There are a number of various surveys being circulated relative to the impact of the now ten-month COVID-19 impact to multi-industry supply chain teams. Having had a fair amount of experience in either developing, conducting or interpreting quantitative or qualitative surveys, this Editor is very selective in referencing specific surveys to our Supply Chain Matters readers.

As many may be aware, the most important qualifiers for good survey data is the depth and objectivity of the survey questions along with the overall multi-industry sampling and total number of responses incorporated in any particular survey.

The following our two recent surveys that have caught our attention as to the above criteria.

Supply Chain Matters Multi-Industry Supply Chain Perspective

Supply Chain Resilience in a Post-Pandemic World

Global contract manufacturing services provider Jabil has released results of its contracted survey: Supply Chain Resilience in a Post Pandemic World, A Survey of Supply Chain Decision Makers, September 2020.

Acting on behalf of Jabil, research firm Dimensional Research surveyed 715 supply chain professionals among seven unique industries: Automotive and Transportation; Consumer Electronics; Healthcare; Telecommunications; Energy and Industrial; Smart Home; and Retail.  All respondents reportedly had decision-making responsibility for supply chain budgets at an original equipment manufacturer (OEM) manufacturing company with more than $500 M in annual revenue.  The geographic footprint was skewed somewhat toward the U.S. but there was other geographic sampling.

Among the key findings:

A noted 78 percent of multi-industry respondents indicate that the COVID-19 disruption has had the most significant impact on their respective companies in the past ten years, more so than natural disasters, geopolitical and trade instability.

Responding to the question of how effective your company’s predictive supply chain risk management approach was in dealing with COVID-19, only 17 percent indicated that their organization had visibility into coming changes and easily adapted. Nearly 65 percent of responses rated their approach as either acceptable or good. A whopping majority (99 percent) are indicating investment in technologies or services to address the pandemic’s impact on the supply chain.

Regarding which technologies or services companies are considering in addressing COVID-19 impacts, Supply chain network optimization and visualization capability garnered 54 percent of responses, risk management garnered 52 percent,  advanced and demand planning garnered 46 percent. Three other investment areas were noted as business continuity readiness assessment, predictive analytics, response protocol and process applications.

A final rather interesting finding was related to how the pandemic impacted a company’s approach to working with contracted manufacturing partners. The responses seemed evenly split- 35 percent indicating more likely to bring manufacturing in-house for greater control while 34 percent of responses indicated more likelihood to work with large partners that can absorb risk more effectively. A further 19 percent reportedly indicated likelihood to work with smaller partners that have more flexibility. That trending will be important to watch in the coming year.

Overall, we found this report to be rather interesting as to its findings and insights. This report can be downloaded at this Jabil web link. (Email registration is required)

 

Coupa Software Business Spend Index

Procurement spend management technology provider Coupa Software provides a quarterly Business Spend Index that analyzes global indirect spend sentiment and confidence levels. We highlight this index primarily because it analyzes billions of dollars of aggregated and anonymized business spend decisions recorded on the Coupa platform and can be indicator of macroeconomic health.

What caught our eye in the recent BSI Q4 2020 Outlook was the following year over year summarized spending trend data:

  • 29 percent increase in business spending for shipping and freight
  • 41 percent increase in contingent workforce spend
  • 13.5 percent increase in business spending on technology, including hardware, software and services
  • 97 percent decrease in business spending for air travel
  • 22 percent decrease in business spending on office supplies

 

In our various COVID-19 focused supply chain disruption commentaries we have highlighted the significant increases in logistics, transportation and online customer fulfillment costs. A further obvious driver has indeed been needs for additional supplemental workers, added workplace safety and sanitation measures and needs for additional digital based technologies. The Coupa BSI and Q4 2020 Outlook spend data indeed brings visibility to these added costs. (83.5 percent overall, year over year)

However, notice the offset, the significant decreases in air travel and office administration costs. That is likely an indication that increased supply chain and customer fulfillment costs are somewhat offset by reductions in other pre-COVID costs. Businesses may or may not be able to manage overall 2020 expense budgets, but 2021 will be a whole different ballgame.

If ocean container transport, surface transportation and trucking carriers continue to extract significant rate increases next year, there may well be either push back by companies or more drastic needs to reduce other costs including staffing.

 

Two insightful surveys with indications of what is to come in the year 2021.

 

Bob Ferrari

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