For decades, lean supply chains have been the key to doing business across industries. This was general wisdom until 2020, which has been appropriately dubbed the year of supply chain disruption. Issues with lockdowns and travel restrictions led to shortages that limited access to important items, like toilet paper and PPE. By as early as February, US businesses were already noticing an impact. 70% of them were assessing their supplies to see which ones were impacted by lockdown.
Despite the appearance of coronavirus vaccines, businesses continue to suffer. In total, 97% of businesses worldwide have experienced supply chain disruptions, bringing about an average drop in revenue of 23%. Some of these business ills were terminal; 60% of business closures during the pandemic are now permanent. The most likely businesses to close were small, locally owned enterprises. Many happened early in the pandemic.
Such closures didn’t affect all small business owners equally, however; minority business ownership declined twice as much as that of whites in the February-April time period, with African-American business owners declining 41%. According to Robert Fairlie, Professor of Economics at the University of California, Santa Cruz, prolonged depression in minority-owned businesses could be detrimental to racial equality because it decreases the local job creation, economic advancement, and wealth-building tools available to minority.communities.
Later in 2020, the public outcry for diversity exploded. 70% of Millennials chose to shop with brands that demonstrate diversity and inclusion, and 60% of people say the way brands reacted to the protests would influence future buying decisions. More than being trendy, diversity in business and supply chain is good for companies. It leads to innovation: more patent filings, more citations on patents, so on and so forth. It’s time for companies to move beyond diversity compliance and embrace diversity as a business strategy.
Infographic Source: The Diversity Consortium