The Long-Term Consequences Of Knee-Jerk Supply Chain Reactions

In a black swan event such as the pandemic, ensuring business continues to flow not only means mitigating volatility of today. For many businesses along the global supply chain, it may also mean introducing changes that will affect how trade is done well into the future, too. In its recent B2B Payments: COVID-19 Impact Report, a collaboration with American Express, PYMNTS digs into some of the most dramatic and immediate shifts within global supply chains as a result of COVID-19. Unsurprisingly, manufacturers in the food and beverage, cleaning supplies, and medical equipment arenas are facing immense pressure from demand spikes, forcing shifts in their supplier bases, redrawn trade routes, and optimized production and logistics operations. But there could be many long-term consequences of these immediate changes, PYMNTS’s analysis reveals. “The pandemic is forcing B2B firms to rethink how they work with and pay each other, with at least one major brand deciding to accelerate transfers to its smaller vendors to help them survive the economic downturn,” the report stated. “Companies that can collaborate and adapt will be more likely to stay afloat, retain their business partners and come out of the crisis with tighter customer bonds.