Our most important business relationships are now conducted over the digital ecosystem. Magazine publishers, fitness instructors and rock bands have switched to digital channels. Favourite brands who cannot serve us via their usual consumer channels have an eye to the future, empathetically checking in with emailed wellness tips, ‘better days’ competitions and motivational videos.
Listen to Episode 108 “Navigating in Uncertain Times: Supply Chain Flexibility and Resilience” at GoBeyondDisruption.com.
There is growing recognition of the need, in this extraordinary situation, to support others.
At the brewing company mentioned in the 'As employers' section', reductions in capital expenditure mean funding is available to support payment pauses for its smaller customers, such as independent pubs and restaurants. Keeping them in business through and beyond the crisis is in everyone’s self-interest.
Banks report that they are talking to their customers more than before, discussing liquidity and capital requirements. Although physical presence has changed, operations continue much as usual.
The education sector, on the other hand, has had to radically change how it operates, delivering remote learning and examination sessions. International students are an important source of revenue to universities, but familial concerns combined with travel restrictions are likely to have a huge impact on the 2020–21 academic year. The charity and service sectors, traditionally face-to-face, are having to rethink how they can support and maintain connections with service users.
Behind the digital portal, it is people who are the interface between business and customer. More than ever, we must all become advocates and brand ambassadors.
Organisations globally have recognised the need to build resilience into their upstream and downstream supply chains. In the UK, pre-Brexit supply chain reviews gave some organisations a head start. But how well do you know the people and organisational cultures in your supply chains? In a crisis, the survival of your business may rely on these relationships.
The global reach of today’s supply chains — over 90% of Fortune 1000 companies had one or more Tier 2 suppliers in Hubei province — carries the risk that supply chains become transactional rather than relational. Cost-cutting, distance and communication barriers can lead to supply chains that are fragmented rather than lean. When international transport logistics break down, insourcing by country or region may seem a better, if not cheaper option. Organisations are considering the balance of cost and resilience but often, as has been the case with PPE, there is simply not enough supply to fulfil demand. In some cases, there are alternate supply options. Hospitals and care settings have reached out to maker communities to help fill the gaps, and spirit distillers are diversifying into the production of hand sanitiser.
Good relationships, like good accountants, rely on trust and transparency. This is particularly important when the supply of goods to the end-user relies on strong linkages between suppliers, manufacturers and logistics-providers.
Tools such as open book accounting can help build the relational, collaborative aspects of supply chains. By looking at cost structures across the supply chain, partners can identify and eliminate non-value-adding activity, such as process duplication, which can incur substantial cost. Quality costing approaches enhance understanding of prevention, avoidance and failure costs. The information gathered can then be discussed openly with cross-functional teams, resulting in better decision-making.
Every disruption is a test of risk management processes and resilience in supply chains. Agility, flexibility and open communication are crucial to an effective response.
