A path towards supply chain flow recovery

Apr 29, 2020
Innovation

For the past two months, many European nations’ healthcare systems have been engaged in the battle against COVID-19. The pandemic has disrupted life on our planet faster and more severely than any other event in recorded history, forcing many governments to close borders and place entire countries into confinement; aiming to shield overwhelmed medical centers as the global death toll skyrockets into the hundreds of thousands.

Countless men and women working in plants, warehouses and transporting goods are going to considerable lengths and overcoming significant barriers to ensure communities remain well stocked with essential products.

However, many industries have experienced some dramatic declines in their supply chain activities, according to our Shippeo real-time supply chain visibility network data, with Automotive & Transport manufacturing falling to an astonishing 7% of normal activity within the space of 3 weeks. In the same vein, sectors like Machinery, Equipment & Engineering, Construction & Building Materials and Non-Food Retail all experienced severe declines.

Food, Beverages & Tobacco carriers are now operating at 101% of normal levels. Grocery stores and supermarkets have remained open throughout lockdown periods, with retailers able to quickly adapt their operations to guarantee safety of staff and shoppers while in store. The increased demand has been caused by a few factors:

• An increase in home cooking with the closure of restaurants and cafes

• Panic buying leading to stockouts and increases in retailer order quantities

• A surge in online shopping and home deliveries

Construction & Building Materials collapsed to just 4% three weeks into lockdown, since all non-essential construction projects and sector retailers and suppliers were ordered to cease activities. For the past 3 consecutive weeks, activity has steadily increased to 23%, as some construction work begins to restart, with deliveries enabled by new social distancing and safety protocols.

Automotive & Transport has experienced a sharp decline, having been highly impacted by lockdowns. Plants and production lines were halted due to both workers having to stay home and the severe disruption of parts shipments, often manufactured in Asia. The complex nature of ‘just in time’ supply chain operations, which rely on the health of many upstream flows, are making it difficult for the industry to restart. Supply chain activity remains low at 5%.

Machinery, Equipment and Engineering transport activity has gently climbed to 35%, as shipments of raw material and spare parts, often needing to cross borders, slowly recommence.

Non-Food Retail has been highly impacted due to the forced closure of physical points of sale but some retailer initiatives, allowing customers to make purchases online and safely collect items at stores, have resulted in supply chain activity increasing to 22%.

With the average supply chain activity across all sectors rising from 30% to 38% within the past week we are now seeing some positive signs of recovery, but there is still a long road ahead.

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