Time to Focus on Efficiencies


The pandemic has put an unprecedented strain on various areas of business operations. With less cashflow and a depletion in staffing and so execution ability, it’s very difficult for businesses to continue executing on current projects, or begin re-starting projects that have been put on hold during recent events.

As part of LiveArea’s business research, we found that 53% of UK businesses have had to stop operating, with 46% having to furlough staff, and 49% reducing working hours. Such substantial changes will clearly have a far-reaching effect for businesses.


Evolution over revolution

For many manufacturers, supply chains will have been disrupted. Combined with the inevitable operational hurdles to overcome in terms of social distancing, increased hygiene efforts, and staff shortages, being able to identify which production lines can begin operations will be key. Then, drip-feeding individual production restarts will be more manageable than restarting multiple production lines and encountering various problems all at the same time.

This provides an opportunity for businesses to reconsider operational efficiencies, if they hadn’t already. Now is the time to change. And this is about evolution over revolution – it doesn’t need to involve a complete overhaul of a production line or IT infrastructure. Businesses should start by identifying smaller operations that can be improved, which may mean applying digital technologies, such as artificial intelligence or automation technology, to improve their efficiencies.

At a time when cashflow is low, staffing issues are front of mind, and supply chain issues hamper return efforts, those larger investments may be difficult to justify. It’s really a time to think about making business operations as lean as possible and reducing costs.

Businesses can also prepare by contacting their suppliers, to understand their readiness and forecast likely restart dates. Likewise, it’s worthwhile taking this time to contact customers, channel partners and distributors, and checking in on their operations and states of readiness. Whilst some businesses might not be able to pinpoint exact restart dates, there are certain things they can be doing to make the restart as quick and straightforward as possible.


Clarity the key to business continuity

It’s understandable that many businesses are struggling to restart their operations whilst struggling with a lack of clarity, with 55% of UK businesses claiming clarity around the duration of lockdown is the most important measure that will help their continuity.

For those whose operations have been impacted, just a fifth of UK senior decision-makers say they feel their business will be running as normal in the next three months. Time, however, may prove telling, as 57% say they feel their business will be running as normal in the next 6 months. It’s likely that will be a new normal, and businesses will need to adapt and implement changes.

For example, in factories, warehouses and distribution centres, it’s likely that the new social distancing measures will hamper efficiencies. For those businesses that can remain effective in their operations, success will be measured by how quickly they can get back to capacity, to secure their business continuity.


The D2C opportunity

For some businesses, this might be an opportunity to adjust their business models. For example, those manufacturers considering their supply chains and distribution efficiencies may see an opportunity to try a direct-to-consumer (D2C) sales model, particularly if their retail sales channels have been badly affected by store closures or distribution issues. If there are production lines for certain products or bundles that lend themselves to a direct model, now could prove an excellent time to shift.

This is where businesses need to identify where they have a good understanding of customer value. By narrowing their focus onto a product range that is highly profitable, quick to manufacture, and in high demand, businesses can add value during this time. Clearly, this will take some investment in IT infrastructure, warehousing adjustments, digital commerce and marketing efforts, but targeting smaller, key product lines will make this more manageable for businesses.


Digital focus

Half of businesses still operating say they will invest in digital technologies as a result of the pandemic, with IT infrastructure and digital commerce being the most common priorities. There’s certainly more that can be done through digital technologies to help internal business efficiencies, whilst also improving the customer experience.

If we’re expecting more eCommerce demand, this is going to increase the load on processes like ship from store, click and collect, and returns, which requires sophisticated logistics, not just in warehouses, but also in-store. Businesses will need to focus on the systems behind these operations, to really master inventory management and make sure it’s visible to customers. There are modern OMS, and DOM tools available that can optimise these areas.

This D2C model could explode, not only in B2C but also B2B. And, if this is the case, the platforms will likely have to adjust to this demand. If businesses are looking to implement smaller, quicker eCommerce projects to get targeted product lines to market quickly, this isn’t the way traditional B2B commerce is geared.

To keep up with this shift, the bigger B2B platforms will need to adapt. Businesses might reduce their catalogues from 200,000 SKU’s to 2,000, so don’t need the bigger platforms they previously relied on. Expect to see pressure from the smaller commerce platforms, and the traditional players making changes to keep up.

If this is the case, as well as thinking about marketing and sales channels, businesses will need to rethink how they handle data. Manufacturers accustomed to selling through traditional retail channels will not have to deal with issues surrounding end customer data management, payments, GDPR and security.


In summary

The impact of COVID-19 on businesses will, in some ways, never go away. Unfortunately, this may mean the end for some businesses, and for others will enforce disruption in terms of business efficiencies, supply chains, product lines and sales channels. For those that can return to business continuity, now is the time to make key changes and increase their business effectiveness and profitability.