Tag Archive: lockdown

My Favorite Pre-COVID Travel Destination & Travel During Lockdown

July 26th, 2020

As my long-term newsletter subscribers know, I enjoy traveling. Of course, during lockdown, I haven’t even gone to visit my Mom in Arizona since you never know what unintended germs you might bring along for the ride. So, I thought I’d go back to my favorite recent (within the last few years) travel destination. What do you think about Taormina, Sicily?

 

 

What’s not to like? The smell of citrus trees, cobblestone streets, beautiful seascapes, Mt. Etna serving as a backdrop, and excellent food… I was fortunate to stay both on the hilltop at the edge of town and on the beach with a beautiful view and relaxing atmosphere (favorite hotel thus far in my travels). I saw it as a win-win! I had effective strategy discussions and toured around the area enjoying the country. Because I really enjoyed the trip, I plan to return someday although I’d also like to see new places. Where do you want to travel when the coronavirus is no longer a concern? What should we do in the interim?

One Tip to Implement This Week:
Well, certainly, when it is safe, I look forward to visiting my Mom and family again. With that said, a few short road trips might be a nice option in the interim.

And, you can ‘travel’ around the world on Zoom. I participate in a global strategy group with consultants from Australia, New Zealand, Japan, Canada and the U.S. I am co-Executive Director of the Society for the Advancement of Consulting.  We have Zoom calls with members around the globe (15 countries and counting). I also participate in a Global Supply Chain Think Tank with supply chain experts from the Pacific Rim, Europe, and North America. The list could go on….

While on these Zoom calls, I learn about what is going on around the world and with the people next door, in the next state, across the country and across the globe. Are you curious as to what is going on around you? How about how people are holding up? Perhaps try taking a short trip to the next town, next state, next region or next country. Learn something of value that you can share with friends and colleagues. I’d be curious to know what you learn. Drop me a line.

If you are interested in learning about global trends as it relates to manufacturing and supply chain, read my free eBook Future-Proofing Manufacturing & Supply Chain Post COVID-19.



What’s Going On Around the World?

July 11th, 2020

After receiving questions from multiple people about “What’s going on in Asia?”, we dug into what’s going on around the world (at a high level). In today’s globally-connected world, it isn’t a question you can ignore!

Starting with Asia, from a supply chain point-of-view, product continues to move. All three China ports are open and the volume has picked up. China’s capability was back up to at least 80% of the pre-coronavirus levels. However, once China started ramping up after the first infection wave, N.A. and Europe were under lockdown, impacting customer requirements. According to CEOs from across the U.S., they experienced delays initially but it is largely back to ‘normal’. On the other hand, we are also hearing that some folks are experiencing extended lead times. It certainly can depend on the product, material, specific supplier, etc.

Customers that switched supply to Vietnam prior to coronavirus have experienced high levels of service and are generally happy. While there aren’t a lot of numbers coming from Vietnam, it appears as though manufacturing has largely carried on to the levels needed. Of course, if you were in process of transitioning to Vietnam when coronavirus hit, it probably has been put on hold. India shut down for a month during coronavirus but started up essential manufacturing early in the ramp up. India hopes to ramp up manufacturing as companies accelerate the de-risking process from China whereas Vietnam is already in that position and hopes to expand. Japan and South Korea largely carried on through coronavirus. The only noteworthy disruptions were caused by shortages of supplies from their extended supply chain. Overall, there were initial delays with Asian supply, and the degree varied quite significantly based on the source of supply.

With that said, there are increasing levels of concern about a second wave of coronavirus hitting the Asian supply chain. Beijing has been in lockdown with surging cases of coronavirus. Although not integral to the supply chain, it is a bad sign of potential negative impacts to come. It is recommended to bring inventory in ahead of the holiday season and to be cautious with paying cash upfront as several small and medium size Chinese suppliers are struggling.

In Europe, it varied significantly by country. German manufacturers kept operating throughout the coronavirus lockdown. Since they saw the virus coming from what happened in Asia, they implemented social distancing and other protocols throughout rapidly. Certainly, Spain and Italy were impacted more severely and shutdown for a period of time. Several European and U.K. car manufacturers shutdown due to lack of demand and significant disruption in the supply chain. Aerospace companies in the U.S. experienced issues receiving essential components from Europe during the pandemic. Overall, CEOs across the U.S. said that supply from Europe wasn’t interrupted significantly.

U.S. manufacturers of essential products were largely able to continue producing. Of course, depending on the customers’ served, volumes dropped dramatically and disappeared (suppliers to hospitality for example) or experienced aggressive growth (lawn and gardening, toilet paper, PPE).  However, on average, volume dropped to 50-70% of the pre-coronavirus levels. CEOs from multiple industries have said the biggest issue has been disruptions in the supply chain. There are examples of essential U.S. manufacturers experiencing issues receiving materials/component parts from Mexico, Europe and Asia. Not every country had the same definition of essential. Consequently, there is a lot of talk about regional manufacturing and reshoring.

Brazil has been hard hit with the coronavirus recently, and manufacturers have been forced to shutdown. No part of the world has escaped this pandemic! Thus, the global supply chain has come into the forefront and is taking a seat at the table. Are you going to chase your supply chain or build appropriate diversification and flexibility and identify acceptable levels of risk upfront in your strategy discussions?

We are seeing a surge of supply chain strategy assessment and roadmaps. Are you evaluating your supply chain so that you can take charge of your future? There is no such thing as no risk.  Understanding your customer profiles, changing customer requirements and associated product supply strategies is a place to start. If you’d like to discuss your strategy, please contact us.

 

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What’s Going On with Asia Supply Chains

June 25th, 2020

 

Supply chains are quite tenuous, and China drives the most volume:

  1. Coronavirus: Beijing is under a soft lockdown with a surge of virus cases. Although Beijing doesn’t impact trade, it is another sign that China vastly under reported previously and it is likely to have a new surge of coronavirus and plant closures.
  2. Manufacturers in China: Small and medium size manufacturers are not doing well. They are struggling to keep up since they had to continue paying people even when they weren’t producing. Are you watching your quality and cash?
  3. Vietnam: so far, they are faring pretty well and companies that moved prior to coronavirus and quite happy with service; if they hadn’t yet moved prior to coronavirus, it is likely on hold due to the disruption.
  4. Global transportation: Volume has picked up at all 3 ports in China (although they are dealing with a short-lived vessel shortage) and we aren’t seeing goods movement issues.

International rates are rising: they are up a hefty 12% from Asia to Northern Europe & 32% on the Transpacific route. They have taken capacity out and are slow to add it back. We’ll have to stay tuned to see what will happen.

 

 

Are you taking the continued disruption into account in your supply chain plans?

 

What Should We Consider and/or What Impacts Could Arise?

Undoubtedly, you should be thinking about how to proactively manage your global footprint:

  1. Re-evaluate your sourcing strategy: as many are already doing, the least you should do is re-evaluate your sourcing strategy. Generally speaking, the total landed cost for non-commodity products is less expensive in the U.S. than in China. Check your total cost and review multiple sourcing alternatives.
  2. Review your customers’ needs: Undoubtedly, consumer and business buying behaviors are changing during these unprecedented times. What is happening with your customer base? What can you do to get in front of the changes and see opportunities for expansion?
  3. Review your customers’ requirements: Understanding where your customers are located is a good start. It can have a profound impact on your supply chain, where you should produce and how you should set up your supply chain infrastructure. In addition, what expectations do they have? Are they expecting immediate delivery? Are their preferences changing to deliver at home? These questions will have a profound impact on your supply chain setup.
  4. Understand your transportation options: Clearly, understanding the speed, cost and effectiveness of your transportation options will be integral to your supply chain infrastructure.
  5. Understand likely disruption: Do a risk assessment to understand the likely disruption and risk associated with your options. You certainly have a different situation in China vs. Europe vs. Brazil.

Read more about this topic as well as your strategy, priorities, key trends, and your restart recipe for success in my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19 . If you are interested in a rapid assessment, please contact us.



What Do We Most Want to Do Post Lockdown?

May 20th, 2020

 

 I was on a Zoom call yesterday (one of 9), and we broke into groups to answer the question of what we most want to do post lockdown. Haircuts beat going to the bar! It is especially tough when you are on video 10 to 12 hours a day! I think the group feels a bit like this woman…

The same issue is occurring in business. What type of maintenance are you deferring due to lockdown? Should you continue to defer this maintenance type activity?

One Tip to Implement This Week:

Of course, the answer is “it depends”. We shouldn’t do everything just because we used to do it; in fact, the lockdown has created the opportunity to reexamine our focus. Take advantage of this opportunity to figure out where to focus. Perform a rapid assessment, prioritize what you should pursue and proceed with essential go-forward maintenance. If you’d like to hear more about these priorities, read my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19

 

 

We have also launched a rapid Future-Proofing Manufacturing & Supply Chain assessment if you’d like assistance with the process. Contact us if you are interested. Stay safe and healthy. We continue to post coronavirus resources, write blog articles on navigating coronavirus as well as “beyond lockdown” strategies, and we are sponsoring APICS Inland Empire‘s “Navigating Through Volatility” webinar series. Join us and learn more here.

Since the lockdown will carry forward for several months in some form or fashion, we will be expanding our webinar series and providing additional resources to help you think about how to thrive in this pre-vaccine environment.  Let us know if you have topics you’d like addressed. We would love your feedback.



Should We Prioritize or Deprioritize Innovation & Technology During the Coronavirus Pandemic?

April 3rd, 2020

What is the first thing that happens when a client is shutdown due to the coronavirus? Cut all unnecessary spending. Certainly, I agree with this approach in most situations. If you cannot pay for your employees, you shouldn’t pay for unnecessary expenses! However, if the situation isn’t dire, it might just be an opportunity to refocus on innovation and technology.

There are well-regarded statistics about the Depression and the Great Recession that those companies that invested while everyone else cut back were significantly more successful following the recession. Of course, it depends on whether you are investing in what will be needed as the lockdown ends or if you just continue with your prior plans because they were well-thought out previously. All bets are off! You must re-review your strategies, business plans and associated investments with the ‘new world’ in mind. Ask your executive team and key partners questions:

  1. What will have changed as we emerge from lockdown?
  2. What opportunities will it present for your customers?
  3. What new roadblocks will exist for your customers?
  4. Is there an opportunity for new customers?
  5. Do you have an opportunity to expand to new markets?
  6. What products and services will be needed?
  7. Can you get ahead of the competition so you’ll be out of the gate at 200 mph instead of crawling at a turtle’s pace?
  8. Will you need to re-tool?
  9. What skills will you need?
  10. What technology will you need?

Challenging times can create opportunity with innovation and creativity. Innovation will fast-track growth and profits. When has there been a better time to innovate? Although we started our innovation series a while back and have always been involved with encouraging innovation (such as the Manufacturers Innovation Awards), we are going to start adding content to encourage clients to focus on innovation since we think this is a critical time to ramp up your focus on innovation.

Innovation doesn’t have to involve technology as it could simply involve repurposing, repackaging, or repositioning. In fact, there is very little that is truly ‘new’. How often does a client invent something new like the sticky note? Certainly we hope a new vaccine will be developed rapidly, but many industries will simply come up with new ways of doing things and that type of innovation will fast-track growth and profits. The only precursor is whether you have an innovative culture. Now that is something we can control, and it doesn’t have to require capital or cash.

Why not put your top talent on an innovation project while under lockdown/ social distancing? There is plenty that can be accomplished via Zoom, and you might just be thrilled with the results. From all accounts, it appears as though the recession will be short-lived and in a V shape with a rapid recovery. Will you be ready to take advantage of the opportunities?

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