Experts are estimating a 30% decline in the global shipping market through May in these COVID19 times. Supply chains are suffering from a unique event that cut everyone by surprise. Numerous steamboat lines have canceled entire lanes.
There is a high possibility that we will continue to see more shipping disturbances in Q3 2020, and perhaps even longer.
Large corporations and small businesses are searching for ways to insulate their companies and maximize opportunities in this uncertain time. Statistics show 75% of companies reporting supply chain disruptions, and an estimated 40% of companies don’t have a backup supply chain plan in place.
The best way to protect a company is planning, not forecasting.
Here are some common best practice principles which can help every business succeed:
Care For Your People. Do everything in your power to make sure your employees and customers are protected – get the best PPE available, heed governmental warnings, and sanitize all equipment on a frequent basis.
After all, people are the best asset of your business, take care of your employees and customers.
Pay Close Attention To The Current Tendencies. In more simple words, give them what they want. Switch your focus on the demand and they will generate positive cash flow.
Look at your inventory, find products or new services that you can promote to help your customers or new customers. Freeze other costs until the market dictates they are needed and focus on the cash positive products or services.
Analyze Other Countries. Other countries like China, and Italy started this crisis weeks before ours. Keep monitoring what is happening in these countries just so that you get an idea of possible scenarios that may happened locally.
Be aware that the shipping route normally used for your product could be altered or become a blank sailing. The best defense against disruptions is being familiar with and tracking your entire supply chain.
Plan For Longer That You Think. We all have already begun adapting our process by looking to other origins for sourcing materials and products.
Your business should look for alternate materials and products from areas that have not been as affected by the COVID19.
Consider multiple trucking to varying ports to spread out the potential for inventory volume disruption. Relocate all critical inventory as close to the major consumer bases as possible.
Nobody knows if this COVID19 pandemic will be over by the end of this year or that a cure will be available. We don’t even know if this will become a seasonal COVID19 flu or not.
Prepare for a post-COVID-19 environment by having other options for your supply chain. Gather as much data and information pertinent to your business and create a plan. Taking these steps will help provide stability and maximize cash flow during this time of crisis.