The COVID-19 pandemic created a global crisis unmatched in the modern era. As governments scrambled to contain the virus and flatten the curve, businesses all over the nation shut down to protect workers. For over a year, companies continued to limit or modify their operations again and again as wave after wave of different COVID-19 variants spread around the world.
Amid this economic upheaval, American citizens did something unexpected. Despite often being quarantined and unable to engage in normal activities, they started spending at unprecedented rates. According to Bloomberg news, consumer demand rose more than 15% two years ago. Whether it was the influx of stimulus money, stress buying, or just staving off boredom, Americans started buying more than ever.
The combination of fewer workers on-site and higher demand created a unique situation. An enormous influx of goods ran headlong into a grossly understaffed supply chain. Even as dock workers and truckers returned to work, buying continued at higher-than-normal rates. The result is a supply chain backlog that will take time to recover.
The Impact on businesses
Businesses on either side of the production line have been hit. Companies that manufacture goods find themselves with overwhelming ques of product with no way to get their merchandise out. As a result, sellers cannot deliver the goods their customers require. Those in the transportation industry are caught in the middle.
Because all of these companies are facing challenges unique to this moment in history, traditional responses will not be enough. Only leaders that can adapt quickly will keep their companies flexible enough to weather these enduring difficulties.
Staying flexible
In light of these unprecedented difficulties, companies must be fast on their feet to stay relevant. Short-term solutions that address supply chain interruptions will lead to long-term survivability.
Cut the middle man
A few businesses have put in the time of shipping manufactured goods directly from overseas factories to their headquarters. By cutting out warehouses and stateside vendors, retailers can get their products delivered much more expediently. While the process may take diligent research and a bit of trial and error, the payoff of showing customers reliable service is well worth the effort.
Be transparent
Maintain open lines of communication with customers and update them as often as possible. Inform them of supply chain difficulties without making excuses and give them reasonable (not optimistic) estimates of when they will receive their product. When customers are in the loop, they feel assured that they are not being neglected or forgotten, which inspires loyalty.
Diversify
Now is not the time to stick with a vendor just because they have worked well in the past. Without burning bridges, companies need to look for suppliers that can help meet their needs quickly. Having redundant suppliers on standby also allows retailers to have a backup in case of delays from the original vendor. By diversifying a portfolio of suppliers, companies will have the option of importing goods in smaller quantities from multiple sources, keeping operations running and customers satisfied.
Become cyber-secure
According to a recent report from the FBI, U.S. security experts are expecting an uptick in Kremlin-backed cyberattacks specifically aimed at disrupting the supply chain. Leaders that neglect this vital aspect of their business’ security are leaving themselves open to ransomware attacks and worse. Cyberattacks from Russia are particularly dangerous because of their propensity to utilize “fire and forget” viruses that destroy data with no hope of recovery.
Insure
The pandemic and resulting economic disturbances outline the need for proper business insurance more than ever. A tailored plan that includes contingent business interruption coverage or extra expense coverage can mean the difference between life and death for businesses that face unexpected difficulties. To learn more about uniquely crafted coverage plans, visit foyandassociates.com.
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