Managing Your Coronavirus-Stricken Business: Top Fears and Solutions
What’s the Plan, Stan?
For most, the answer to that is “Who T.F. knows?!”
Late last week, IBF posted that 44% of companies do not have a plan for managing Coronavirus moving forward. Odds are, you are reading this because you don’t either. Or if you do, you’re wondering if it’s the right plan. Hard to tell, when the economic landscape is literally changing by the hour.
In a recent Supply Chain Now Radio podcast Episode-294, our EVP, Product Strategy Cliff Isaacson described demand planning in supply chain as this:
"(Managing supply chain volatility) is like driving down a broken road with bridges that keep exploding out of all the time."
And that was demand planning BEFORE Coronavirus entered the equation! One thing is certain. For wholesale distribution companies in every industry from foodservice, wine and spirits and furniture to HVAC and automotive parts, the decisions made today will leave a lasting mark (either good or bad) on the future of business.
Threats Can be Opportunities
Most distribution businesses are in ‘triage mode’ right now, so we realize this is easier said than done. But if you can be part of that 56% who do have a plan, then that Coronavirus THREAT becomes a Coronavirus OPPORTUNITY.
Start by Evaluating Risk
The companies that will come out of this crisis are those who study the economic changes daily and adapt their business to reduce risk. Don’t just sit back and take it. Customer loyalty is at an all-time low, as desperate businesses buy from anyone who has what their customers need.
Get out of your comfort zone. Try something creative to offset potential sales loss. A good place to start is to look at some of the common risks or ‘fears’ specific to your business, and then answer with a solution (which may or may not seem logical at the moment). Just bear with us.
Starting this Week
We’re putting out a daily list of some of the fears and solutions being applied by the distributors we work with every day. We will cover:
- What if my customer shuts down?
- Role of supply chain analytics in this mess
- Logistics impacts of Coronavirus on supply chain
- Forecasting "un-forecastable" lead times
- How to free up cash during this uncertain time
TODAY'S FEAR: MY CUSTOMER WILL SHUT DOWN. THE FLOW OF GOODS WILL BE THERE, BUT THE FLOW OF CUSTOMERS WILL NOT.
SOLUTION: Especially for foodservice distribution companies that work with restaurants, it’s important to explore ways to assist your customers in executing alternative services to consumers, such as home delivery, a skinnied-down menu, etc.
Maybe your customer is implementing a drive-through; what promotions can you run to help them move product and support their interim model?
Muy Importanté: If you are using a demand planning solution, do NOT just zero out your forecasting! It’s crucial to still pay attention and prepare for bounce-back. As soon as bars, restaurants and retail stores re-open, consumers will race out to their favorite hangout and demand will spike sharply.
Keep tracking customer-level history during this time. More sophisticated supply chain planning solutions allow you to do this by region, and even freeze a forecast to ensure that the forecast is not altered based on current demand high/low scenarios. Typically, you can set up Events in the system to filter demand based on a start/end date that is above the forecast.
If you have any questions on any managing your Coronavirus-stricken business, please reach out now. We are here to help!
NEXT UP IN PART 2: Managing Your Coronavirus-Stricken Business: Supply Chain Analytics. Be sure to follow us on LinkedIn and Twitter for daily updates to this series.
Related Article: "Stop Price Gouging in Disaster: A New Trend Puts CX First"