We conducted a survey during the "Impact of COVID-19 on Global Supply Chains" Webinar, to understand how COVID-19 has impacted businesses, their supply chain and operations across MENA, Africa, India, and APAC regions.
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Key Insights From Our Webinar
How Global Supply Chains & Business Continuity Plans Are Standing Up To COVID-19
Global trade is experiencing a shock of unprecedented magnitude due to the COVID-19 pandemic. Businesses on both the supply and demand side are grappling with a number of challenges, unable to predict with certainty when the crisis will be contained, and economies will recover.
The WTO predicts that world merchandise trade will fall by between 13 and 32% in 2020 due to the pandemic. A recovery could be on the cards for 2021, but this is dependent on how long the outbreak lasts and how effective the various policy responses are[1]. During a recent webinar held across the Middle East, Africa, India, Asia, Australia and New Zealand, Thomson Reuters asked participants how the crisis is impacting their supply chains and whether they have adequate resources in place to maintain some form of business continuity.
Outlined below are some key insights gained from their responses.
Supply chain disruptions
Due to lock-downs, border closures, restrictions on the movement of people and goods, and other preventative measures – many businesses are struggling to get the parts, materials and products they need to keep their businesses running.
Close to half (48.80%) of our webinar attendees said the COVID-19 pandemic has been “very disruptive” to their supply chains, while 41.50% said it has been “somewhat disruptive”.
This comes at a time when increased protectionism was already having an impact on trade flows and supply chain management. We discovered that 63.50% had already anticipated an increase in the nationalization of supply chains, before the crisis delivered a greater blow.
Lack of visibility is a pressing challenge
When asked what factors have had the greatest impact on their supply chains since the virus outbreak began, a third (33.30%) cited a lack of visibility of events and possible alternatives; 26.70% said a shortfall of suppliers was a critical issue; and 23.30% pointed to border closures.
In order to understand the nature of these challenges better and mitigate them as far as possible, supply chain visibility is crucial. Right now, organizations need to understand the impact that the COVID-19 fallout is having on their supply chains, so that they can develop alternative routes sooner rather than later.
Business continuity plans of dealing with one-off events
While it is incredibly challenging to prepare for a global pandemic, the speed and scope of the COVID-19 outbreak has underscored the importance of robust business continuity planning going forward, with regular stress testing.
Three quarters (75.30%) of our survey respondents said their businesses had not been prepared to meet unforeseen circumstances on the scale of the COVID-19 pandemic.
On a more positive note, 33.30% said their businesses did have sound strategies in place to mitigate COVID-19 related supply disruptions and that these are “going according to plan”, while a further 43.60% are now in the process of developing crisis response plans.
The majority will use technology to optimize supply chains going forward
Given how unpredictable the situation is, no business can plan for full immunity from the ongoing impact of the current crisis. However, modern digital technology can facilitate a proactive and strategic response to current and future supply chain disruptions.
Any company that has not already invested in adequate technology to support business continuity will need to rethink its approach. Modern trade management solutions allow employees and supply chain partners to communicate and collaborate remotely, reduce risk and manual effort through automation, and crunch data more efficiently to accelerate decision-making.
Encouragingly, 83.75% of our survey respondents say they see their businesses turning towards technology to improve supply chain visibility and manage future disruptions effectively.
The journey ahead
Uncertainty will be the new normal for the remainder of this year and potentially longer. It is therefore critical for all businesses involved in trade to ensure they have the processes and systems in place that support virtual ways of working, increased agility and clear visibility along the supply chain. With the right tools in place, businesses will be better positioned to rebuild their supply chains and increase business resilience in the years to come.
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During the COVID-19 pandemic, our main objective is to support you and your business, and to navigate this complicated and everchanging environment together.
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