Inside Logistics

Pandemic preparedness update

Survey reveals supply chain planning actions taken since pandemic declared


April 3, 2020
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CAVERSHAM, United Kingdom – The U.K.-based Business Continuity Institute has published the second in a series of survey reports on how businesses around the world are reacting to the Covid-19 pandemic.

On the supply chain side, 68.9 percent of organizations have reviewed the business continuity plans of their key suppliers. In the first survey, conducted two weeks earlier, only 55.5 percent had performed this check.

The report suggests “it is worth revisiting critical suppliers as the pandemic progresses to ensure they can continue to deliver services.” BCI members have noted examples of organizations that are no longer able meet their obligations due to new restrictions from governments despite earlier checks revealing they would be able to continue to deliver at the start of the pandemic.

Two new questions in this survey have revealed that 76.3 percent of organizations have now identified a list of critical suppliers in response to COVID-19 and 52.5 of organizations have now prioritized suppliers for review based on operating location.

“It is crucial to continue to review critical suppliers based on location as the geographic pattern of the pandemic progresses,” the report notes. Many organizations sought to move production from China at the start of the pandemic, for example, but it is now European and North American operations that are more affected by shutdowns.

A quarter of organizations have now switched suppliers, up from 16.2 percent two weeks ago This suggests organizations were still carrying out their due diligence of suppliers at the point of publication of the report two weeks ago, and are now making changes based on the information they have gathered. A further 27.1 percent have moved to source production to local suppliers to mitigate against delays in delivery, with some allowing local pickup of goods.

Over three quarters (76.4 percent) of organizations are maintaining regular communication with suppliers. “Regular communication can help to provide an early warning of potential issues arising from suppliers, but it can also help to maintain a good relationship which could lead to price advantage as we emerge from the pandemic,” the report said. A third of organizations (34.2 percent) have already been in contact with suppliers who are no longer needed.

“The results provide encouraging evidence of improvement in the actions taken by organizations in the fight against the coronavirus,” said Tim Janes, the BCI’s Chairman. “Clearly, a lot can be achieved in just two weeks. The unprecedented scale of the Covid-19 pandemic means that, no matter how
experienced our teams or well rehearsed our plans, this is an uncharted global event and we are all learning as we go.”

“An adaptable capacity is a key condition for organizational resilience, and as professionals we need to be as flexible and creative as possible if we are to navigate successfully through this crisis That includes treating our plans as living documents that adjust to the challenges thrown at us by the pandemic and absorb the lessons that it is teaching us.”

The survey polled 394 respondents in 64 countries and 19 industries in the week of March 23, 2020.