2X2 MATRIX -IMPACT OF COVID-19 ON DIFFERENT INDUSTRIES
Mindset shifted from Luxury to Necessity (Question of survival) COVID 19 IMPACTS Reputation of company(Either vendor /customer) depends on Continuity in Delivery & Consistency in quality Procurement professionals are Managing Financial implications (cash flow of company)
Travel restrictions in many countries leading to grounding of airplanes AVIATION/AIRLINE Economic Loss within the Industry – upto $118 B till date Airlines are requesting government support Jobs and cost cut down
9.7M pbd drop in Demand. OIL/GAS Price has fallen by 70% Price expected to go below USD 20 bbl and Hits Negative as well
Downward pressure on Products Demand Financial Impact MANUFACTURING major global supply chain disruptions for raw metrical etc social distancing in workplaces that are typically worker-dense (e.g., manufacturing plants, warehouses, material movements and logistics, etc.)
disruptions are minimal as food supply has been adequate and markets have been stable so far. However, we have already seen challenges in terms of logistics F&B bottlenecks restrictions of movement, as well as basic aversion behavior by workers, may impede farmers from farming and food processors Closures of restaurants and less frequent grocery shopping diminish demand for fresh produce and fisheries products, affecting producers and suppliers Border closures, quarantines, and market, supply chain and trade disruptions could restrict people’s access to sufficient/diverse and nutritious sources of food, especially in countries hit hard by the virus or already affected by high levels of food insecurity.
Global demand for voice and data increased. TELECOM Impacts planned investments particularly 5G 80% of network equipment are chinses Telcos may face issues with cash flow in the long term, similar to other industries Leading to Collaboration between competitors
Global growth is at risk. BANKING People and businesses are risk averse which would cause a sharp fall down in demand. Long term impact and industry transformation in the horizon.
Demand for cars is likely to be deferred or AUTOMOTIVE: dropped given low consumer confidence, subdued economic activity, lower disposable income and higher prices. Demand for commercial Vehicles will be dependent on growth in Gross Material Products(GMP), which is expected to be slower. Component dependency will create supply side disruption.
ENTERTAINMENT The Biggest concern is the likely continuation of social distancing measures to avaid the risk of any relapses. Revenues from advertisements will be dependent on revival of the aggregate demand in the economy
Even when the travel bans are lifted, both foreign TOURISM & HOSPITALITY tourist arrivals and domestic tourist movements are expected to remain very low because of heightened risk aversion, measures related to social distancing and lower disposable incomes Slowdown in the tourism sector will have knock-on effects on hospitality. occupancy rates may remain very low untill Q1 2021 In an effort to increase and improve the bottom lines, many business are expected to cut down travel and accommodation costs for their employees.
Slow demand due to lockdown in many countries but resilient for certain categories due to Panic Buying Sudden surge in demand for online delivery for essentials (labor shortage is a concern) E-COMMERCE Clearly mark out of stock items and ensure they cannot be ordered. During times of uncertainty, customers need the reassurance that items are in stock and will be shipped if they are ordered. If items are out of stock, provide a realistic ship date Distributor anticipates slower sales
BEST PRACTICES TURNED 1)Just in Time & Inventory management TO WRONG DUE TO COVID 19 2)Hedging 3)Monopoly vendors with strong contracts(outside of UAE) 4)Take or pay agreements 5)Orders placed to L1 vendor through E-auction (availability of materials /transit raw materials got held up) 6)Forecast accuracy
Identify at-risk suppliers and HOW TO REDUCE THE gauge their ability to meet demand. Evaluate and measure IMPACT: the risk and plan to mitigate the risk through alternates Find new sources of supply quickly. Co-ordination &Communication with all the internal & external stakeholders plays main role Mitigate disruption and plan for what comes next. Prepare a Roadmap for Business continuity plan/risks
BALA ANUSHA Procurement Manager RAK Ceramics Email : Balaanu.u@gmail.com https://www.linkedin.com/in/balaanusha/
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