The COVID-19 pandemic struck the world like a Tsunami. Despite significant efforts to curb the spread, COVID-19 has now infiltrated 214 countries, and the global deaths have surpassed a million.
Economists have been unable to forecast the volatility and impact, whilst companies have struggled to keep their global procurement and supply chains in motion. Whatever the global economic and financial fall-out, businesses cannot afford to exit 2020 without key learnings from the pandemic entrenched in future business models.
The business response to COVID-19 had a direct correlation to their survival and profitability. With the consumers still exercising social distancing and remote working, countries keeping their borders sealed, numerous travel restrictions, lack of personnel mobility, and remote workforces – recovery will be painful and inventive.
COVID-19 impressed the need for innovative and assertive collaboration. Re-inventing the wheel with agility and tenacity. Clearly, the significant disruptions on supply chains globally with imports from China were nullified for months. Significant production disruptions in various countries all hastened businesses to either scale back or look for local substitutes.
The lean supply chain model to generate higher efficiencies took a 180-degree spin. Yet, the dynamism with which supply chains have adjusted to the new realities have accelerated the creation of more sustainable businesses.
So, what are some of the learnings businesses should take with themselves into 2021:
Resilient and cash-flow centric
In a crisis, profits and revenues will dwindle, but without cash, bankruptcy is inevitable.
Companies should devise plans to conserve cash, undertake extensive cashflow analysis, and empower teams to oversee and manage cash.
Strive for operational resilience.
Be proactive and opportunistic—review potential merger and acquisition opportunities, new ancillary growth opportunities, whilst navigating the crisis.
Agile recovery, capability and capacity preservation, targeted investments
Businesses need to strengthen operational and structural resiliency to ensure a fast recovery.
Create multi-sourcing strategies for critical materials
Develop flexible supply, production, and logistics partnerships
Invest in digitalization - AI, Machine Learning, IOT to trace and track
Gaining customer’s trust should be of topmost importance to the business leaders.
Companies should invest in retaining existing customers before focusing on new customer acquisitions.
Heightened transparency around safety agreements and certifications
Proactively engagement and swift response times to any queries.
Building trust in the brand and products.
E-commerce, digitization is no longer optional.
Continue investing in digitization and e-commerce platforms; some of the consumer shifts towards online platforms will be permanent.
Prioritize analytics and track high demand products for stock replenishment
Cancel any on-going and upcoming promotions and discounts to increase profitability margins
Focus on liquidity rather than growth
Businesses should exit 2020 with sustainable business models and clear sight on liquidity
Tight inventory forecast and algorithm-based analysis of customer preferences, stocks, delivery times to increase efficiency
Innovations, modifications, market expansions, and partnership forging have helped businesses maintain current revenue levels during these unprecedented times. The mantra for 2021 should be about increasing revenue post the recovery season.