Two-thirds of organisations plan to source goods more locally post-pandemic, reducing reliance on the Far East - BCI report

Seventy-three percent of organisations have encountered ‘some’ or ‘significant’ detrimental impacts within their supply chain due to COVID-19, according to research from the Business Continuity Institute (BCI). 

This was, in part, caused by the fact that less than half (49.5%) of businesses had plans in place that sufficiently covered them for the supply chain issues that arose during the first few months of the coronavirus.

The report - COVID-19: The Future of Supply Chain - does, however, highlight that many lessons have be learnt, and that organisations will be taking steps to ensure their supply chains are more robust for the next incident or crisis.

Over half (57.2%) will look to diversify their supplier base post-pandemic, for many organizations this means reducing their reliance on the Far East (29.9%), and a further 13.1% from China. There will also be a shift towards sourcing goods more locally (66.2%), and others will look at additional stockpiling.

Other areas organisations have highlighted for improvement include – due diligence deeper into their supply chains, although this has largely been carried on tier 1 suppliers, improvements can be made on tier 2 suppliers and beyond; and improved documentation, including specific pandemic plans that include supply chains.

BCI head of thought leadership, Rachael Elliott commented: “With three out of four organizations reporting their supply chains have been adversely affected by COVID-19, this report serves as a timely overview of the issues organisations have suffered throughout the pandemic. It serves as a benchmark to organisations, but also offers suggestions on measures organisations could consider implementing into their future supply chain strategies to help similar issues reoccurring in the face of a second wave or future global crisis.”

”Whilst the pandemic continues to wreak havoc with supply chains globally, it has also brought opportunity: many organizations are already actively investing in new technologies to help with activities such as supply chain mapping, whilst others have developed cross functional teams – which they plan to keep post-COVID – to work together to help combat supply chain issues in a more organisationally cohesive way.”

Other key findings from the report included:

  • There has been a discernible increase in the use of technology during the pandemic to help with supply chain planning and strategy: 57.1 percent of organisations are using their own internal systems and spreadsheets for supply chain mapping, whilst 13.5 percent are using specialist tools. Of those who are not currently using tools, a fifth are now considering purchasing a specialist tool.
  • Local sourcing will become more mainstream: two-thirds of organisations (66.2 percent) plan to source goods more locally post-pandemic. A further fifth will be engaging in more stockpiling post-pandemic.
  • 12.4 percent of organisations intend to increase their use of third-party logistics post-COVID-19.