Pandemic exposes manufacturing supply chain weaknesses, report finds

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CHICAGO — June 8, 2021 — Nearly all respondents (93%) to a recent industry survey said they experienced supply chain challenges as a result of the COVID-19 pandemic. Further, 76% of respondents acknowledged that the pandemic has exposed gaps or weaknesses in their supply chain, and 77% of companies are requesting changes from their suppliers. The Supply Chain Resiliency report from Sikich and IndustryWeek explores the pandemic’s impact on manufacturers’ supply chain strategies and how companies are responding.

“While the COVID-19 pandemic created many challenges for manufacturers, it also gave companies an opportunity to identify and address weaknesses in their supply chains,” said Debbie Altham, senior director on Sikich’s technology team. “As they try to put the pandemic behind them, manufacturers need to seek better visibility throughout their distribution networks and improve supply chain efficacy by strategically implementing advanced technologies.”

The top pandemic-related supply chain challenge, affecting 73% of survey respondents, was late deliveries from suppliers. More than half of manufacturers also struggled with inventory shortages or outages (63%), missed or late deliveries to customers (61%), and increased inbound supplier lead times (58%). As a result of these obstacles, manufacturers are taking the following steps:

  • 45% are diversifying their supply base
  • 17% are investing in supply chain visibility technology
  • 16% have switched logistics providers or are re-evaluating current suppliers
  • 15% are consolidating suppliers

The survey also found while 10% or less of respondents’ supply chains are currently offshore, companies are likely to decrease their percentage of offshore suppliers over the next five years.

Manufacturers eye technology as solution to supply chain issues

Many of the manufacturers surveyed identified technology as a key to overcoming future supply chain challenges. Nearly two-thirds of survey respondents (63%) plan to increase their investments in technology – including robotics and automation, CRM software, and demand-planning software.

“Advanced cloud-based technology can help manufacturers improve customer relationships, inventory management and speed production,” added Altham. “Strategic implementations of advanced technology can help manufacturers overcome their pandemic-related struggles and improve supply chain operations, as they look beyond the pandemic.”

For the Supply Chain Resiliency survey, Sikich partnered with IndustryWeek to survey more than 130 manufacturing leaders from companies across sectors, including industrial, automotive, telecom, consumer goods, aerospace, chemicals, health care and more. Click here to download the full report.

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