Inside Logistics

Supply chain changes due to pandemic will be permanent: survey

Almost two thirds of companies will seek new or alternative suppliers to rebuild supply chains


July 30, 2020
by

STAMFORD, UK – Almost half of businesses say it will take 12 months or more before supply chains return to pre-pandemic levels.

A new poll by the 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.

This global business disruption looks set to continue for some time, with 46 percent of businesses stating that it will take 12 months or more before supply chains return to pre-Covid levels of productivity.

The survey was conducted in June 2020 with 112 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 developed 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 in order to limit further international disruption and find new suppliers.

The pandemic 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 which may be pushed to consumers in the coming months.

As businesses reacted to changes day by day, CIPS asked about initiatives that may fall by the wayside as supply chain managers tried to protect their businesses in response to shifts in trade and other economic impacts. Sustainability initiatives were affected as 15 percent of businesses said they will no longer maintain their plans for sustainable supply chains due to the impact of Covid-19.