Supply chain risk mitigation top priority for CFOs during crisis, finds PwC
Supply chain security will be the top priority for businesses looking to stabilise their operations post-Covid-19, according to PwC’s latest coronavirus impact report.
“Most CFOs are still considering cost containment measures, but they are also planning various actions around work sites, supply chains and investments that will position their company to succeed in the post-crisis world,” PwC says.
In a survey of CFOs, PwC found 52% will prioritise alternative supply chain sourcing options and 50% will analyse the financial and operational health of suppliers.
“Organisations with supply chains that are highly integrated both internally and externally will be better equipped to develop alternative sourcing or extend visibility to suppliers,” PwC says, adding that such companies have already automated most of their supply chain processes.
German CFOs are most likely to prioritise deeper visibility of suppliers’ networks as part of risk management and scenario planning to build resilience. In Switzerland and Portugal, CFOs are more focused on improving risk protection measures, PwC says.
By industry, CFOs in financial services are more likely than other sectors to plan greater use of automation to improve decision making. Energy, utilities, industrial manufacturing and automotive CFOs place understanding the health of their suppliers as their number one priority. While health industries, retail and consumer CFOs are more likely than average to focus on understanding demand.
PwC also found that many companies are considering changes to health and safety when businesses return to work onsite. Some 64% of firms are planning changes to safety measures and 55% will reconfigure work sites to allow for distancing. A further 46% plan to increase automation.
Naturally, the biggest concern for CFOs is the financial impact of the pandemic. PwC found 70% of those surveyed are greatly concerned. However, PwC found that in some countries, less than 50% of CFOs are greatly concerned about the economic impact. CFOs in Denmark, Switzerland and Germany reported lower levels of concern than the average. Only 48%, 47% and 44% respectively are greatly concerned about the economic impact of Covid-19.