Global Value Chain California Management Review

2022, Vol. 64(2) 71­–96

© The Regents of the

Reconfiguration and University of California 2022

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DOI: 10.1177/00081256211068545
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Investigating the Case for

More Resilient Redistributed
Models of Production
Wendy Phillips1, Jens K. Roehrich2, Dharm Kapletia1,
and Elizabeth Alexander3

SUMMARY
The COVID-19 pandemic shocked the global economy, laying bare the coordination
challenges and vulnerabilities of global value chains (GVCs) across sectors.
Governments, consumers, and firms alike have called for greater GVC resilience to
ensure critical products are delivered to the right place, at the right time, and in
the right condition. This article investigates whether GVC reconfiguration through
the adoption of redistributed manufacturing (RDM) in local production can deliver
greater resilience against unexpected, disruptive global events. It proposes actionable
steps for managers to ensure more resilient GVCs in the face of global shocks.

Keywords: crisis management, health care, resilience, global supply chain,

redistributed manufacturing, global value chain, coordination challenges

T
he COVID-19 pandemic and ongoing waves of infection have sent
unprecedented shocks through the global economy, laying bare the
vulnerabilities of global value chains (GVCs) across different indus-
tries. Heralded as bastions of value-creating configurations,1 GVCs
have come under scrutiny in many industries, most viscerally with the supply
of personal protective equipment (PPE) such as respirators and surgical masks.

1Bristol
Business School, Bristol, UK
2Universityof Bath, School of Management, Bath, UK
3Newcastle University Business School, Newcastle upon Tyne, UK

71
72 CALIFORNIA MANAGEMENT REVIEW 64(2)

GVC vulnerabilities are also evident in other areas; in the automobile industry,
a global shortage of computer chips has stalled output leading to the closure of
production lines.2 Even before the pandemic, it was estimated if severe disrup-
tion occurred in any of just 2% of Ford’s suppliers, it would be unable to meet
demand.3 The pandemic has highlighted the lack of resilience of GVCs4 in the
face of both heightened risk and urgency, calling for a more coordinated and
responsive supply of goods and the relocation of production closer to the point
of need.5 Without examining their GVCs, it is impossible for firms to adequately
address risks and vulnerabilities or stress-test beyond their tier 1 suppliers and
precludes identifying opportunities to reconfigure their GVCs.
Firms can address vulnerabilities and risks in GVCs using buffer stocks and
multiple sourcing strategies with in-built supplier redundancies. Alternatively,
they could look to reconfigure their GVCs through “Redistributed Manufacturing”
(RDM)6—small-scale local production that enables decentralized design and man-
ufacture through geographically unconstrained value chains to address urgent
needs.7 RDM builds on the convergence of innovative technologies, such as addi-
tive manufacturing (AM)8 and microfactories, supporting moves toward custom-
ized delivery of products at point of use.9 The pandemic has generated greater
recognition of the untapped potential of RDM, particularly its impact on complex
GVCs through a shift toward more localized production. A case-in-point is the
automobile firm Jaguar Land Rover (JLR) harnessing the agility offered by its AM
and computer-aided design (CAD) capabilities to quickly develop and ramp up
production of reusable face visors in the United Kingdom.10
Against this backdrop, our central question asks whether adopting and
implementing RDM-led GVC reconfiguration can deliver greater resilience against
disruptive global events. Many drivers for GVC reconfigurations were evident
pre-COVID-19 as re-shoring of manufacturing garnered renewed interest follow-
ing changed social attitudes toward climate and environmental concerns,11 greater
scrutiny of value system resilience, sustainable forms of value and ethical trad-
ing,12 as well as increasing awareness of the reputational and financial risks of
GVCs. Although these have arguably led to relatively incremental changes, cata-
strophic events such as economic and humanitarian crises (including COVID-19)
radically impact the way firms do business,13 requiring firms to “do things differ-
ently.”14 We provide an analysis of the opportunities and challenges for reconfig-
uring GVCs using RDM at a local level by drawing on insights from the literature
on GVCs and RDM, setting the scene for our empirical exploration of the potential
for RDM-led GVC reconfiguration across three health care GVCs: medical devices,
diagnostic technologies, and pharmaceuticals.
COVID-19 highlighted GVC vulnerability and risk in health care. For
instance, in specialized PPE (e.g., N95 respirators), China accounted for 41% of
the world’s exports and around 90% of such masks used in the United States.15
Yet, during the pandemic, China required more masks than it could initially sup-
ply domestically, reflecting a supply-side disruption. The Organisation for
Economic Co-operation and Development (OECD) highlighted the core
Global Value Chain Reconfiguration and COVID-19 73

supply-side bottleneck was the availability of melt-blown polypropylene that the

Chinese government addressed by adding over 100 new manufacturers. Supply
constraints also occurred as some nations imposed export bans and authoriza-
tions, making it impossible for health care organizations to urgently source
required products. Against this background, the Director-General of the World
Health Organization argued for countries to increase local production of PPE by
40%.16
These factors demonstrate risks associated with depending on the geo-
graphically concentrated supply of a critical good and the need for resilience plan-
ning. As our research demonstrates, complexities in GVCs are apparent in other
valuable health care products, such as medical devices, diagnostic technologies,
and pharmaceuticals. Although our focus is on health care, we highlight the
transferability of GVC issues to other industries. More broadly, the OECD17 high-
lights the importance of addressing risk (including upstream dependencies on a
few suppliers, especially when geographically concentrated) to build greater resil-
ience across GVCs because of the COVID pandemic. Although traditional
approaches to GVCs have been predicated on cost-competitiveness seeking advan-
tage through globally disaggregated production, resilience requires firms to focus
on approaches with risk as a central factor. The next section introduces the core
concepts of GVCs and RDM, before positioning our methods and cases. We col-
lected rich primary and secondary data sets, and our research was undertaken
before and after the first wave of lockdown in the UK (March and July 2020). This
setting provided us with a natural experiment, investigating different scenarios
for reconfiguring GVCs pre-pandemic and experiences of the effects of the first
wave to assess the potential for RDM in this reconfiguration. We then present our
findings by mapping healthcare GVCs to uncover drivers and barriers for GVC
reconfiguration. Our work reveals that opportunities for reconfiguration utilizing
RDM can be framed in the context of two key dimensions of urgency and risk
affecting sourcing and supply. From this, we offer an actionable framework for
business leaders in any sector to navigate the minefield of disrupting existing
GVCs. The framework provides insights, clear steps, and questions to guide man-
agers seeking to reconfigure more responsive and resilient GVCs and evaluating
how RDM can contribute to this.

Theory Background
Leveraging GVCs
The GVC concept explains how value18 is created, distributed, and cap-
tured as globally connected organizations work together to bring products to
market19 and sustainability for local communities.20 Popularized as the global fac-
tory,21 GVCs have been a widely adopted framework for analyzing the geograph-
ical footprint, role, and influence of global lead firms in interactions between
multiple actors,22 such as suppliers and nongovernmental organizations (NGOs),
in shaping the governance of these GVCs.23
74 CALIFORNIA MANAGEMENT REVIEW 64(2)

In most health care GVCs, front- and back-end (knowledge-intensive)

activities are generally located in more advanced economies. Firms in developing
economies are often concerned that they are trapped in low value-added activities
and locked out of higher value-added activities in design, key technological inputs,
and marketing. It has been argued that in developing countries, involvement in
GVCs may benefit the entire population through expanded trade and faster
growth, but this development often does not benefit all GVC members equally.24
In health care, this is evidenced by the European Federation of Pharmaceutical
Industries and Associations25 that identified vulnerabilities in traditional GVCs,
and the need for investment in capabilities to strengthen the higher value-added
activities such as R&D and services that anchor either end of the so-called “smiling
curve” (particularly against global competitors).
Recent studies highlight the possible impact of technology (Industry 4.0)
on shortening GVCs through re-shoring routine labor-intensive activities from
developing countries back to developed countries.26 Such technology advances
may make undertaking aspects of the production in high-wage countries more
profitable by reducing the amount of labor required, and thus the reliance on low-
cost labor from developing countries.27 As a consequence, the World Trade
Organization (WTO) has highlighted the potential negative impact on developing
countries but has also identified opportunities associated with technological
advances for small firms to participate in complex GVCs, especially those in higher
value-added knowledge-intensive sectors.
GVCs have not only made it possible to buy and offer products at affordable
prices through exploiting economies of scale and scope,28 but have created oppor-
tunities to increase economic value and bring about technological advance-
ments.29 An oft-cited benefit of integrating multiple actors, including customers,
into GVC configurations is firms’ increasing ability to engage in value co-creation.
Well-known examples exist in the consumer experience space (e.g., Airbnb) but
are also evident in the health care sector (e.g., serving an end-user with computed
tomography [CT] and magnetic resonance imaging [MRI] scanners for hospi-
tals).30 Global markets, alongside new technologies, provide new ways of value
co-creation, leading to value chain reconfigurations. As firms adopt an integrative
approach to creating value, the organizational architecture (or boundaries
between GVC actors) begins to shift, requiring a rethinking of the GVC structure.
However, while GVCs offer benefits, they also have inherent coordination chal-
lenges and vulnerabilities that must be navigated.31

Coordination Challenges and Vulnerabilities in GVCs

According to WTO data (Figure 1), the United States predominantly relies
on imports from the “rest of the world” (vs. regional agreements) for medical
equipment, supplies, medicines, protective equipment, and cleaning products.32
Data also show around $26.8 billion of medical technology was imported into
China in 2019, representing a fourfold increase over a decade, whereas the
United States imports around £29.5 billion in medical instruments and $79.5
billion in packaged medicines.33 COVID-19 is likely to exacerbate short-term
Global Value Chain Reconfiguration and COVID-19 75

Figure 1. (a) Top importers for medical products; (b) Top exporters for medical products.

(a)

(b)

Source: Adapted from Word Trade Organization (April 2020).

dependencies on such imports, notwithstanding ongoing reported shortages of

PPE, laboratory kits, ventilators, and non-COVID-related medicines.34 For EU
member states, Figure 1 implies reliance on imports from regional trading part-
ners, yet this did not entirely insulate member states from high-stakes behavior
in competing for limited resources—hence calls for improved coordination and
a sharper focus on so-called “health sovereignty” within the European Union.35
An exemplar GVC is vaccine manufacture that is both complex and requires
specialized production capacity, much of which is supplied by U.S. and EU firms.
Production can draw on raw materials and components from over 300 suppliers
in 30 countries, and for which global shortages were noted in April 2021 for
76 CALIFORNIA MANAGEMENT REVIEW 64(2)

around 100 components and ingredients, ranging from lipids to tubing and single-
use reactor bags used in the vaccine production process.36 In sourcing raw materi-
als and parts, similar challenges have occurred for other high-demand medical
products such as ventilators.37
Vaccine production reflects highly interdependent relationships honed
over time and concentrated on relatively few firms and countries. For example,
trade interdependencies among major vaccine-producing countries (such as India,
China, Brazil, the European Union, the United States, and the United Kingdom)
for key ingredients for vaccine production sourced mainly from other major pro-
ducers38 allow little leeway for GVC failure. The system is dependent on (and
must deal with risks from) not only suppliers, but an array of subcontracting,
transport, and logistics firms, and the constraints of shipping, especially airfreight
and cold chains. For instance, vulnerabilities in cold chain distribution, which
affect a range of pharmaceutical GVCs, are estimated to contribute wastage of
15% to 25%.39 Furthermore, there are inherent risks associated with government
policies, for example, variations in national regulatory frameworks for vaccine
production and the threat of “Vaccine Nationalism.”40 Vulnerabilities in such com-
plex systems quickly surface; while global demand for vaccines rose to 3.5 billion
doses by 2018, 68 countries suffered stockouts of at least one month’s vaccine
supply due to manufacturing issues or procurement delays.41 This hinders urgent
responses to sudden outbreaks in both developed and developing countries, as the
case of stocks of Yellow Fever vaccine depletion demonstrated.42
Integration across complex GVCs presents risks as well as opportunities.
Confronted with disaggregated production and supply, coordination of economic
activities in GVCs varies in the complexity of roles and relationships among the
actors required to mobilize value creation. Governance of activities can be orches-
trated along a continuum: from simple market transactions to in-house manage-
ment. Coordinating activities depend on the complexity of the value chain
transaction, codifiability of the production task, and suppliers’ competences.43 The
GVC concept provides insights into how firms can create greater value through
GVC reconfiguration. Lead firms not only have to consider the geographical loca-
tion of GVC activities,44 but they also need to consider how to coordinate them
and make decisions about what activities need to be undertaken in-house versus
elsewhere. Consideration of key decisions include time/urgency of delivery, costs
of production and logistics, product quality considerations, risks involved in the
GVCs, and the various relationships between GVC members that may hinder
speedy scaling up/down of production. Increasingly, exposure to vulnerabilities
and the potential for shared value creation is reshaping GVCs.45 A natural pro-
gression is to consider the role of RDM in future GVC reconfigurations.

Why RDM?
RDM represents a shift away from large-scale GVCs toward small-scale,
localized, and flexible manufacturing, offering reduced lead times and increased
product personalization.46 Time/urgency is particularly important in crises,47 such as
a global pandemic, when vital products are needed to deliver health care services.
Global Value Chain Reconfiguration and COVID-19 77

RDM has the potential to disrupt existing GVCs from a “current state” of a high-vol-
ume, centralized model (with a focus on “scaling-up” production) to a “future state”
of geographically distributed operations located close to the market (or scale-out of
production).48 Some health care products are already produced in a decentralized
manner, but these tend to be low-volume/high-margin products such as radioactive
pharmaceuticals for nuclear medicine, personally titrated anticancer agents, and
blood and platelet supplies.49 In contrast, until COVID-19, it made economic sense
to centralize the production of low-cost, standardized products such as PPE. Yet,
from a risk and resilience perspective, the business case for RDM has become much
stronger through the various waves of COVID-19, whereby the scale-out of manu-
facturing closer to the point of need could complement, or replace, existing supply
arrangements, facilitating an improved response to peaks in demand.50
In the ongoing battle to keep ahead of recurrent waves of COVID-19, we
observe governments and commercial buyers actively reviewing their local sourc-
ing strategies for critical products such as PPE and medical equipment, as well as
placing export bans on some products.51 Such changes are already catalyzing
manufacturers to do things differently by proactively experimenting with new
strategies, such as embracing advances in digital transformation or applying their
technical skills to meet new demand through cross-sectoral innovation. For
example, in the United Kingdom, due to a lack of international supply, there was
a critical need to rapidly increase the production of medical ventilators. The
VentilatorChallengeUK initiative—a consortium of organizations from the aero-
space, automotive, and motorsport industries—worked with medical device firms
to solve the supply problem, rapidly designing and producing critical care and
mobile medical ventilators.52 Similarly, in Germany the “Maker vs. Virus” move-
ment linked-up end-users with manufacturers and logistic providers to support
the production and supply of protective masks, face shields, and ear defenders.53
In health care, new technologies such as machine learning and robotics,
advanced CAD, and big data analytics are supporting convergence toward more
distributed, intelligent, and seamless forms of manufacturing, enabling produc-
tion of health care products close to the point of need. In the emerging area of
personalized medicine, leading-edge cell and gene therapies are particularly well
suited to localized manufacturing due to patient specificity and the instability of
biological materials and processes. These technological shifts are fundamentally
altering the assumptions underlying many traditional GVC configurations—
namely, scale economies and market share for achieving productivity gains, lower
costs, and competitive positions. The rise of RDM is supported by AM, where unit
costs do not vary substantially with scale. Consequently, as the technology
improves, the cost of AM becomes more competitive,54 substituting the labor-
intensive manufacturing underpinning many GVCs. An eroding cost differential,
reliance on fewer component parts combined with an expanding range of applica-
tions for AM, presents numerous opportunities for small firms’ participation in
GVCs, helping to realize the “scale-out” of production stated earlier.
78 CALIFORNIA MANAGEMENT REVIEW 64(2)

Switching to more local sourcing and production systems with a reduced

global footprint is increasingly salient due to growing political and social pressures
for more environmentally sustainable “green” products and the reduction of
resource inputs and waste.55 Pre-COVID-19, the benefits of RDM were identified
as particularly pertinent for complex manufacturing systems such as health care,56
bringing production of devices, medicines, and therapies closer to the point of
need and the delivery of patient-specific treatments. In the COVID-19 era and
beyond, RDM might be recognized as having wider potential to address shortages
of commodities and assisting front-line services in a range of challenging opera-
tional environments.57
In summary, our study combines GVC and RDM to address challenges in
GVC reconfiguration (such as coordination, risks, and urgency),58 and while prior
GVC studies have looked at economic crises and their impact on GVCs, our study
investigates the role, coordination challenges, and vulnerabilities of GVCs during
a pandemic. The COVID-19 pandemic provides an important context to continue
exploring challenges faced by GVCs and offers invaluable managerial insights.

About This Research

To gain insights into the potential for RDM-led GVC reconfiguration, we
draw on our in-depth study of the U.K. health care sector. The study provides
insights before the pandemic and continues throughout the initial phase of the
COVID-19 response. Given the scale of the challenges facing the sector prepan-
demic, from globally recognized issues such as an increasingly aging population,
massively overstretched budgets, unpredictable availability of medical prod-
ucts, and sudden threats from climatic events and conflict/terrorism, the need
for breakthrough solutions and disruptive innovation was apparent. As such,
this sector was purposefully selected as key players sought to understand how
RDM could play a critical role in solving these challenges. Our pre-COVID-19
workshop examined a manufacturing case from the following three areas: medi-
cal device and diagnostic technologies (worth $470 billion globally in 2018;
expected to grow to $595 billion by 2024); advanced therapy medicinal products
(ATMPs), including cell therapy and gene therapy (worth over $3 billion globally
in 2019 with strong expected growth potential); and vaccines (worth over $26
billion globally in 2018, up 25% from the previous year).59
Triangulating different data sources (see the Online Appendix), we col-
lected and analyzed data using a two-stage recursive strategy:

•• Stage 1 (prepandemic) drew on the transcripts and visual materials from an

expert academic and business leader workshop with 50 participants. The
workshop employed value chain mapping60 techniques to explore current
(traditional) and future (RDM-led) value chain configuration and scenarios.
After careful analysis of data collected in stage 1, we sought to establish how
 Table 1. Overview of Cases and Product Manufacturing Characteristics for Stage 1.

Price/Cost Quality Time Flexibility

Medical Diagnostic “We know it costs £12 from “If you get a wrong reading then whose “It is £5,000 per container, 6 “[P]art of the cost of assembling is testing . . .
Automated urine the manufacturer and then it fault is it, then you get an operation weeks . . . shipping by sea If you don’t get it tested, or you don’t get is
flowmeter, eventually costs £50 or more . . . that you don’t want . . . evidence . . .the thing that costs is the assembled but you send everything over in
designed to help which is taken up by the shipping, to the regulators. . .the device was volume that you ship not kit form and bolt it together in an infallible
diagnose medical manufacturer’s overheads and manufactured then, tested then . . . the weight” way so the regulators are happy”
urinary problems R&D costs” your whole manufacturing process
needs to be assessed”

• Base product creates less than • Robust quality system is required, • All raw materials are • Low-cost range of material and
25% of value covering design, integration of parts, sourced from China component suppliers, yet changes may
• Significant cost added by mark- final assembly, self-diagnostic and making production very cause instability and must meet quality
ups of multiple parties in the calibration, tracking of tests, etc. efficient standards
intermediate and later stages of • Lines of responsibility between • Order to stockpile, • Unless cost/performance benefits exist,
the GVC users and producers are advance planning payors avoid capital investment
increasingly blurred

Advanced Therapy “. . . a small patient base . . . it is in “They are complex . . . so there is “[T]hey have got a window “If you are shipping it for any distance you
Injectable therapy the tens of thousands. We are always this worry that you might get a of only about 8 hours after have got to coordinate its arrival with
comprising talking about leukemias which are batch one day that doesn’t work but manufacture” clinical procedure unless you have got
modified cells fairly high rates of incidence.” “. . . it analyses the same and nobody can “[I]t is pretty high value, on-site low temperature storage, and not
to assist the the most costly stage of everything tell what went wrong” people are dying, . . . there many hospitals do not”
patient’s immune is the hospitalization” is more of a justification for
system to detect exception of procurement
and fight severe and ushering it through”
cancers
• Significant capital invested in • Highly regulated, sterile production • Critical emphasis on • Sunk costs in centralized facilities creates
large centralized facilities, where facilities with qualified persons complex rapid logistics and rigidities
specialist skills and equipment taking responsibility for standards cold chain transport • Capital invested is unlikely to be
are concentrated and product safety • Risks of perishability or recoverable
• Complex, high cost cell- • Therapeutic ingredients are freshly mis-handling of product in • Siloed operations between manufacturer
preservation handling and produced for each patient transit or by clinical staff and end-users
logistical processes between • Short-term acceptance for
manufacturer and clinicians novelty but lacking scalable
business model

(continued)

79
80
Table 1. (continued)

Price/Cost Quality Time Flexibility

Vaccine “[P]roduction cost is not actually “So, when you are shipping it into “The storage time is almost “[T]there are certain markets that will just
Injectable what you should be looking at, [remote parts of Africa] the big non-existent, the stability dismiss the vaccine and say, unaffordable.
substance used you should be looking at system problem that we have there was you and all the rest of it is If we reduce the system costs, they can
to stimulate costs, you know, half the vaccines don’t have any cold chill vehicles” difficult” “The Ebola afford it actually . . . whether it’s the
the production in the warehouse are going to go outbreak was last year . . . multinational or not”
of antibodies to landfill” the vaccine is approved now
to fight a life- but the outbreak is gone”
threatening
disease • Significant capital invested in • Complex GVC integration involving • Responsiveness of product • Fixed biological engineering development
centralized manufacturing R&D, primary and secondary development and logistics processes are required
processes manufacturing and worldwide is critical • Centralized facilities are expert at
• Global marketing and various logistics • Limited shelf life, scaling production following approval of
regulatory regimes to navigate • Preservation of substance and vulnerable to temperature formulations
• Complex system costs, high maintaining sterility is vital stress, monitoring costs
volatility

Note: GVC = global value chain.

Global Value Chain Reconfiguration and COVID-19 81

health care GVCs were affected by the pandemic and the role that RDM could
play in addressing key challenges.
•• Stage 2 involved 15 in-depth interviews with senior front-line managers from
public and private organizations during the COVID-19 first lockdown phase
in England (March 2020), and then during emergence from this lockdown
(June-July 2020). We also analyzed over 50 policy and industry reports pub-
lished during this period. Interviewees were asked to draw on their recent
experiences of sourcing critical medical components to analyze the potential
of RDM-led GVC reconfiguration in light of the ongoing crisis of COVID-19.
To obtain an accurate picture of the health care GVCs, we undertook a sys-
tematic mapping of key processes before delving deeper into interview and
secondary data sources.

Findings
Mapping Health Care GVCs
Using four dimensions of manufacturing firm priorities61 (price/cost, qual-
ity, time, and flexibility), we compare and contrast features of the traditional
manufacturing model for each case (see Table 1). GVC challenges across all
three cases highlighted major risks around ensuring production system quality
from basic to regulated and clinical-grade standards. All cases relied on central-
ized production sites to capitalize on efficient operations, economically favorable
access to raw materials, and concentration of skills/labor; yet this fixed approach
does not easily lend itself to achieving operational flexibility or value co-creation.
For example, a Medical Diagnostic Executive noted a GVC had been extended to
China to source a $1 substitute for a component costing $90. The only alterna-
tive would be to redesign the product so that the $1 component was no longer
required. The Medical Diagnostic and Vaccine cases could be considered volume-
based procurements, where product availability would be dependent on stockpil-
ing and inventory management. In contrast, ATMPs reflect a lower volume batch
approach with a relatively shorter GVC and a faster timeline between production
and use.
In all three cases, a range of international environmental dependencies
exists with varying degrees of logistical concerns, such as the correct handling and
integrity of biological materials in transit, raising questions around the efficacy
and performance of the end-to-end quality system between end-users (clinicians)
and manufacturers. For ATMPs and Vaccines, an audit trail was cited as critical in
ensuring cold storage up to the point of use, yet transport distances and condi-
tions, from the production site to eventual use, were considered costly and waste-
ful (see Table 1). One ATMP professional highlighted the scale of the problem: “for
some of the replacement skin therapies, they were losing up to 70% of their
product just in shipping.”
Arising from issues of quality and logistics, interorganizational coordina-
tion mechanisms across the GVC were vital in all three cases, particularly for
82 CALIFORNIA MANAGEMENT REVIEW 64(2)

Figure 2. Medical diagnostic case, traditional GVC.

Note: Attribution – Icons in diagram are made by Pixel perfect from www.flaticon.com. GVC = global value
chain.

Figure 3. Medical diagnostic case, RDM-led GVC.

Note: RDM = redistributed manufacturing; GVC = global value chains.

ATMPs and Vaccine products. A disconnect between manufacturing and service

use was discussed by an ATMP expert who suggested the need for greater coordi-
nation to overcome the siloed operations to “better predict when [cell therapies]
are going to be harvested, and when they are going to be ready, and when it is
going to arrive.” Workshop discussions also explored the potential of a more
sophisticated collaborative relationship if both sides took advantage of real-time
information and communications technology (ICT) and analytic technologies to
ensure a two-way flow of critical information on medicines’ use or patient health
being fed back to manufacturers and R&D.
Figure 2 and 3 provide stylized illustrations of the journey from raw mate-
rials to final use for a medical diagnostic device, comparing traditional
Global Value Chain Reconfiguration and COVID-19 83

manufacturing and a reconfigured GVC, based on applying RDM through the

introduction of a commercially available desktop 3D (3-dimensional) printer
located in a hospital pharmacy near to patients.
The traditional GVC in Figure 2 represents the typical long GVC found in a
range of medical device products originating from lower cost production in Asia.
In this case, the first stage of the GVC, electronics, and plastics are contract-man-
ufactured and assembled in China, where components are sourced, assembled,
tested, and packaged. Postmanufacture, the products are shipped to specialist
warehousing and logistics providers in the Netherlands. Typically, at this stage in
the GVC, shipping hubs provide cost- and/or tax-efficient locations for repackag-
ing and forwarding to distributors serving major customer locations in North
America and Europe. With multiple steps and actors in the GVC, a significant
proportion of the product’s final cost is added during the intermediate and later
storage, assembly, and shipping stages. The RDM-led GVC in Figure 3 shows how
RDM presents an opportunity to produce, on-demand, most of the medical device
parts but in a new design favoring 3D printing rather than mass production. In
this scenario, GVCs are still important for sourcing so-called “feed” material for
the 3D printer and electronic parts that are not easily printable locally at a reason-
able cost. Over time, as 3D printers become more commonplace, our workshop
experts expected raw inputs will be sourced closer to production or will employ
circular economy practices that will allow local waste to be melted down into raw
material for new products.

The expert workshop provided insight into the feasibility of RDM-led GVC
reconfiguration, highlighting some drivers (including risks) and cost reductions
over geographical distances and across firm boundaries, as well as the economic
and clinical benefits of manufacturing responsiveness to demand and ensuring
product quality. Pre-COVID-19, the transition toward RDM was still considered a
niche activity, at best a small-scale complementary operation alongside estab-
lished centralized manufacturing until such time as the business case became
more compelling.

Drivers for GVC Reconfiguration

Drawing across our research stages, we highlighted the impact of the pan-
demic on health care GVCs and issues arising for RDM-led GVC reconfiguration.
Our research revealed major risks in all areas of product manufacturing charac-
teristics highlighted in Table 1 (price/cost, quality, time, and flexibility) related
to reliance on established GVC configurations during the pandemic (i.e., tradi-
tional GVC in Figure 2). Paramount was the lack of global production capacity
for critical health care products, restricting the ability of health care organizations
to respond flexibly to the rapid spike in demand. The situation was further com-
pounded by individual governments focusing on their own citizens’ best inter-
ests. Our findings center on three core issues, reflecting increasing risks in the
GVCs in response to the urgent need to source supplies:
84 CALIFORNIA MANAGEMENT REVIEW 64(2)

•• delivery assurance—reliable delivery of orders to the right place, at the right

time, and in the right condition;
•• procurement capabilities—the knowledge, skills, and experience health care
managers had to manage the supply issues confronting managers during the
COVID-19 pandemic; and
•• product integrity—assurance that a product meets a customer or end-user
requirements for performance, quality, durability, and safety.

Delivery assurance. At the outset of the COVID-19 pandemic, urgency in ensur-

ing a supply of critical health care products meant delivery assurance was vital
due to last-minute changes to availability arising from pressures on suppliers by
their national governments to redirect orders. Furthermore, delivery times were
unpredictable as airfreight and shipping became severely affected by COVID-19.
Our interviewees recounted how suppliers could not deliver on contracts since
“all-of-a-sudden a manufacturer in China cannot cope . . . The French bought
. . . a whole factory capacity . . . that supply that you knew was shut down” (pri-
vate health care provider). A European Head of Sourcing felt that “Some of the
problems we have . . . are from USA firms prioritizing stock for themselves and
not releasing to us.” These experiences mirrored concerns elsewhere, such as the
proposed U.S. Medical Supply Transparency and Delivery Act (H.R.6711) seeking
to avoid competition between states, introducing transparency in managing the
national stockpile, and compelling firms to produce critical medical equipment.
The European Commission actively intervened to restrain national governments’
efforts to restrict cross-border supplies of PPE, creating joint procurement across
European member states, forcing Germany to issue export licenses for PPE to
countries such as Italy and Austria.62 Despite government efforts, one private
health care provider reflected the uncertainty around distributors “basing prom-
ises on anticipated supply from China . . . being almost like the Wild West.”

Procurement capabilities. Prior to COVID-19, most participants were reliant on

U.K.-based distributor networks; when these networks were unable to deliver
on their contracts, managers had to step away from traditional sourcing arrange-
ments and engage directly with the overseas manufacturers. To meet the urgent
requirements for critical medical supplies, managers had to identify new, unfa-
miliar suppliers with no background information. As highlighted in the press,63
this resulted in costly (life-threatening) and irreversible mistakes running into
hundreds of millions of dollars. In a rush to secure a supply of 50 million face
masks for U.K. health care workers, insufficient due diligence on safety standards
meant these masks could not be used. Lacking procurement capabilities in deal-
ing with overseas suppliers, many managers relied on working with firms with
existing logistics arrangements: “We were tactically buying, with the need to pay
high prices and commit large minimum orders to secure supply” (Head of Pro-
curement). We discovered that even organizations with built-in redundancies
and backups (with appropriate suppliers, stockpiles, or sourcing alternative prod-
ucts) were still subjected to unfavorable terms and conditions, artificially high
Global Value Chain Reconfiguration and COVID-19 85

prices for commodities, and dysfunctional bidding wars as regional procurement

hubs prioritized their own hospitals or care systems.

Product integrity. Even when distributors had the logistical arrangements in place,
they often had little expertise in medical product regulations and quality stan-
dards and were working with an overly opportunistic marketplace: “As demand
completely outstripped import supply, a number of UK distributors seemed to
lower standards, chasing the sales” (private health care provider). Counterfeit
goods were a real threat, compounded by difficulties in securing testing facilities
to ensure specifications were met. A Head of Sourcing expounded,

We received fraudulently accredited PPE via a more trusted supplier . . . informa-

tion was provided in Chinese only. We also had a problem with the translation of
specifications for one product resulting in products being produced-to-order that
did not meet our specifications.

While, in the short term, governments may be focusing on fixing legacy

procurement and GVC structures, the pandemic raises urgent questions around
more sustainable long-term investments and solutions. It has provided an oppor-
tunity to reflect on how best to coordinate GVCs and work toward a more effec-
tive response to such future global events. A procurement manager suggested the
situation prompted firms to look at alternative sourcing arrangements, increas-
ingly with local suppliers, since “The local supply chain and providers have been
the ones that got us out of trouble.”
Our findings revealed increasing awareness of the advantages for patients
and end-users in shifting production closer to the point of need (or care). The
immediate challenges of managing GVCs during the height of the pandemic pre-
sented a strong rationale for RDM toward more localized production. Managers
cited benefits such as lead-time reduction resulting in less inventory at point of
use, the potential to purchase tailored service offerings, risk mitigation in terms of
improved availability of critical medical supplies, and a reduced dependency on
large overseas manufacturing sites.

Barriers to RDM-Led GVC Reconfiguration

Despite the support for RDM-led GVC reconfiguration, our study highlights
barriers to adopting RDM, such as difficulties in locally sourcing raw materials
and ensuring quality control across multiple locations. Even during the pandemic,
efforts to manufacture PPE locally gave rise to problems. As a Head of Procurement
noted, “local production using 3D printers was used . . . there were quality control
issues . . . access to raw materials also became an issue. It was again difficult to get
CE (quality standard) accredited products.” Our study revealed five main barriers
to replacing global sourcing with local production systems:

•• Organizational inertia—Having previously invested in centralized forms of pro-

duction and sophisticated logistical and purchasing arrangements, we found
86 CALIFORNIA MANAGEMENT REVIEW 64(2)

some concerns about changing business models to accommodate RDM. As

summarized by a representative from Vaccines, “There is huge organizational
inertia at the institutional level, corporate level, it is not that they do not
know how to do it—they may not be skilled enough to do it.”
•• Lack of systemic perspective—Without a holistic perspective of the risks and ben-
efits, it is challenging to set out the business case for change. As one Medi-
cal Device expert stated, “The view you will get from the [UK health service
provider] purchasing people will be very short term . . . it is the systemic
cost that people do not factor in. They factor in just the short-term costs.” He
went on to suggest, “Hospitals do not want to lay out for a very expensive
piece of equipment, but they are quite happy to lock themselves into paying
for disposables.”
•• Cost-benefit—Our research highlighted the assumption that digital advances
may help the transition to RDM adoption. As explained by an ATMP partici-
pant,

Automation lets you guarantee a good process at a local level rather than central-
izing . . . but then you stop and do the math . . . if I build an automated platform,
it is pretty expensive, and I would need to be quite sure it was working 24/7.

From the purchasing organizations, there is concern regarding potentially

increased management costs if multiple suppliers need to be managed.
•• GVC coordination—RDM proffers opportunities to change organizational con-
figurations. An ATMP workshop expert noted, “The ideal case would be to
coordinate delivery with use because if you can do that . . . you have got the
minimum chance of things going adrift.” Given the requirement for signifi-
cant investment in manufacturing assets associated with such developments
in RDM, a shift to long-term relationships and contracting would be neces-
sary, potentially by more than one user or customer organization. Greater
coordination would be required to ensure all regulatory and quality assur-
ance standards were met, necessitating investment in adequate testing, certi-
fication, and regulatory arrangements across multiple sites.
•• Design control and IPR—Moving to RDM-led GVCs raises both opportunities for
enhanced value co-creation and design improvements, but also raises ques-
tions related to potential IPR issues, such as who “owns” the final assembled
product, especially if something goes wrong. As stated in Table 1 (Medical
Diagnostic), manufacturers and end-users (i.e., clinicians) need to ensure that
risk is managed collaboratively, from design integrity to usage protocol com-
pliance, providing a reliable audit trail for regulators.

In summary, our findings highlight that RDM should not be considered a

panacea for all inputs to a finished product and organizations are likely to require
a portfolio of approaches to managing their GVCs. For example, many raw mate-
rials and some components may not be available locally and this will limit the
extent to which GVCs can be reconfigured.
Global Value Chain Reconfiguration and COVID-19 87

Figure 4. Models of manufacturing and GVC reconfiguration.

LOCAL CONTRACTOR LOCAL CUSTOMIZER

Local Sourcing, Medium-Lead Times,
Local Sourcing, Short-Lead Times,
Market-Led Soluons
Customized and On-Demand,
Cross-Sector R&D and Contract
Redistributed Manufacturing Strategy
Manufacturing Strategy

GLOBAL STANDARDIZER GLOBAL STOCKPILER

Global Sourcing, Medium-Lead Times,
Global Sourcing, Long-Lead Times,
Build or Stockpile to Order
Standardized Products and Scale Economics
Parallel Strategy – Combining Legacy and
Centralized Manufacturing Strategy
New Advanced Manufacturing and Supply

Low High
Increasing risk

Note: GVC = global value chain.

Rethinking Your GVC

Our research has distilled two overarching factors impacting the pressing
need for GVC reconfiguration. These are “risk” and “urgency.” Risk is a charac-
teristic of strategic decisions for GVC reconfiguration64 and captures the dimen-
sions of outcome uncertainty (such as variability in possible outcomes, and the
extent to which organizations have some or no control), outcome expectations
(or the gap between aspirations of anticipated and realized outcomes), and out-
come potential (that the outcome is significant enough to require managerial
attention). In our study, all three forms of risk were evident. The urgency of a
strategic issue driving the GVC reconfiguration relates to time sensitivity such as
immediacy and duration, reflecting managers’ evaluation of the importance of
addressing this issue.65 In the response to COVID-19, this was paramount in the
health care sector as high visibility both within primary care providers and from
external stakeholders, translated into urgency in response by managers who per-
ceived their organizations to be responsible. Urgency in this context is associ-
ated with a heightened sense of threat and perceptions of the real cost of failing
to act. Thus, in the context of varying degrees of risk and urgency, we suggest
four models of GVCs relevant in the postpandemic era, as illustrated in Figure 4.
While the main guiding principles of GVC design (e.g., the search for economic
efficiency) are less likely to change for many products, components, or materials,
88 CALIFORNIA MANAGEMENT REVIEW 64(2)

we show partial RDM-based GVC reconfiguration is vital in three of the four

models in our framework.
The “Global Standardizer” reflects the traditional health care GVC, and likely
for other sectors with similar product profiles. The Global Standardizer is optimized
for mass production and therefore limited in its ability to respond on either axis,
whereas the “Local Customizer” provides a dedicated, or complementary, solution
to high-risk and high-urgency demands, underpinned by an RDM strategy. These
two models differ significantly in where value is created in their GVCs, as conceptu-
alized in Figure 4. The Global Standardizer is more associated with the traditional
diagram in the top half of Figure 5 with a “smiling curve” on which R&D and ser-
vices are located at the top ends of higher value-added activities. Notably, “produc-
tion” is overlooked in this diagram as a potential valuable driver of innovation or a
critical component of a responsive manufacturing capability. When shifting toward
the Local Customizer model, formerly siloed activities gain new value from a more
cohesive RDM approach such as personalized design, development, production,
and tailored products that are a seamless part of an integrated service solution to
deliver clinical outcomes. This is conveyed by the reconfigured “smiling curve” dia-
gram in the lower half of Figure 5. Servitized manufacturer business models may
become a strong feature of the “Local Customizer” approach, as clinical communi-
ties seek day-to-day operational design and engineering support of production
equipment installed within or near to a clinical setting.
We observed rapid adoption of both the “Local Contractor” and the “Global
Stockpiler” in a reactive attempt to deal with the lack of medical product availability
during the initial peak of the pandemic. For example, Local Contractor interven-
tions resulted in urgent repurposing of local assets and infrastructure from other
sectors, while Global Stockpiler interventions resulted in frequent attempts to
secure new international contracts to build or stockpile essential supplies while
simultaneously experimenting with new technologies. For some, a portfolio
approach to hedge the risk of overreliance on a particular model may provide
increasing redundancy and switching capacity in a complex system, but may also
drive up costs. Looking beyond the immediate response to the crisis and business
continuity pressures, we argue against the continuation of short-term fixes in favor
of the Local Customizer RDM profile, which offers greater resilience and other stra-
tegic long-term benefits such as mitigating environmental challenges.
In a post-COVID-19 era, managers will need to quantify risk and urgency
differently when developing new strategies to mitigate future crises. We recognize
that substantive changes to GVCs will often be a long-term process and may
involve experimenting with dual business models or working with new innova-
tors involved in R&D and manufacturing. Our framework (Figure 4) helps orga-
nizations to better understand their current positioning and is designed to trigger
further analysis of future strategic options. Depending on the product, we recog-
nize that the GVC reconfiguration process may be complex. Therefore, we recom-
mend breaking down the process into four steps as outlined in Figure 6. Step 1
involves scoping the rationale, involving key parties, and compiling the evidence
Global Value Chain Reconfiguration and COVID-19 89

Figure 5. Traditional versus RDM smiling curve: Value-added along the (global) value chain
(modified from Berden, 2020a—EFPIA).

Note: RDM = redistributed manufacturing; EFPIA = European Federation of Pharmaceutical Industries and
Associations.
ahttps://efpia.eu/news-events/the-efpia-view/blog-articles/the-eu-s-industrial-strategy-will-europe-smile-or-will-

she-not-smile-that-is-the-question/.

base for further analysis. Step 2 draws on Figure 4 to stimulate a critique of cur-
rent performance and future directions. Step 3 brings together the business case
for GVC transformation, setting out ways to mitigate potential challenges. Finally,
Step 4 involves tracking and evaluating progress with a view to maintaining a
competitive position.
Our study is informed by prior work on GVCs and offers actionable, practical
insights on how RDM-led GVC reconfiguration in health care can offer a solution to
crisis situations. Although the focus of this research is medical product GVCs, our
findings should be of interest to other sectors that recently faced similar challenges
and are actively considering GVC reconfiguration. Exciting developments may
emerge where RDM supports, or is integral to, other pressing agendas, such as
meeting carbon reduction targets, adopting circular economy policies, increasing
personalization to customer needs, incentives for local employment (covering
design, production, and support), and more responsive relationships with buyers.

Conclusion
The uncertainty generated by the ongoing global pandemic has forced
organizations to reconsider risk and urgency as critical factors in the context of
90
Figure 6. Steps to reconfiguring your GVC portfolio.

•
•
• •

• •

•
•
•
•

•
•

•
•

• •

•
•

Note: GVC = global value chain.

Global Value Chain Reconfiguration and COVID-19 91

GVCs; entire sectors of the economy can shut down, disrupting GVCs with-
out advance warning or negotiations. Against this backdrop, firms are actively
seeking insights for achieving innovative restructuring of their GVCs, taking
advantage of existing technological innovations such as AM to overcome the
challenges. Reconfigurations during (and post) COVID waves may help GVCs
to reap the benefits not only of value co-creation but also open innovation.66
Conditions are ripe for changes that will create and shape reconfigured GVCs
and markets. Overreliance on traditional GVCs has strengthened demand for
more localized, resilient, and agile value chains to manufacture products custom-
ized to local needs and with smaller environmental footprints.
The COVID-19 pandemic has highlighted the saliency of redistributed models
of production, but there are important challenges that must be addressed if the
potential benefits are to be realized and a transformative shift made. The complex
nature of these challenges underlines the need for commissioning further multidis-
ciplinary R&D into RDM and horizon-scanning for opportunities to acquire or col-
laborate with early adopters, exploratory pilot ventures, and university spinouts.
With the emphasis on building greater systemic resilience for the rapid delivery of
critical supplies, such as medical products, RDM should be considered as a poten-
tially powerful entrepreneurial solution to meet future challenges.

Funding
The author(s) disclosed the receipt of the following financial support for the
research, authorship, and/or publication of this article: This work was supported
by the United Kingdom’s Engineering and Physical Sciences Research Council
(EPSRC) under Grant EP/M017559/1 and EP/T014970/1.

Supplemental Material
Supplemental material for this article is available online.

Author Biographies
Wendy Phillips is Professor of Innovation at Bristol Business School UWE, UK
(email: [email protected]).
Jens Roehrich is Professor and HPC Chair in Supply Chain Innovation at the
University of Bath, School of Management, UK (email: [email protected]).
Dharm Kapletia is a Senior Research Fellow at Bristol Business School UWE,
UK, and is a Fellow of the Schumacher Institute for Sustainable Systems, UK. He
holds a PhD from the Engineering Department at the University of Cambridge,
UK (email: [email protected]).
Elizabeth Alexander is a Reader in International Management at Newcastle University
Business School, UK, and has a PhD from the George Washington University School
of Business, Washington, D.C., USA (email: [email protected]).
92 CALIFORNIA MANAGEMENT REVIEW 64(2)

Notes
1. Gary Gereffi and Joonkoo Lee, “Why the World Suddenly Cares about Global
Supply Chains,” Journal of Supply Chain Management, 48/3 (July 2012): 24-32,
doi:10.1111/j.1745-493x.2012.03271.x.
2. Examples include Nissan closing U.K. production lines (https://www.theguardian.
com/business/2021/jan/21/nissan-forced-to-shut-uk-production-line-owing-to-sup-
ply-delays-sunderland-pandemic) and shortages continuing to affect the U.K. car
industry in September 2021 (https://www.theguardian.com/business/2021/sep/30/
computer-chip-shortage-stalls-uk-car-industry-production).
3. For example, suppliers (such as specialist resins for fuel tanks) who account for relatively
low spend. David Simchi-Levi, William Schmidt, and Yehua Wei, “From Superstorms to
Factory Fires: Managing Unpredictable Supply-Chain Disruptions,” Harvard Business Review,
92/1-2 (January/February 2014): 96-101.
4. Alain Verbeke, “Will the COVID-19 Pandemic Really Change the Governance of
Global Value Chains?” British Journal of Management, 31/3 (July 2020): 444-446,
doi:10.1111/1467-8551.12422.
5. Rajat Panwar, “It’s Time to Develop Local Production and Supply Networks,” California
Management Review Insight, April 28, 2020, https://cmr.berkeley.edu/2020/04/
local-production-supply-networks/.
6. Jagjit Singh Srai, Mukesh Kumar, Gary Graham, Wendy Phillips, James Tooze, Simon
Ford, Paul Beecher, Baldev Raj, Mike Gregory, Manoj Kumar Tiwari, B. Ravi, Andy Neely,
Ravi Shankar, Fiona Charnley, and Ashutosh Tiwari, “Distributed Manufacturing: Scope,
Challenges and Opportunities,” International Journal of Production Research, 54/23 (2016):
6917-6935, doi:10.1080/00207543.2016.1192302.
7. Dharm Kapletia, Wendy Phillips, Nick Medcalf, Harris Makatsoris, Chris McMahon, and Nick
Rich, “Redistributed Manufacturing—Challenges for Operations Management,” Production
Planning & Control, 30/7 (2019): 493-495, doi:10.1080/09537287.2018.1540057.
8. Avner Ben-Ner and Enno Siemsen, “Decentralization and Localization of Production,”
California Management Review 59/2(2017): 5-23, doi:10.1177/0008125617695284; André O.
Laplume, Bent Petersen, and Joshua M. Pearce, “Global Value Chains from a 3D Printing
Perspective,” Journal of International Business Studies, 47/5 (2016): 595-609, doi:10.1057/
jibs.2015.47.
9. Wendy Phillips, Nick Medcalf, Kenny Dalgarno, Harris Makatoris, Sarah Sharples, Jagjit Srai,
Paul Hourd, and Dharm Kapletia, “Redistributed Manufacturing in Healthcare: Creating New
Value Through Disruptive Innovation,” Policy Document, UWE Bristol, 2018.
10. https://www.theengineer.co.uk/expert-qa-engineering-a-response-to-covid-19/.
11. Frederick Dahlmann and Jens K. Roehrich, “Sustainable Supply Chain Management and
Partner Engagement to Manage Climate Change Information,” Business Strategy and the
Environment, 28/8 (December 2019): 1632-1647, doi:10.1002/bse.2392; Maria Jose Murcia,
Rajat Panwar, and Jorge Tarzijan, “Socially Responsible Firms Outsource Less,” Business &
Society, 60/6 (July 2020): 1507-1545. doi:10.1177/0007650319898490.
12. Sustainability includes social and environmental benefits to society. Incremental changes
have been brought about through reconfigured roles and activities within global value chains
(GVCs). See Nigel D. Caldwell, Jens K. Roehrich, and Gerard George, “Social Value Creation
and Relational Coordination in Public-Private Collaborations,” Journal of Management Studies,
54/6 (September 2017): 906-928, doi:10.1111/joms.12268; Gereffi and Lee (2012), op. cit.
For a discussion of social impacts of GVCs, see Peter Lund-Thomsen and Adam Lindgreen,
“Corporate Social Responsibility in Global Value Chains: Where Are We Now and Where Are
We Going?” Journal of Business Ethics, 123/1 (2013): 11-22, doi:10.1007/s10551-013-1796-x.
13. Major crises have the effect of disrupting entire operations and lines of supply, see Carlos
Martin-Rios and Susana Pasamar, “Service Innovation in Times of Economic Crisis: The
Strategic Adaptation Activities of the Top E.U. Service Firms,” R&D Management, 48/2 (2017):
195-209, doi:10.1111/radm.12276.
14. Wendy Phillips, Richard Lamming, John Bessant, and Hannah Noke, “Discontinuous
Innovation and Supply Relationships: Strategic Dalliances,” R&D Management, 36/4
(September 2006): 451-461; Vijay Govindarajan, Anup Srivastava, Thomas Grisold, and
Adrian Klammer, “COVID-Imposed Opportunity to Selectively Unlearn Past Practices,”
California Management Review Insight, October 6, 2020, https://cmr.berkeley.edu/2020/10/
selective-unlearning; Wendy Phillips, Jens K. Roehrich, and Dharm Kapletia, “Responding
Global Value Chain Reconfiguration and COVID-19 93

to Information Asymmetry in Crisis Situations: Innovation in the Time of the COVID-19

Pandemic,” Public Management Review (2021), doi:10.1080/14719037.2021.1960737.
15. Organisation for Economic Co-operation and Development, “The Face Mask Global
Value Chain in the COVID-19 Outbreak: Evidence and Policy Lessons,” May 4, 2020,
https://read.oecd-ilibrary.org/view/?ref=132_132616-l4i0j8ci1q&title=The-Face-Mask-
Global-Value-Chain-in-the-COVID-19-Outbreak-Evidence-and-Policy-Lessons&_
ga=2.209945500.860952508.1623666115-349462873.1623248567.
16. Jane Feinmann, “PPE: What Now for the Global Supply Chain?” BMJ 369 (May 15, 2020):
m1910, doi:10.1136/bmj.m1910.v.
17. Organisation for Economic Co-operation and Development, “Global Value Chains: Efficiency
and Risks in the Context of COVID-19,” February 11, 2021, https://www.oecd.org/corona-
virus/policy-responses/global-value-chains-efficiency-and-risks-in-the-context-of-covid-
19-67c75fdc/.
18. For a discussion of value creation and capture, see Cliff Bowman and Veronique Ambrosini,
“Value Creation versus Value Capture: Towards a Coherent Definition of Value in Strategy,”
British Journal of Management, 11/1 (March 2000): 1-15, doi:10.1111/1467-8551.00147.
For a discussion of value co-production, see Rafael Ramírez, “Value Co-Production:
Intellectual Origins and Implications for Practice and Research,” Strategic Management
Journal, 20/1 (January 1999): 49-65, doi:10.1002/(sici)1097-0266(199901)20:1<49:
aid-smj20>3.0.co;2-2; Jens K. Roehrich and Ilze Kivleniece, “Creating and Distributing
Sustainable Value Through Public-Private Collaborative Projects,” in Handbook on the Business
of Sustainability: The Organization, Implementation, and Practice of Sustainable Growth, ed. Gerard
George, Martine R. Hass, Havovi Joshi, Anita M. McGahan, and Paul Tracey (Cheltenham,
UK: Edward Elgar Publishing, 2022), pp. 125-151.
19. Here we mean from conception to final use. See Charles B. Stabell and Øystein D. Fjeldstad,
“Configuring Value for Competitive Advantage: On Chains, Shops, and Networks,”
Strategic Management Journal, 19/5 (May 1998): 413-437, doi:10.1002/(sici)1097-
0266(199805)19:5<413: aid-smj946>3.0.co;2-c.v; Gary Gereffi, John Humphrey, and
Timothy Sturgeon, “The Governance of Global Value Chains,” Review of International Political
Economy, 12/1 (2005): 78-104, doi:10.1080/09692290500049805; Gary Gereffi and Karina
Fernandez-Stark, Global Value Chain Analysis: A Primer (Durham, NC: Duke Center on
Globalization, Governance and Competitiveness, 2016).
20. Gereffi and Lee (2012), op. cit.; Valentina De Marchi and Di Maria, “Environmental
Upgrading and Suppliers’ Agency in the Leather Global Value Chain,” Sustainability, 11/23
(2019): 6530. doi:10.3390/su11236530.
21. Peter Buckley, “The Impact of the Global Factory on Economic Development,” Journal of
World Business, 44/2 (April 2009): 131-143, doi:10.1016/j.jwb.2008.05.003.
22. Increasingly firms engage with nongovernmental organizations to develop and man-
age their GVCs, especially for sustainable production standards. See Paola Perez-Aleman
and Marion Sandilands, “Building Value at the Top and the Bottom of the Global Supply
Chain: MNC-NGO Partnerships,” California Management Review, 51/1 (Fall 2008): 24-49,
doi:10.2307/41166467.
23. Valentina De Marchi, Eleonora Di Maria, Ruggero Golini, and Alessandra Perri, “Nurturing
International Business Research through Global Value Chains Literature: A Review and
Discussion of Future Research Opportunities,” International Business Review, 29/5 (October
2020): 101708, doi:10.1016/j.ibusrev.2020.101708.
24. The World Bank, Global Value Chain Development Report: Measuring and Analyzing the Impact
of GVCs on Economic Development (Washington, DC: International Bank for Reconstruction
and Development/The World Bank, 2017), https://documents1.worldbank.org/curated/
en/440081499424129960/pdf/117290-WP-P157880-PUBLIC.pdf.
25. See https://efpia.eu/news-events/the-efpia-view/blog-articles/the-eu-s-industrial-strategy
-will-europe-smile-or-will-she-not-smile-that-is-the-question/.
26. WTO, Global Value Chain Development Report 2019: Technological Innovation, Supply Chain Trade,
and Workers in a Globalized World (WTO, Geneva/IDE-JETRO/OECD, Paris Cedex 16/Research
Center of Global Value Chains, University of International Business and Economics,
Beijing/World Bank Group/China Development Research Foundation, Beijing, 2017),
doi:10.30875/6b9727ab-en.
94 CALIFORNIA MANAGEMENT REVIEW 64(2)

27. Bernhard Dachs, Steffen Kinkel, and Angela Jäger, “Bringing It All Back Home? Backshoring
of Manufacturing Activities and the Adoption of Industry 4.0 Technologies,” MPRA Paper
83167, University Library of Munich, Germany, 2017.
28. Anil Gupta and Vijay Govindarajan, “Converting Global Presence into Global Competitive
Advantage,” Academy of Management Perspectives, 15/2 (May 2001): 45-56, doi:10.5465/
ame.2001.4614881.
29. GVC research has focussed on power asymmetries of lead firms, as well as economic impact
and policy issues, for developing countries. For discussion, see Gary Gereffi, Global Value
Chains and Development (Cambridge: Cambridge University Press, 2018); Valentina De Marchi,
Elisa Giuliani, and Roberta Rabellotti, “Do Global Value Chains Offer Developing Countries
Learning and Innovation Opportunities?” The European Journal of Development Research, 30/3
(2017): 389-407, doi:10.1057/s41287-017-0126-z.
30. For a discussion, see C. K. Prahalad and Venkat Ramaswamy, “The New Frontier of
Experience Innovation,” MIT Sloan Management Review, 44/4 (Summer 2003): 12-18; Mark
Johnson, Jens K. Roehrich, Mehmet Chakkol, and Andrew Davies, “Reconciling and
Reconceptualising Servitization Research: Drawing on Modularity, Platforms, Ecosystems,
Risk and Governance to Develop Mid-Range Theory,” International Journal of Operations &
Production Management, 41/5 (2021); 465-493, doi:10.1108/IJOPM-08-2020-0536; Michael
W. Preikschas, Pablo Cabanelas, Klaus Rüdiger, and Jesús F. Lampón, “Value Co-creation,
Dynamic Capabilities and Customer Retention in Industrial Markets,” Journal of Business &
Industrial Marketing, 32/3 (2017): 409-420, doi:10.1108/jbim-10-2014-0215.
31. International Bank for Reconstruction and Development/The World Bank (2017), op. cit.
32. https://www.wto.org/english/tratop_e/covid19_e/medical_products_report_e.pdf.
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Global Value Chain Reconfiguration and COVID-19 95

46. Kapletia et al. (2019), op. cit.; Patrick Hennelly, Jagjit Singh Srai, Gary Graham, Royston
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52. For examples, see Jon Excell, “Vital Capacity—The Story Behind Penlon’s Ventilator Push,” https://
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to Regear Factories to Build Ventilators for NHS,” March 17, 2020, https://www.theguardian.com/
business/2020/mar/17/uk-manufacturers-regear-factories-build-ventilators-nhs.
53. Tobias Mueller, Ahmed Elkaseer, Amal Charles, Janin Fauth, Dominik Rabsch, Amon
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of-3d-printing-report-2020/ and industry forecasts at https://3dprintingindustry.com/
news/3d-hubs-3d-printing-trends-report-forecasts-24-growth-in-3d-printing-industry-over-
5-years-167998/.
55. Cindy Kohtala, “Addressing Sustainability in Research on Distributed Production: An
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medicinal-products-market-latest-in-depth-report-segment-by-manufacturers-type-applica-
tions-and-dynamics-2020-06-19; “Global Medical Device Technologies Market Report 2019,”
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60. Stacy Frederick, “Global Value Chain Mapping,” in Handbook on Global Value Chains, ed.
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coronavirus-puts-europes-solidarity-to-the-test/.
96 CALIFORNIA MANAGEMENT REVIEW 64(2)

63. See “England’s PPE Procurement Failures Must Never Happen Again,” BMJ, 370(July 17,
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66. Henry Chesbrough, “The Value of Openness in the Covid-19 Era,” ISPIM Virtual Conference,
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