Over 85% of supply chains saw reduced operations in pandemic, survey finds

18 September 2020 Consulting.us

The pandemic has greatly impacted global supply chain operations, according to a recent survey from Infosys Consulting. A full 85% of supply chains said they saw a reduction in operations during the Covid-19 pandemic, with over half (57%) seeing at least a 25% reduction in supply chain operations. The Infosys survey polled 78 operations professionals, more than half of whom were located in North America.

Though most respondents reported significant operational drops – including 6% who saw complete supply chain shutdowns – approximately 13% reported exceeding their normal operations in the pandemic period.

Respondents were quite optimistic on recovery timelines, with 60% believing their company would recover within 6 months, and only 10% saying it would take more than a year to recover. However, a significant 8% said that their business would never recover.

The pandemic also uncovered a marked overconfidence in supply chain preparedness among respondents. Though 77% said their supply chain was at least somewhat prepared for a major disruption pre-pandemic, that number dropped to 39% in the pandemic era.The impact of Covid-19 on businesses“It is reassuring to see that supply chain executives are optimistic about future recovery, despite the ongoing disruptions and challenges ahead,” said Andrew Duncan, partner and UK CEO of Infosys Consulting. “However, many organisations were overconfident in their ability to weather a major disruption, indicating the need for better strategies, tools, and planning moving forward."

When asked which supply chain areas had been most impacted at their company, the top two choices were “sourcing and procurement” (65%) and “warehouse and distribution” (48%). The rolling wave of the pandemic across the globe in February and March expanded the supply disruption that had previously been bounded to Asia. One surveyed company, for example, said the pandemic spread eventually forced the shutdown of its manufacturing operations across Italy, France, and India.

Which areas of your supply chain have been most impacted by the pandemic?

Companies that saw increased demand for products also struggled to fill shelves. One respondent in the Infosys survey said that they were unable to replace inventory depleted by panic buying because of reduced manufacturing output, delays at ports, and trouble sourcing ground transportation.

The top areas respondents said they needed to strengthen to prevent future disruption were demand forecasting (43%), readiness and continuity planning (39%), and inventory management (39%). With the pandemic causing extreme swings in demand, many now feel their forecasting tools are lacking.

What changes are needed to strengthen your supply chain against future disruption?On the business continuity front, an APQC report found that 44% companies lacked a business continuity plan – which outlines disaster scenarios and subsequent processes to minimize harm. Meanwhile, respondents worried about inventory management, citing uncertainty in border regulations, warehouse disruptions, and inaccurate forecasting as main factors.

Duncan added, “Digital tools and analytics will be a fundamental part of building resilience in the future, helping us better able to navigate uncertain supply and demand, adjust to disruptions in operations and supply chains, and adapt to sharp changes in consumer confidence and priorities.”


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