ISSA Virtual Manufacturer Peer Exchange: Building Business Resilience
ISSA, your global cleaning industry association, presented the exclusive for ISSA Members Virtual Manufacturer Peer Exchange: Building Business Resilience on 27 April, 2021. During this members-only round table, facilitated by Dianna Steinbach, ISSA Vice President of International Services, registered attendees heard manufacturing and supply chain expert Mike Marks, managing director partner at Indian River Consulting Group, share tips on how to build resilience into strategic planning and prepare for the certainty of facing the uncertain.
How would you rate the resiliency of your supply chain?
As supply chains become more efficient, they also become more brittle. Resiliency is a measure of how big a shock a supply chain can take and still function. There will be large and frequent supply chain shocks throughout 2021.
“What’s happened because of the pandemic is all of the supply chains that were very efficient, broke,” Marks said. “And everybody’s trying to rush back but what people fail to understand is how complex these supply chains are.”
When looking at supply chain disruptions:
- Do you see it as a threat or an opportunity?
- Is your goal to just get back to where you were before?
- What is the executive interest in innovating your supply chain operations?
The ‘”new normal” could be an opportunity to strengthen your market access, according to Marks. “This year is not going to be about sales, this year is going to be about improving your competitive position,” he said.
Supply chain shocks are predicted to continue
There’s a real chance that supply chain shocks experienced throughout the year will be the critical constraint on 2021 revenue results.
The strategic question is: how can product allocation strategies improve your market access and coverage in 2022?
Marks said: “If I am going to be limited on my revenue in 2021, what can I do to increase shareholder value by the end of this year? If I can strengthen my access to market, as the economy comes back and these shortages go away, my growth rate will be significantly higher than my competitors.”
Supply chains exist in a value stream
Value chains are very complex and ever-changing, striving for both efficiency and effectiveness. When it comes to the value stream where supply chains exist, four key questions need to be asked:
- Do your suppliers rely on other needed inputs to provide materials to you?
- Can you improve your fill rates if you provide earlier order and later ship dates to your inbound suppliers?
- Have you developed access to spot markets and helped your inbound suppliers do the same?
- Can a switch to pull replenishment systems from push processes help?
Summary of key discussion points
While specific products, markets, and prices were not discussed, the interactive round table generated informative and insightful conversation on topics including:
- How to address inbound supply chain challenges
- How to approach marketing and sales in the new normal
- Lessons learnt from the industry.
How is buying behaviour changing in the evolving new normal?
Have there been signs of distributors running to help create the new normal for selling in the industry?
How does allocating product impact the attractiveness of downstream channel partners?
The pandemic has created a documented increase in end-user churn between distributors. Product shortages from incumbent distributors are part of the cause, but what other factors may be in play? Does this turmoil create any opportunities to change long outmoded policies and practices?
Below is a summary of key trends and insights raised by delegates during the round table:
- Huge differences and ongoing changes in countries around the world.
- Major impacts likely to be felt for a number of years.
- Raw materials prices (especially steel, metal, and wood) going up.
- Difficulties with supply chains and production lines due to COVID-19 situations.
- Transportation and logistics issues e.g. the distribution of containers.
- A tremendous shift towards online distribution.
- Customers need to adjust their expectations.
- A hiatus in sales with so many people not yet back in the workplace.
- Raised visibility on the importance of cleaning – not only to be COVID-19-safe, but to provide comfort and confidence for returning stakeholders.
- People now understand the difference between cleaning and disinfecting.
- Mistakes, misunderstandings, and lack of training related to adoption of some new technologies.
- Facilities and service providers can overcome customer attempts to cut cleaning budgets by demonstrating the value of risk management, productivity audits, select testing, etc.
- Reliable forecasting is often critical for suppliers, manufacturers, and distributors.
- Loyal relationships with customers are the glue for good business.
ISSA would like to thank all round table participants for their contribution.