World Economic Forum
Helping the Supply Chain Rebound from COVID-19

Helping the Supply Chain Rebound from COVID-19

May 6, 2020
In a study by the World Economic Forum, supply chain executives identify strategies and processes to adapt to the pandemic.

In the wake of COVID-19, how can companies increase the resilience in their supply systems? What are forever changes that companies need to adapt to, to ensure long-term success?

The World Economic Forum, in collaboration with Kearney, asked  C-level executives from different industry sectors how they are responding to the  COVID-19 crisis.

The result of those interviews is a white paper entitled “ How to rebound stronger from COVID-19 Resilience in manufacturing and supply systems.” The findings are based on interviews with 400+ senior executives in operations and supply chain management from different industry sectors.

The survey found that global multinationals were seeing disruption on the supply side with the emergence of the crisis in China in early January. Most executives surveyed indicated that they were slow to respond to initial supply-side disruptions. When asked, global respondents, rated their businesses an average of 7 out of 10 in terms of how the crisis is disrupting their companies’ supply network, including suppliers and manufacturing centers. Furthermore, the respondents scored their businesses an average of 5 out of 10 when asked how well they had adapted to the impact of COVID-19.

While companies overall felt their supply chain network and organization adapted moderately well to the crisis, smaller companies scored the response of their supply chain network and organization 48% lower than did large companies. “This echoes statements from our structured interviews where large companies were able to leverage their investments in supply chain visibility processes to mitigate some negative impacts,” the report said.  

Five distinct strategies towards more resilient supply systems emerged:

1.  Adopting the overall supply chain set-up by carefully managing interdependent levers such as dual sourcing, complexity reduction and localizing

2.  Doubling down on investments in advanced manufacturing technologies that were attributed to an essential role in ensuring a quick reaction to the crisis

3.  Adjusting the operating model to allow for a more flexible and decentralized manufacturing organization with a consistent risk management system in place

4.  Redefining external relationships and capturing new opportunities from cross-industry collaboration models

5.   Reviewing and challenging the product portfolio to reduce complexity and refocus on key strategic directions

When looking at strategies to prepare for long-term business success, these five emerged:

Rapid tailoring of manufacturing and supply systems to changing consumer behavior

Agile manufacturing and supply system setups enabled by advanced technology

Logistics coordination across and within global value chain

Adoption of new ways of working and governing to increase manufacturing resilience

Shared responsibility and collaboration among companies and authorities to address social and environmental challenges

Note: The whitepaper offers detailed analysis of all of these trends as well as exploring related topics. View the report here