Covid-19 Procurement Impact: Responses & Strategies Survey

Managing Partner at Procura Consulting

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.

Conducted during the lockdown and with a view to economic restart, the survey revealed:

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.

Restart will certainly not be straightforward

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.

Procurement Excellence will be a key differentiator for businesses in the recovery from the economic impact of Covid-19

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:

Download Report

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

Covid-19 Procurement Impact: Responses & Strategies Survey