We
have witnessed during the 4th quarter 2008 and 1st quarter 2009 to a
considerable decline in world trade as can be seen on the graph below.
It may be noted that the countries with very strong industrialization
and that are suppliers of machinery, components and semi-products which have
suffered most from the decline, namely: Japan, China, Germany, United States.
The countries more oriented towards the production of finished products were
affected to a lesser extent. This is a clear sign that there was during
those two quarters of contraction considerable industrial stocks.
Indeed, unlike previous major crises, the impact of declines in
production plans across the supply chain has been very rapid.
The generalization of production management systems (ERP / MRP) and the
interconnection between suppliers and customers via electronic
exchanges (EDI) allows a very high reactivity (downwards) through all
the links in the supply chain although this is distributed over the
entire planet.
Moreover, in a context of financial panic, there are probably overreaction to cut the production plans that led to the stalling of the industrial production across the world. As consumption has not decreased at the same pace, much of the stock of components and semi-products have been emptied. And now, while activity remains low, it becomes very difficult to manufacture products when we can imagine the opposite: the stock is empty and shortages widespread.
It is certain that a re-start of the activity will not be without pain and it will take some time before the industrial production lines find a nominal functional dynamics, even at a lower level than pre-crisis .
