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Maintaining a keen focus in challenging times B arely anyone can avoid being affected in some way by the current Coronavirus pandemic, whether socially, domestically or professionally. Moreover, we are now hearing reports of the catastrophic damage it has already done to the global economy and will continue to do so even long after the virus has abated. So, it would appear that there needs to be a radical re- think in terms of how companies operate in order to best ensure they are able not only to survive but also to prosper. One aspect to give due consideration to has to be technological investment. Indeed, a new white paper by global tech market advisory firm, ABI Research titled ‘Taking stock of COVID-19: The Short- and Long-Term Ramifications on Technology and End Markets’, looks at the current and future ramifications of COVID-19 across technologies and verticals. ABI Research analysts also offer recommendations to weather the storm and strategies to help companies rebound and prosper after the pandemic has slowed. Stuart Carlaw, chief research officer at ABI Research, believes that to effect change there must be a stimulation of a magnitude that means companies cannot do anything but make bold decisions to survive. COVID-19 is that magnitude. He adds that bold decisions and technological investments could lead to outcomes such as: a more concerted and widespread move to lights-out manufacturing; increased usage of autonomous materials handling and goods vehicles; a more integrated, diverse, and coordinated supply chain; investment in smart cities to support community resilience; and a move to virtual workspaces and practices. “Before we feel this potential long-term impact, there will be some serious short-term implications,” says Carlaw. “Contractions in consumer spending, disruptions to supply chains, and reduced availability of components will create a rough sea for all boats. In the short-term, there will be a retrenchment in outlooks a reduced investment in modernisation, as survival instincts trump the drive to prosperity.” Stephen May, supply chain expert at PA Consulting, makes the point that the first shock in the supply chain will be caused by the scarcity of supply. With this in mind, he states that as the outbreak spreads to new countries companies should follow the process recommended for China – immediately review their inventory levels and policies and ask suppliers to do the same. He stresses they should then work with their suppliers to identify the scale and timing of their exposure within the supply chain, including effects that may be hidden. May states that these could be where alternative suppliers are likely to be dependent on the same Tier 3 or 4 supplier. May also emphasises that communication remains key. “Companies should review their contractual obligations with suppliers, paying particular attention to the possibility that they may attempt to claim this is out of their control and thereby avoid liability for failing to supply,” he says. With regard to preparing for when the epidemic is over, May expects the progress of the epidemic to be uneven, with countries reaching the post-epidemic phase at different times. However, he is confident that, country by country, the epidemic will be brought under control allowing industry to open up and supply to be resumed. In preparation for this, he believes companies should work with suppliers to ensure that they are among the first to start to receive deliveries. During the whole period May maintains that companies should focus on their own planning processes to maximise the use of inventory. He anticipates that inbound supply and outbound demand will continue to be unpredictable for some time and maintains that closely managed rapid sales and operations planning (S&OP) processes should be used to drive supply chain decision making on a day-by-day basis. May believes senior management visibility of sales & operations planning (S&OP) processes should be enhanced to ensure quick decision making, high level awareness and executive accountability. May considers that supply chain disruption can be managed by understanding the location risk across the tiers. “It is important to avoid clustering of suppliers in one region and particularly around similar supply chains,” says. “This will be increasingly critical as the world becomes more volatile through climate change and other man-made impacts. That makes it important to look beyond selecting on lowest price only and understand the overall value and the risks in the supply chain.” Understanding how to optimise business and operational practices in challenging times can only help companies to continue to triumph, even in the face of formidable adversity. It’s time to focus. EDITOR’S COMMENT Ed Holden Editor Understanding how to optimise business and operational practices in challenging times can only help companies to continue to triumph, even in the face of formidable adversity. www.hpmag.co.uk HYDRAULICS & PNEUMATICS March 2020 3

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