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How to Get a Handle on Risk in Uncertain Times: 10 Important Considerations

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Archives, Global Logistics, Global Trade Daily

How to Get a Handle on Risk in Uncertain Times: 10 Important Considerations

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Risk: It’s the operative word on everyone’s mind right now. Whether it’s COVID-19 or oil prices, supply chain impacts or financial market concerns, understanding the impact of macro and micro-events, assessing their impact and putting in place the right action plans to mitigate that risk as best as possible is the priority task at hand.

Here we’ll examine ten steps to consider to ensure you’re being as thoughtful and rigorous as possible in your response to risk.

1. Take Care of Your People – Hopefully, this has already been priority number one for your business after the past few weeks. How do we safeguard our people? How do we handle work from home – voluntary versus mandatory? What other flexible resourcing options do we provide – from sick leave to absenteeism considerations? What are the IT implications and subsequent human resource and capacity management concerns we need to consider and fully factor in? Err on the side of caution. Better to be safe than sorry.

2. Analyze Internal Risks – Before you can do that, you need to galvanize the right teams to be able to understand, assess and action against those risks. It’s critical to build the right cross-functional teams to be able to look at, and understand, the relevant issues to consider. This will involve finance, R&D (depending on your business) and marketing and sales. It will also involve teams like quality and sustainability leaders, as there will be implications and follow on ramifications despite your very best efforts.

3. Conduct Scenario Analyses – For critical categories, it’s important to get a handle on what alternative demand/supply options are. What are the pessimistic versus expected versus optimistic cases depending on what happens with the current situation, both in terms of the pandemic but also in terms of current and expected economic conditions? As part of any such assessment, you’ll need to score, assign probabilities and weights and adjust your thinking and actions accordingly.

4. Talk to Customers –This doesn’t tend to be the first thing people think about when it comes to procurement, but understanding the demand side implications for your business will be essential. How will demand be disrupted? Will there be specific products in your portfolio that will be more directly or severely impacted? Will this result in demand cutbacks or surges? Where will you source supply from? Can you cut back supply needs for others? How will buying patterns change – will there be channel shifts from offline to online? How does that play out in terms of critical suppliers and critical buys and requirements in the near to medium terms? Maintaining a dialogue with customers to understand their needs and issues and where all of this plays through for your team is essential.

5. Develop Plans for Strategic Categories –You’ll need to revisit your plans and the related risks around your most critical categories during a time of crisis. Make sure that these plans have been reviewed, the pressure points tested, the risk points analyzed and alternative plans considered. This could mean enhancing inventory levels (and rethinking inventory buffers based on the scenario planning we talked about earlier), assessing implications for delivery performance, gaining a view of multi-tiered supplier performance, increased inbound category visibility and more.

6. Examine Logistics Implications – By the same token, businesses must assess the logistics implications both inbound and outbound, either to make products or to ensure delivery. This has cost and timeline implications. All modes of transportation can be seen to be impacted, not least of which is shipping impacts – especially to and from China, but elsewhere, as well – whether these impacts are halts on movements, ramp downs, or the subsequently phased ramp back up. Or bypassing some of these options and going to airfreight which presents another level of cost to timeline tradeoffs.

7. Assess Liquidity – This will be critical and will call for a stronger partnership and alliance with finance. Looking at cash positions, assessing payables, and of course extending that into receivables, etc. will be essential. Add to this, talk of tightening credit markets and this makes it all the more important. Cash as always will be king if we need to endure near term instabilities, revenue disruptions, supply chain impacts, sourcing problems, and more

8. Assess Supplier Health – Part and parcel to all of this is assessing supplier health and evaluating who will be the most impacted. A clear view of your supplier segments – strategic versus mid-tier versus everyone else – is essential so you can focus your time and analysis accordingly.

For the most strategic suppliers, it’s critical to have a multi-tiered view of their supply base and related dependencies so you can adequately assess their performance and supply chain bottlenecks. This will involve structured risk analyses – looking across multiple variables beyond financials, to operational performance, to industry performance factors, to geographic and locational concerns and more. You’ll also need to identify alternate supply sources to shift production as and where needed, and as quickly as possible. Not all of this can be done at a moment’s notice. Some of it should have been done as part of a prior risk assessment exercise.

9. Think Ahead – Businesses can’t afford to simply think about today. Consider what the next three to six months look like. This is where scenario planning comes into play. It is critical to assess not only how you can react now but also how to prepare for eventualities later, when things are either fully back to normal or in some altered state based on longer-lasting ramifications from the events of today.

10. Work With Facts and Manage Emotion – Fundamentally, the most important thing you can do is to continuously monitor changes in a structured fashion. Have a programmed information collection and analysis mechanism. If we accept that the crisis is still unfolding and that the true impacts from a supply chain disruption perspective may not reveal themselves for months, we need to take tangible steps.  This can be done by establishing a process to monitor other regions outside the infected areas that could be impacted. Are ports outside the infected areas being impacted through disruption or through new regulations to protect against transmission of the virus?  Are suppliers struggling financially without access to the Chinese markets, jeopardizing their viability? Data will be important but data converted to relevant insight for your specific supply chain situation will be essential.

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Omer Abdullah is Co-founder and Managing Director of The Smart Cube and is responsible for managing the company’s Americas business.Omer has more than 25 years of management consulting, global corporate and industry experience across North America, Europe and Asia.

Prior roles include A.T. Kearney (North America), Warner Lambert (USA) and The Perrier Group (Asia-Pacific). Omer has an MBA from the University of Michigan at Ann Arbor, USA and a BBA from the University of East Asia.

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Archives, Global Trade Daily, Special Reports

How To Make Your Business More Financially Sustainable after COVID-19

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The coronavirus outbreak in December 2019 came at a time when the global economy was trying to get its act together after being slowed down for a while by trade tensions, especially between China and the US. The much-needed transition towards sustainable manufacturing and clean energy has also played a part in slowing down the global economy, but for a good reason.

When the virus checked into town, all the gains we have experienced over the last decade were turned upside down. Businesses now have to address the health, social, and economic impacts of the coronavirus on top of the already existing geopolitical (e.g. Brexit) issues that impact the business.

Supply chains all over the world have been disrupted by the pandemic, millions of working citizens infected, hundreds of thousands dead, and billions of potential customers rendered jobless. To compound these miseries, most markets are under lockdown, and no one knows for sure when life will get back to normal. The big question now remains: How will business people make their businesses more financially sustainable after COVID-19? Here are 5 measures you can take as a business leader to counter the financial impact of the coronavirus:

1. Leverage employment organizations when expanding internationally

If your intentions were to expand to international markets, or if you had already opened shop overseas, you can collaborate with professional employment organizations to source for and compensate employees. You can, for example, count on a Japan employer of record to help you to establish presence and support personnel in Japan cost-effectively and efficiently. They will help you hire new talents, manage existing staff, and navigate the legal requirements and obligations that come with business ownership in Japan. When you don’t have to worry about managing employee payrolls and compliance issues, or to hire an HR department for that matter, you are able to save on overhead costs until your business recovers fully from the coronavirus shock.

2. Re-evaluate your supply chains

The coronavirus has grossly exposed the vulnerabilities of global supply chains. Companies that depended entirely on Chinese manufacturers or raw materials have been forced to close down temporarily with some closing shop completely. Businesses that will survive this pandemic have to look beyond first- and second-tier suppliers, especially for their key products’ raw materials, and expand their supply lines to bring in more players. Businesses also have to expand their markets. Having a contingency “plan B” will not be enough. You will need to diversify in all aspects of your business so that if one line closes or is unable to recover fast from the pandemic, you will always have alternatives.

3. Reach out to customers

Do everything that you can to retain your main customers. If they owe you, don’t be quick to pressurize them to pay because they are also struggling to get back on their feet. You can loosen repayment terms a bit to accommodate the new normal- this is one of the small prices you may have to pay in order to keep your business afloat. Your lenders are probably doing the same for you. The most important thing here is to maintain open communication lines with your debtors, creditors, and other clients and being honest with one another in case of any payment difficulties. In the long run, when you are all back on your feet, you will still have your customers, and cash will start flowing in as it used to.

Reaching out to customers also means reaching out to new markets, or offering more products to your existing market. If your existing market isn’t recovering as fast as other markets, it is okay to move your business elsewhere. If one of your competitors has closed shop, this is your chance to move in for their customers. Be courageous to fill in every gap that the virus could have created within your market, and to explore other options that could bring in additional cash provided they won’t compromise your brand identity.

4. Update your terms and conditions

There are some terms and conditions that you have held on for too long, some of which have left your business vulnerable during the ongoing pandemic. This is the time to scrap them all and create better terms that protect you from future crises. In fact, you would rather pull out of a contract now and pay the cancellation fee, rather than push on with it and incur losses in the end.

Going forward, you need to take a proactive approach in revenue, employee, clients, and commercial risks management. Crisis management is a process; not just an event. You will need all the teamwork and support that you can get if you are to pull this off. Flex your network and get rid of any dead weight.

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Archives, Global Trade Daily, International Trade

Fashion Retailers & Brands will need to Adapt As the Industry Emerges from the Pandemic 

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The coronavirus pandemic has thrown the entire industry into crisis. Beyond its tragic human cost, the disruption inflicted on businesses has been unprecedented. Footfall has disappeared from the high street as people practice social distancing, while demand for non-essential products such as fashion has dwindled.

With international flights grounded and much of Europe and the United States on lockdown, boutiques are concerned about how they will shift this season’s summer dresses and beachwear. Likewise, small independent fashion brands are apprehensive about retail sell-through and how their stockist partners will be able to pay their invoices.

For many businesses, innovation will be key to getting through this extremely challenging time. The government has laid out plans to help businesses with schemes such as loans and grants. However, this type of aid will only stretch so far.

Some boutiques are taking drastic measures to reach their customers. Several closed their bricks-and-mortar stores early on, deciding to concentrate on their online offering to ride out the storm. Meanwhile, those retailers without an online presence have been thinking outside of the box. Some have locked their doors for one-to-one appointments while others are conducting telephone consultations on FaceTime and personal shopping sessions via WhatsApp.

But selling to customers is just one part of retailing. Buying for the store and its shoppers is just as critical for sustaining a profitable business. Trade shows, buying trips and fashion shows are a fundamental part of the chain – and we have already seen many cancellations since the outbreak began to take hold. Will the pandemic be over when brands re-open their order books for SS21?

Forward ordering is another concern for many small independent retailers right now. With sales of SS20 season stock now under threat, many are worried about AW20 orders written just weeks ago arriving in July and August. If they decide to cancel now, what happens if sales begin to pick up and they’re left with empty rails? Likewise, if they don’t cancel, will they end up with surplus stock that they can’t pay for?

For many, using budgets to buy in-season offers a straightforward solution. Because when the panic subsides and sales begin to pick up – which they inevitably will – ensuring that stores have the right stock in place for shoppers will once again be paramount.

B2B fashion marketplaces such as TradeGala will become increasingly important for retailers. Effectively removing the need to travel or visit trade shows and showrooms, buyers can browse multiple brands online and place orders directly. The brands on the site offer in-season delivery, meaning retailers can order what they need as and when they need it. Plus, it’s easy to check live stock at a glance so buyers can see exactly what’s available with just a few clicks – minimizing any concern surrounding supply chains.

For brands, TradeGala is offering free registration during this crisis period to offer time to prepare for when the market revives. The marketplace is also building its international following of buyers, allowing labels to reach buyers in markets that are less affected by the crisis to help minimize the drop in sales.

The coronavirus pandemic has changed the world and the retail sector needs to adapt in order to survive. There is a challenging time ahead, but retailers and brands are working together in new and effective ways. More than ever before, it’s time to support each other. And if there’s one thing this industry is good at it’s triumphing over adversity.

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Archives, Global Logistics, Global Trade Daily, Trucking

Handling Workforce Management Challenges in a Logistics Company During High Demand

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The ongoing COVID-19 global crisis has caused a spike in demand for online shopping due to the stay-at-home orders that have been instituted by many countries all across the world. Most of the hauling necessary to get these ecommerce products to their intended recipients is being done by truck drivers. This means there’s more work than ever for the logistics industry but more tired workers too.

Keeping fleets properly organized and scheduling the right number of employees to manage all the necessary deliveries is the top workforce management challenge in a logistics company during such a period of high demand. It can be both difficult and stressful to match employees’ availability to demand.

Managers have to be able to track employees’ stress profiles for effective scheduling and also have to be ready to deal with unplanned changes to schedules as drivers could need to swap a shift with a colleague or fall sick (not just from coronavirus, but other ailments too). Companies should have the right tools in place to keep up with unforeseen shifts in demand and update their schedules accordingly.

Communication is important

Efficient, effective communication is absolutely vital to any workforce, but it is particularly crucial for teams that are as remote as those in the logistics industry, especially during this time. It’s important for managers to prioritize communication during this crisis because if communication falters, work progress not only suffers, but truck drivers are also extremely vulnerable to feeling both overwhelmed by the news and isolated from the team and company. This can have adverse effects on employee morale.

Work on employee morale

Speaking of employee morale, that’s another pressing workforce management challenge for logistics companies during this time. If we who are at home are struggling with motivation and mental health, you can imagine how heavy it must be for truck drivers who are out there all alone on the roads driving through deserted cities, staying away from their families as the world goes through such a scary time.

Keep in mind that they are scared to go home because they might accidentally infect their families and have to eat alone due to strict social distancing rules at restaurants. Maintaining high morale in the face of such extreme loneliness can’t be easy, both for the truckers and for their managers. Companies should leverage instant messaging apps to keep in touch with staff and use video sharing/conferencing tools more than ever to make both team updates and employee appreciation more personal.

We have all come to realize just how important truck drivers are to our way of life; that they have always been providing a service that is absolutely crucial to our supply chains and are continuing to do so even with their well-being at high risk. They are driving into places that others are fleeing from to deliver consumer goods to retailers and medical supplies to hospitals. Companies should make sure they are being compensated like the essential employees they are with significant salary raises and bonuses.

Keep your employees safe

Furthermore, employee morale during such a time is greatly tied to a sense of personal safety. Most truck drivers are middle-aged and/or older men who are more likely to suffer immunodeficiency from chronic illnesses such as pneumonia that make them more vulnerable to succumbing to the coronavirus.

Logistics companies should, therefore, make sure their drivers are sufficiently supplied with the necessary protection at all times – from face masks to gloves to hand sanitizer. Trucks should also be thoroughly disinfected as frequently as possible. When it comes to morale during such a time, it’s extremely crucial for employees to feel that their employers are doing their absolute best to keep them protect them.

Managing employees and hiring new ones to help

Managing the multiple locations and mobile employees that characterize the logistics industry was already challenging enough before the pandemic hit and even more now, in this time of high demand. There’s high potential for confusion around tracking hours accurately for payroll. Managers should be able to track employee hours from any location and capture accurate timesheets using geo-location.

Lastly, with the increased demand, many logistics companies are facing a higher need to acquire and onboard fresh talent but unfortunately, even before COVID-19, hiring and retention was already a major issue for the logistics industry according to recent PwC research. The survey found that transportation and logistics companies are lagging behind other sectors in terms of recruiting and hiring. SMEs in particular are not regarded as the preferred employers of the future.

Job seekers still don’t see transportation and logistics as a desirable industry. Logistics is one of those industries that most people looking for jobs, especially for fresh graduates, simply don’t find very appealing. This has to change if the industry is to keep up with this recent spike in demand. Companies have to make it appealing for fresh graduates, as well as people who have been laid off by other industries, by highlighting the potential for career growth.

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Derek Jones  (VP Enterprise Strategy, Americas)

Derek spearheads key initiatives at Deputy, a global workforce management platform for employee scheduling, timesheets and communication. With a focus on Healthcare, Derek helps business owners and workforce leaders simplify employment law compliance, keep labor cost in line and build award-winning workplaces. Derek has over 16 years’ experience in delivering data-driven sales and marketing strategies to SaaS companies like MarketSource and Griswold Home Care.

Archives, Global Trade Daily, Special Reports

How Opportunity Zones Could Help Restore the Economy After COVID-19

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The COVID-19 shutdown has created financial setbacks for millions of Americans and their communities, but economic troubles – whether caused by the pandemic or otherwise – don’t hit everyone equally.

“Unfortunately, there are many rural and urban areas across our great nation that have become distressed due to a variety of circumstances and factors – and that was true for these areas even before COVID-19,” says Jim White, founder and president of JL White International and author of Opportunity Investing: How To Revitalize Urban and Rural Communities with Opportunity Funds (www.opportunityinvesting.com).

“These areas cover the entire breadth of our nation and their populations are diverse. Poverty is a condition that does not discriminate, impacting people of every race, creed, color, gender, and age group, though it does strike minorities with far greater severity.”

But despite the problems, White says, those distressed communities have the potential to provide one path back both for the economy and for investors seeking to diversify with alternatives other than the stock market.

How so? Through the Qualified Opportunity Zone program, which Congress created in 2017 to encourage economic growth in underserved communities. The 2017 Tax Cuts and Jobs Acts provided tax benefits to investors who invest eligible capital in these opportunity zones to create retail, multifamily housing, manufacturing or other improvements. To qualify, the areas must meet certain specifications related to such factors as the poverty rate and the median family income. There are more than 8,000 opportunity zones nationwide.

“I believe, as we move forward to reinvigorate the economy, investing in our poorest communities is going to be the right avenue to take,” White says.

White says a few reasons opportunity zones could be an important and effective part of the recovery include:

Improvements to distressed communities will build on themselves. If businesses in the zones thrive, the communities will have more jobs and better salaries to offer. “More people will want to relocate to these areas, which will increase real estate values and breathe new life into local shops and stores,” White says. When residents and business owners are doing well, they spend more money on beautifying their homes, storefronts, public buildings, streets, parks, and monuments. Their infrastructure will improve, crime will decrease, and better health care will be available for residents.

Investors can make money as well as save on taxes. Those who invest can benefit from more than just the initiative’s capital gains tax breaks, White says. They also can see a significant return off their investments.

Investors also can help improve people’s lives. The zones give investors who want to do more than just make money a chance to have a positive impact on low-income urban and rural communities, and the lives of millions of people. “Investments have already worked miracles in several American communities and we are only at the early stages of experiencing their capabilities,” White says.

“These opportunity zones can simultaneously channel economic help to distressed communities, and create an outsized return for investors,” White says. “Both these things will be critically important as we try to bring back jobs and restore the economy coming out of the pandemic. If nothing else, the coronavirus is teaching us that we are all in this together, and that all of us, across the country and globally, must be responsible for one another.”

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Jim White, Ph.D, author of Opportunity Investing: How To Revitalize Urban and Rural Communities with Opportunity Funds (www.opportunityinvesting.com), is founder and president of JL White International. He also is Chairman and CEO of Post Harvest Technologies, Inc. and Growers Ice Company, Inc., Founder and CEO of PHT Opportunity Fund LPX. Throughout his career, he has bought, expanded, and sold 23 companies, operating in 44 countries. He holds a B.S. in Civil Engineering, an MBA, and a PhD in Psychology and Organizational Behavior.

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Archives, Global Logistics, Global Trade Daily, In The News

Food Sector Faces Multipronged Consequences of COVID-19 Outbreak

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Brick and mortar, as well as online food chains, are facing the wrath of the current COVID-19 outbreak. The worldwide supply chain includes distribution, packaging, as well as sourcing of raw materials. Lockdowns are disrupting the transportation of packaged foods, prepared foods, non-alcoholic and alcoholic beverages. Before the pandemic, the major growth drivers were growing consumption of ready-to-eat convenience foods among on-the-go consumers.

Shifting lifestyle patterns, rising per capita income, and a growing population have been the prominent growth-enhancing factors associated with the food sector prior to the outbreak. However, shutdowns of restaurants and quick service facilities due to lockdowns have hindered the growth of the food & beverage industry to a large extent.

Online Food Orders Surge as Offline Food Chains Struggle to Cope with COVID-19

In view of the dual nature of the food industry, the impact of COVID-19 is multifaceted on online and offline food chains. The offline food chain comprises of cafes and restaurants that have been shut down across the globe. However, online food deliveries remain operational in most of the regions. The packaged food industry, in particular, is witnessing prolific demand for milk products and shelf-stable foods. As consumers hurry to fill their pantries, the demand is projected to surge even further. Almost every region of the world has been affected by the coronavirus crisis, namely, Asia Pacific, Europe, North America, and the rest of the world. An example of how supply chains were gravely affected is derived from Coca Cola Co.

The carbonated beverage giant, sources raw material from China where the outbreak surfaced in early December of 2019. During the initial days of the pandemic, the company faced a great deal of difficulty in managing the frontend of its supply chain. The production, supply, and export of raw materials from China were delayed due to which the company now solely relies on its suppliers in the US for sourcing sucralose. The major companies in the food & beverages industry affected by coronavirus outbreak include Subway Restaurants Inc., Starbucks Corp., PepsiCo Inc., Papa John’s International Inc., McDonald’s Corp., KFC Corp., International Dairy Queen Inc., Dunkin’ Donuts LLC, Domino’s Pizza, Inc., and Burger King Corp. For instance, Starbucks had to shut down about 2,000 outlets in mainland China after the pandemic began to spread like wildfire.

Livelihoods and Lives at Risk from COVID-19 Pandemic

The looming food crisis amid trade disruptions, quarantines, and border closures continues to endanger both livelihoods and lives worldwide. The huge imbalance between supply and demand resulted from economic shock in the midst of the widespread shutdown of businesses. The uncertainty surrounding the eventual retreat of the COVID-19 pandemic is adding to the crisis. Fast and effective measures are required to mitigate the effects of the pandemic on the vulnerable food supply chain.

Nutritious and diverse food sources are in short supply in the wake of the global health crisis. Furthermore, greater food insecurity is prevalent in regions hit hard by COVID-19 such as Spain, Italy, and the US. However, there is still the need for anyone to panic about the food crisis as the world has adequate stock of it. The only problem is making it accessible to every section of the society amid strict lockdown.

What Has the World Learned from History?

The 2007-2008 food crisis offered the world some important lessons which can be utilized to avoid letting a health crisis turn into an indispensable food crisis. Policymakers worldwide are intent on not repeating their mistakes of the past. As the measures tighten around the pandemic, it will be even more challenging to prevent the downfall of the global food system. Logistics bottlenecks are a major challenge facing the globe at present. The global food industry is certainly strained in terms of transport and accessibility.

So far food supply has been sufficient thereby disruptions have been minimal. However, the production of high-value commodities such as vegetables and fruits has declined. Hence, governments, especially in India, aim to restart the agriculture activities in parts during the harvest season.

What Does the Immediate Future Hold for Food Sector?

The food supply chain disruption is expected to continue through at least May 2020 as new cases of COVID-19 continue to rise. Movement restrictions will continue for at least two more months in various parts of world, which is why minimizing bottlenecks will remain crucial for major manufacturers in the food industry. Agricultural production, on the other hand, will be affected by a shortage of veterinary medicines, fertilizers, and other inputs. Moreover, demand for seafood products and fresh produce will continue to decline in view of less grocery shopping and closure of restaurants. In particular, aquaculture and agriculture sectors are among the most adversely affected by the pandemic. Canned seafood and other frozen food products will be on the other hand in demand. The suspension of school meals in emerging nations in India is another area facing the brunt of the COVID-19 outbreak.

One thing is certain: the poorest sections of the society including the migrant workers will be the worst affected by the pandemic. In India, migrant workers are terrified of dying from hunger even before the pandemic can strike. Feeding millions of poor families is a daunting task being faced by the government of India. Individuals continue to contribute their part to help the vulnerable ones. However, feeding them every day requires uninterrupted production and supply of essential food items. The food sector in developing nations will thus certainly face greater strain over the entire system in the foreseeable future.

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Nandini is a senior research consultant working with Future Market Insights (FMI), a global market research and consulting firm. She has been serving clients across Food & Beverages, Pharma, and Chemical domains. Currently leading FMI’s Food & Beverages division, Nandini handles research projects in various sub-sectors, viz. Food Ingredients, Food Innovation, and Beverages. The insights presented in this article are based on FMI’s research findings on Impact of COVID-19 on Food Sector Industry of Future Market Insights

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Archives, Global Trade Daily, In The News, The Big Idea

A Human Perspective – Global Business in the Post COVID-19 World and The New Norm

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There is little doubt that our economy will not be the same in the post novel coronavirus world. American businesses long have shown the scars of national trauma: Devastating fires, for example, spawned major factory regulations. World War II hastened the entrance of women into the workforce. September 11th drastically heightened security protocols. Analysts say the novel coronavirus pandemic could push broad societal shifts and human behavior. There will essentially be a “new norm” where new businesses will start, others will thrive, and many will disappear. As human beings in this New Era, this article will identify how the human perspective will influence business and consumer trends.

One of the most apparent human factors consumer impacts from the coronavirus outbreak is a shortage of toilet paper stemming from panic buying originating from video’s that went viral such as this one from Australia.

However, upon a human perspective evaluation, there is a supply chain shortage of toilet paper, not an inventory shortage. Consumers are now buying for their homes as the toilet paper supply in offices, restaurants, airports, hotels, and schools go unused.

Other observed human factor trends are a shortage of Viagra where Pfizer is allegedly at full production capacity of Sildenafil at its Amboise France Facility (Now managed by Fereva). Lastly, figuratively related, in Food Science, packets of yeast are also at shortage levels as homebound bakers now have more time on their hands to take the time required to bake fresh bread.

Lastly, the best performing commodity during this epidemic has been frozen concentrated orange juice rising over 20% (Akin to the 1983 film Trading Places)

The most significant impact economists say will likely be dramatic losses in local retail and dining options, with millions of jobs disappearing as the most prominent and wealthiest companies — especially those that do much of their business online — extend their gains. Giants such as Amazon, Walmart, Target, and Costco — and the rest of the industry. Companies selling groceries and staples are thriving, while the rest are barely hanging on.

Telework, online education, and streaming video services have grown sharply, while movie theaters, schools, and traditional workplaces close their doors. Some will never reopen in a world where the shift from real to virtual suddenly has gone into overdrive. In the entertainment industry, Universal Pictures announced this week that its animated adventure “Trolls World Tour,” due for release in April, instead will be available for streaming. Such shifts, if they take hold long term, could imperil movie theaters, especially small and independent ones that run on narrow margins based heavily on concession revenue.

Virtually any business practices, such as remote work and the online medical visits or telehealth, which were slow to win widespread adoption because of behavioral inertia, will now speed adoption of such unfamiliar ways of doing business. Any traditional face-to-face encounter — going to an accountant’s office, sending children to class, traveling for a business meeting — will seem less necessary as more remote options become publicly acceptable and widespread.

An economic silver lining will emerge for janitors, child-care workers, grocery store clerks, and servers who will be able to demand higher pay and better working conditions in the post-coronavirus world, some analysts predict. Many have called these workers “heroes” in the crisis.

It’s impossible to say what ripple effects these massive disruptions could cause. One analyst pointed to groceries: When few people opted for home delivery, the scale of the enterprise ensured the costs were high, and availability was low. But as crowds of people opt for delivery, the route drivers will grow denser, and customers will expect everything is dropped off at home. Deliveries of items that were generally in-store purchases — fresh foods, prescription drugs — could usher in new economies of scale.

Businesses dependent on prime real estate and bringing people together could be especially vulnerable as people opt against public gatherings, including shopping at malls. That could have other impacts, too: One analyst said he suspected conspicuous consumption — high fashion, expensive sneakers, sparkling jewelry — might suffer when people “don’t have anywhere to parade.”

Other firms may become winners, too. Blue Apron, the food-delivery service, struggled for months to convince investors that people would pay $60 a box for all of the ingredients they need to make home-cooked meals. But the firm saw its stock price skyrocket more than 500 percent last week amid a flurry of new interest. The company said it is hiring workers at its fulfillment centers in California and New Jersey to meet demand.

But as surgical masks become desperately desired items, schools from Japan to Ireland sit closed, airlines scrap flights, trade shows are canceled, and stock markets plunge, the pandemic seems likely to alter the contours of globalization and human behavior. However, one thing we all can agree is human beings will prevail over the virus. As the Great Winston Churchill said: “If you are going through hell, keep going.”

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Frank Orlowski is an accomplished Senior Finance Executive and Board Member with more than 25 years of success in the pharmaceutical, medical devices, contract manufacturing, and healthcare industries. Leveraging extensive experience leading manufacturing, operational, and financial strategies across 35 countries.  Frank has also implemented over 30 FCPA Compliance/ Controls Remediation and Certification Programs across 25 countries.

Contact:

Email: frank@ationadvisory.com

Website: www.ationadvisory.com

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Archives, Commentary, Global Trade Daily, News

How Entrepreneurs can Respond to the Coronavirus Pandemic

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Within the past couple of weeks, communities across the U.S. have taken swift and drastic action to slow the spread of coronavirus (COVID-19). Schools have been closed, events canceled, and businesses have changed their day-to-day operations.

In times like these—where the stakes are high and everything is rapidly changing, it’s hard to know exactly what to do. That’s especially true for entrepreneurs, who have to manage their business and care for their employees as well as themselves, their families, and their communities.

With that in mind, here are four ways small business owners can stay informed, prepared, and ready to respond.

Stay informed

New stories are breaking every few hours and official recommendations are constantly developing. With so much information out there, it’s easy to get overwhelmed … which can either lead to hours spent scrolling through the news, or tuning it out simply because it seems impossible to filter through everything.

Since it’s important to stay up to date, try putting together a roster of reliable resources you can use to stay on top of the latest news for yourself, your family, and your business—without necessarily spending a lot of time chasing down information.

Here are a handful of sites that might make worthwhile additions to your list.

Health organizations: The Center for Disease Control and the World Health Organization have a suite of medical resources, regular updates on the coronavirus, and guidance for how businesses, schools, and other organizations can protect the health of their communities.

National business organizations: The US Chamber of Commerce is regularly sharing updates and resources focused on businesses and the economic impact of the coronavirus, while the Small Business Administration has resources including employer guidelines, information on their disaster loan program, and a directory of local business organizations.

State and county governments: Local health and business departments are working to take swift action and keep their communities informed as they respond to the coronavirus. Checking in with them can be a great way to understand what’s going on in your community and what services they are offering in response. You can typically find their websites through a quick search.

Look for resources that can help

The sweeping changes we’re seeing in response to the coronavirus are, inevitably, having massive social and economic impacts. With schools closed, events canceled, restaurants vacant, and many other businesses dealing with closures or reduced demand, many people are dealing with reduced income or economic uncertainty.

At this point, nearly everyone is significantly impacted in some way. As a result, we’re seeing government and community organizations come together and try to find new ways to support each other.

If you, or someone you know, is facing challenges as a result of the coronavirus, look for resources that might help. And if you’re not sure where to look, start by checking with your local newspaper or news outlet, or contacting your state or county government for advice.

Here’s a general overview of programs that are already available or in progress:

-Although most schools are closed, many of them are still offering meals to children who rely on school lunches.

-Food pantries are doing their best to adapt to the changing needs of communities.

-The federal government is working to pass response packages that offer economic support to families, communities, and businesses.

-The Small Business Administration is offering resources, including disaster loans, for small businesses.

-Many state and local governments are offering financial relief for small businesses, including tax deferments, grants, legal assistance, and loans.

It’s likely that more and more resources will become available as time goes by. These programs all exist to help businesses, families, and communities get through challenges and bounce back from them, so don’t hesitate to use them.

Find ways to adapt

There are a lot of businesses that are especially hard-hit by the coronavirus. Travel, restaurants, entertainment, events … the list goes on.

And although it would be ridiculous to suggest that all these businesses can mitigate their losses by smart planning and marketing, some are finding ways to cushion the damage a bit. For example, some restaurants are closing their tables but offering delivery or pickup instead. Retail shops are focusing on ecommerce efforts.

If you’re seeing a substantial drop in business, take some time to brainstorm. Talk to other entrepreneurs in your community (perhaps via a virtual meetup). Look for new needs and opportunities, and see if there’s a way your business can pivot or stretch to fill them.

Challenges and obstacles can lead to innovation and new opportunities, if you’re prepared to meet them.

Support your community

It’s a tough time right now. Although many groups are hit harder than others, practically everyone is feeling the strain one way or another.

That’s why, if you can, it’s more important than ever to volunteer, donate, and find other ways to support your local businesses and communities. Here are just a handful of ideas:

-If local restaurants sell gift cards, consider buying one (or a handful) to show your support. You can also look for small independent retailers who offer delivery or online sales instead of turning to bigger businesses.

-Consider donating to your local food bank or Meals on Wheels.

-If you can, give blood. There’s currently a severe blood shortage, and the Red Cross has put together guidelines on donating blood during the coronavirus pandemic.

-Help neighbors who are especially vulnerable to the virus due to age or pre-existing health conditions.

-Find and support local nonprofits whose services are likely to be strained by the virus. The impact is potentially wider-reaching than you might think, but nonprofits that focus on food, healthcare, and housing are a great place to start.

It can be especially challenging to donate or volunteer when you’re feeling anxious or economically strained, but every little bit counts. One thing we do know about the pandemic is that working together, as a community, is critical—so keep looking for ways we can all support each other through this.

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Chelsea Hoffer is a writer at Azlo, an online banking solution for entrepreneurs, where she gathers and shares knowledge about building successful businesses.

transformation
Archives, Global Trade Daily, In The News

How A Transformation Mindset Positions Companies To Succeed After The Crisis

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Many businesses are reeling from the COVID-19 pandemic, and while some may return to business as usual once the crisis is over, others may need to alter the way they think and operate in order to survive.

Many global leaders think the pandemic will transform the world in significant ways, and companies with leaders who already have a transformation mindset will be better equipped to adapt and succeed at a high level, says Edwin Bosso, founder and CEO of Myrtle Consulting Group (www.myrtlegroup.com) and ForbesBooks author of 6,000 Dreams: The Leader’s Guide To A Successful Business Transformation Journey.

Bosso notes there are two types of companies who entered the crisis. “The first type are those who went through a level of transformation prior to the crisis and had the plans and structure in place to keep moving. For them, it will be a lot easier to see where the gaps exist and also where the opportunities are for growth,” Bosso says. “They’ll have better tools to react and analyze what happened and make decisions on what to change.

“The second type of companies are those who, before the pandemic, were contemplating changes that were necessary, but they didn’t follow through. Those companies will come out of this wounded and feeling the environment is more chaotic. Transformation management in this environment is vital. It’s about creating momentum to see results and growth, and the process must be geared at successfully moving hearts and minds toward the end that we seek.”

Bosso suggests three phases – prepare, initiate and implement – for managing transformation in these challenging times:

Prepare

Understand your soul as a company. “Understanding an organization’s soul becomes important because it is the only true representation of the impact that the organization has on the world,” Bosso says. “Knowing the company’s true north puts it in a position to build a higher purpose into the transformation program, and ensures the transformation is rooted in the essence that will make the company successful going forward. It really comes down to answering one question: ‘When people think about our company, whether we are still in business or whether we are gone, what will we want them to say?’ The answer to that legacy question should be a set of descriptors of your identity and capabilities.”

Conduct a post-crisis assessment. “Companies should take this opportunity to examine what they were dealing with before the crisis, how they handled the crisis, and to create plans for how to emerge stronger than before,” Bosso says.  “This event gives leaders carte blanche, in many respects, to implement bigger plans and changes than before. At the end of this, there will be opportunity for those who seize it.”

Initiate

Program the team structure. Bosso organizes a transformation team into these departments: program managers, the leaders of the workstreams, the team members for the workstreams, and administrative support. “This team will be in charge of the implementation phase and be accountable to the company leadership team,” Bosso says. “Communication must constitute a key part of every transformation program and must be organized to reach various audiences at different stages of the program.”

Implement

Manage results: “The implementation phase is the riskiest,” Bosso says, “because it includes the organization’s transition through the emotional cycle of change. Programs must deliver the intended results, and along the way, failure will happen. Measuring short-term and long-term results allows the opportunity to deliver on a specific goal and to celebrate specific successes. However small they are, they add stamina and motivation to the effort.”

Manage people: “A significant challenge that organizations often face when it comes to implementation is people’s resistance to change,” Bosso says. “Implementation is much about building people and building performance. It involves teaching, convincing, coaching, rewarding, sometimes disciplining, but always expressing to people that they are at the center of the organization’s destiny.”

“All companies that come through this pandemic have a huge opportunity to learn from what they’ve done and from what they haven’t done,” Bosso says. “For many, it will be a time for transformation.”

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Edwin Bosso (www.myrtlegroup.com), ForbesBooks author of 6,000 Dreams: The Leader’s Guide To A Successful Business Transformation Journey, is the founder/CEO of Myrtle Consulting Group. Bosso specializes in operations improvement and change management, and his project history includes work for major brands such as Heineken, Texas Petrochemicals, T-Mobile, Anheuser-Busch, Rohm and Haas, Campbells Soup, Kellogg’s and Morton Salt. A wide range of assignments has taken him to Asia, Europe, and North America. He completed his undergraduate education at The Hague Polytechnic in the Netherlands and earned an MBA from Rice University in Houston. 

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Archives, Global Trade Daily, Special Reports

Your Enemy is not Uncertainty, but Complexity

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As a nation, we look to the economy to answer our basic questions about the future. What will fluctuations in global markets and supply chains bring? How will the dollar recover from the circumstance of a stalling consumer market? And what impacts, if any, will change the way we do business? As spring approaches, the anticipation around these questions builds. We watch for signs of our shuttered economy lurching back into motion.

Businesses, much like individuals, have coping mechanisms when faced with a crisis. There are ways to build a business contingency plan, even with unforeseen challenges. Some industries have not dusted off their plans since the financial crisis of 2008, and there is anxiety around what it means to enact it. But the truth is: business contingency plans are built precisely for moments like the spread of COVID-19. And while words like “unprecedented,” “alarm,” and “volatility” rule headlines, reactivity is not how businesses run. It is through preparedness and foresight. It is with a business contingency plan.

While no leader takes comfort from enacting their company’s plan, the ability to swiftly empower crucial business functions with ease is possible. Uncompromising company and financial data security and work-from-home procedures are not mutually exclusive. A bit of knowledge is required to migrate an office environment to the home without opening new vulnerabilities.

Divide and Conquer

Dividing and conquering is the oldest trick in the book for any opportunist looking to damage their business. Security hackers and other ill-intentioned opportunists look for times of organizational chaos to strike. They trust that business leaders have overly-divided their attention and that employees will not adhere to traditional protocols for data security or safe treatment of sensitive information.

There are also a substantial number of leaders who will focus on the uncertainties of the future, preventing them from seeing vulnerabilities that are right in front of them. This, of all things, means that many companies and their leaders must know the enemy is not the distractionary dips and dives of the economy, but the complexity of an organization that prevents it from responding elegantly to uncertainty. Military strategist Sun Tzu of The War of Art provides insight into how we should prepare for battles with the unknown:

“Know the enemy and know yourself; in a hundred battles, you will never be in peril. When you are ignorant of the enemy, but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and yourself, you are certain in every battle to be in peril.”

Having a business contingency plan is only the beginning. Redraw your battle lines when uncertainty strikes, and you will unmask the hidden areas that need better solutions.

Strategies for reducing business complexity:

Strategy #1: Define ‘new normal’ from the top down, but bring insight from the bottom up

Your employees will not naturally intuit where the new boundary lines exist. Spell it out so that everyone is on the same page. Barring in-person meetings, you may need to host a company-wide Zoom call with a panel of C-Suite leadership to reassure, set new expectations, and answer questions.

Most importantly, leadership should use this as a chance to gather further information. Seek out the experiences of those who serve your customers directly to get their perspective. How are customers responding to the shift? What are their emerging needs, and is there a niche there that your industry can uniquely fill? Keep your company’s ears to the ground.

Strategy #2: Banish organizational drag through automation.

In environments of economic hardship, businesses with leaner operations and less organizational drag do better. Cutting out redundant manual processes is crucial to eliminating complexity. A business contingency plan will help enact the first line of defense for your business. However, this is not all you will need. The second wave of reinforcements is crucial to keep your business advancing through times of uncertainty.

Automation is your greatest ally in this fight. Now is the time to abandon stale processes. If they’re manual or paper-based, requiring cartons of messy file work or repetitive wet-ink signatures, its time to rethink. Lean heavily on electronic AP solutions, which can clear up the bottlenecks choking out crucial supply chain relationships.

Never in history has the value of a swift and reliable supply chain been more evident than now, as hospitals face shortages of both personal protective equipment and crucial medicines. Industries are re-learning a valuable lesson: that while necessity is the mother of invention, the cost of waiting to innovate can be incredibly painful.

Strategy #3: Reach for a sturdy bottom line more than blue-sky profits

This year is unlikely to offer many sunny prospects in the realm of profits. Yet cost-cutting initiatives will provide the kind of stability a company needs to make impressive cumulative gains in the coming years. What does this mean? Playing defense isn’t your only strategy. You can also cut costs to preserve the liquidity you do have.

With electronic tools already up and running for staff communication or remote meetings, it’s time to ask yourself how you might unburden other areas of the office from slow performance inefficiencies. What is sending through the mail that could be automated? How might making payments to suppliers electronically cut back on paper check costs? Explore every avenue for cost savings. There are many electronic solutions at the ready to lift manual-based work with minimal if not zero downtime for your business. Now is the time to employ these solutions and not hold back when better-designed options exist.

Strategy #4: Invest in secure solutions without needing to hire more IT

Everyone at this point could do with one more great IT hire, but the point of a business contingency plan is to be resourceful with what resources do exist. Making quantum leaps from the office to a remote setting is much easier for companies who have already made steps toward digital transformation.

Instead of losing more time to processes like answering phones, getting approvers to hand-sign checks, and sending paper mail to closed-up company headquarters, make them digital, with greater control and traceability. Fraudsters’ potential access to your systems diminishes when you have greater visibility and fewer cooks in the kitchen. Higher thresholds for security mean that problems or threats are identified in real-time and careless or lagging processes fall by the wayside.

Strategy #5: Innovate, innovate, innovate

It’s tempting to lose steam during a crisis and consider it the wrong time to try creative solutions, but the logic doesn’t stand. Now is absolutely the time to try new things.

Since volatility has introduced new stressors into the equation for your business, the target has shifted. A brand new segment of the market may have just locked into place in the form of potential customers. You have the potential to attract them by showing that you understand their needs quicker than anyone else in the space. This requires agility and a bit of risk, but it’s a risk worth taking, even under present circumstances. Innovation isn’t an optional advantage in times of plenty. Innovation is essential to the survival of every business.

In the words of Sun Tzu, “In the midst of chaos, there is also opportunity.” Do not take advantage of the chaos, but respond with resilience to its demands.

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Lauren Ruef is a research analyst for Nvoicepay, a FLEETCOR company, with years of experience conducting market research and crafting digital content for technology companies.  Nvoicepay optimizes each payment made, streamlines payment processes and generates new sources of revenue, enabling customers to pay 100 percent of their invoices electronically, while realizing the financial benefits of payment optimization.