March 26, 2020 9 a.m. PST Hosts: Deborah Stanton, Executive - PowerPoint PPT Presentation

March 26, 2020 9 a.m. PST Hosts: Deborah Stanton, Executive Director Nicole Leonardi, Director of Corporate Accounts Material based on the CAPS Research CPO Insights Survey conducted March 12-19, 2020

CPO’S RESPONDING TO THE CORONAVIRUS PANDEMIC CPO Respondents by Sector Services Process 22% 34% • 74 CPO’s from major companies • Revenues: ~$1.8 trillion • 84% HQ in the US Manufacturing • 16% HQ outside of the US 45% • Responses collected: March 12 – 19, 2020 www.CAPSResearch.org

CPO’S RESPONDING TO THE CORONAVIRUS PANDEMIC NATURE OF High level of action underway ACTIVITY YOUR 97% across the enterprise COMPANY IS TAKING IN RESPONSE TO Only taking action in specific COVID-19 3% "hot zones" Not doing any planning or 0% taking action % of Companies www.CAPSResearch.org

CPO’S RESPONDING TO THE CORONAVIRUS PANDEMIC Significant disruption to employee internal 33% IMPACT OF US- interactions 49% IMPOSED CHINA AND EUROPE 44% Significant disruption to supplier interactions 37% TRAVEL BAN 22% Anticipated loss of revenue 32% No impact to operations, suppliers, or 27% employees in affected countries 19% 5% Minimal impact 11% Does not apply - we do not have operations, 14% suppliers, or employees in affected countries 5% China Travel Ban Europe Travel Ban Percent of companies. Multiple options could be selected. www.CAPSResearch.org

IMPACT OF US-IMPOSED CHINA AND EUROPE TRAVEL BANS Significant disruption to 33% employee internal 49% interactions 49% 37% Significant disruption to 44% supplier interactions 37% Anticipated loss of 22% 44% revenue 32% 33% No impact to operations, 27% suppliers, or employees 19% in affected countries Employee Supplier 5% Interaction Interaction Minimal impact 11% Europe 49% 37% China 33% 44% Does not apply - we do 14% not have operations, China Travel Ban China Europe 5% suppliers, or… Europe Travel Ban www.CAPSResearch.org

IMPACT OF US-IMPOSED CHINA AND EUROPE TRAVEL BANS China Travel Ban Significant disruption to 33% employee internal (by Sector) 49% interactions 70% 44% Significant disruption to 60% supplier interactions 37% 50% 22% Anticipated loss of revenue 40% 32% 30% No impact to operations, 27% suppliers, or employees 19% in affected countries 20% 5% 10% Minimal impact 11% 0% Does not apply - we do Significant disruption to supplier Significant disruption to employee 14% not have operations, interactions internal interactions suppliers, or employees 5% China Travel Ban Manuf Process Services in affected countries Europe Travel Ban www.CAPSResearch.org

IMPACT OF US-IMPOSED CHINA AND EUROPE TRAVEL BANS China Ban Significant disruption to employee 33% 70% internal interactions 49% 60% Significant disruption to supplier 44% interactions 37% 50% 22% 40% Anticipated loss of revenue 32% 30% 27% No impact to operations, suppliers, or employees in affected countries 19% 20% 10% 5% Minimal impact 11% 0% Manuf Process Services Does not apply - we do not have 14% Does not apply Minimal Impact No Impact operations, suppliers, or 5% China Travel Ban employees in affected countries Europe Travel Ban www.CAPSResearch.org

CPO’S RESPONDING TO THE CORONAVIRUS PANDEMIC Imposing travel restrictions 97% ACTIONS YOUR Activation of emergency response COMPANY IS 89% teams TAKING OR Requiring employees to work remotely PLANNING ON 81% TAKING Changing forecast due to significant 42% change in customer demand Restricting discretionary spending 40% Pulling back on capital investments 26% Slowing/holding expansion plans 22% Furloughing / side-lining idle employees 12% Percent of companies. Multiple options could be selected. www.CAPSResearch.org

ACTIONS YOUR COMPANY IS PLANNING / TAKING By Sector Imposing travel restrictions 97% Activation of emergency 89% 100% response teams 96% 96% 94% 88% 88% 85% 85% Requiring employees to work 81% remotely Changing forecast due to 63% significant change in 42% customer demand Restricting discretionary 40% spending Pulling back on capital 26% investments Slowing/holding expansion 22% plans Imposing travel restrictions Activation of emergency Requiring employees to work response team remotely Furloughing / side-lining idle 12% employees Manufacturing Process Services www.CAPSResearch.org

ACTIONS YOUR COMPANY IS PLANNING / TAKING Imposing travel restrictions 97% Taking Action to Change Forecasts (% of companies) Activation of emergency 89% 52% response teams Requiring employees to work 81% remotely 38% Changing forecast due to significant change in 42% 31% customer demand Restricting discretionary 40% spending Pulling back on capital 26% investments Slowing/holding expansion 22% plans Furloughing / side-lining idle 12% employees Manufacturing Process Services www.CAPSResearch.org

ACTIONS YOUR COMPANY IS PLANNING / TAKING Spending, Investments, and Expansion Imposing travel restrictions 97% (% of Companies) Activation of emergency 89% response teams 44% 44% 42% Requiring employees to work 81% 36% remotely Changing forecast due to 29% significant change in 42% customer demand 25% 25% Restricting discretionary 40% 18% spending 15% Pulling back on capital 26% investments Slowing/holding expansion 22% plans Restricting discretionary Pulling back on capital Slowing / holding expansion Furloughing / side-lining idle spending investments plans 12% employees Manufacturing Process Services www.CAPSResearch.org

ACTIONS YOUR COMPANY IS PLANNING / TAKING Furloughing / Side-lining Employees Imposing travel restrictions 97% 18% Activation of emergency 89% response teams Requiring employees to work 81% remotely Changing forecast due to significant change in 42% customer demand Restricting discretionary 8% 40% spending 6% Pulling back on capital 26% investments Slowing/holding expansion 22% plans Furloughing / side-lining idle 12% employees Manufacturing Process Services www.CAPSResearch.org

ACTIONS YOUR COMPANY IS PLANNING / TAKING Imposing travel 97% restrictions MANUFACTURING PROCESS SERVICES Activation of emergency 89% response teams Requiring employees to 81% work remotely 1 . Changing forecasts 1. Restricting 1 . Restricting Changing forecast due to discretionary spend discretionary spend significant change in 42% 2. Restricting customer demand discretionary spend 2. Changing forecasts 2. Pulling back on Restricting discretionary capital investments 40% 3. Furloughing/side- 3. Pulling back on spending lining employees capital investments 3. Changing forecasts Pulling back on capital 26% 4. Slowing/holding 4. Slowing/holding 4. Slowing/holding investments expansion plans expansion plans expansion plans Slowing/holding 22% 5. Pulling back on 5. Furloughing/side- 5. Furloughing/side- expansion plans lining employees capital investments lining employees Furloughing / side-lining 12% idle employees www.CAPSResearch.org

CPO’S RESPONDING TO THE CORONAVIRUS PANDEMIC Increased demand for health and safety 31% THE GREATEST items CHALLENGE FOR Increased lead time 20% YOUR SUPPLY MANAGEMENT Decreased source of supply from “hot 20% GROUP zones” Shortage of logistics carriers 12% Receiving inaccurate / inadequate 4% information from suppliers Decreased source of supply from outside 1% “hot zones” Inflated prices (i.e. price gouging) 0% Percent of companies. Select one.. www.CAPSResearch.org

THE GREATEST CHALLENGE FOR YOUR SM GROUP Greatest Challenge Increased demand for 31% health and safety items 60% 50% 20% Increased lead time 40% Decreased source of supply from “hot 20% zones” 30% Shortage of logistics 12% carriers 20% Receiving inaccurate / inadequate 10% 4% information from suppliers 0% Decreased source of Increased Increased lead Decreased Receiving Shortage of Decreased Inflated prices 1% supply from outside demand for time source of inaccurate / logistics carriers source of (i.e., price “hot zones” health and supply from inadequate supply from gouging) safety items “hot zones” information outside “hot Inflated prices (i.e. from suppliers zones” 0% price gouging) Manufacturing Process Services www.CAPSResearch.org

CPO’S RESPONDING TO THE CORONAVIRUS PANDEMIC Creating contingency / mitigation plans 97% ACTIONS YOUR SUPPLY Assessing sub-tiers in the supply chain to 75% identify vulnerabilities MANAGEMENT Shifting to alternate sources 68% GROUP IS TAKING OR PLANNING ON Responding to increased challenges in 67% logistics TAKING High-level of sourcing for health and safety 63% items Increasing material inventory 50% Improving demand planning, S&OP 24% integration Renegotiating supplier contracts due to 19% change in volume Buying insurance to cover disruptions 1% Percent of companies. Multiple options could be selected. www.CAPSResearch.org