FUTUREPROOFING THE SUPPLY CHAIN POST-COVID-19

R&C: Could you provide an insight into how the coronavirus (COVID-19) pandemic has affected global supply chains over the past 18 months or so? What key trends would you highlight?

Liddell: The coronavirus (COVID-19) pandemic had an immediate impact on the transport and logistics industry and all companies reliant upon their services were impacted by continuous disruptions to global, regional and local product flows. This includes a radical decline in the number of ships and planes, which severely impacted the volume of imports and exports and increased the price of freight, and limited or no access to source destinations, which reduced the availability of critical materials. The pandemic also caused domestic challenges, including limited food and specialty goods containers, internal country border slowdowns and a reduced number of freight operators. We expect this will continue to be felt over the extended medium to long term.

Clements: Many organisations found themselves in challenging positions where they were unable to get the supplies that they had taken for granted. For example, personal protective equipment (PPE) – suddenly, a simple face mask, face shields, blue nitrile gloves or hand sanitiser became the hottest commodities globally, making the simplest activities and what was considered basic human integrations very challenging.

Agarwal: COVID-19 has impacted supply chains across industries and regions. Most people have not experienced disruptions of similar scale in their lifetime. What has taken everyone by surprise is how fragile the current state of the supply chain is. Industries across the board, from life sciences to consumer goods, to automotive to high-tech, have built their production and procurement capacities focused on single geographies. The existing networks were not able to handle the onslaught of COVID-19 and led to surges in shortages of critical components across multiple sectors, as well as the demand surges for key COVID-19-related products.

Oct-Dec 2021 Issue

KPMG