The spread of the novel coronavirus (COVID-19) impacts many businesses. In a fast-changing situation, it’s important to have a plan in place. Here are our five suggestions, providing a guide for your firm.
1. Look after employees and their families
- In an effort to halt contagion, employees in affected countries have been unable to work from their regular workplace.
- Ensure you can contact your staff and share information at short notice. Have a business continuity plan which enables remote working.
- Consider technology to enable this, such as video conferencing, through company or personal computers.
- If necessary, split teams across multiple sites or rotate office-based staff with those working remotely.
- Follow World Health Organisation, governmental and public health official updates - and keep employees updated.
2. Review your supply chain
- Following the 2011 Fukushima nuclear disaster, global car manufacturers discovered a significant supplier dependency when one company producing 40% of the world’s microcontrollers had to close a plant.
- You can unearth hidden dependencies through reviewing your supply chain from end to end, identifying your suppliers’ supply source down to component level and understanding who your customers sell onto.
- Undertake a risk assessment of contractual commitments and potential use of clauses relating to unforeseeable circumstances, by you or by your buyers and suppliers.
- Identify and connect with alternative supply options, right down to the component level.
3. Logistics and distribution
- Enforced office or factory closures and disruption to transport services – including roads, ports and loading facilities – could impact on goods being delivered and documents being processed on time.
- Map your dependencies, ensure you have visibility and a plan for disruptions – for example, using air freight in the event shipping is restricted.
- Anticipate disruption to service providers – from legal services to customs checks.
- Consider implications right across your operations - from sourcing to production to distribution.
4. Build resilience
- Replicate this exercise to plan for other potential disruptions – such as natural disasters, political instability or cyber-attack.
- Develop response protocols and internal chains of command for each scenario.
- Contingency planning for different scenarios will stand any business in good stead.
5. Manage financial risks
- Prepare for changes in market conditions including demand, price, and foreign exchange volatility.
- Stress test your working capital, as flows of goods and services are interrupted and consider any support you may offer your suppliers.
- Where necessary, build your inventory selectively and consider insurance requirements if interruptions occur.
- Speak to your bank about immediate support and building resilience against potential disruption.
How we can help further:
We’re here to support our clients. We’ve introduced relief measures to help our clients. Speak to your Relationship Manager as you develop a plan for your business.