11 May Rethinking Business Resilience In The Midst Of The COVID-19 Outbreak
As U.S. and world leaders step up efforts to slow the coronavirus pandemic, the estimated financial ramifications on businesses may be deep as companies struggle to produce and move many of the everyday products and services consumers have come to depend on. German luxury auto giant Daimler—which makes Mercedes-Benz—cautioned in its annual report that the virus “may not only affect the development of unit sales, but may also lead to significant adverse effects on production, the procurement market and the supply chain.”
In China, the virus could affect up to 42 percent of China’s economy—that will be felt globally as China represents about 16% of the world GDP.
The impact of COVID-19, and other global emergencies like it, is compounded by the fact that many companies have limited visibility into their risk exposure or supply chain – especially among tier 2 and tier 3 suppliers that provide parts to their direct suppliers. And without knowing who is supplying what and from where, companies have no real-time knowledge of which parts and products will be affected. This leaves executives, employees, and customers at risk – and without comprehensive knowledge of just how at risk they really are.
This same location intelligence can be used by a company to understand their operational exposure to a wide variety of risks. Here are three steps a company can take to prepare for a global crisis.
Increase Risk Awareness
Companies that excel at creating real-time location intelligence know that awareness begins with good data. And while that data can be generated by the business itself—through on the ground research, sensors on machinery, GPS trackers in delivery vans, and more—full-fledged operational awareness often stems from a variety of sources.
For businesses concerned about fire risk, operations managers might consult real-time maps like this one from the National Interagency Fire Center (NIFC), then use GIS technology to overlay that risk data with the current locations of employees and facilities. Together, those data sources create a real-time 360-degree view of operational risk.
Executives who see risk mapped—with profit and revenue figures attached to each risk—can prioritize adjustments to the company’s asset portfolio. For expanding businesses, GIS can also identify less virus-exposed regions where they might build facilities or take on new suppliers.
Map Your Supply Chain
General Motors’ production is exposed to a broad range of disturbances—from political uprisings and weather events to labor disruptions and supply shortages. When problems arise, the faster the company’s Supply Chain Risk Management (SCRM) team can get information to GM’s global crisis managers, the sooner the company can resolve those problems before customers are affected
To do that, Paul Rossi, currently a member of the strategic risk management team at General Motors, and formerly the company’s supply chain risk management (SCRM) lead, relied on a geographic information system (GIS) to map the interconnections among GM’s thousands of tier 1, tier 2, and tier 3 suppliers. When a disruptive event occurs, whether it’s as common as a factory fire or a phenomenon like COVID-19, the system enables the team to trace specific parts from their source to their destination plant and vehicle program.
Understand Your Customer
In order to understand the full impact a global event like COVID-19 will have on a company, executives must first understand their customers. In collecting and analyzing information about customer locations, purchasing behaviors, online/offline behavior, and product preferences, a company becomes better equipped to serve those customers during times of need.
Companies using GIS for location analytics can pinpoint core profiles and see how they behave and spend differently in different geographies. Instead of using a ubiquitous approach across all those customers, they are able to stock products and customize communications based on behavior and geography. While mapping the location and behaviors of every single customer may seem like a daunting task, with the help of location intelligence, companies can quickly start to discover their core customer profile for different locations.
Lesson Learned
The impact on human lives and the global economy will not be fully understood until well after COVID-19 has been brought under control. It is, however, possible to begin gleaning insight from the current crisis now. Implementing emergency response protocols by mapping risk and increasing operational awareness is one way businesses can be better prepared for the next crisis
Understanding risks specific to location matters greatly, and is key to reliable threat assessment, emergency preparation, and crisis response. A deeper understanding of operations, supply chains, and customers can be an effective tool against loss and a way to ensure companies can meet social responsibilities in the face of global uncertainty.
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