Coronavirus pandemic drives Asian companies to digitize and examine supply chains: HSBC survey
ECONOMYNEXT – The Coronavirus pandemic has made Asian firms digitize their business, and examine supply chains and have become more cautious, a survey 1,400 firms in Asia by HSBC has found.
“The global pandemic has also driven business to rethink how they can inject more transparency and traceability into their supply chains,” the HSBC said.
“COVID-19 has exposed weak links in supply chains, and companies are shifting from a just-in-time model to just-in-case when it comes to managing their stock. ”
But many Asian firms felt they were well prepared to meet the challenges.
Over 55 percent of Asian firms had said they were as prepared as they could be, compared to 38 percent in the rest of the world, according to HSBC’s Navigator report.
“Over half of companies in Asia indicated they were as well prepared as they could be, far more so than firms in the rest of the world,” HSBC said.
“The higher level of preparedness stands Asian firms in good stead as and when the world comes out of this public health crisis.”
Asia is more likely than the rest of the world to believe that digitisation of trade and payment processes will become standard practice over the next 1-2 years.
Forty percent of the respondents in Asia said digitization of trade processes was a priority in the next two years (22 percent in rest of the world) and 38 percent said digitization of payment processes were a priority (25 percent rest of the world).
“Digitisation is no longer something that is nice to have – Asian firms have woken up to the benefits of being digital,” Stuart Tait, Regional Head of Commercial Banking in Asia-Pacific for HSBC said in a statement.
“While in the past some firms were reluctant to adopt new technologies, COVID-19 has clearly illustrated the need to embrace change. The digitisation of processes can build resilience and safeguard against external shocks.”
The survey found that 54 percent of Asian companies said would increase the transparency and traceability of their supply chains. Oer one-third of Asian firms will review supply chain partners to ensure they are able to weather future challenges.
When asked to describe a resilient business, Asian companies say that the top three characteristics are
Asian firms had cited being agile, being customer-centric, and acting in a sustainable manner to be resilient, while barriers were to resilience factors such as having sufficient cashflow and managing the cost of working capital.