For supply chain distributors and manufacturers, sales across virtually every industry are expected to take (an even further) nose dive in Q2 2020. Some sectors are looking at an average of -11.3% sales, with some expecting to contract up to 20%.
When investment firm Baird surveyed 620 companies with aggregate revenues north of $100 billion about the actions they are taking in response to COVID-19, nearly half (47%) report that they are reducing future inventory orders.
Baird’s research, which spanned 18 product categories found that, in addition to inventory reduction, work-from-home orders and more drastic measures like Reductions in Force and furloughs, there are 5 supply chain industry trends that are emerging from Coronavirus:
- Interruptions and Closures are Broad-Based
- Lead Times are Surging Amid Wide-Reaching Supply Chain Disruptions
- Competitive Pressures are Expected to Rise Dramatically
- Cash-Flow Concerns are on the Rise — Especially Accounts Receivable
- Significant Share Shift Possible Amid Profitability, Solvency Concerns
Read more about the MDM-Baird Distribution Survey here.
Learn More About Inventory Reduction
If inventory reduction is a key focus for you right now, schedule 15 minutes with one of our experts. We can share how we help our customers cut inventory an average of 10-20% while maintaining or even improving customer service levels, in less than 90 days. One of our customers recently told us they are paying for a future WMS project with the cash they freed up from implementing our supply chain planning solutions.
Got a craving for more in-depth supply chain trends? Grab the 2020 State of the Wholesale Distribution Supply Chain survey with SmartBrief: