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As the panic of COVID-19 began to sink in, we saw consumers flood to retailers to stock up on items like toilet paper. While the TP crisis has settled down, the impact of the pandemic on the supply chain is ongoing and with a second wave of the virus looming over us, further breakdowns in the system will likely be exposed.
Earlier this month, GlobalTranz released the results of a survey of supply chain leaders. Of those surveyed, about ⅓ reported they didn’t feel their company was prepared for the evolving needs in their systems brought on by the pandemic.
“The economic disruption experienced in the last several months has pushed business leaders to make quick adjustments to meet new consumer demands and mitigate delivery problems,” said Bob Farrell, GlobalTranz Chairman and CEO in a press release accompanying the report. “Businesses remain challenged by new demands on their supply chain and need partners that can help them solve issues around sourcing, fulfillment, and final mile delivery.”
A recent survey by Interos asked which of 11 risks, including cyber threats, bankruptcy, tariffs and natural disasters, posed the biggest threat to supply chains, COVID-19 was the clear frontrunner with 57 percent. The survey found that more than 90 percent of supply chain leaders are concerned about what future waves of coronavirus could do to their businesses, and they’ll likely find out sooner than later.
Now, with positive tests and COVID deaths rising rapidly, manufacturers and distributors will be put to the test again. Media outlets are reporting that people are beginning to panic-buy, and those at the head of large consumer retail chains are preparing. During the Yahoo Finance All Markets Summit, Walmart CEO Doug McMillon said the company is working closely with key suppliers to avoid a repeat of empty shelves.
Among the 11 risks, Cyber Threats came in second at 41 percent. Before Covid, a vast majority of security breaches took place in supply chains including attacks suffered by Target and Equifax and things have only gotten worse. Nearly half of those surveyed by Interos said Automation is a priority for their business. Increasing the use of technology increases the chance that something goes wrong.
A survey conducted in June by Opinion Matters found that 80 percent of organizations have had a breach that was caused by one of their vendors. One of the easiest ways to reduce the odds of such a thing happening is to thoroughly vet the privacy and security policies of every supplier – something some companies don’t take the time to do.
It’s important to remember that while very large suppliers have elaborate security measures, the smaller ones may not. Companies need to know who every vendor is and who has access to sensitive data. Doing your due diligence when checking out suppliers is a vital part of assessing potential risks to the supply chain as a whole. According to Dov Goldman, director of risk and compliance at Panorays, taking the time to review those policies can lower the odds of a breach from 66 percent to 46 percent.
With the peak season approaching, 59 percent of suppliers surveyed by GlobalTranz expressed concerns about whether or not they are going to be able to meet customer demands. Half said they believe they won’t see as much revenue during peak season as they have in previous years.
Despite feeling unprepared to handle things in the beginning, more than half of the respondents felt their company has successfully adopted an omnichannel strategy and 77 percent believe that, in six months, their supply chain will have improved.
What adaptations have you made to your supply chain because of COVID-19? Let us know what has worked and what hasn’t for your organization.
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