Supply chains reach COVID-19 ‘tipping point’

The COVID-19 pandemic has accelerated manufacturers’ shift to digital transformation, with 70 per cent of organisations saying the crisis has focussed on the need for more digital procurement.

A Vanson Bourne survey of 200 procurement, supply chain and finance professionals on behalf of smart procurement firm Ivalua, found that organisations believe that greater digitalisation (84 per cent) and better digital skills (83 per cent) will enable them to more effectively mitigate the impact of COVID-19 on the business.

Furthermore, when it came to mitigating the disruption of COVID-19 on supply chains, organisations said the biggest challenges they were facing were: over-depending on a limited set of suppliers (35 per cent), identifying alternate suppliers (30 per cent), a lack of understanding of suppliers’ risk exposure (28 per cent), and a lack of visibility into tier two or three suppliers (18 per cent).

In response, 78 per cent of organisations said that COVID-19 has increased their focus on supplier visibility, while 88 per cent said greater digitalisation will improve their ability to collaborate with suppliers and find alternative supply during the global pandemic.

Alex Saric, chief marketing officer at Ivalua, said: “The supply chain disruption caused by COVID-19 is completely unprecedented - procurement is on the front line mitigating its impact, but the dearth of digital technology and skills in hindering its effectiveness.

"Teams are still reliant on paper-based processes or outdated systems, making it impossible to gain visibility into the thousands of suppliers they work with.”

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