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The current crisis is very different from that of 2008, with panellists agreeing that once demand begins reappearing, trade will quickly recover. How different the industry will look after the crisis is another matter – with changes from an operational and technological perspective set to stick or further develop to transform the entire trade ecosystem.
Societal attitudes are also set to heavily impact the industry – including the possibilities of increased working-from-home practices or changes in childcare preferences. These will undoubtedly help boost technological adoption across the industry, such as digital signatures and electronic documents. These changes will not happen overnight, however, and it is likely that for some time the industry will work in a hybrid mode – “straight through the printer, rather than straight-through-processing,” concludes Schmand.
More fundamental changes to the way enterprises interact with their customers and supply base will also take place, Matthew Burton, EY EMEA Supply Chain Leader explains. “It is all very well keeping an eye on your own enterprise, but more companies and leaders are recognising early on that it won’t survive if their customers of supply base don’t as well.”
Deepening a company’s understanding of its supply chains and reassessing the geographic concentration of suppliers will become a major focus for many organisations post-Covid-19. “Complex global supply chains have largely been tuned for cost and speed. What the Covid-19 crisis revealed is how brittle they are,” says Burton. As a result, companies are having new conversations about how to balance cost efficiency and speed while improving resilience. This must be balanced with plans to keep existing business going and so will involve a three-step process for supply chains – protecting supply, restarting operations, and building resilience.
Visibility over the supplier base is the first priority in achieving this objective – supporting them through the crisis, not only for the benefit of the buyer, but the supplier as well. Next, operational decisions will need to be made as lockdowns lift. What production to restart first? How to implement new health and safety protocols as this ramps up? Finally, and perhaps most importantly, the entire supply chain needs to be re-examined to increase resilience, assessing what changes might be needed in terms of footprint, integration and supplier networks.