Working unconventional hours in remote locations disrupts business more than material shortages.
As we enter the third year of our pandemic-altered world, more chains are strained than just supplies. With people working remotely during odd hours, changing careers, or stepping out of the workforce altogether to care for loved ones, the basic chain becoming strained is communication.
Communication has been transitioning over the past couple decades. Time, culture and technology have dramatically transformed. Long gone are the storied two-martini business lunches where colleagues, customers and suppliers met, broke bread and discussed one-on-one issues that needed ironing out. Over the past decades, face time (not FaceTime) with any business client has become extremely difficult to arrange. Today with Covid, meeting face to face is all but impossible for many. Long-changing trends compounded by recent events have had a negative impact on the ability to communicate effectively, which in turn has strained the quality of relationships in too many cases.
For years, a typical customer service or salesperson would spend so much time on the phone with clients, they were jokingly referred to as having “cauliflower ear.” The ongoing constant chatter between people – most business, but some social – helped build strong relationships. How times have changed. The phone-savvy businessperson and bonding over long lunches are no more. Over the past two decades, email has become the communication vehicle of choice. And the pandemic scattered employees, customers, suppliers – everyone – to remote offices, usually in their homes, hopefully with a quiet room from which to log on to Zoom, GoToMeeting and WebEx.
One of those rituals that takes place around this time is developing the business plan and related budgets for the new year. Deciphering the crystal ball, discerning optimism from reality in the sales forecast, determining budget capital investments and human resource needs, and so on, is always a complex task. The very unusual pandemic/post-pandemic world we are now in makes it even more so.
As we look to 2022, we see some unusual and especially onerous hurdles: a more strained supply chain, deteriorating consumer sentiment, increasing inflation, and segments of the economy still reeling from the worst days of the pandemic. While no single hurdle can be compensated for, the combination of threats can tempt the planner to take a conservative approach and decide it’s time to hunker down.
But what does a conservative approach to planning and budgeting really mean? Typically, plans might include reducing inventory, cutting back capital spending and trimming staff (or hours worked by staff) to “right size” expenditures with the projected (feared?) lower levels of business. All are prudent steps that in normal times should be considered when an industry or the economy shows symptoms of fatigue. The problem is these are not normal times!
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Read more: Planning is Always Challenging. This Year It May Be Worse.
One of the biggest current concerns for the economy, in virtually every country in the world, is the state of the global supply chain. Whether discussing the shortage of chip’s impact on the auto industry or the shortage of paper goods (think toilet paper), all fingers point to a supply chain that is showing signs of fatigue.
To fully appreciate the situation we face, one needs to first look at how the supply chain got to this point.
Historically companies strived for a fully integrated manufacturing capability, so materials, parts, subassemblies, etc., were designed and controlled by the company that produced the end-product they were to be used in. As an example, an automaker would own the steel mill, glass-making facility, radio manufacturer, paint factory, etc., so virtually all parts that went into their automobiles were manufactured – controlled – by one company. Shortages, if and when they occasionally might occur, could be quickly rectified by moving resources around within the parent company to increase supply of needed items.
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Today’s builders have data analytics skills that match their manual dexterity.
Sometimes you see things a hundred times or more before it hits you the image presented does not match the message it intended to convey.
Case in point: A common television ad of late for a fairly high-tech product. The message was about the quality that goes into “making” these devices. So far, so good. But the ad fades to a man decked in a flannel shirt, blue jeans and the obligatory well-groomed beard, eyeing with pride some woodworking project. I get it: Pride in workmanship. The skilled craftsman produces a fine item. The message and imagery are ageless. One problem, though: That’s not how it goes!
It’s been decades since I purchased an item that is not the result of vigorous, data-driven engineering, followed by a slew of process, manufacturing, quality, and even finance folks obsessed with the analyses, measurement, inspection and costing of every piece of anything that gets even close to the product. While I’d like to think some flannel-shirted woodworker hand-built a device, the reality is data, and more data, and a little data on top of that, are what it takes to turn a concept into a successful product.
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