Recipe for Business Resilience
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Recipe for Business Resilience

By now, many companies have taken the appropriate and recommended steps to protect their employees from potentially contracting and spreading coronavirus. Many companies are finding out that they were ill prepared for this type of impact, whether it was within their infrastructure, business processes or their financial structure.  While the approach to manage direct labor depends heavily on the industry, indirect labor such as office workers and administrative staff remain on the payrolls as they try to make the transition to working remotely.

Lynn Borek, Practice Leader, ForeOptics

For many companies, this is not the norm for conducting business and it is new to many workers as well. The question many CEOs and CFOs have on their minds right now is “Is my paid remote staff being productive and working on the most important tasks to sustain and protect the business?”  How do I direct them to plan for the recovery, what will it look like, and when will it come?   The good news is that many activities necessary for driving business resilience during these challenging times can be effectively carried out remotely.

Your Revenue and your EBITDA optimization processes are primarily run by your administrative staff, particularly those in planning and Supply chain management.  These roles across the value chain, are critical for enabling a company to weather the storm. These expensive resources should be executing activities in the “Recipe for Business Resilience” as they work from home. ForeOptics services enable teams working remotely to be intimately involved in sustaining and protecting the business and continue to drive value.

Revenue Enhancing Strategies

3-Step Recipe for Business Resilience

  1. Locate and identify business risk: Portfolio Analysis and Demand Forecasting

Sun Tzu wrote “Invincibility is a matter of defense” in “The Art of War”. In order to defend a business in trying times, the company must understand its risks by systematically examining them area by area. Knowing this enables the business to maximize the effectiveness of its strategy using limited time and costly resources.

    • Market and Customer Risk – Where will your demand truly be coming from for the next 2-12 months? Have orders been cancelled or only delayed? By how much? Are some markets and customers more important to the business than others?
    • Product Risk – Will there be a shift in demand for parts of your portfolio? How will this shift impact margins and profitability? How will that shift over the next 2-12 months?
    • Delivery Risk – Where are the failure points in the supply chain and operations? What external risks are posed from external suppliers? Are the internal operations capable of delivering orders? What cost leakage exists that will erode profitability?

Strategic portfolio analysis and systematic demand forecasting helps answer these questions and establishes the foundation on which effective operational and delivery planning can be built.  Strategic focus on the elements that will drive a profitable recovery using data driven knowledge of the market and customer recovery demand will be critical.

  1. Anticipate near- and longer-term future: Synchronized Planning and Inventory Strategy

The business should use a combination of data-driven forecasting models and subject matter expert input to anticipate likely scenarios based on key factors impacting the specific markets and products. Scenarios should clearly show the impact on the top- and bottom-lines of the business, with the key drivers of revenue and costs described, and include the assumptions from which the financial outlooks were derived.

Joshua McDonough, Practice Leader, ForeOptics
Joshua McDonough, Practice Leader, ForeOptics
    • Demand planning: translate expectations into actionable numbers
    • Supply planning and sourcing strategy: vet demand scenarios through critical internal & external supply resources
    • Production, inventory and delivery: Pressure test linkages through the value chain to be able to deliver on commitments and capitalize on real demand in a timely manner while controlling costs and investments

Critical planning functions such as sales, program management, demand planning, supply chain, and finance need to be driving to the same strategy to take critical actions and minimize wasted cost and time. Senior planning relationships with customers right now could be strengthened by reaching out and sharing how you see the recovery and help them plan as part of your partnership.  Own your ecosphere, remote or not you can reach out.  Capable and authorized representatives from each key planning function should be identified in order to streamline planning coordination and communication efficiencies to maximize business flexibility.

  1. Develop and implement risk mitigation plans: Supply Analysis & Delivery Assurance

Businesses that proactively work to mitigate the key risk areas are shown to suffer less stock value declines versus those companies who simply “grin and bear” the storm.

    • Use data analytics to quickly dissect the supply base to pinpoint where risk mitigation strategies need to be implemented
    • Identify and enable sourcing strategy adjustments to increase likelihood of delivery assurance on the products that matter
Seema Phull, Principal, ForeOptics
Seema Phull, Principal, ForeOptics

The challenges facing businesses will continue to evolve over time. Implementing a flexible strategy to respond to them is critical and requires the full engagement and attention of your workforce. Our strategy toolset, framework and team can support you remotely now to ensure your teams can contribute no matter where they are located.

Check in with ForeOptics for more information on how to protect, sustain and grow your business, as well as how to train your team to work that way now and in the future.  Many of our clients have been able to use our services remotely during this time, and we will be sharing how this could be done starting now, as well as our thoughts on how the recovery will come and how to prepare for it, and how to take advantage of the stimulus package before Congress.  This time is not for the faint of heart, but it is also not the time to sit by and watch as others prepare for the recovery.