Editorial: Never waste a good crisis

by Dirk Ungerechts

The fact that we are currently in a crisis needs no further explanation. There has never been such a development in the world and the global economy since the end of February in the recent past. The range of questions that have reached us as a consulting company in recent weeks ranges from dealing with sharply rising or sharply declining sales, to urgent inventory optimization due to a lack of stock. Cash flow problems, through to better prioritization of production due to missing components or reduced production capacity. These are all very exciting topics, which also make it clear that the challenges for different companies in the current situation are very different.

No matter what your challenges are in the current crisis, please do not forget the words of Rahm Emanuel, former advisor to Barack Obama: “Never waste a good crisis“. Of course, the primary concern at the moment is to “keep the business running somehow”. But really good companies should not and will not limit themselves to maintaining production. CEOs and CSOs with foresight will certainly think about how they can set up their companies differently in the future to better arm themselves against such global shock events. Single sourcing on the other side of the globe may be cheaper. But what good is that if suddenly ships can no longer set sail due to lockdowns at various ports and you can’t get hold of urgently needed components? In such cases, wouldn’t it be worth considering switching your supply network to alternative suppliers in different parts of the world to ensure that “something still works” in the event of economic, political or health problems in different parts of the world? Sales are also diversifying into different markets. Or does it perhaps make sense to invest more in the flexibility of production facilities, produce less stock and respond to customer orders as they come in? Does it make sense to change disposition mechanisms, e.g. to DDMRP?

We should not waste the lessons learned from this crisis, but rather rethink the future fundamental direction of our supply chains and, if necessary, change them. simulate possible alternative scenarios.

Because one thing is certain: this will not be the last crisis to shake the world.

Stay healthy,

Yours, Dirk Ungerechts

Image rights: Tumisu on Pixabay

Picture of Dirk Ungerechts

Dirk Ungerechts

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