97% of supply chains disrupted as a result of COVID-19
Organisations looking at building resilience in response to widespread disruption
According to the How Now? Supply Chain Confidence Index 97% of the 605 supply chain professionals surveyed experienced a supply chain disruption related to COVID-19.
Breaking down this disruption further, respondents reported the following as key disruptions:
- 31% experienced decreased demand for products and services
- 26% saw a lack of available supply due to production downtime and shutdowns
- 21% have faced logistics and transportation slowdowns and delays
The survey found visibility is a critical issue undermining effectiveness, with 39% of those surveyed said they were blinded by a lack of supplier and geographic risk and 29% said they didn’t understand the upstream supply chains of their suppliers.
In response, the majority (73%) of organizations are now planning major shifts in supply chain and procurement strategy post-pandemic, including supply base expansion (38%), reductions in supply chain globalization (34%) and increases to inventory levels (21%). Fifty-nine percent of respondents believe the Fortune 500 should reduce globalization by localizing supply chains and bringing manufacturing back home.
“We expect to see seismic strategy changes in the months ahead that fundamentally alter the makeup of global supply chains,” said Tania Seary, founding chairman and CEO of Procurious. “For decades, low-cost country sourcing and offshoring was the foundation of global supply chains. The pandemic has many executives considering reducing globalization—and for good reason. But these changes won’t come easy.”
As a result of the chaos, supply chain and procurement are moving towards the centre of their organisations and the supply chain is being recognised as a competitive advantage. During the crisis, 40% of respondents said their recommendations were solicited more than usual internally, and 22% said they now have a seat at the executive table.
This growing platform has inspired a new generation of professionals to further pursue careers in supply chain and procurement. Procurious found that 62% of all respondents and 71% of millennials said their interest in procurement and supply chain has increased as a result of the pandemic.
“We found that most practitioners stepped up in a big way and responded effectively to a crisis that literally brought the world to a halt,” said Seary. “The spotlight on performance will lead to increases in budgets, tech investments and board-level involvement, and create new opportunities for practitioners to make their mark at the executive level.”
Analyzing employment trends, Procurious found that 20% of supply chain and procurement departments experienced job cuts and 23% of departments were forced to take pay cuts. However, go-forward job confidence remains high. On a scale of 1 – 5, weighted job confidence for the next 12 months is a 3.96—meaning employees are more confident than not.
The full report is now available for download.