Corona necessitates changes in supply chains

The global supply chain study by Orange Business Services shows: The global pandemic reveals necessary changes for future-proof supply chains. Around 83 percent of the companies surveyed in this study stated that they are more aware of supply chain risks such as raw material shortages, production stoppages or transport blockages than they were a year ago. Accordingly, the pandemic is something of a wake-up call for companies. In particular, speed, agility and innovation are seen as essential for mastering future challenges. In addition, to ensure survival, building resilience and sustainability in supply chains through digitalization and real-time data insights is a priority within transformation strategies for many companies. In fact, 44 percent of companies plan to launch real-time data initiatives in the next two years.

Strengthening the supply chains

According to the survey, nearly eight out of ten companies have accelerated the digitization of their supply chain. In addition, nearly 50 percent of respondents are considering revising their risk management strategies in the next two years. Also gaining importance is automation to manage rapidly changing demand. In fact, 42 percent of companies say they are using automation to manage risk. The same number (42 percent) plan to do so in the next two years.

The extent to which the pandemic is affecting supply chains is also made clear by the following findings: two out of five study participants say that their supply chain was unable to keep up at the first peak of the pandemic. This is where technology enablers such as artificial intelligence (AI), cloud, 5G and Big Data analytics will play a big role in the future, as they improve supply chains through improved planning and execution. Collecting and sharing real-time data increases efficiency and transparency throughout the supply chain. At the same time, it supports relationships between suppliers and manufacturers to make smart decisions.

"The global health emergency has led organizations to accept the fragility of their ecosystems. Critical gaps must now be closed to ensure end-to-end transparency on a global scale and minimize risk to businesses and organizations. Digital technologies and capabilities are key to enabling companies and their partners to secure the supply chain. Digitization and data capture will also be key enablers to become more sustainable and save both costs and the planet's resources," says Kristof Symons, Executive Vice President, International, Orange Business Services.

New impetus for sustainability programs

Although the pandemic has pushed the issue of sustainability down the corporate agenda, 59 percent of respondents said that a company that is not run ethically and sustainably poses a significant business risk that impacts the bottom line. Smart factories, for example, are capable of saving around 30 percent on energy costs.

Looking ahead, 85 percent of the companies surveyed plan to make investments to become more sustainable. These include new data collection technologies to gain better insight into sustainability metrics, as well as management and control of factors such as energy consumption. 78 percent of companies see sustainability as an opportunity to drive product and service innovation - a key advantage in maintaining competitiveness.

"The pandemic will eventually and somehow come to an end. But climate change, sustainability - these developments and risks will remain for the next decades," explains Erwin Verstraelen, CDO and CIO at the Port of Antwerp. "For example, the European Green Deal will put more pressure on all stakeholders to identify the origin of emissions and minimize their environmental footprint. The supply chain is an important element in this." Should companies live up to their claim, digitally driven sustainable management programs are expected to be nearly universal in the next two years.

Source: Orange Business Services