New Technologies and Data are Key to Preparing for Covid-19 as a “Constant” in Business Throughout 2020
By Jason Busch and Lisa Reisman
Manufacturers should prepare for Covid-19 to be a constant in business throughout the remainder of 2020. Why? While it appears there will be numerous vaccine candidates reaching later stage clinical trials for Covid-19 in the months to come, it is unlikely they will have a significant effect on the mass population in 2020 based on the statements of numerous medical authorities.
Combine this with spiking cases throughout different regions in the country and we get a recipe for a situation where things may get worse before they improve. Manufacturers need to be prepared for this scenario. Many Surplus Record readers are familiar with the general guidelines that the National Association of Manufacturers (NAM) and others have published around Covid-19. These recommendations include: engaging public officials in lobbying for key legal protections (e.g., reducing/eliminating liability for workplace illness), preparing for new shutdown orders for non-essential businesses, protocols for managing worker sickness/illness, and implementing standard PPE guidelines and safeguards.
But beyond these general guidelines, there are a number of recommendations we’re seeing based on the best practices of more advanced manufacturers we work with. These revolve, in many cases, around adopting new technologies and data sources to drive automation and insight. Manufacturers of all sizes should be prepared to incorporate these recommendations in the remainder of 2020 — and likely into 2021 — until a vaccine is widely available.
First, we recommend that manufacturers work closely with counsel (internal and external) to analyze all of their strategic contractual agreements — with both buyers and suppliers. There are now automated technologies that can “group” clauses into specific classifications based on existing paper contracts, such as high or low levels of business risk. These tools can help companies better understand force majeure liabilities with customers as well as risks from suppliers. DocuSign recently acquired a company called Seal Software which does just this (but there are other choices as well).
Second, we recommend investing in monitoring supply chain risk and financial/credit risk — both with customers and suppliers. Solutions from services such as D&B and RapidRatings (for private companies) can help provide rapid insights into both supplier (supply chain) and customer (credit) risk. Risk monitoring should not be a one-time effort. Companies should, under usual circumstances, update risk data at least yearly. But given the current market environment, risk monitoring should be continuous, with updated scores on a quarterly basis and playbooks that address specific risk scenarios.
Third, organizations should consider adapting technology whenever possible. This not only includes “moving to the cloud” for spreadsheets — making remote collaboration easier — but for core financial, procurement and supply chain systems as well. Manufacturers should also consider adopting “bots” which combine robotic process automation (RPA) and artificial intelligence (AI) for removing people from manual work streams whenever possible.
An industry friend who runs IT and “digital” initiatives for a $2B manufacturer told us his team had implemented a series of bots to address invoicing, purchase order and other “matches” to automate steps in the accounts payable process, removing human touch points from the equation. These bots are also helping by gathering information for sales, operations and other planning efforts — replacing previous human efforts.
Preparing for Covid-19 as a new manufacturing “normal” — at least for the near future — requires investing not only in protocols, but new technologies and data sources
Jason Busch and Lisa Reisman are Editors at Large.