It should come as no surprise that most businesses in the supply chain were at least somewhat impacted by the novel coronavirus pandemic, and the impact of the first slowdowns that took place months ago are still being felt across the industry. For obvious reasons, that includes companies' purchasing and procurement efforts, and it's expected that the effects of this slowdown will continue for some time to come.
While only 21% of companies said the pandemic would definitely change their purchasing plans - and 26% said it would not - nearly half of all respondents were simply unsure what kind of impact it would have, according to a Peerless Research Group poll conducted in April. Some aspects of the supply chain, such as those in the food and beverage space, continued to boom, while other companies were forced into temporary shutdowns or significant scaling back of their operations. However, the uncertainty the industry felt at the time of the poll has likely lingered, at least to some extent, over the past few months.
Was the industry ready?
It may be fair to say that much of that uncertainty comes because the pandemic's fallout was both sudden and significant, but at the same time, many supply chain industry veterans also think the sector itself may not have been set up to absorb such an impact, according to new research from AIMMS, published by DC Velocity. For instance, 54% of those polled said they believe their own companies' supply chain planning processes are just "somewhat effective," with another 17% saying their in-house strategies were either "not at all effective" or "not so effective." Altogether, that represents more than 7 in 10 businesses in the industry feeling at least some negative feelings about how they handle the supply chain.
Figuring it out
Of course, many of these issues existed even before the COVID-19 outbreak, which led to many companies scrambling to correct course, according to Supply Chain Dive. Included in those emergency efforts were canceled orders, of which fewer than half of purchasers in the clothing supply chain said they canceled 25% of theirs or less. In other cases, companies sought to reduce the cost of their orders, with 1 in 5 companies saying they got discounts of 25% or less on their previously completed orders.
The latter case shows a potential path to success in these uncertain times: Strategizing alongside your supply chain partners will likely go a long way toward ensuring you get through these challenges - and those in the future - effectively.