40% Businesses Hit by Supply Chain Issues During COVID-19

For supply chains to emerge victorious from the global pandemic crisis, enterprises need to focus on real-time data insights and digitalization. Let’s look closely at how supply chains can amend their strategies to withstand future epidemics. 

A report Opens a new window published by Orange Business Services on January 19, 2021, has found that the supply chains in 40% of multinational corporations could not withstand the consequences of the COVID-19 crisis. The survey was conducted across 320 enterprises and focused on manufacturing, transport, and logistics sectors that are prominent value drivers for supply chains. The survey highlighted how the global crisis had impacted the supply chains and, in turn, changed their outlook and attitudes to potential risks.

[Press 📰] Nearly 75% of #supplychainOpens a new window leaders reported that they continued to innovate throughout the crisis, and 44% even said the crisis had a positive impact.
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In the survey, about 83% of respondents said they were more aware and alert of supply chain risks now, including shortages in raw materials, manufacturing unit shutdowns, or transport issues, than they were twelve months ago. The pandemic shook up the entire supply chain ecosystem. It opened its eyes to the need to adopt speed, agility, and innovation to cope with the dynamically changing supply chain spectrum. 

During these challenging times, the survival of many companies will depend on building resilience and sustainability into supply chains by embracing digitalization and prioritizing real-time data insights for smoothly incorporating transformation strategies. The research report did not mention last year’s U.S.-China tariff wars. However, vendors like Cisco said that they had felt the tremors of the pandemic even before the COVID-19 pandemic hit in March 2020.

Learn More: Will COVID-19 Continue to Impact Transportation and Logistics in 2021?

Strengthening the Foundations of Supply Chain

In the survey, nearly eight in 10 respondents said they had accelerated their digital supply chain strategies. About 50% of companies said that they are now looking at overhauling risk procurement and risk management strategies within the next couple of years, as the virus-related threat continued to put strain and rattle the very foundations of these companies.

Automation has gained more steam as it is set to dominate the supply chain activities to handle rapidly-changing demand levels. During the survey, roughly 42% of enterprises said they are using automation to manage risks, and they expect it to double over the next two years.

Two out of five respondents believed that their supply chain could not cope at the height of the crisis as they are ill-prepared to handle such rapidly changing supply chain dynamics. Keeping in mind the current situation, strengthening supply chains through enhanced planning and execution by employing technological enablers, including artificial intelligence (AI), cloud, 5G, and big data analytics, seems to be of paramount importance today. 

This change can be initiated by collecting and sharing real-time data for improving efficiencies and visibility across the entire supply chain while supporting relationships between suppliers and manufacturers for smart decision making to ensure that the supply chains are well equipped to handle issues in real-time and make decisions that are beneficial for every party involved.

“The global health emergency has made organizations accept the fragility of their ecosystems. Critical gaps must be plugged in to ensure end-to-end visibility on a global scale and minimize the risk to the business. Digital technologies and capabilities are the keys in allowing enterprises and their partners to reimagine their supply chain securely,” saidOpens a new window Kristof Symons, executive vice president, International, Orange Business Services. “Digitalization and data collection will also be primary enablers to become more sustainable and save costs as well as the planet,” added Symons.

Learn More: FedEx To Implement a New Peak Surcharge on Express Shipments

Restructure Strategic Sustainability

The pandemic crisis ensured that companies do not have sustainability as their immediate corporate agenda. However, the survey still had 59% of respondents saying that not following ethical and sustainable business standards affected their bottom line as it seemed to pose a significant business risk during this testing period. For example, smart factories can easily realize a 30% saving in energy costs if sustainability programs form the core block of the concerned companies.

Further, about 85% of respondents said their business is investing to become more sustainable in the long term. Their plans include utilizing new data collection technologies to give better insight into sustainability metrics while simultaneously managing and controlling energy usage factors.

“The pandemic will stop, somehow. But climate change, sustainability – those trends and risks are here for the next few decades,” explainsOpens a new window Erwin Verstraelen, CDO and CIO at the Port of Antwerp. “For example, The European Green Deal is going to put more pressure on all stakeholders to identify the origins of emissions and minimize their environmental footprint. The supply chain is an important element of that.”

Organizations need to take action to promote their ambition and future vision for supply chains. This calls for a proactive sustainability approach by companies where companies adopt digitally-driven sustainability management programs to an extent such that they become near-universal and indispensable parts of supply chains within a couple of years.

Note: Orange Business Services’ independent research group Longitude surveyed Opens a new window 320 firms (i.e., manufacturing and logistics companies) for this research across 18 countries between August and October 2020.

In conclusion

This survey throws light on the opportunities to future-proof supply chains if they restructure and adopt strategic sustainability programs in the long run. The success of these supply chains will also depend on real-time data insights, agility, and digitalization. This can be achieved by incorporating technologies like artificial intelligence, cloud, 5G, and big data analytics into the foundational framework.

Do you think future-proof supply chains will be able to adopt sustainability programs, enable real-time data insights and digitalization in the long term? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!