The Dun & Bradstreet COVID-19 impact index has logistics management implications

Dun & Bradstreet, a leading global provider of business decisioning data and analytics, recently introduced the COVID-19 Impact Index, a new resource - based on client feedback - that addresses the urgent needs of business leaders to better understand the real-time impacts of the pandemic on companies and their network of suppliers and shippers.

Following the movement of the virus across the U.S., Dun & Bradstreet concludes that while 90 percent of businesses across the U.S. have been impacted, 43 percent of businesses in the high impacted states of New York, New Jersey and Pennsylvania, are most challenged to continue operations as a result of the pandemic’s impact in their area at this time.

Industries with the highest impact include restaurants and socialization places, beauty shops, merchandise retailers, and real estate, due to government enforced non-essential business shutdowns. Inversely, 83 percent of businesses across Wyoming, Minnesota and Vermont have seen a low level of disruption to their commercial operations. Lowest risk industries in these states include business services, farming and single-home contracting. 

“Companies of all sizes are being bombarded by crisis management tactics on a daily basis, but what our clients are challenged to see is how this pandemic is taxing their own operations, including their network of partners, customers and suppliers,” said Brian Alster, General Manager, Third-Party Risk & Compliance. “With Dun & Bradstreet’s COVID-19 Impact Index, clients are able to see – for the first time – the ripple effect that the pandemic has had across their entire global network – down to the companies and specific regions in which they operate. This level of granularity can greatly change the way companies view their plans for stabilization and growth.”

The Dun & Bradstreet COVID-19 Impact Index supplements Dun & Bradstreet’s risk scores and provides a view of the potential impact of the pandemic on a business’ operational activity, as well as its network of suppliers and shippers.

The Index is based on the evolving local conditions of the pandemic and ranks business entities with respect to one another. The Index compliments other decision-making data and resources to help inform the following use cases:

Identification of suppliers that present significant potential supply chain disruption 
Counter party credit risk and collections prioritization 
Revenue protection and sales prospect prioritization

The new Index ranks a company’s level of risk and potential business disruption on a scale of 1 (highest risk) to 100 (very low risk) based on four factors:

Location Impact – An assessment of a business’ site and corporate family locations subject to a variety of government enforced restrictions, weighted by the number of local confirmed cases and growth rates. 
Industry Impact – The impact to a business based on industry classification and whether it is identified as an essential or non-essential business, with further specification on its ability to operate remotely or with physical presence. 
Company Health Impact – An assessment of a company’s health using existing Dun & Bradstreet predictive scores, which are a predictor of a business’ ability to survive post-disaster. 
Network Impact – A holistic view that connects businesses with their network of customers, suppliers, or other third parties using Dun & Bradstreet proprietary data.

In an exclusive interview, Alster said that all supply chains have been impacted by COVID-19. “Industries that have shuttered their doors due to government-enforced orders have been hit the hardest. Inversely, industries that were able to transition to remote work environments, such as business services, have remained productive at this time,” he said. “While these factors are well-known, what is often overlooked is the health and management of a business, prior to the pandemic’s occurrence. Furthermore, said Alster, this pandemic has taught supply chain managers that leaders must continually have a detailed and holistic view of their business.

“While industries such as manufacturing, mining, transportation, and retail are currently severely impacted, Dun & Bradstreet data highlights companies and how their commercial partners are employing best practices in financial management,” he said. “Those businesses that were in a solid position and connected to strong business partners prior to the pandemic are finding ways to survive. In fact, we see that pre-disaster credit health of a company and its business partners is one of the top-most predictors of a business’s ability to survive this type of economic disruption.”

Having a solid view of a business’ financials and operations is essential at any time to ensure the health and stability of a company, concluded Alster.