Disruption, Digitisation, Resilience

9 DISRUPTION, DIGITISATION, RESILIENCE : The future of Asia-Pacific supply chains Figure 3: Disrupted industries Significance of disruptions to supply chains by industry Healthcare/pharmaceuticals/biotechnology IT/tech/electronics Manufacturing Food and beverage Footwear and apparel Automotive and in manufacturing, and far above managers from the healthcare, pharmaceutical and biotechnology sectors (13.3%) and amongst technology and electronics firms (6.7%). In the beginning, there was a huge supply shock. In China you couldn’t get people into factories, you couldn’t get raw materials into factories. Jan Nicholas, a Hong Kong-based partner at PwC The top reason cited for supply-chain disruptions in the automotive industry was production stoppages (48%), followed by trade restrictions such as export controls (24%) and access to raw materials or primary inputs (12%). of Commerce in Hong Kong. “In China you couldn’t get people into factories, you couldn’t get raw materials into factories.” And with most of the final assembly for firms’ supply chains still located in China, that had a cascading effect throughout the region. Similarly, in India, “during the first lockdown last year, we saw a lot of challenges in distribution of goods, last mile in supplies, sourcing for our manufacturing plants, and employee access to the plants and distribution centres,” says Momchil Jelev, head of strategy and supply chain for government affairs and policy, Asia-Pacific, Johnson and Johnson. Among the industries covered by our survey, the one that has struggled the most, at least in Asia, is the automotive industry (Figure 3). Fifty-two percent of automotive supply-chain managers answered that covid-related disruptions have been “very significant”, 9% more than their counterparts in footwear and apparel Source: The Economist Intelligence Unit Very significant Somewhat significant Somewhat minor Very minor We have not experienced disruptions to our supply chain(s) due to the pandemic 13.3% 36.7% 26.7% 20.0% 3.3 6.7% 30.0% 23.3% 33.3% 6.7% 42.3% 30.8% 11.5% 7.7% 7.7% 26.7% 33.3% 36.7% 3.3 43.3% 30.0% 16.7% 10.0% 51.7% 34.5% 6.9% 6.9%