Supply chain and global trade
All supply chains have experienced disruption. The task now is to address these challenges while re-tooling supply chains for greater resilience, end-to-end visibility – and reducing costs.
Organizations should conduct regular supply chain resilience assessments to define strategy and capability build-out, and conduct stress tests to anticipate future disruption. Transitioning from a linear to a networked ecosystem, where internal and external data is in the cloud, allows supply chain activity to be seen by all and worked on simultaneously. This end-to-end visibility can match supply to demand by analyzing data around inventory, network, hubs and nodes, identifying single points of failure, such as supply concentration.
Supply-chain decisions influence up to 75% of corporate costs, and organizations may also achieve reductions in selling, general and administrative expenses through contract reviews and sourcing events, and improve margins and the cost of goods sold through simplifying products, rationalizing the portfolio and optimizing asset utilization.
Factories face challenges to restarting production. Which products are needed most? Which sites should reopen, and when? How do you initiate turning machines back on? Manufacturers know how to plan a new factory or an overhaul, but restarting operations is an unprecedented technical challenge.
Finally, customer access to services is a major consideration. Operations need to be reframed around different delivery channels – for example, consumers have shifted rapidly to e-commerce and home delivery, forcing retailers to follow. This change in behaviour seems likely to stay, and among the many lasting impacts of the pandemic may be the need to invest in better access to goods and services via websites or apps, and to change the physical design and layout of stores to ensure long-term social distancing.
Customer and brand
The pandemic is forcing a reassessment of values, habits and consumption patterns, and many of these won’t reverse. The EY Future Consumer Index finds more than a third of consumers plan to spend less – and 13% of all consumers plan to make deep cuts.
Companies are going to need to reframe their futures around very different digital behaviors. Business must act across four customer-strategy areas critical to creating value.
To engage customers, take a disciplined approach to consumer segmentation, nurturing and lead generation, and move faster to drive marketing and communications agility, including refreshed loyalty programs.
In growth drivers, shift the mix to new sales channels and extract value from existing innovation to drive product strategy. In customer experience, prioritize (digital) customer journeys and new means of engagement, experience and service. And address the physical/digital divide, particularly solving delivery and last-mile challenges.
The crisis continues to be a test of brand protection. Organizations can build trust through demand fulfilment and innovative offerings. But building wider long-term value is also critical – whether it’s building trust in capital markets, having a positive social and environmental impact, or creating an inclusive culture of personal development and purpose.
See our checklist for actions now, next and beyond