COVID-19 – Preparing Your Business for the New Normal by Harbour Results
COVID-19 Effects on the Global Economy
- Global GDP Expected to be -3% in 2020
- Oil Prices Plummet
- Manufacturing PMI is Contracting Everywhere
- Retail Sales See Record Drop
- Unprecedented Stimulus Packages
- Record Unemployment Globally
Quarterly GDP Growth Projections:
For the first quarter of 2020, the major economic firms (Goldman, JP Morgan, Conference Board, WallStreet Journal) all predict a loss of 6%. The effect is minimized due to a strong January and February.
However, Q2 will have losses somewhere between 25 and 30%. These staggeringly low numbers are most likely due to an entire month of businesses being shut down and citizens being quarantined. We have even seen that some states have extended their policies for longer than the original month planned.
We will get back to normal, just slowly.
- Lifting of Gov’t Restrictions – states will begin to reopen the economy and get money flowing again
- Willingness to Leave Homes and Interact – This entirely depends on the choices of individuals and could potentially continue to slow down the economy if people decide to stay at home even after the states open everything back up.
- Manageable Hospital Capacity – As the spread of the virus slows down, hospitals will start to have the situation under control
- Vaccines – We will likely not see a vaccine until 2021, but the safety that comes with it will accelerate the economy toward what it was before.
- Consumer Spending of Those Employed – Those of us that are still earning an income will need to continue to spend money to increase the flow of money around to other industries.
- Feelings of Financial Stability – As the economy slowly improves, people will begin to feel more financially stable, resulting in more spending.
Impact on Manufacturing
Top Concerns for Manufacturers now (other than health and safety of employees):
- Global Recession (73%)
- Financial Implications (65%)
- Sales (64%)
Manufacturing Across Industries at Risk:
- Medical and Communications are actually going to see a slight bump in production (5%).
- Heavy Truck and Aerospace will have about a 30% decrease in production in 2020.
- Automotive will experience a 20% decrease.
- Appliances will also take a hit of 15%
- Mining, Oil, Gas and Agriculture will see a slight decrease of about 5%.
4 areas to focus on:
- Customer Demand – Adjust your forecast to align supply and demand. It seems impossible to forecast right now, but you need to be gathering as much intel as possible and adjusting as best you can as often as you can. Communicate with customers and prospects to position yourself for success.
- Operational Efficiency – Look at all options to improve efficiency.
- Workforce Readiness – Plan workforce onboarding and engagement. Know what skills and people you need. Learn how to manage working from home and plan for the transition back into the workplace.
- Technology/Automation – Technology will play a key role in recovery. Learn how to use data better, think about your opportunities and capitalize now.
The key to all of this is communication and teamwork. Each individual or team in charge of these areas needs to be on the same page as everyone else.
Strategic vs. Tactical Planning
- Create a long-term plan (at least 18 months)
- Use market intelligence to inform decisions
- Question Everything; Look for unique ways to operate
- Focus on Sales; Talk on the phone to get that personal touch
Harbour’s COVID-19 Virtual Assessment
A tool for manufacturers to better position their company for COVID-19 recovery by getting a solid understanding of the current state of business.
-½ -day online session
-2 HRI personnel (consultant/analyst)
-Dialogue –Finances, Strategy, Operations, Leadership, Sales
-Share –Market Intelligence, COVID-19 Benchmarking Data, Best Practices
Manufacturing is and will continue to be significantly impacted by this virus. This assessment will help you prepare for the new normal that we will experience during the remainder of 2020 and beyond.
The data, insight, and information critical to build short-, medium-and long-term plans that will better position your company for the next 6-18 months.
The cost is a discounted $1,200 USD for the half-day session with 2 Harbour Results consultants; payable upon completion. Contact Laurie.Harbour@harbourresults.com to secure your assessment.
Do you see manufacturing coming back to the US from Asia?
We have seen re-shoring already just in the past few weeks. Ford and GM have announced that a few projects originally planned for Asia will now be here in the US. Particularly production opportunities will come back for the long-term. Tooling will most likely see a short-term return to the US and then possibly go back.
If you have more questions:
Cara Walton: email@example.com
Laurie Harbour: firstname.lastname@example.org
To view the full webinar, click here.