To say that US supply chains are currently operating in uncharted waters would be a gross understatement. The reality is that in the past century, U.S. businesses have not faced anything quite like the current global Covid-19 Pandemic and its unknown undercurrents. Sure, we’ve survived multiple business disruptions including, transportation deregulation in 1980, the 9/11 attacks and even the Great Recession, but none of those events compares to what global supply chains are currently experiencing.
To add insult to injury, no one really knows how long we will be in this situation. One thing is for sure, we’re not going to be back to “normal” anytime soon. And I defy anyone to define “normal” or the “new normal” which will obviously vary from company and company. The reality is that we will be in a state of Flux for quite a while!
It is true that some companies will be growing by leaps and bounds during this crisis, but we are sure the majority of US businesses will be struggling financially for quite some time. So, what’s a company to do? To help us answer that question, we quote the following words of wisdom, “how do you eat an elephant…One bite at a time.” This might be the best approach for any business to help them going forward.
So if sales are dropping off significantly, company revenues are being depleted and that probably means that staffing reductions are also taking place, or will be taking place the longer we remain in the current world of uncertainty. But, what is the “true” price companies will pay as a result of these staff reductions? That question will also vary by company. But, let’s be honest here, in some cases these staff reductions will not even be felt and will in fact bring meaningful cost reductions which begs the next question, if that’s the case why wait for a global pandemic to make those staffing reductions?
However in other company’s these staff reductions could actually be devastating because the company has never actually quantified the true value of work these employees have consistently provided that positively impact a company’s bottom line. And that my friends, is a real travesty.
So going back to eating elephants, what should our “first bite” actually be? How about assessing all of the tasks the in-house supply chain team is responsible for and truly evaluating whether the team or teams are an asset or a liability or something in-between. Businesses constantly look to ROI considerations whenever they make a decision to spend money, at least they should. But we’re not sure the same ROI analysis applies when they make a financial investment in their internal staffing needs.
By no means are we advocating for staff reductions, but rather we’re advocating for staff accountability measures and a comprehensive ROI analysis. One of the best ways to make this analysis valuable would be to determine if like services or even enhanced services can be provided by outsourcing these functions to firms or individuals who are better qualified to provide the various services. One of the main benefits of these outsourced services is that companies immediately convert a fixed expense to a variable one and that can bring huge savings to a company’s bottom line. And that will have an extremely critical and beneficial impact on a company’s finances.
So what services can be outsourced? That’s a great question. To follow another great quote I heard from a computer programmer many years ago, “if you can clearly state what you’re looking for, we can program the computer to provide that to you.” So we can tell you that just about every internal job function can be outsourced if the outsourced service provider has a complete understanding of the results your company is looking to achieve. To be very transparent here we are also not advocating outsourcing functions for the sake of outsourcing, but we are when the decision to outsource has been totally vetted as a better option for the company and there are valid KPI’s that can be tracked to ensure desired results are actually achieved.
In our future blogs, we will discuss the outsourced services every company should at least be evaluating.
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