Released by Procurious the How Now? Supply Chain Confidence Index reveals that nearly all (97%) of the 600+ professionals surveyed experienced a supply chain disruption related to COVID-19. In response, the majority (73%) of organizations are now planning major shifts in supply chain and procurement strategy post-pandemic, including supply base expansion (38%), reductions in supply chain globalization (34%) and increases to inventory levels (21%).
When asked where COVID-19 had the biggest single impact on their supply chains:
- 31%: Decreased demand for products and services
- 26%: Lack of available supply due to production downtime and shutdowns
- 21%: Logistics and transportation slowdowns and delays
“We expect to see seismic strategy changes in the months ahead that fundamentally alter the makeup of global supply chains,” said Tania Seary, founding chairman and CEO of Procurious. “For decades, low-cost country sourcing and offshoring was the foundation of global supply chains. The pandemic has many executives considering reducing globalization—and for good reason. But these changes won’t come easy.”
Reflecting on lessons learned, 39% of those surveyed said they were blinded by a lack of supplier and geographic risk and 29% said they didn’t understand the upstream supply chains of their suppliers. Fifty-nine percent of respondents believe the Fortune 500 should reduce globalization by localizing supply chains and bringing manufacturing back home.
Confidence Remains High, Despite Looming Uncertainty
Uncertainty around when the disruption will peak continues to loom. Procurious found that while 34% of business leaders believe the worst has come and gone, nearly half believe the peak impact will occur within the next six months.
“The message from frontline practitioners is that the end to these supply chain disruptions is not near. Most professionals believe the crisis will peak in or after June,” said Seary.
As a result, supply chain and procurement teams will continue to play a key role in recovery and resiliency initiatives. During the crisis, 40% of respondents said their recommendations were solicited more than usual internally, and 22% said they now have a seat at the executive table.
This growing platform has inspired a new generation of professionals to further pursue careers in supply chain and procurement. Procurious found that 62% of all respondents and 71% of millennials said their interest in procurement and supply chain has increased as a result of the pandemic.
“We found that most practitioners stepped up in a big way and responded effectively to a crisis that literally brought the world to a halt,” said Seary. “The spotlight on performance will lead to increases in budgets, tech investments and board-level involvement, and create new opportunities for practitioners to make their mark at the executive level.”
Analyzing employment trends, Procurious found that 20% of supply chain and procurement departments experienced job cuts and 23% of departments were forced to take pay cuts. However, go-forward job confidence remains high. On a scale of 1 – 5, weighted job confidence for the next 12 months is a 3.96—meaning employees are more confident than not.