Lingering geopolitical conflict, raw material shortages, facility closures, changing customer habits, among others continue to stretch supply chains, pushing organisations under pressure to remain profitable.
According to a new report, less than 20 per cent of global organizations feel equipped when it comes to dealing with disrupted supply chains.
In Nigeria, however, access to cash remains a challenge for many businesses and industrial firms as the latest Purchasing Managers’ Index (PMI), which is compiled by S&P Global, eased to 44.7 in February from 53.5 in January.
The PMI report stated that the cash shortages led to business conditions deteriorating markedly, ending a 31-month sequence of expansion, adding, “the decline in operating conditions was the sharpest since the survey began in January 2014, excluding the opening wave of the COVID-19 pandemic in the second quarter of 2020.”
Readings above 50.0, for the PMI report signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.
The report said: “The most severe impacts of cash shortages were seen with regards to output and new orders, which both fell substantially as customers were often unable to secure the funds to commit to spending.
The decline in new orders was the first since June 2020, while the fall in output ended a seven- month sequence of growth. In both cases, the reductions were the most pronounced in the survey’s history, apart from during the opening wave of the COVID-19 pandemic.”
Exacerbated by the pandemic and recent geopolitical tensions, the report noted that it is no secret that the availability and transportation of materials and products has faltered. If large organisations have felt the strain, then small- and medium-sized enterprises will surely have, too.
Recent findings from the Capgemini Research Institute (Capgemini) are quantitatively backing that up. Three-quarters of organisations have been impacted by myriad factors (closing facilities, supply chain disruptions, employee absence, and remote work in the past three years – just to name a few), and only one-in-five of those feel like they can bounce back.
The report, which gathered online responses from 1000 organisations across many sectors and conducted in-depth interviews with industry leaders, suggests that investing in supply chains is critical in order to meet future demands.
Over the next three years, organisations participating in the survey say they will plan to increase their investment in supply chain transformation by 17 per cent, and expect to double their business outcomes in terms of growth, profitability, and sustainability.
The latter was outlined as particularly important in the report, with supply chains currently accounting for over 90 percent of an organisation’s greenhouse gas emissions. Automation and robotisation were also highlighted as important factors to boost operational efficiency.
“There are numerous building blocks that need to come together to create a future-ready supply chain network and provide differentiated offerings that customers are looking for,” stated Mayank Sharma, Global Supply Chain Lead at Capgemini.
“The last few years have highlighted the need for organisations to build agile and resilient supply chains, not only to cope with disruptions but also to help them stay ahead of the curve, especially from a sustainability perspective.
“It is clear that there’s no one-size-fits-all solution, but organisations that lay the foundation for a data-driven, technology-enabled, scalable, and sustainable supply chain are the ones that will reap the most impressive returns in terms of driving improved customer loyalty, creating more business value and meeting sustainability goals.
