New EIU Report Shows Scale of COVID-19 Impact on Supply Chains
In a new survey from Economist Intelligence Unit (EIU) with sponsorship from Citi, clarity has been given regarding which industries were hardest hit by the various supply chain disruptions in 2021 — most of which were directly related to the COVID-19 pandemic, CNBC reports. While some of the results were expected, the sheer scale of the impact is certainly significant enough for supply chain managers to take notice and evaluate their own supply chains’ ability to mitigate disruption.
EIU surveyed a total of 175 supply managers between February and March this year, with 70% of the respondents located in Asia. The industries covered from the survey included footwear and apparel; food and beverage; manufacturing; IT, tech, and electronics; and healthcare, pharmaceuticals, and biotechnology.
As might be expected based on recent news coverage, the auto industry saw the most disruption. According to the survey, 51.7% of respondents from the auto industry said disruption to their supply chains have been “very significant.” The footwear and apparel industry saw the second highest proportion of “very significant” responses, with 43.3%. Interestingly, the IT, tech, and electronic sector saw the least proportion of similar responses with, 6.7% indicating disruption has been “very significant.”
“While industries are responding differently to the range of challenges they are facing, they are doing so with a common goal in mind – to make their supply chains more resilient. Increased investments in technology and digitization will help companies build resilience while advancing digital trade and supply chains more broadly, areas that have been relatively slow in keeping pace with technological change,” said Rajesh Mehta, Asia Pacific Head, Treasury and Trade Solutions, Citi, in the report.
Looking toward the future, there is a majority agreement that in order to mitigate such disruptions in the future, changes need to be made. Over half of respondents surveyed (54%) acknowledge that they must make significant changes in order to effectively manage supply-chain disruptions over the next five years. Additionally, 51% believe that they need greater visibility and control over their supply chains. Of those surveyed, only 22.9% say they are not making any significant changes to their supply chain strategies.