COVID-19 is changing the face of industry worldwide. Lindsley Ruth, CEO of Electrocomponents, highlights the primary challenges that face businesses and how they can be addressed.
Since the start of the COVID-19 pandemic, Electrocomponents has taken swift action to support the needs of customers, suppliers, and employees, as well as aiding communities. As a global, omni-channel business, our experience and presence in Asia meant that as the virus was emerging, we were able to establish a crisis management team quickly. Then, as it spread worldwide, we rolled out business continuity plans rapidly across the globe.
The cornerstone of our business ethos has been to ensure we respond swiftly to changing customer needs. When lockdowns restricted movement we were well-placed to adapt our service offerings. This was due to our early investment in eCommerce and digital platforms (now generating 63% online revenue), and partly through the nature of our business.
A priority was to provide support for customers in critical industry sectors, including medical and healthcare, food and beverage, utilities, logistics and the public sector – especially police and ambulance services. Top of the list was to help make PPE products available. In the UK, we ring-fenced essential products to support the NHS in the supply of medical equipment, as well as for medical analysis and vaccine research laboratories.
With factory activity restricted and international transportation limited, some products were in short supply. But, with 500,000 products from 2,500 suppliers on offer, and with a global distribution network, our teams were able to find alternative products and sources where necessary.
We implemented flexible employee working practices globally, including new support structures for home working and resources to help our employees stay mentally and physically well. We changed operating procedures in 12 distribution centres, including the provision of PPE, social distancing measures and split shifts. Another early initiative was to set up an employee assistance programme and wellbeing hub to keep colleagues connected.
COVID-19 is accelerating the need for businesses to shift to working digitally. Customer behaviour has changed along with digital transformation. To identify trends and be responsive to changing needs, suppliers need to collect more data for analysis. In addition, our own experience shows that the personalisation of digital offerings is an important part of the mix. Manufacturers need to be agile to regain or retain market share. Exploiting data is critical to understanding the changing market and what businesses might need in the future.
Supply chain continuity & resilience
The pandemic has shown that global supply chains can be fragile, especially if they involve single source products. The Institute of Supply Management (i) reported at the start of the pandemic that 75% of companies suffered supply chain disruption.
The ability to source from a diverse range of suppliers has become paramount and firms should consider supply options from multiple and geographically disparate sources.
Global manufacturing recovery
Industry worldwide faces a period of uncertain recovery. Sectors that were least impacted are expected to recover soonest. These include process manufacturing, food and beverage, chemicals, and pharmaceuticals. Aerospace and automotive manufacturers, meanwhile, have suffered considerably and their recovery rate is dependent on various factors.
Firms are going to require a ‘strategy reset’, even significant product diversification. But by exploiting technology, data collection and automation, companies will be able to stay flexible and responsive to changing environments and ultimately, build their resilience. Reviewing supply chain resilience will mitigate the risk of disruption. These actions, plus taking care of the physical and mental wellbeing of employees, can help safeguard future business prospects.