INVERTO survey shows how companies are managing the COVID crisis
As a ‘black swan’ event, COVID-19 took the world by surprise. Companies are rapidly tackling the challenges caused by the virus. Over 65% have already taken liquidity, business and supply measures to maintain their business activities. 90% of decision-makers surveyed believe that risk management and supply chains will look different after the COVID-19 crisis than they did before. These are key findings from a survey conducted by INVERTO, a BCG company specialising in procurement and supply chain management consultancy.
Overall, the results of the study provide an insight into how companies across all sectors are affected by the pandemic: For example, 86% of those surveyed said that they already perceive bottlenecks in their supply chains and expect the situation to become worse in the future. While 38% currently feel a minor impact, only 17% expect this to happen in the future.
31% of respondents expect a revenue decrease of over 20%. Sectors that are most impacted by COVID-19 are automotive, retail and engineering.
The activities of the survey participants can be assigned to the fields of liquidity, business resilience and supply chain stability. Almost two thirds of the respondents do not focus on one field of action, but have started activities in all three areas.
Almost 90% of those involved have taken or at least planned measures to make the company crisis-proof. These include, for example, the establishment of control committees for the daily assessment and management of supply risks (75%), the selection of new suppliers (86%), the reduction of all short- and medium-term investments (83%) and strict cash management to maintain liquidity (78%).
However, there is still considerable amount of implementation to be completed, especially in recognizing distressed suppliers, refining budgets, implementing alternative supply and reducing opex.
“To date, companies have had a short-term focus on crisis response which should now shift to addressing inherent cost structures and demand patterns.” Lance Younger, UK Managing Director
The respondents perceive two major obstacles as problematic: 88% complain about a lack of information in view of rapidly changing conditions, while 47% complain about a lack of transparency in the supply chain. Furthermore, travel restrictions and other political measures as well as conflicts of objectives in prioritization have a negative impact on the development of solution concepts.
Looking ahead of the crisis, almost all participants are planning changes in their current procurement strategy: 46% of those surveyed want to be better prepared for crisis scenarios in the future, while 42% will integrate local suppliers into their supply chains. 36% of those surveyed plan to increase transparency in their supply chains – also with the help of technical means – while 35% want to work more closely and in a more cooperative manner with their suppliers.
“There is huge value to getting closer to your key suppliers now to help distressed suppliers and to collaborate intensively with your critical suppliers.” Thibault Lecat UK Managing Director.
In the last week of March, INVERTO surveyed 102 participants across 23 industries on sales development, procurement measures and challenges in dealing with the corona crisis. To learn more about the study results with recommendations please click here : https://www.inverto.com/en/publikationen/how-does-procurement-react-to-covid-19/
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