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The latest BCI report, COVID19: The Future of Supply Chain, shows the devastating impact the pandemic has had on supply chains, with 73% of organizations encountering „some” or „significant” harmful effect on the supply side. There has also been a discernible increase in the use of technology during the pandemic to help with supply chain planning and strategy.

This was, in part, caused by the fact that less than half (49.5%) of businesses had plans in place that sufficiently covered them for the supply chain issues that arose during the first few months of the coronavirus.

The report does, however, highlight that many lessons have been learnt and that organizations will be taking steps to ensure their supply chains are more robust for the next incident or crisis.

Over half (57.2%) will look to diversify their supplier base post-pandemic, for many organizations this means reducing their reliance on the Far East (29.9%), and a further 13.1% from China. There will also be a shift towards sourcing goods more locally (66.2%), and others will look at additional stockpiling.

Other areas organizations have highlighted for improvement include – due diligence deeper into their supply chains, although this has largely been carried on tier 1 suppliers, improvements can be made on tier 2 suppliers and beyond; and improved documentation, including specific pandemic plans that include supply chains.

More key findings: making a plan; increasing digitisation and local sourcing

Slightly less than half of the organizations (49.5 percent) reported having a plan in place that sufficiently covered them for the supply chain issues encountered during the pandemic.

Nearly three-quarters of organizations (73.0 percent) encountered some or significant detrimental effects on the supply side, with 64.8 percent reporting the same on the demand side. One in five organizations, however, reported increased demand for their products and services. IT, telecommunications and pharmaceutical organizations, for example, noticed an increased demand, whereas other organizations launched new products and services geared to catering for differing customer needs during the pandemic.

There has been a discernible increase in the use of technology during the pandemic to help with supply chain planning and strategy: 57.1 percent of organizations are using their own internal systems and spreadsheets for supply chain mapping, whilst 13.5 percent are using specialist tools. Of those who are not currently using tools, a fifth is now considering purchasing a specialist tool.

Local sourcing will become more mainstream: two-thirds of organizations (66.2 percent) plan to source goods more locally post-pandemic. A further fifth will be engaging in more stockpiling post-pandemic.

12.4 percent of organizations intend to increase their use of third-party logistics post-COVID-19.

With three out of four organizations reporting their supply chains have been adversely affected by COVID-19, this report serves as a timely overview of the issues organizations have suffered throughout the pandemic. It serves as a benchmark to organizations, but also offers suggestions on measures organizations could consider implementing into their future supply chain strategies to help similar issues reoccurring in the face of a second wave or future global crisis” – BCI Head of Thought Leadership, Rachael Elliott commented. –Whilst the pandemic continues to wreak havoc with supply chains globally, it has also brought opportunity. Many organizations are already actively investing in new technologies to help with activities such as supply chain mapping, whilst others have developed cross functional teams – which they plan to keep post-COVID – to work together to help combat supply chain issues in a more organizationally cohesive way.”.”

The report was supported by Resilience360

Photo: PxHere


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