An organisation is the mid-point between its customers and its suppliers. During a pandemic, both will need a new and previously unimagined level of support.
Given the uncertainty of the situation, communication is vital. It’s essential for businesses to provide regular updates so that customers and suppliers alike are informed, secure and prepared for change.
Potential issues
Changing demand and erratic customer demands will be difficult to forecast. Large volume changes will impact pricing, costs and inventory.
Establishing effective methods of cash collection and adjusting terms of payment will be essential for minimising the financial impact if credit insurance is withdrawn. Quick implementations and reactions are needed across areas like online sales, inventory management, distribution formats and servicing the vulnerable safely.
Forecasting and mitigating supplier risk around financial and operational failure can ensure supply chain resilience and efficient operation. Replacing imported products with your own domestic version, where possible, can help reduce import challenges, while identifying essential versus discretionary spend with suppliers and choosing where to prioritise payments will protect liquidity.
Communicating with your customers and suppliers is vital, so that they know about any changes to your business and they understand that you are prepared for and able to respond to the unfolding crisis. Think how communications can be delivered to customers and suppliers about changes to the business, the decisions you are having to make and how you are reacting to COVID-19.
Actions to consider
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Assess
Identify issues that might impact your suppliers and customers, and consider what the ramifications might be. How will the situation impact your business specifically?
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Protect
Quickly develop top-down, high-level options and tie your strategic and tactical decisions into those choices to ensure synergy. What are your specific priorities?
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Restore
Once the market is more stable, take time to think through potential ‘aftershocks’ for your business from the COVID-19 outbreak. How can you plan for these and will you have the working capital to restart your business when activity picks back up?
Consider these questions
- What are the main changes to your services and how are they affecting customer behaviour?
- Can you ensure regular and clear communication about your policies and service updates?
- Where are the risks of financial failure and what are the opportunities to generate cash more quickly?
- Which customers and suppliers will need extended terms or different arrangements, and where your supply chain relies on travel or exports do you have alternatives in place?
- Are any of your competitors in other countries that are impacted and are there opportunities to support customers who are struggling with supply?
“Our clients are part of a network that includes them, their customers and their suppliers. In turbulent times it’s even more important to plan and work in alignment with both to meet all the networks’ needs.”
Alan Dale, Partner
Manage the impact of COVID-19 on your business
As the situation changes businesses need to remain agile and alert. We can support you to manage many of the impacts of COVID-19 on your business.
More practical guidance for your COVID-19 response
