Almost a third of businesses in Scotland are at high risk of collapse due to COVID-19 impacting on their supply chain, according to a new report from the School's Centre for Innovation and Technology Management (CITM).
The report follows on from an earlier analysis of companies in the Midlands and northeast of England but this time researchers from the Centre reviewed over 250,000 companies across the whole of Scotland, spread across 99 different sectors, and found that 29% of these are at high risk due to how their supply chains operate.
The report also shows that around 35% of the firms are either at low or medium risk due to the potential impact of COVID-19.
The report entitled, 'COVID-19 and Supply Chains in Scotland: Impact & Mitigation', was again co-authored by Professor Kiran Fernandes and Dr's Atanu Chaudhuri and Manish Shukla, alongside other professors from Durham University Business School's Centre for Technology and Innovation Management (CITM) and the Centre for Process Innovation (CPI).
The researchers analysed data of 266,954 companies in all regions of Scotland to calculate the potential impact of COVID-19 on their supply chains. While many of these companies operate through global supply chains, the impact of such an external shock is felt at a local level.
The study addresses the impact of COVID-19 from a Supply Chain perspective on the four broad priority areas as set out in Scotland's Economic Strategy.
- investment
- innovation
- inclusive growth, and
- Internationalisation.
The study highlights the need for policies that support "rapid innovation" and "inclusive growth" in the Scottish knowledge economy – particularly high-risk sectors like ICT, scientific and technical activities and support services.
Kiran Fernandes, Professor of Operations Management at Durham University Business School, says, "The Scottish economy is primarily comprised of the quaternary & tertiary (79%) sectors. This "knowledge" economy primarily drives the Scottish economy. Most companies in sectors have never experienced such an external shock and therefore were not prepared with mitigation strategies for their complex global supply chains. Our study shows that many of the supply chain configurations within the knowledge and secondary (manufacturing) sector not only need investment but an internationalisation strategy that can help these high-tech companies connect to trade corridors beyond the existing networks".
Experts from the Business School also reviewed a number of supply chain mitigation and resilience strategies that companies could utilise to overcome this negative impact too. The School are now offering free of charge consultations for businesses with key international experts from the School's Centre for Technology and Innovation Management (CITM). These experts all have vast, global experience in consulting organisations in the area of operations, innovation and supply chain management.
A free webinar this Thursday (7 May) will also offer managers and business owners advice on how to navigate their company in this time of crisis.
