People must be buying toilet paper because they are shitting themselves about Coronavirus; there can be no other logical answer!

Based on the worlds response it seems like we are delaying the inevitable outbreak and at the same time sending the economy into melt down, and I’m not sure which one is scarier.

I’m sick of reading about it, or at least the same old risk management articles and how there are going to be shortages in your supply chain or how demand will fall off, how the economies are doomed and perhaps we should all just give up!

Most articles are about how to suck lemons, how to manage the bottom, Continuity planning or risk mitigation plans. These are all the things you know how to do and if they aren’t already in place, talking about ‘next time’ isn’t exactly helpful when you are stuck in the middle of ‘this time’.

How about a dose of positivity?! Or at least the optimistic ideas you might not be thinking about right now… Stop trying to manage the doom and gloom and consider the way to survive will be to get ahead and think about upsides not downsides.

Perhaps the worst is behind us already and China as always will be back online and firing. Myer for example commented that all factories the group uses will be back online, and most of the stock should be in transit with only a 6-week delay.

In fact, the CEO added that “Myer had been able to save money by cancelling deliveries, and the operational team are learning to live with lower stock levels in some areas.” which Myer sees as a cash flow opportunity in the short term.

Now, that same principle could be applied across lots of different industries, (perhaps not more pertinent than those providing the essentials that customers are stock piling for the apocalypse). Most businesses are sat on obsolete or as we call it slow moving stock, now could be the perfect time to clear it. Just because a SKU didn’t sell when other choices were available, doesn’t mean it won’t sell when consumers are in panic mode.

Consider what is happening to your competitors, and the global stock position on your products and determine if export is now feasible to more places and if your product going to be price inelastic in the near-term.

Finally, do you have something in your supply chain other people want?

• Local supply where competitors import – do you have stock they do not, can you use this to win long term shelf space, or customers.
• Export supply chains – are there businesses you could provide with export services, i.e. you have the channels and contacts, they have the product but no idea how to export.
• Capacity to make other products – could you make and fill hand sanitiser, co pack or manufacture on your manufacturing lines for companies who are shutdown or had their stock zeroed. Could you approach the government about a stock build for emergency supplies?
• Raw Materials – It not just your finished goods that have value. Your raw materials could have inflated in value, and with an eye on the future you could be sat on gold which can be unlocked now – it could even be a material you previously deemed obsolete or slow moving!

In summary, we aren’t saying its right to take advantage of a potential global crisis, we believe you can think carefully about how you keep trading through these uncertain times, as the continuation of our economy is how we can get through this together.

 

Paul Eastwood; CEO – Pollen Consulting Group