History shows that companies focused on cost cutting strategies during a recession seldom emerge as market leaders. McKinsey & Company, the prestigious international consulting firm, examined the pattern of declines and recoveries during recent recessions dating back to the 1970s. The February 2009 McKinsey Quarterly points out that in past recessions “businesses that followed counter cyclical patterns of cash utilization and spending fared much better than those with purely defensive strategies.”
With the uncertain economic climate, planning a strategic recovery plan is no easy task. For companies to emerge stronger and capturing bigger market share when the economy recovers, they need to be realistic in assessing the business environment by reviewing internally its own operational capabilities, technological competence, skills, knowledge, flexibility and competitive positioning.
Append below are steps to begin with
1. A total understanding of all the supply chain functions and costs
Operating a warehouse/distribution centre need a thorough understanding of cost control, maximizing productivity, improve throughput, minimizing downtime and improving accuracy. By understanding the said opportunities, the management team is able to identify a system that can be implemented for automation, integration of processes and able cater to volatile demand.
2. Understand your customers’ needs
Is the time to get closer to your customer so as to improve your customer’s economic performance whom demand shorter delivery times, inventories control due to contracting product life cycle and having a friendly system in stock picking (Pick To Light or Voice)
3. To plan even with a reduced staff
With certain departments downsized and probably eliminated, companies need time to properly execute a redistribution of responsibilities. Due to time constraints or lack of expertise, the remaining in-house engineers may be focused on ad hoc solutions to reduce cost and shared work load. Outsourcing is an option to move from fixed to variable costs. Successfully outsourcing requires careful selection of a partner that understands your business and effectively bond with your organisation goals and expectation.
4. To be a top competitor
As the Logistic Sortation and Warehousing(LSW) industry continues to grow, the gap between customer expectations and the current technological capabilities is a challenge to the industry. LSW player must show sustainability, security and technology as the crucial areas they are capable of. The pressures to keep supply chain management efficient through innovative technological solutions and priced right for customers. These are ways to retain and grow market share in the economic recovery.
5. Communication of lead time to customer
Experienced companies understand the time it takes to plan, design and implement a material handling project whereas a potential customer would not have idea of the flow development. While time factors vary with the nature and complexity of the project, a good communication with customer is vital to prevent misunderstanding and losing a job given.
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