Nimble suppliers can actually grow
Posted by David Richards on April 20, 2020, 1:35 PM EDT
“In a crisis, be aware of the danger--but recognize the opportunity.” - JFK
Open Health Innovations hosts, supports and manages dozens of “communities” based on our Connect technology. Most of these systems deal in some way with businesses and in many instances their core aim is to foster business growth and job creation.
This blog post was prompted by an online exchange recently brought up in collaboration with organizations from Vermont. It’s called Manufacturing Exchange - Vermont (MXVT), is championed by VMEC and can be found at www.MXVT.org. (read the case study HERE)
MXVT launched with the near term and urgent objective of connecting state manufacturers to address PPE and other medical equipment shortages. Which it is doing. But many in the state see a longer-term opportunity for manufacturers to actually grow due to the changing landscape brought about by the COVID-19 crisis.
Short term risk, longer term opportunity
Over the past 30 years huge sectors of manufacturing have migrated offshore. The pandemic, however, is already causing some of this capacity to return due to breakdowns in global supply chains; when these breakdowns impact critical products like PPE, buyers simply have no choice. This dynamic will assuredly accelerate to some degree as a result of political forces and narrow business considerations. Those US companies that are prepared to take advantage of this movement will benefit.
Politically, it’s almost inconceivable that some form of a Jones Act type reaction won’t happen for healthcare items like PPE and devices like ventilators. Research by government organizations is already commencing as to the import, export and policy implications of COVID-19.
Private industries, on the other hand, are rapidly examining domestic options for key components where supply chains have weakened or broken entirely. This will continue even when “normalcy” returns because procurement and delivery risk models will be adjusted and more weight added to the possibility of the virus returning. High value-added components central to supply chain continuity will be analyzed differently in this light.
Suppliers must be “in the game”
There are powerful organizations whose missions entail helping US manufacturers survive and thrive and who therefore are firmly in the supplier’s corner. These include Federal organizations like NIST/MEP, state and local economic development authorities, and the large “Prime” federal contractors who depend upon suppliers for components and increasingly for innovation.
But these organizations can only help those suppliers who have taken the basic steps to help themselves. Taking a cue from the Vermont initiative, four tactics can make a difference in this regard:
- Connect and engage: Suppliers simply can’t sit on the sidelines… and there’s no need to. In Vermont’s case, the MXVT forums inform suppliers of opportunities and provide the necessary information, contacts and roadmaps for going forward. But suppliers need to engage and figure out how all of this is relevant to them. Because MXVT is free, every revenue-related manager has an easy on-boarding path AND no excuse for not becoming actively involved.
- Tell your story: Suppliers must put their best foot forward and make sure there’s a wealth of information out there on what they do, who they are, and why they’re important. Vermont’s MXVT platform allows marketing folks to rapidly build out such information profiles. This is important because VMEC and others use these profiles to identify suppliers and make connections.
- Take stock: There are powerful tools available that can be used individually or with advisors to help business leaders better get hold of their situation. Two of these are Core Value Software and Virtual CEO. A slow period is the perfect time to apply these analytics and get a team on the same wave-length so everyone is prepared for what’s to follow.
- Don’t waste this prep time: Suppliers must and can complete in advance important items that have longer lead times. For example, while bankers are currently busy working through stimulus applications, that work will eventually subside. When it does, proactive suppliers will be meeting with their bankers to make sure everything is tee’d up for when things start moving. They’ll have applications and paperwork completed so an additional 30-60 days aren’t wasted doing something that could have already been done.