Pandemic triggers greater focus on supply chain risks

supply chain risks

The supply chains in 40% of multinational corporations were unable to cope with the crisis created by the COVID-19 pandemic. This has dramatically changed attitudes to risk, according to a report titled ‘Real-time Intelligence and the Future of Supply Chains’ by the network-native digital services company Orange Business Services.

The research was conducted among 320 senior executives from multinationals in the manufacturing, transport and logistics sectors across 18 countries. Some 83% of the survey respondents say that, compared with 12 months ago, they are now more aware of supply chain risks such as raw material shortages, manufacturing shutdowns and transport blockages. The pandemic has made them realize they need more speed, agility and innovation to cope with change and safeguard their survival.

Reinforcing the supply chain

According to two out of five respondents, their supply chain could not cope at the height of the crisis. Building resilience and sustainability into supply chains through digitalization and real-time data insights is clearly a priority for transformation strategies. Nearly eight out of ten respondents say they have accelerated their digital supply chain strategies. In addition, almost 50% of companies surveyed indicate they are now looking at overhauling their risk procurement and risk management strategies within the next two years.

Automation is set to increase in prominence to handle rapidly changing demand levels. Currently 42% of enterprises surveyed say they are using automation to manage risks, but this is set to double over the next two years. Technological enablers, including artificial intelligence (AI), cloud, 5G and big data analytics, will play ever-important roles in strengthening supply chains through enhanced planning and execution. Collecting and sharing real-time data will improve efficiencies and visibility across the entire supply chain, while supporting relationships between suppliers and manufacturers for smart decision-making.

Fragile ecosystems

“The global health emergency has made organizations accept the fragility of their ecosystems. Critical gaps must be plugged to ensure end-to-end visibility on a global scale and minimize the risk to the business,” comments Kristof Symons, Executive Vice President International at Orange Business Services. “Digital technologies and capabilities are the key in allowing enterprises and their partners to reimagine their supply chain securely.”

Reenergizing sustainability programmes

Although the crisis has pushed sustainability down the corporate agenda, 59% of survey respondents regard not running an ethical and sustainable business as a significant risk affecting their bottom line. Moving forward, 85% of respondents say their company is investing to become more sustainable. This includes new data collection technologies to give better insight into sustainability metrics and managing and controlling factors such as energy usage. “Smart factories can realize a 30% saving in energy costs, for example. Digitalization and data collection will be primary enablers to become more sustainable and save costs as well as the planet,” adds Symons.