Effects of the COVID-19 Pandemic on Manufacturing Companies' Supply Chain Management in Finland

Abstract

The COVID-19 outbreak shocked the whole world in 2020. As the pandemic quickly spread across the globe, only during its first year, over 75 million positive cases and 1,6 million deaths were reported worldwide, and in November 2022, the same numbers were over 634 million and 6,6 million. The world’s economic system and global markets were greatly affected, and many countries tried to counter the pandemic’s spread by implementing strict lockdowns, which further caused turbulence on the markets. Countless manufacturing companies across the globe were faced with massive global supply chain disruptions, and they were felt even in companies operating in Finland. Managers and scholars alike have been working very hard for the past three years to find out what were (and are) the best countermeasures to combat the pandemic’s effects and disruptions, but a consensus of an answer is still missing.

This thesis aims to investigate the effects of the COVID-19 pandemic on manufacturing companies operating in Finland, and to examine what kind of ways or methods these companies adopted to counter the COVID-19 pandemic in Finland compared to the rest of the world. These two topics form the two main research questions of this thesis, and they are answered from the basis of a qualitative systematic literature review and a mostly qualitative semi-structured interview study to which interviewees from six different manufacturing companies take part in. The literature review consists of supply chain management theory and a look into the effects of the COVID-19 pandemic on manufacturing companies operating outside of Finland. The literature review is also used to build a theoretical framework, which is used in the end to analyse the results of the interview study and compare them to the findings of the literature review.

The results of this thesis offer insight into the differences of the COVID-19 pandemic’s impacts on the supply chain management of manufacturing companies operating in Finland and outside of Finland, and the different supply chain management related countermeasures taken by these companies. From the literature review, it was discovered that global supply shortages, large-scale fluctuations in demand, consumption shocks, and increases in material prices and lead times were some of the most recognizable effects of the COVID-19 pandemic on the manufacturing companies operating outside of Finland, often affecting directly to their operations and Tier 1 suppliers. The interview results reflected similar results, only the companies operating in Finland mostly experienced the pandemic’s effects through their suppliers’ suppliers’ problems, which were usually operating outside of Finland. Also, the companies that were located in countries that went into lockdowns had their own challenges as well. To counter the global supply chain disruptions, both the interview study and the literature review provided similar findings: the realization of the necessity of evolving the existing supply chain management from lean thinking to a more agile and resilient system became evident for those that hadn’t already done so. Differences in the ways of attempting to accomplish this were found, but the goal was still very similar for most of the companies.