Has COVID-19 served as a catalyst to force companies to rethink their supply chains? While supply chain transformations often happen over long periods, the pandemic pushed businesses to adapt and change rapidly. It also exposed vulnerabilities that organizations may not have previously been ready to acknowledge or act upon.
Regardless of how operations functioned before COVID-19, what has become increasingly clear is that safeguarding the supply chain against future disruptions is a business imperative that positively affects organizations beyond a pandemic.
As McKinsey & Company states, “Actions taken now to mitigate impacts on supply chains from coronavirus can also build resilience against future shocks.”
To better understand the impact of COVID-19 on the supply chain and what actions companies are taking to safeguard the supply chain against future disruptions, we conducted a survey.
One of the biggest takeaways was that 89% of participants surveyed say their company has either created a contingency plan that has been fully implemented or partially implemented due to the COVID-19 disruptions. Another 9% have not created a contingency plan yet but plan to in the future, and only 2% of survey participants reported their company does not plan to create a contingency plan.
With an overwhelming majority of companies taking immediate action to safeguard the supply chain, we thought it would be interesting to know what actions these organizations are taking.
Here, we discuss the key findings of our survey.
Our online survey included 600 participants who live in the United States and work at an enterprise-level company (above $500 million) within the supply chain, regulatory, technology, manufacturing, or similar sector.
Survey participants self-identified as holding a job related to the following job titles:
- CTO: 5.67%
- CSCO: 4.5%
- VP/Director of IT: 24%
- VP/Director of Supply Chain: 10.17%
- VP/Director of Regulatory: 5.83%
- VP/Director of Operations: 11.33%
- Other: 38.5%
Our survey sample included a range of participants from smaller companies to large organizations with the following number of employees:
- 0-500: 19.17%
- 501-1,000: 26%
- 1,001-5,000: 23.67%
- 5,001-10,000: 12.5%
- More than 10,000: 18.67%
How COVID-19 impacted the supply chain
Whether companies experienced the impact of COVID-19 directly or indirectly, the pandemic took a substantial toll on company supply chains. Fortune’s report found that “94% of the Fortune 1000 [were] seeing coronavirus supply chain disruptions” in early 2020. The extent of these disruptions varied in scope and timeframe, with some supply chains shutting down entirely while others were unable to source materials to meet customer demand.
Shutdowns occurred due to several reasons, including an inability to provide adequate personal protective equipment to employees, a lack of raw materials or a drop in sales. Regardless, these shutdowns certainly had a ripple effect on many people, products and across industries.
While over the years, many companies spent time, effort and substantial investment creating complex global supply chains, they may not have anticipated what could potentially go wrong. In response to unexpected events of the global pandemic, companies are taking action to safeguard against future disruptions.
Let’s explore the 9 ways businesses are planning for the future based on our survey results.