redesigns its supply chains, sup-

pliers, third-party service providers, and customers are affected as

well. In some cases, new processes are needed, while in others,

new suppliers must be identified and qualified.

As globalization is furthered in some cases and rethought in

others, corresponding research questions in supply chain manage-

ment come to the fore. Global supply chain research is therefore

a current and crucial topic. It must fulfill its role to help aca-

demics and practitioners understand current challenges and pro-

duce actionable results. Accordingly, the Journal of Business

Logistics is issuing a call for a Special Topic Forum in Global

Journal of Business Logistics, 2020, 41(1): 4–5 doi: 10.1111/jbl.12241

© 2020 Council of Supply Chain Management Professionals