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The PwC CFO Survey Series: Sustainable Supply Chain

PwC asked CFOs in Belgium to weigh in on the ways in which the current crisis is impacting their supply chain and their plans for a post-COVID-19 world.

The PwC CFO Survey Series

The effects of the current economic crisis due to the COVID-19 pandemic are being felt by businesses across the globe. To gauge their impact on Belgian companies, PwC Belgium has carried out a series of surveys, gathering the opinions of a group of CFOs from different sectors. The results have been published in a set of reports revealing the effects of the crisis on finance, operations, workforce and supply chains.

Survey 5: Sustainable Supply Chain

This report covers the findings on the effects of the crisis on a selection of Belgian companies’ supply chains, and their plans and predictions for a post COVID-19 world.

Download the full report

CFO Survey Series Confidence Barometer

Each edition of the PwC CFO Survey Series begins with two barometer questions to gauge CFOs’ predictions about the Belgian economy and company revenues over the course of the surveys. 

Among respondents to PwC’s CFO Survey 5: Sustainable Supply Chain, 60% collectively believe that the economy will improve moderately or greatly in the next 12 months, a sharp rise compared with a collective 36% in the survey of October.

In line with respondents’ growing optimism in Belgian economic growth in the coming 12 months, they also believe that their revenues will increase. 73% of respondents believe that their revenues will remain stable or increase.  Since the first survey results in June, there’s been a steady increase in respondents’ optimism in both their revenues and in economic growth.



What are your organisation’s predictions in terms of revenue in the coming 6 months?


Revenue fall of more than 20%
%
Revenue will fall within 10% - 20%
%
Revenue to fall 10% of less
%
Stable of increased revenues
%


Do you believe Belgian economic growth will improve, stay the same, or decline over the next 12 months?


Decline moderately
%
Stay the same
%
Improve moderately
%
Improve greatly
%
  • 53%

    have a contingency plan to ensure the continuation of supply.

  • 40%

    have accelerated their digital transformation projects in response to the crisis.

  • 80%

    don’t believe that their supply chains will become more localised as a result of the pandemic.

  • 20%

    have implemented real-time track and tracing or crm software-based supply chain technologies.

Ensuring the continuation of supply

It comes as a surprise that despite all the disruption caused by the COVID-19 crisis, only 53% of respondents have a contingency plan to ensure continuation of supply. Our experience shows that the extent of preparedness varies significantly from industry to industry. Companies in sectors already well versed in ecommerce tend to be better prepared than those that had to suddenly adapt. The latter finding themselves with systems not designed for the massive volumes they had to swiftly deal with and accustomed cost-efficiencies no longer available.

To remain fully operational, businesses must pressure test their systems to assess their robustness in the event of increased or decreased volumes.



Do you have a contingency plan to ensure the continuation of supply?


Yes
%
No
%
Only for key suppliers
%
Limited to local suppliers/vendors
%
Peter Vermeire, Partner at PwC Belgium

“Whether the COVID-19 crisis has had a negative or positive effect has varied from sector to sector. For some, demand has risen, leading to increased volumes, but via different channels. Others have experienced sharp decreases. The challenge faced by most companies is how to plan for the future, and how to calculate costs. With the exception of perhaps the pharmaceutical industry, it’s a brave person who dares predict what will happen in the coming months."

- Peter Vermeire, Partner at PwC Belgium

Focus on digital transformation

40% of respondents have ramped up their digital transformation projects in response to the COVID-19 crisis.  PwC research shows that these projects primarily focus on the front end - the customer - and this has an impact on the supply chain. Companies need to consider integrating buffers should their supply chain be disrupted. 

A knock-on effect of prioritising digital transformation projects is that other investments have been delayed.  For example, in a hospital, the massive demand for face masks will likely lead to the delay of less urgent projects such as upgrading an operating theatre. This, in turn, puts pressure on the supply chain as demands change. Nowhere is this more evident than in the retail and consumer goods sector.  Many stores had to temporarily close their doors as they were unable to handle the digital ordering process. 

The need to build resilience in such turbulent times is reflected in almost half of the companies implementing programmes to strengthen their supply chains in the event of further disruption. 



What changes to your supply chain have you made post crisis?


Reassessment of technology footprint
%
Reassessment of system-wide planning capabilities
%
Implementation of dedicated programmes to build resilience
%
Acceleration of digital transformation projects
%
Maintenance of larger stocks
%

In line with the findings in previous questions, most respondents are still lacking an integrated approach to their supply chains. With only 20% scoring on either integration with customer relationship management (CRM) or real-time track and tracing, there’s clearly still some way to go for many Belgian companies to optimise their supply chains.

Whereas warehouse management systems are of fundamental importance (87% have implemented such systems), companies that have integrated real-time track and tracing and customer relationship management into their supply chains will have greater resilience in the long term. 

Global or local supply chain

A surprising 80% of respondents believe that things will go back to normal, post-pandemic.  An unexpected result in view of the fact that consumer habits will almost certainly have changed permanently, even when the high streets return to normal. The shift to ecommerce is unlikely to revert back to former levels, and the volumes of goods bought online will increase. 

It’s worth noting that the sector in which a respondent works will have influenced their answer.  B2B companies are more likely to predict ‘business as usual’, whereas B2C businesses will anticipate having to make changes.



Do you expect your supply chain to become more localised as a result of the pandemic?


Yes, we have already initiated changes to this effect
%
Yes, circumstances will force us to make changes
%
No, I don’t expect any change
%
Jochen Vincke, Partner at PwC Belgium

“Global supply routes have been interrupted during the crisis, forcing companies to localise their supply chains. This has highlighted the need to increase resilience and reduce dependence on a single country or supplier. While many US and European manufacturers are now looking into moving production closer to their customer base, our survey shows that Belgian companies do not anticipate having to take such measures in the short term. However, they will not escape this trend of increasing regionalisation, and will need to adapt to this new reality.”

- Jochen Vincken, Parter at PwC Belgium

Contact us

Peter Vermeire

Peter Vermeire

Partner, PwC Belgium

Tel: +32 493 51 87 28

Jochen Vincke

Jochen Vincke

Partner, PwC Belgium

Tel: +32 477 61 12 22

Connect with PwC Belgium