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Renowned management consulting firm McKinsey & Company have outlined 5 themes that they believe could drive a post-COVID transformation in supply chains.

The findings were published in McKinsey & Company’s recent white paper, titled „Resetting supply chains for the next normal”, which is based on a survey of 60 senior supply-chain executives from different industries across the globe.

The survey found that 93% of respondents plan to increase the level of resilience across their supply chain. In order to do so, they shall use a variety of means, including „dual sourcing of raw materials, increasing their inventories of critical products and, to a lesser extent, by near-shoring, dual-sourcing, or regionalizing their supply chains.”

McKinsey & Company used the data from the survey to present the 5 themes that may drive a post-COVID transformation in supply chains.

They are as follows:

  1. Developing more-agile mindsets and behaviors, with increased acceptance for previously disputed centralization opportunities
  2. Establishing dedicated risk-management functions to prepare long-term risk-mitigation strategies with a greater emphasis on supply-chain management
  3. Increasing regionalization and inventory storage closer to end consumer, with reexamination of the supplier footprint
  4. Focusing on capability building, not only for online channels but also for embedding digital tools and skills, eg, in automation, end-to-end planning, and shared service centers for supply-chain management
  5. Accelerating societal push for sustainability, with high-pollution activities increasingly perceived as expendable

The 1st theme, which regards „more-agile mindsets” and behaviours, is a reaction to how the 1st wave of the pandemic brought about a rapid redeployment of resources. Meanwhile, the 2nd theme on risk management recognises the exposure of supply-chain risks that were previously unrecognized or dismissed earlier in the year.

The 3rd theme. which concerns regionalisation of inventory and storage, is a means of allaying concerns about supply-chain disruption and shortages of critical goods. Capacity Building, the 4th theme on the list, is something that could blossom following the new ways of operating that have been discovered over the last 6  months.

Finally, the 5th theme relates to sustainability, and the extent to which people will want to see the environmental benefits of lockdown continue once the ‚next normal’ comes into view.

You can read the white paper in full here.

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