As we enter the third year of the pandemic, we’re all asking ourselves, “When will it end?” From the beginning, businesses everywhere have taken hit after hit. The immediate effects were felt as everyone’s favorite local businesses closed. Now, the effects are still rippling across the globe in waves, as the global supply chain has been ravaged by lockdown after lockdown. Businesses are forced to make hard decisions and take immediate action to keep the wheels moving, but as one cog after another in the machine falters, this is becoming increasingly difficult. So, what’s a business to do, when they have a responsibility to not only provide for their customers, but support their workers? Let’s break it down.
Why is this happening? The pandemic has disrupted nearly every part of the usually invisible funnel of production, logistics and transportation that moves goods (and services) where they need to go, resulting in shortages in materials vital for production. These shortages are causing record lows of inventories in a domino effect.
Who is affected? A report from Accenture indicates that 94% of Fortune 1000 companies are experiencing supply chain issues, and more than 75% of businesses have experienced negative outcomes as a result. All industries, from food, to tech, to manufacturing and construction are feeling the impacts of the shortages.
What are some of the effects? Scarcity is driving prices up. According to a White House report, commodity prices rose by 19% between May 2020 and May 2021 – the largest year-over-year increase since 1974. Moreover, this translates to higher prices for consumers and producers alike. As a result, 55% of companies plan to downgrade their growth, or have already done so.
Despite efforts to jumpstart the economy, recovery is slow and the impact on both consumers and producers is costly. Simply producing more isn’t an option.
So how do you move forward? With so much out of your hands, focus on what can be controlled.
Mobilize, be flexible, and be creative with your solutions. It takes ingenuity to navigate the operational and financial challenges of the pandemic while addressing the needs of a business.
Evaluate for efficiency and quality. Now is the time to evaluate old processes and implement a new set of strategies. Find ways to eliminate unnecessary steps and streamline production.
Make the best of what you already have and what you have access to. Make sure it’s put to the best use possible.
Collaborate with your suppliers and be transparent about your needs. A company may be able to provide you with a crucial piece of what you are lacking, and you may not know it.
Learn and evolve. Combine responsibility and resilience to help your business come through stronger. And above all, stay the course.
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