Covid-19 Procurement Impact: Responses & Strategies Survey
Covid-19 Procurement Impact: Responses & Strategies Survey
Understanding the impact of Covid-19 on Procurement
Procurement functions have always been the heart of operations, managing complex supplier relationships and central to business profitability. With the impact of Covid-19, their expertise is now central to business survival and recovery.
The Procura Covid-19: Procurement Impact: Responses & Strategies survey was completed by over 200 senior procurement and finance leaders and examines the effect of the Covid:19 pandemic, the immediate responses to the crisis, and strategies for the recovery.
- 87% of businesses have been negatively impacted,
- A third of businesses are dealing with cashflow issues
- Significant impacts to a high percentage of businesses’ supply chains,
- High levels of supplier financial pain, with 14% dealing with supplier insolvencies
- Strong upward price pressure
Procurement Leaders are employing a wide range of commercial and logistical responses; from collaborative supplier support, to commercial renegotiation and re-contracting, through to rapid sourcing of new suppliers and complete supply chain reconfiguration.
The survey also highlights a timeline of challenges that will need to be addressed as economies unfreeze and businesses restart
- Credit and cashflow causing friction in supply chains
- Supplier liquidity problems and supplier insolvencies
- Cost inflation manifesting in supplier price increases
Underpinning the responses, is a common view that procurement functions must become more agile, flexible, and responsive
Looking forward, Procurement Leaders outline a range of strategies. The themes are primarily around strategic de-risking; widening the supply base (developing new suppliers and supply routes, dual and multi-sourcing, near-shoring and domestic sourcing), and then monitoring and managing – not just tier-one suppliers but entire supply chains.
We provide eight actionable recommendations to guide procurement strategies in the next phases of recovery. You can download a copy of the report, insights and recommendations below:
If you would like to discuss any of the challenges outlined in this article or if you would like some expert support, please get in touch on+44 (0)203 693 7275 or Email us: info@procuraconsulting.com