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In a world that is changing more quickly than ever, businesses need a plan when things go sideways. Companies like Cisco have taken the principle of “planning ahead” seriously, ensuring that they don’t have to be worried about the effects of the Coronavirus outbreak, they can calmly implement their Pandemic Response Plan. According to the document published to their website, Cisco has “well-established processes to coordinate our efforts during outbreaks like COVID-19, including our Global Business Resiliency (GBR) and Supply Chain Incident Management (SCIM) Processes.”
Business Resiliency programs centered on surviving unprecedented crises, like the coronavirus outbreak are the exception, not the rule, especially in smaller companies. Annual reviews and “fire drills” ensure that operations do not become so reliant on existing supply chains and processes that they cannot pivot in case of a crisis. For critical business operations, larger companies conduct audits and annual exercises to make sure their resiliency plan works to mitigate disruptions.
Most businesses were blindsided by the COVID-19 supply chain and business as usual disruptions. If your business was left wondering what to do next in this crisis, consider establishing an action plan moving forward to meet the changing economic realities of a post-coronavirus world.
The reality is that many industries walk a fine line with thin margins and complicated outsourcing strategies. This is especially apparent in hospital supply chains, which rely on low pricing strategies that leave vendors with little room to make adjustments. Most hospitals pool money between several locations and use it to purchase supplies in bulk — a simple system that works well when supply and demand are predictable; when it isn’t, systemic problems become glaringly obvious.
While the effects of a shortage are significantly more detrimental in a hospital or other medical facility, these businesses can rely on support from the World Health Organization and the federal authorities to help. For other industries, the cushion is much less forgiving (if present, at all.) The Institute for Supply Management, which conducts monthly economic surveys, found that nearly 75 percent of the companies it contacted in late February and early March reported some kind of supply-chain disruption due to the Coronavirus. And 44 percent of the companies didn’t have a plan to deal with this kind of disruption.
If you are a company with a back-up plan — like Cisco — these types of disruptions are manageable, if not welcome in an environment that thrives on innovation. Cisco created contingency plans based on potential issues in its supply chain and general management structure before they arise. They have practiced alternate operation strategies and were therefore able to transition seamlessly into “plan B” as needed.
Whether or not you had a “Plan B” prior to the Coronavirus outbreak, there are still options to move forward and make adjustments as we continue to deal with its effects. Here’s a summary of our recommendations for business owners looking to pivot and thrive in an unpredictable economy:
- Identify opportunities for growth. When the world gets turned upside down, it can be an important opportunity to reassess certain systems or operational strategies that haven’t been working. Economic slow-downs will reveal weak links in your supply chain that can be taking a large toll on your profitability.
- Be open to new strategies. The COVID-19 outbreak and its impact on our economy were a shock to everyone involved — including our government. As we head towards uncharted territory, it is important to keep an open mind when making adjustments to your operational strategies. Innovation will be an important part of any recovery plan.
- Stay positive. We have a long road ahead of us, but in order for the economy to fully recover, we must all do our best to stay positive about the future and remain committed to the long-term success of our industries.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.
Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
