Supply chain execs optimistic about recovery, despite big disruptions and challenges ahead
Most supply chains faced a 25% or greater reduction in operations due to the coronavirus pandemic and many were overconfident in their ability to manage the crisis; still, execs say a recovery is on the way in 2021, survey shows.
The coronavirus pandemic has disrupted virtually all supply chains, and although challenges still lie ahead, most executives remain optimistic about a recovery, according to a recent industry impact report from Infosys Consulting, released this week.
Infosys surveyed 80 supply chain executives from eight countries and found that more than half—57%—said their companies felt a 25% or greater supply chain impact from the pandemic; a quarter of those indicated a 50% impact and 6% reported a total shutdown of their supply chains, the researchers said. The survey also revealed that many organizations were overconfident in their ability to weather a major disruption—three-quarters of respondents said they were at least somewhat prepared for a disruption pre-Covid-19, compared to 39% who said they felt that way during the pandemic—and that risk mitigation and business continuity strategies, tools, and planning are more important than ever.
“This before-and-after assessment of supply chain preparedness to face major disruptions makes a compelling case for tools and technology that allows companies to simulate major disruptions within their supply chain networks to identify potential weaknesses and develop contingency plans,” the researchers wrote.
Despite the difficulties, most organizations said they are optimistic that they will recover from the pandemic-related slowdowns in a matter of months. Nearly 70% of respondents said they expect their business to recover in nine months or less—with 61% expecting a recovery in less than six months. Just 10% of respondents said they expect a recovery to take more than a year, and 8% said they don’t expect their supply chains to recover at all.
Respondents said the top three supply chain areas most affected by the pandemic have been: sourcing and procurement (65%), warehouse and distribution (48%), and supplier networks (43%). Looking ahead, the top three areas for change and improvement are: demand forecasting (43%), readiness and continuity planning (39%), and inventory management (39%).
For more coverage of the coronavirus crisis and how it's affecting the supply chain, check out our Covid-19 landing page.