Coronavirus: 9 Steps to Protect Your Company

The business world was caught off guard by Covid-19. According to a report by Dun & Bradstreet, 94% of Fortune 1,000 companies are experiencing supply chain delays. Then there is workplace absences, lower productivity, travel cutbacks, and reduced trade and investment.

Arianne Cohen suggested 9 steps to protect your company (but these are large companies with supply chains) and the 9 steps are:

1.         Know the basics. Depending on the crisis, Tony Adame of Aon Plc says, business disruptions require four types of responses:

a)         Emergency response and safety. This is making sure people and facilities are safe.

b)         Crisis management and communications. Analyzing the situation and informing staff, media, suppliers, and customers of the crisis and the plan.

c)         IT recovery. The tech department protects corporate information, hardware, and software.

d)         Business continuity. Keeping essential operations running.
 

2.         Establish a war room—three of them. Start on-site, but have off-site and online options as backups.

3.         Update your HR guidelines. They should include remote work rules and family medical leave allowances. Rachel Conn, a labor and employment lawyer with Nixon Peabody LLP, suggests establishing a communicable illness policy. It should include what sicknesses are covered, employees’ obligation to report them, sick leave rules, how the employer will communicate and keep workers informed in an outbreak, and travel restrictions.

4.         Identify critical operations. A finance department might have to pay vendors and employees, but its tax and audit work could be put off. Then figure out your critical needs, such as raw materials or subcontractors, and plan for how you would maintain those supplies and relationships.

5.         Assemble skeleton staffs. “Prepare for situations when critical personnel are unable to come into work,” says Brion Callori, manager of engineering and research at insurance company FM Global.
 

6.         Consider a digital supply network. Execs should spend their time making decisions, not calling Asia to track down what’s where. 

7.         Work those connections with companies you rely on. Are you a priority—or client No. 168? Building relationships in every facet of production will help in a future disruption. “The power behind the supply chain is people,” says David Cahn, director of global marketing at Elemica Inc., a digital supply network. For example, China is requiring that factories obtain health department approval to reopen, and if you know the local inspector, getting a signoff could be a smoother process, says Rodney Manzo, CEO and founder of Anvyl Inc., another DSN.
 

8.         Defuse your supply chain time bomb. Corporate risk is defined by the number of buffer days in your inventory and your short-and long-term options for sourcing. Work on backups—and backups to backups. Industries with more regulatory oversight, such as pharmaceuticals, need even more buffering, because switching facilities requires time-consuming inspections.
 

9.         Think creatively. Of Manzo’s hundreds of Chinese suppliers, 93% are affected by Covid-19, with an average manufacturing delay of 17 days. If inventory is held up, do you have alternative markets to sell in? AJ Mak, who runs Chain of Demand Ltd., an artificial intelligence supply chain company, says a clothing retailer could sell late-arriving summer wear in Australia, New Zealand, and Brazil.

The International Organization for Standardization’s guidelines include No. 22301, which deals with disturbances.

But above all, think cash flow. That's for large or small companies. If a company is to survive, cash retention is the primary goal – followed by perhaps temporary staff layover, unpaid leave or other fixed cost reduction. So how does one generate or retain cash? Look at debtors and creditors ageing – collect those you can and defer those payments as long as possible, reduce all incidentals like travelling, training or entertainment. Review cash position daily or at least weekly and have six months forward to cover overheads.

And with Covid-19, strong representation to the Government is necessary to meet cash forward for six (6) months. Singapore, Germany and China have good plans to help SMEs survive this tough period. Good luck!

Reference:

The Coronavirus Checklist: Nine steps to protect your company, Arianne Cohen, March 3, 2020 (www.bloomberg.com)