The Coronavirus (COVID-19) pandemic has shown the vulnerability of the current supply chain model and had an extensive impact on the manufacturing industry’s global supply and transportation networks. Global supply chains are forecast to become more regionalised with greater share of production moving to developed economies, while digital and automation tools would make the industries more resilient to future shocks.
55% of the companies in the Euromonitor International Voice of the Industry COVID-19 survey indicated that the COVID-19 outbreak had an extensive impact on their operations. Geographically, the virus outbreak largely affected business in North America, Europe and Asia.
Industries relying on efficient transportation networks, such as food products or pharma, have the most vulnerable supply chains. Unexpected transportation bottlenecks can have a domino effect on global operations.
According to the results of the Euromonitor International Voice of the Industry COVID-19 survey, over the next six months almost 25% of companies expect a shift towards greater supply chain localisation and diversification. The supply chain diversification efforts are expected to accelerate over the next 2-3 years.
Accelerating diversification and regionalisation of supply chains could erode China’s dominant position in the global supply chain. Emergence of new technologies that help to reduce operating costs and government support for industrialisation are expected to move part of the production from China to Europe and North America.
Increasing regionalisation of supply chains and manufacturing reshoring back to developed economies could have an adverse effect on emerging countries. Lack of foreign capital and investments could impede industrialisation efforts and slow down socioeconomic development of emerging markets.
Voice of the Industry COVID-19 survey plan to implement digital strategies to better cope with similar disruptions in the future. Digital tools are expected to help companies to better track their supply chain and adjust their production in times of emergency. 57% of respondents in the Euromonitor International
During the COVID-19 outbreak, many B2B customers switched to online buying and are likely to continue buying online after the lockdown. Companies are addressing customer behaviour changes, with 47% of respondents in the Euromonitor International Voice of the Industry COVID-19 survey planning to accelerate e-commerce investments.
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