Inside Logistics

Productivity, paused

Businesses estimate a year before return to normal


October 23, 2020
by

Almost half of businesses (46 percent) believe it will take 12 months or more before supply chains return to pre-pandemic levels of performance.

A poll by the U.K.-based Chartered Institute of Procurement & Supply (CIPS) has found that the disruption caused by Covid-19 will lead to permanent changes in global supply chains, as businesses look to adapt to new ways of working and managing the varying stages of lockdown around the world.

The survey was conducted this summer among global supply chain managers who were asked about the effects of lockdown and the pandemic on their businesses and in their region.

Respondents to the survey said that supply chains were being remapped and redeveloped in reaction to new regulations as well as permanent and temporary lockdowns as countries navigated the waves of the pandemic. In fact, 62 percent of global supply chain managers said they will seek new or alternative suppliers in order to rebuild their supply chains in the wake of the Covid-19 disruption.

These actions could cause a significant impact on global trade, with 31 percent also stating that they will reshore their operations to limit further international disruption and find new suppliers.

The impact has also affected prices. Two thirds (67 percent) of global businesses reported having to pay more for goods and services as a result of the disruption, costs that may be pushed to consumers in the coming months.

CIPS asked about initiatives that may fall by the wayside as supply chain managers try to protect their businesses in response to shifts in trade and other economic impacts. Fifteen percent of businesses said they will no longer maintain their plans for sustainable supply chains due to the impact of Covid-19.