Let’s take a look at how COVID19 is impacting small business supply chains.
The Coronavirus has disrupted nearly every business in the USA and affected nearly every member of the population. As the virus continues to spread and with most of the United States and much of the world on essential lock down, small businesses in particular are facing tough choices and immense pressure to balance their financial stability with the health and continued support of their employees.
As part of this drastic disruption, many companies are facing supply chain challenges during this crisis.
Essential businesses supplying medical and other emergency products as well as consumer packaged goods and other foods are facing incredible demand. We’ve heard from several companies of this type that production is doubling and tripling due to these extreme circumstances.
For companies with increased production, supply chain costs can be much higher as their dedicated or contracted capacity is simply not enough to move their volume and spot market rates in many lanes have also risen dramatically.
While every case is different, firms in this scenario need to utilize as many resources as possible and work with new carriers and brokers to secure hopefully cost efficient capacity. While some verticals in the market are booming, others are mostly shutdown including anything related to auto manufacturing.
Try reaching out and working with multiple carriers on each lane to try to arrange capacity to keep your key goods flowing, understand that costs likely will be higher, but with a 2x to 3x increase in production that is to be expected.
The unfortunate economic downside with the crisis is that many companies are finding an immense lack of demand. Or are being shutdown in an effort to promote worker safety in non-essential verticals. For example, nearly all US auto manufacturing facilities have been shut down over the last week to combat the spread of coronavirus.
These businesses face an entirely different set of challenges that require understanding partners on all sides as they face such uncertainty.
For these businesses, again be very communicative with logistics partners as you shutdown and then hopefully sooner than later reopen. Logistics partners of all kinds will be grateful to you providing as much lead time as possible for either, as it allows them to re position assets and personnel where demand is greatest in their system.
Technology has made this this entire process somewhat easier, particularly for shippers that embrace TMS systems and work with digitally enabled partners. The increased pace of communication and rapid access to many carriers for capacity gives shippers an edge and a bit of a safety valve when situations change as quickly as they currently are.
While no one knows how long this crisis will last or what the true human and economic damage will be. Try to take some notes on how you handling each situation and new challenge, these will be vital in the future to building a set of contingency plans for that will allow your business to have a set of plans already in place for extreme situations. Larger businesses generally have the advantage of deeper resource pools, more contingency planning and personnel on hand for black swan situations but for small and medium businesses in particular being very agile as the business environment changes can be the difference between remaining cash flow positive and becoming illiquid.
Never forget that the true assets of any company are its team members, protecting and taking care of them the best as you possibly can will pay massive dividends as the crisis passes. If employees are able to work from home then please let them. For essential staff, work to minimize their risk by constantly cleaning surfaces, door handles, etc, spreading out desks if possible and limiting contact. Consider buying a cheap laser thermometer and taking everyone’s temperature as they enter the facility. While this is not at all a catch all, it’s better than nothing and it could be the difference in preventing someone sick from spreading it to the entire workforce.
We truly wish everyone the best during the ongoing Coronavirus crisis, continue to be as lean, agile and determined as possible! The companies that can be flexible with the quickly changing situation will be the ones that thrive as the economy opens back up.
While our staff is working from home, we are doing our best to provide the best continued service possible throughout this pandemic. If there is anything we can do to help please let us know.
