Of all the challenges brought about by COVID-19, supply chain disruption has been one of the most prominent. It impacted – and continues to impact – both businesses and consumers, with everything from car parts to bread flour struggling to reach the people who need it.
That supply chains would be adversely affected by the pandemic was, of course, no surprise. As soon as news of the virus surfaced in Wuhan, it quickly became apparent that the knock-on effects would be vast.
Manufacturing plants were forced to stop or limit production, transports systems shut down and cross-border movement became difficult to say the least. At the same time, many businesses became inactive; while consumer behaviour changed so radically that some markets exploded while others collapsed.
For each individual business, the question over the past six months has been: can we get our hands on the goods we need to operate as normal, and can we get our product into the hands of paying customers?
In many cases, unsurprisingly, the answer was an emphatic “no”. In fact, One World Express commissioned a study among over 500 UK businesses in late July, finding:
- 36% have seen another company within their supply chain close down as a result of COVID-19
- Since March, 42% have needed to source new suppliers or vendors after the pandemic cut them adrift from their usual partners
- And 56% have had to pivot the way they deliver their product or service because they were unable to sell to their usual customers or in their usual way
However, this disruption to supply chains should not be seen as overtly negative. In reality, it has forced businesses to reassess their operations and the partners they work with; and consider how to improve efficiency or develop a more effective business model.
This, too, was uncovered in One World Express’ recent study. Of the 500 companies we spoke to, 41% said that, in forcing them to find new partners, the pandemic has actually led them to superior alternatives to those they had previously worked with. Similarly, 35% said they have made cost savings by sourcing cheaper suppliers to those that they had relied on before the lockdown period.
Overall, 57% of UK businesses believe the pandemic has provided the incentive they needed to make positive changes to their business model. What’s more, a slim majority (52%) are confident that they will see positive growth in their turnover in the second half of 2020.
In what has been an incredibly testing year for the businesses around the world, the statistics above provide reason for optimism. Our research demonstrates that the UK private sector is actually seizing new opportunities in the midst of the pandemic chaos.
No longer able to operate in the way they did for so long, businesses have been forced into change – evidently, for many this will be lasting change for the better. In amongst all the negative news surrounding the private sector, this is something to be welcomed.