Nine in 10 supply chains hit by coronavirus

16 March 2020

The outbreak of coronavirus has disrupted almost nine in 10 (86%) of supply chains but buyers are working to mitigate the risks, according to a survey. 

The snap survey, conducted by SM and CIPS, found almost two-thirds (62%) of respondents had been alerted of the impact of the virus on their supply chains after being warned by a supplier, but almost two fifths (37%) had found out when a supplier failed to deliver.

Three-quarters of procurement and supply chain professionals said products manufactured in China are integral to their supply chain. 

Prior to the outbreak of the virus, nearly a quarter (24%) of firms did not have risk mitigation plans in place to deal with the level of supply chain disruption experienced, according to the survey, which received 80 responses by Monday 16 March. 

Almost 61% of buyers said they had taken action to analyse their supply chains to identify risk, and almost half (49%) had found alternative suppliers when others could not deliver. 

Rising costs are a cause of concern for many, as 58% reported they had paid more for goods and services following the outbreak, and 58% expect a downturn in business over the next six months. 

The majority of buyers said they had increased their communication with suppliers over the last few weeks, with 58% communicating regularly with their key suppliers and 34% extending communication to all tiers of their supply chain. 

Crucially the pandemic has caused procurement professionals to reevaluate their supply chain strategies going forward. Almost 58% said they would move away from single sourcing to mitigate risk in the future, and almost half (47%) said they would look to increase stock levels in the long-term. 

Last week, CIPS shared advice on short and long-term actions procurement professionals should take to minimise the impact of coronavirus on their businesses. 

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