Businesses Seek More Control of Supply Chain, Survey Finds
The idea that the COVID-19 pandemic shock will “only accelerate retrenchment and deglobalization appears premature. The survey points to supply chains being reshaped, rather than reshored,” according to HSBC, which conducted a survey of 2,604 businesses in 14 countries between late April and early May.
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The survey found that 5% of the businesses had shuttered permanently due to the COVID-19 crisis, and that auto, wholesale and retail businesses were affected the most by the pandemic. The replies from the 5% that closed were excluded from the results within in the report.
HSBC asked about how businesses want to change their supply chains as a result of the shock. About 20% said they intend to increase trade within their own regions. But of the two-thirds of businesses that said their top supply chain priority is to increase control, changing the geography of where they buy was not the most common concern. About 26% of companies said they want to work in countries that are more stable; 22% said they want to own more of their supply chain; 30% said they will review suppliers' ability to withstand shocks; and 31% said they will secure critical suppliers. About 44% of businesses said their top priority is to increase supply chain transparency.
“Businesses feel closer to their suppliers and have taken active steps to support partners,” the report said.