What is your plan for recovery after COVID-19? Not only has this pandemic flipped the world on its head by affecting the health of millions, requiring us all to embrace an entirely new way of living (and countries operating), but it has also devastated the business sphere. According to Fortune magazine, 94% of the Fortune 1000 companies are seeing supply chain disruption from the COVID-19 crisis.
With corporate bailouts de rigueur across the world, energy and airline businesses taking an enormous hit, and China’s auto sales down 92 percent, it is clear that businesses need to take action to avoid bankruptcy and restart with the right business model – and it may be quite different from the one they’ve been running with up until now. Dynamic simulation can offer a lifeline to companies scrambling to figure out their next steps. It’s a way to help ensure business continuity for manufacturing even when dealing with the unknown.
We take a look at how events like the coronavirus crisis affect and reshape business, and what you can do about it right now to get a clearer view of the future and find your way forward.
Black Swan events are those which have a tremendous impact, and lie outside of the realm of possible expectations, as the past cannot predict their occurrence. This is why despite all the AI you may have put into your supply chain strategy or business intelligence, you couldn’t have predicted this event and its effects – and don’t have a plan in place for how to recover.
Other Black Swan events still in our recent collective consciousness include the 2008 financial crisis, 9/11, and the dot com bubble.
While Bill Gates indeed had an inkling that another pandemic more impactful than Ebola was just around the corner, COVID-19 crisis management is not something that businesses could have been prepared for.
By playing with different variables in your model, such as the available stock in a warehouse, a more expensive but faster shipping option, or decreased/increased plant output, you are able to find optimizations by examining downstream effects. Rather than experimenting one variable at a time, with these simulations, you’re able to play with many variables at once – which can surface some unforeseen results.
By running simulations with decreased demand for certain products, you are able to see which links in your supply chain also need to be decreased, and optimize the chain given this new demand. This robust supply chain planning allows you to concentrate on future what-if plans while knowing what needs to be done right now.
Suppliers, logistics networks, and business contacts may all operate at a different rhythm now than what you are accustomed to. By inputting these new values into your model and running your supply chain simulations, you’re able to see where other links in the chain can make up for lost time, or where it’s time to find a new alternative to ensure supply chain resiliency.
If you are ready to model your business and get to work running simulations to determine your restart plans, then please get in touch to book a meeting. We can run through a demo with you, discuss timeframes, and get the wheels in motion to find your forward. Contact us today.