Two fifths of business leaders are concerned about their suppliers in the wake of Covid-19, according to research.
A global survey showed that nearly 43% of companies questioned were concerned about their suppliers’ ability to fulfil orders. The study of more than 600 senior financial decision makers also found that 40% were concerned about their suppliers’ business health.
Coupa Software’s study also found that 37% of respondents were concerned about how quickly their company could change suppliers if needed.
The study found that although businesses were taking active steps to try and mitigate the negative effects of the pandemic on their supply chain, not all were well equipped to do so.
The survey found that 40% of businesses were using the downturn to re-evaluate supplier selection. Just under half (47%) said they had diversified their supplier base, while 41% said they had shifted to new suppliers based on their location.
Coupa said businesses should be using digital technology to mitigate against supply chain threats and optimise their supplier base.
John Callan, senior director EMEA at Coupa, said the resurgence of the coronavirus, leading to regional lockdowns, meant that uncertainty was set to continue, leaving many businesses with an urgent need to increase resilience and diversify supply chains.
“Understanding the health of your suppliers is critical in uncertain times, as these suppliers will be key to getting your business back on track,” he said. “It is vital that businesses are digitising their supply chain so that they have full visibility and control.”
He said the survey found that three quarters of businesses were relying on traditional or outdated methods to manage suppliers and business spend.
“Without being able to access detailed insights into their suppliers, nor the ability to quickly assess and source new suppliers, procurement teams won’t be able to make decisions with confidence or with the speed they need to respond to rapidly changing market conditions,” said Callan.
The survey was conducted by Sapio and included responses from 667 senior finance decision-makers from companies with 500-plus employees based in countries including the US, UK, France and Germany.
Source: Supply Management