Our hearts go out to everyone impacted by COVID-19, the Coronavirus.
We’re all doing our part to mitigate and recover from this crippling pandemic – whether it’s our healthcare workers putting their lives and safety at risk to save those in need, to workers who have lost their jobs, to kids ripped from school and spending days stuck at home – sacrificing moments and memories they will never get back like graduation and dances. Many of us have lost jobs, family, and friends. Many of our dreams are on hold.
All of us are making our way through uncertain times, trying to make the best of a difficult situation and hoping we emerge in a better world.
Not to diminish the personal struggles we are facing, but this is also a difficult time for businesses. Businesses play a vital role in this battle against COVID-19. They are doing their part to help us all, and many businesses are struggling.
Let’s look at what lessons businesses can learn from the difficult situation we find ourselves in today.
The State of Business: Supply Chain Disasters and Customers in Need
Since the turn of the century, globalization has slowly transformed business and commerce. As companies look to expand their market and reduce costs, they are breaking down borders and operating on an international scale.
Today, businesses rely on a wide and diverse network of suppliers and distribution points. A single product may use supplies from countries around the world. One part comes from Canada, and another from China, and another component may be highly regulated with limited accessibility. The finished product may be shipped to customers and locations in Europe, Asia, and North America.
With a crisis like we are facing now, that wide and diverse network represents a potential risk. That network offers your business a multitude of risk points. If one supplier is hit with a restriction and can’t fulfill an order, what can you do? A distribution point may go down, preventing you from receiving mission critical supplies. If your customers are relying on you and your business during this time of need, how can you explain to them that you can’t fill your order?
What has COVID-19 Taught Us?
Now, more than ever, businesses need to plan and prepare for supply disruption. Businesses need a contingency plan for their supply chain.
As we have learned from COVID-19, it is often the challenges you can’t plan for that can be the most disruptive to your business. The greatest risk may not be a competitor, a new technology, or even a mistake you have made, but a world event that few could see coming, and even fewer could imagine the impact.
Customers today are relying on the businesses they work with to be trusted advisors. They need stability and consistency. They need companies that can provide solutions rather than empty promises. They are looking for more than a supplier. They need partners that can deliver a plan or strategy rather than an excuse.
If you can’t provide solutions, the customer will find a company that can. If you don’t have a strategy that meets their needs, they will find a competitor who can provide that strategy.
To be a responsible supplier and trusted advisor to your customers, you need to have solutions in place before a problem happens.
Where Do We Go from Here?
There are risks out there. Business success requires recognizing that disruption can impact your supply chains, customers and even employees. Now more than ever, we need to prepare for the next crisis.
Developing a Business Contingency Plan
While every company is different, and every situation unique, there are lessons that can be learned from the situation we find ourselves in. We need to identify the hidden risks facing your business and identifying solutions before a crisis.
Here are questions you should ask as you develop and prepare your contingency plan:
- How secure is your supply chain? Identify your key suppliers and conduct a review of their ordering and supply process. Review if they have a contingency plan in place. Do they have additional inventory on hand? How much lead time can the supplier provide if there is a problem? This can be a difficult task, which is why many companies are turning to a distributor program that can deliver more options and more price control, rather than direct sales that offer greater risk.
- Can you identify risks? When a crisis hits, some areas or supplies will be hit harder. Take time to identify areas that are at greater risk of disruption – for example, a custom product or a material with limited supply. Determine how much inventory you and your customers will need of your highest risk and highest priority supplies, then look at distribution strategies for a crisis. Once you understand the risks, look at creating a strategy or plan for managing that risk.
- Do you have a contingency plan? Just as important as diversifying your markets and customers, it’s important to diversify suppliers. Identify and onboard additional suppliers who can provide support when you need it. Conduct a review of these suppliers and set up a workflow and process for a crisis to minimize and mitigate disruption.
- Do you have a network? As critical as it is to diversify your network with new suppliers, it’s also important to partner with a supplier who understands the market and can provide the insight and intelligence to navigate and succeed in that market when a crisis occurs. As a business, it is likely you aren’t an expert in the market, but there are businesses that are experts. Their expertise will be critical in a crisis
Crisis Security: Protect your Customers and Business
If the COVID-19 crisis has taught us anything, it’s that our businesses and livelihood are at risk of disruption. The next crisis doesn’t care about our current business strategies or internal workflows. It will disrupt your supply chain, business, and even our lives.
Even as we work to overcome the current crisis, we need to start preparing for the next one. That means reviewing the supply chain, diversifying our suppliers and vendors, identifying higher risk materials and supplies, and implementing a contingency plan for our business, employees, and customers.
If you want to learn more or speak to an expert who can help you evaluate your supply chain and business risk, then contact GO2 Partners today. We’ve been helping businesses increase profit and improve efficiency, while eliminating waste and solving problems. We do that by hiring and supporting industry leaders, providing businesses like yours the expertise they need to succeed.