DoD likely to reduce supply chain exposure due to COVID-19: Poll

22 May 2020 (Last Updated May 22nd, 2020 07:27)

The COVID-19 pandemic has exposed the Department of Defence’s (DoD) supply chain vulnerabilities rising questions about the sustainability of its supply chain.

DoD likely to reduce supply chain exposure due to COVID-19: Poll

The COVID-19 pandemic has exposed the Department of Defence’s (DoD) supply chain vulnerabilities rising questions about the sustainability of its supply chain.

Verdict has conducted a poll to assess whether the DoD will reduce its supply chain exposure due to the COVID-19 outbreak.

A majority 58% of the respondents felt that the DoD would reduce its supply chain exposure as a result of the COVID-19 pandemic, while 42% opined that the DoD will not make any such changes.

Analysis of the poll results shows that the DoD may reduce its supply chain exposure in the future.

DoD global supply chain-COVID-19

The analysis is based on 584 responses received between 04 May and 18 May.

COVID-19 impact on DoD supply chain and the most affected areas

The COVID-19 pandemic has exposed the weaknesses of the defence supply chain, forcing the DoD to grant $3bn in early invoice payments to the industry. Though the grant is expected to help in the short-term, it may not help in solving the fundamental sustainability issues in the supply chain, according to experts at GlobalData.

The pandemic has been particularly disruptive for small subcontractors who primarily rely on prime contractors for orders. Lockheed Martin was one company that acted early by announcing accelerated payment checks to its suppliers.

Not all companies, however, can manage to make early payments as many were forced to close their manufacturing operations due to the lockdown measures, says GlobalData.

The DoD’s announcement of aggressively partnering with the defence industry has brought some relief to the small contractors by providing immediate cash flow.

Aviation supply chain is among the most affected areas for the DoD, apart from shipbuilding and small space launch, according to the Undersecretary of Defense for Acquisition & Sustainment.