The coronavirus-related headlines in recent months have not been good for the U.S.: Cases keep rising, especially in "hot spot" states that are not managing infection rates effectively, and the economic downturn is likely to get worse before it gets better. But in a testament to how resilient the national and global supply chain have become, there are some strong signs of recovery within the industry.
Nationwide, 97% of companies in the supply chain saw at least some disruption of their operations due to the novel coronavirus pandemic, and the vast majority pivoted their operations to deal with it in one way or another, according to a recent poll from Procurious. While the effects of the lockdown and virus spread have been varied to say the least, the most common issues were a drop in demand (experienced by 31% of companies in the supply chain), lack of supply (26%) and slowdowns in shipping (21%).
With the benefit of hindsight, supply chain pros now recognize their biggest weaknesses that left them vulnerable to these disruptions, the survey found. Nearly 2 in 5 said they didn't realize their geographic risks, and 29% said they just didn't understand their suppliers' own weaknesses.
Of course, even despite these difficulties, many companies continued doing business - albeit at reduced or greatly altered levels - and some certainly made out better than others, according to Supply & Demand Chain Executive. The Hackett Group's recent 2020 Working Capital Study found that companies in the top 20% of their industries were able to turn over cash three times more efficiently than even the median business. That meant collecting money from customers or clients 19 days more quickly, paid suppliers 20 days slower and turned over inventory more effectively (holding less than half of median numbers).
All of that has become vitally important during the pandemic, the report said.
"For most companies, there's suddenly a 'burning platform,' a sense of urgency that is driving improvement," Craig Bailey, associate principal of strategy & business transformation at the Hackett Group, told the site. "Companies are making liquidity and cash flow a top priority."
Getting on the right footing
With all these changes, companies are now feeling much better about their standing today, according to a separate report from Supply & Demand Chain Executive. A recent APQC survey found that 82% of companies are either confident or very confident about their pivots to the "new normal," and 61% say they have already fully changed their supply chains to acclimate to the current situation.
However, challenges do remain, the survey showed. Nearly 1 in 3 say their biggest issue will be training employees to handle the changes, and more than a quarter still need to implement more changes to their organizations. Another 25% said they have yet to shorten their supply chains.
With all this in mind, companies will have to continue improvising and finding new ways to manage in these uncharted business waters. The situation is evolving across the U.S. and issues that may have been cleared up for some time in one state may continue to persist for some time to come just over the border.