How can distributors adapt to the post-covid19 environment?
- Status of the new normal
The new normal requires firms that want to stay afloat or grow to understand its peculiarities and take action. Low Touch Economy is the new state of our society and economy and has been permanently altered by Covid-19. It is characterized by low-touch interactions, health and safety measures, new human behaviors, and permanent industry shifts. For the distribution industry, it creates both internal and external challenges.
The most prominent and probably lasting external hardship is the behavioral shift. Particularly, people will know how they interact with each other and businesses. Thus, we can expect lower demand for the entities which are most affected by the behavioral shift such as restaurants, schools, and other places for public gatherings. People are also changing their behaviors relative to how they try and touch things with health and safety issues being paramount.
Secondly, some of these changes seem like they are here to stay. Thus, for some distributors such as foodservice and apparel, demand shock of this new normal can last longer and changes in demand patterns can be permanent.
And lastly, behavioral changes also affect how people co-exist in the workspace and interact with clients. Working from home has particularly become more widespread. Additionally, fieldwork will produce interactions inherently riskier.
- Adapting your organization’s external strategy
Consider the instability in supply and demand. As the recent meat crisis in the US shows, sudden supply chain disruptions are possible. To mitigate demand shock or even prepare for further growth companies should focus on their competitive position and expand on it by searching for new opportunities or moving into new subsectors. One example could be adopting better e-commerce practices by creating tools to support online purchasing. Improving the interface for online food menus is a good example. Changing product assortment and looking for new verticals is also a viable option.
- Adapting your organization’s internal strategy
a) Taking care of the health and safety of field-service personnel by limiting close interaction with customer representatives and move to electronic document exchange.
b) Change office and warehouse rules. For example; less personal interaction and meetings, office space redesign to lower the proximity between employees.
c) Adapt new remote managerial and operational technologies. Try to keep as many people working remotely as possible, especially vulnerable groups. It also requires adapting cloud–based load and route planning and delivery execution platforms.
d) Adapt to new staffing and HR procedures.
Adapting to the new normal is not going to be an easy task and will require a good amount of brainstorming by everyone. The key is to understand industrial, behavioral, social, and regulatory changes and to be able to mitigate current losses and seize new opportunities.