Next steps following the video
The video on supply chain disruption was dense with information and insights. Do not stress yourself, just follow this step-by-step guide below to help you get going! If you feel it is necessary, get a Strategic Planning Facilitator to support you through this process and always revert to legal counsel for any concerns.
Step 1: Identify the impact on your business
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Action - Schedule Workshop: Gather the required personnel who can give insight to leadership on the current status of the supply chain. The first step is thus framing the issue. Orientating yourself and ensuring the leadership is aligned will allow for the remedial actions needed to be executed faster. 3 topics ought to be discussed in this workshop:
- What does m business model look like? (30 mins)
- What is my value chain to create the finished good? (30 mins)
- What the customer considerations? (30 mins)
- Suggested timeframe: Next 24 hours
- Suggested tools: Slide 18 of Supply Chain Module
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Action - Quantify the impact: Head of Sales or BD should compile a comprehensive risk profile that quantifies the impact of disrupted supply chains. Traditional methods of assessing supply chain disruptions are still applicable but tend to focus on likelihood of occurrence and the magnitude of impact (such as the popular risk heat map methodology). Given COVID-19, however, newer, advanced tools are needed as well. The aim of this exercise is to understand:
- Where the gaps are
- Where the cost sink holes are
- Identification of hidden risk exposure
- Supply chain dependencies
- Collaborate on potential solutions
- Suggested timeframe: Next 48 hrs
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Action - Plan scenarios: Once you have understood financial impacts and the customer risk profile the next step is to create your high, medium, and low forecasting scenarios. Schedule a workshop where the leadership team (with input from the organization) determines what the high, low and medium scenarios will be.
- Suggested timeframe: Next 48 hours
- Suggested tool: Scenario Building Guide
- Action - The Gap: Based on the scenarios identify the most likely scenario for your business. This will provide a starting ground to identify the priority elements in the supply chain to address.
Step 2: Adjustments to improve liquidity
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Action - Identify and Rank Sources: The next step in addressing the supply chain impact is to understand that you need to address liquidity as well as operational efficiency. This first step looks mainly at liquidity.
- Schedule a strategy session with you Head of Finance or equivalent
- Start by exploring the cost cutting options available to the business
- The aim is to maximise revenue in the short term
- Minimize operation costs in the short term
- Cutting the fat from the business to create a leaner more cost-efficient business
- Identify which of the options your business is eligible for
- Based on the pros and cons and the specific make-up of your business, decide where you will cut costs
- Assign the relevant POC in your business to negotiate / terminate the engagements with the relevant parties
- Ensure you or a figure of authority is available to assist in particularly tricky negotiations
- Suggested timeline: Next 3 days
- Suggested tools: Cost Cutting Plan, Risk Assessment Tool, Runway calculation Model
Step 3: Adjustments in operations to improve efficiencies:
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Action : After securing a way forward with you suppliers it is necessary to address the customer side next. The means by which to mitigate against the possibility of customer drop off is to ensure that you as a business can meet their needs. Ensuring you have sticky customers will make the eventual recover post CV-19 that much easier. The aim of this step is to:
- Condense operations by taking out unnecessary steps
- Moving quickly to a work-from-home model so that efficiency of your workforce is not lost
- Restructure the organisation to be leaner with more effective communications channels to suppliers and vendors
- Suggested timeframe: Run parallel with improving liquidity
- Suggested tools: Org. Redesign Excel Tool
