Kearney: are UK supply chains adapting to COVID-19
In a recent survey conducted by the World Economic Forum and Kearney, the two organisations revealed that UK leaders have low confidence in their supply chain’s capability to adapt to COVID-19.
The survey interviewed over 400 senior operations and supply chain executives about the resilience of their supply chains. Results showed that almost two thirds of UK leaders (63%) ranked their organisation at a 4.8 out of 10 for their adaptation.
Currently the country in response to the crisis is conducting a number of different measures to combat the impact of COVID-19, including:
- 69% are protecting their suppliers by providing purchase guarantees
- 43% are supporting suppliers by analysing the risks for certain components
- 40% are reporting that they have shut down non-essential facilities in order to free up national energy and infrastructure resources
In contrast to this the organisations discovered different strategies from global firms including:
- 44% adapting transportation methods to ensure that the supply chain continues
- 40% prioritising critical facility and vulnerable customer orders
- 48% preparing measures to completely overhaul their entire procurement and supply chain strategy if the crisis is prolonged
When it comes to managing during the crisis, the organisations spoke with leaders in the supply chain industry who emphasised the importance of risk management, as well as communication and transparency with suppliers, in order to keep people safe while ensuring supply.
“Supply chain leaders have been confronted with one of their biggest challenges to date in the shape of the coronavirus crisis. As a result, supply chain resilience is now at the forefront of discussion, with the sector severely rattled. Global trade has been heavily impacted and issues such as food waste and diversion of supplies dominate the agenda. Simply put, supply chains have proven to not be resilient enough. In some cases, they are collapsing altogether. Supply chain leaders are realising that they’ll have to adapt in order to minimise exposure in the future, but adapting so rapidly is a challenge in itself,” commented Nigel Pekenc, Partner at Kearney.
In its report, Kearney highlighted some key ways in which supply chains can adapt and pivot during the current crisis, including:
- Rapid tailoring of manufacturing and supply systems in order to cater for changes in consumer behaviour
- Harnessing advanced technology for agile manufacturing and supply systems
- Coordinating logistics across and within global value chains
- Sharing responsibility and collaboration between companies and authorities in order to address social and environmental challenges
“Whilst the coronavirus crisis continues to affect both health and economies worldwide, it also presents opportunities. The sheer speed of the onset of the pandemic has short-circuited many firms’ standard adaptation strategies, but leaders who are nimble enough to find a way through this crisis are likely to reap substantial rewards in market share and supply chain resilience,” added Pekenc.
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