How can I help my business to survive the increased disruption caused by COVID 19?
In the whitepaper “How does NORMAL look like in an ABNORMAL reality?” we already described a number of steps you could take to strengthen your internal organization.
In this Whitepaper we look a bit further into some of the back-office processes like procurement & sourcing, S&OP and commercials.
At the first glance you might think not all are related but they are for sure all connected…
Commercially you try to fill all your capacity of production with the best margin products.
Of course you can not only cherry-pick, sometimes the same customer needs as well good margin products as bad margin products. In many cases, you can not do other than accept both. When you are lucky the forecast of your customers is very good and your S&OP process is showing good predictability… In that case Procurement knows exactly what we need to buy and Sourcing can have sharp negotiations on exact amounts.
All 4 processes are connected!
And that is exactly where the difficulty starts when disruption like this crisis kicks in.
Demands are less and less predictable, S&OP process is completely undermined, and before you realize, you have a mix of stockouts and too high inventories making our life difficult…
And when that happens we blame the COVID-19 crisis, because we could not see it coming.
Maybe we did not see it coming but we were also not prepared…!
In fact there is a lot what you could have done to be better prepared…
- Have clearly defined communication flows between departments.
- Make sure all communication is Complete, Correct and on Time. (C,C&T)
- Measure the defects against the C,C&T standards and provide feedback to the sender. (because the receiver determines the standards)
- Have high expectations translated into challenging but easy measurable targets.
- Increase the involvement of people to contribute to improving their communication processes.
- Increase the frequency any quality of your performance dialogues, ensuring you do not accept the status quo any more and for sure do not allow to let it slip further.
- Do a structured What if? Scenario and make sure you have response standards defined for all possible defect situations. The good part of this is, that if you have for extreme scenarios a response scenario ready, you can also use this on a smaller scale, in times the crisis does not hit but the variance is bigger than normal, due to whatever reasons.
In this way information which is C,C&T helps to control your processes optimally and you have a standard way how to respond to defected information which is not C,C&T. Because we should always try to prevent the out of control situation in which we always spend money on things we do not need and we spend too much money on things we urgently need. And in this way if you are not properly prepared, the disruption of a crisis like the one of COVID-19 becomes also a crisis in our complete value stream. At least bigger than it should be and needs to be… So we better should be prepared, we do not know if this will happen only once!!
If you would like to know how above scenario effectively can be put into action please leave your contact information behind in below section. If you do so, one of our experts will reach out to you and plan a conference call in order to understand your challenges better. During this Free of Charge call we will also already focus on how we can provide you with concrete help to continue your journey to the next level of excellence… AchieV believes strongly that together we can survive this crisis and help each other to grow stronger than ever before…