Asian firms have higher risk awareness in supply chain management to mitigate the effects of the COVID-19 pandemic than their non-Asian peers, a survey released yesterday by HSBC Holdings PLC showed.
About 37 percent of Asian firms polled would review supply chain partners to ensure that they can weather the pandemic and other challenges, while only 25 percent of non-Asian companies would do the same, the survey showed.
About 54 percent of Asian companies would also increase the transparency and traceability of their supply chains, as they aim to have a better understanding of their suppliers, compared with an average of 22 percent for the rest of the world, it showed.
With better visibility in the supply chains, companies could unearth hidden dependencies and prepare for interruptions down to the component level, HSBC said.
“In the face of an uncertain future, it is obvious that companies need to re-examine the relationship between supply chains, working capital and liquidity in order to mitigate and manage risks in advance,” HSBC Bank Taiwan Ltd (匯豐台灣商銀) commercial banking head Stanley Hsiao (蕭仲程) said.
Taiwanese firms need to consider taking different approaches to make their supply chains more adaptive to market changes as they try to diversify their production lines and expand international sites, Hsiao said.
HSBC said Asia is more likely than the rest of the world to believe that digitization of trade and payment processes will become standard practice over the next one to two years, as Asian companies would prioritize digitizing their trade (40 percent) and payment process (38 percent) in the next one to two years, compared with 22 percent and 25 percent respectively for non-Asian firms, it said.
“Digitization is no longer something that is nice to have, but it is a must-have. Asian firms have woken up to the benefits of being digital,” Hsiao said.
Some firms used to be reluctant to adopt new technologies, but COVID-19 has illustrated the need to embrace change, he said.
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