How to Find Business Opportunities Amid the Coronavirus Supply Chain Crisis
Here are ideas for grasping opportunities in the midst of the Coronavirus supply chain challenges
The coronavirus’ supply chain and business impacts are being felt around the world and in our backyards: this strange time is slamming markets, causing confusion and changing patterns of normality. A common reaction seems to be to close shop, hoard toilet paper and canned goods and expect the worst. These events surprise us every few years. I can recall the housing/banking crisis, hurricane Katrina, 9/11, Y2K…and these were all within this century. Each had a dramatic effect on society (mostly the US), and after each we recovered. During each crisis, some companies retreated and waited for a clear sign to return to normal; other companies were able to “win in the turns”, as Gartner puts it. “Organizations that practice discipline and display confidence are rewarded with sustained advantage over their competitors long after the turn passes.”*
Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them.”
– Andy Grove, former global CEO of Intel
Some interesting companies launched or had great growth in recession times. Microsoft launched in 1975, a time of great stagnation, inflation and unemployment. Apple launched the iPod in 2001 during the dot.com bubble. Each saw opportunity and a path out of the current downturn. Each has had their share of success because they were savvy enough to not retreat and hide. The opposite result happened to one of my former employers. The company was poised to go public and had gone through the quiet period, and on the verge of stock launch, chose to withdraw the offering due to the dot.com downturn. They never recovered and were later bought for a fraction of their value. Had they gone public (nice in hindsight), they could have had funds to ride out the dot.com era and to buy the company that bought them. Their decision to buckle down and hide instead of looking for opportunity cost them dearly.
What opportunities exist for companies in this market (besides hoarding toilet paper)? Surprisingly, many. One such area is to improve efficiency and financial health.
Why you should consider implementing a supply chain software project now
This may seem surprising but implementing a software project now makes sense. This may seem counter-intuitive, but consider the reasons:
- Most modern projects are SaaS based. The need to install and tune hardware or software is not done on location. Computers reside on the cloud and teams work remotely.
- Some projects make money to fund other projects. During a downturn, profitable projects take priority over enhancements to things like a POS, ERP or HR system. A system that optimizes inventory (especially in a time of turmoil) can remove excess capital and focus those resources on products in high demand. Consumers will continue to shop with those merchants and companies that supply them well. Many people don’t shop around once they have found a reliable source. You can meet the demand of your customers better and gain ongoing goodwill and market share. An inventory optimization project is one of few through which a company can see more money in their account at the end of the term; other projects often claim ROI but are very hard to measure true results. The scope of an inventory optimization project is often much more manageable than an ERP or finance project.
- Training can be done remotely more easily than ever. With video and voice technologies, and time gained by eliminating daily commutes, more can be done, in many cases. We are moving to remote work (even if we don’t want to in many situations). Why not take advantage of this?
- Your company productivity may not be optimized when staff work from home. Take advantage of money-making projects that can be implemented in a time of crisis that increase the bottom line.
How do you prepare your company to excel even in trying times? Gartner recommends supply chain companies drive their teams to improve in three critical areas: strategy, cost and talent:
Strategy: Prepare to act confidently amid uncertainty.
Cost: Implement a cost management discipline to allocate and execute resources while spurring innovation.
Talent: Position talent to sustain progress on transformation.*
With the strong foundation these disciplines enable, your company will be better prepared to reach company goals and seize opportunities, even in times of crisis. How will you continue to drive your company forward in the weeks and months to come? Focusing on a digital supply chain project that increases the bottom line and leverages resources that can work remotely readies you for less stressful times and will keep you ahead of those that just hide away and lose momentum.
Do you have resources working from home that can take on projects to enhance the bottom line? Are you planning for when the world returns to more normal times or will you have to catch up with companies that push forward?
* Gartner–Winning in the Turns: A Supply Chain Action Guide. Published 3 September 2019 – ID G00450336