Push To Start
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No doubt that the sky has just fallen. We are going to experience a sharp recession, which I hope will be a V-shape, not an L-shape recession. Bottom line is that we must do everything we can to mitigate this short-term crisis. So we are inviting you to consider the following 7 points as part of the reset opportunity:

  1. Rethink supply chain dependencies: There are limits to globalization. This was a warning shot. We need to focus on supply chain resilience and establish a more robust network of strategic suppliers. Bottom line, manufacturers might consider reshoring or near-shorting critical parts and equipment.
  2. Embrace omni-channel strategies: Many manufacturers have already prepared their e-commerce strategies. Most, though, delegate this activity to their distributors. Get your website cart ready and get ready to activate the cart functionality. You cannot just rely on your distributors to conduct touchless interactions. You must be ready to be in control of your e-commerce future.
  3.  Think D2C (distributor to consumer) model: Along the same line, there are massive investments made in direct-to-consumer business model. Selling direct online and establishing a D2C model are not the same as selling on an e-commerce platform. A D2C business is set to a sustainable part or a business or a separate entity all together. It is not an opportunistic change to address a portion of the business through a web site or a marketplace. D2C means a radical change in marketing, supply chains, and other support activities.
  4. Launch usage-based and subscription-based business models: Now is the good time to take leadership in your market as long as your cash situation allows for it.
  5. Refocus on profitable growth and cash flow: As the economy resets over the next quarter or two, refocus your strategy away from unsustainable growth and more on profitable growth. That means making priorities in allocating cash to attractive opportunities and focusing on differentiated innovation development.
  6. Revisit and reset business rules: When things are going great, the focus is on growth and profit. This is great time to reset your business rules and kill the high cost-drivers in your cost-to-serve analysis. Maybe you can change your delivery conditions. Or you could consider cancelling allowances or legacy favors that were in place for many years. The focus here is to optimize costs and protect cash flow again.
  7. Scratch your asset plan and start over: This crisis is for sure challenging all the strategic assumptions. At least if the case for the next 12 . This is a turning point, and leaders are going to think twice about large investments.

 

Manager’s Office Team

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