Preparing for recovery and survival in a post-Covid world

Feature articles | November 12, 2020

By Nick Flaherty

Medical Electronics Distributors

Since the start of the COVID-19 pandemic, Electrocomponents has taken swift and responsive action to support the needs of customers, suppliers and employees as well as providing assistance to communities. As a global, omni-channel business, our experience and presence in Asia meant that just as the virus was emerging in China, we were able to establish a crisis management team quickly. Then, as it spread worldwide, we rolled out business continuity plans rapidly and efficiently across the globe.

The cornerstone of our business ethos has always been to ensure we can respond swiftly to changing customer needs, although we did not have a pandemic in mind! When lockdowns restricted movement of all but essential people and goods, we were well-placed to adapt and evolve our service offerings. This was, in part, due to our early investment in eCommerce and digital platforms, now generating 63% online revenue, and partly through the nature of our business.

Customer support

One of our first priorities was to provide urgent support for our many customers in critical industry sectors, including medical and healthcare, food and beverage, utilities, logistics and the public sector, especially police and ambulance services. Thus, it was essential that we mobilised fast to ensure continuity of supply, and to meet new and urgent demands. Top of the list was to help make PPE products available to allow frontline workers to continue their work safely.

In the UK, we ring-fenced essential products to support the NHS and its contractors in the development and supply of vital medical equipment, such as ventilators and respirators, oximeters and temperature measurement systems, as well as for medical analysis and vaccine research laboratories.

With some factories shut down or with much reduced output, combined with significant international transportation limitations, some products were in short supply. But, with more than 500,000 products from 2,500 suppliers on offer, and with a global distribution network, our expert teams were able to find alternative products and sources where necessary. Proactive engagement across our supply chain has enabled us to maintain a strong inventory and consistency of supply.

Employee support

Throughout this period of uncertainty, we have been investing in initiatives to ensure the safety and wellbeing of employees in the workplace – our own, as well as our customers’. We very quickly implemented flexible working practices to the vast majority of our employees globally, including new support structures for home working and resources to help our employees stay mentally and physically well.

We made changes to our operating procedures in our 12 distribution centres around the world, including the provision of PPE, social distancing measures and split shifts, with very little service impact to our customers. Another early initiative was to set up an employee assistance programme and wellbeing hub to keep colleagues connected.

The response from our people has been outstanding. Our staff have shown an impressive level of adaptability and excellent team spirit across the organisation. They have a real sense of making a difference and being involved in an important effort to support critical businesses.

They have had to cope with short-notice changes in requirements, reduction in staff levels due to self-isolation and a very challenging work environment. In the UK, Europe, Asia Pacific and the Americas, staff have worked relentlessly and shown great innovation to meet the demands of a society in crisis. Examples include same-day calibration of thermometers for a hospital in Birmingham, UK, holiday weekend working to fulfil and order for a Dutch company producing respiratory systems, and the delivery of critical parts to help fit out a US Navy hospital ship.

At a community level, we have responded to the issues surrounding school closures, with a campaign called Kits for Kids to support parents trying to educate their children at home. These educational kits teach children how to use single-board computer products.

With the strength and resilience the business has shown through COVID-19, we are well positioned to offer some insights into how industry globally is responding to the crisis and to provide an outlook on the emerging challenges that businesses will face in the aftermath. We can single out some of the specific areas that will need to be addressed to remain operational in a post-COVID world.

Digital domain

Clearly, COVID-19 is accelerating the need for businesses to shift to working digitally. Those that had already entirely or partially embraced digital transformation are better positioned to adapt. Many companies in many sectors have had to rush to launch online sales/service offerings, mid-pandemic.

As a result, McKinsey reports more than 90 percent of sales moved from ‘in-person’ interactions to sales via a digital model. Some 80 percent of companies claim they will sustain these changes for a year or more at least. The move has been effective, and some are already seeing faster revenue growth, more efficient purchasing and a 40-60 percent reduction in sales costs.

Customer behaviour has changed along with digital transformation. To identify trends and be responsive to these changing needs and expectations, 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, meanwhile, need to be agile and move fast in order to regain and/or retain their share of the market. Exploiting data is again critical to understanding the changing market and what businesses might need in the future.

Supply chain continuity

The pandemic has shown that global supply chains can be fragile, especially if they involve single source products. The Institute of Supply Management3 reported that in March, at the start of the pandemic, 75 percent of companies suffered supply chain disruptions due to transport restrictions. Almost half of the companies surveyed had no contingency plans for supply chain disruption leading back to China.

The ability to source from a diverse range of suppliers has become paramount. Firms should consider supply options from multiple and geographically disparate sources, if possible.

People vs workers

Post-Covid, the number of employees working remotely is likely to remain higher than pre-pandemic levels and is predicted by Gartner to represent up to 50 percent of the workforce on average, compared to 30% before. However, it is estimated that more than 70% of employees in B2B services can typically work from home whilst in manufacturing, the figure is just over 20 percent.

Whether working from home or travelling and working in a factory or office environment, how a company treats its employees is likely to become a significant factor post-Covid. Recognising that employees are people, not just workers, means that appropriate levels of support should be provided to help employees’ mental and physical wellbeing. From PPE in the workplace to communication and teamworking tools, it’s essential to help keep home-workers connected. Admittedly, both in services and manufacturing, such changes to operational procedures can be expensive and complex.

But the result, as we have found, can be a more resilient, engaged and loyal workforce, prepared to go the extra mile when needed – our employee engagement score reached a new high in our most recent survey. Innovation is another proven way of meeting disruptive challenges, and this too is mostly likely to come from dedicated employees.

Global manufacturing recovery

Clearly, industry worldwide faces a period of uncertain and uneven recovery. Certain sectors that were least impacted by the pandemic 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 and variable risk factors as well as long-term, even permanent changes to our society, post-Covid.

For sure, many firms are going to require a ‘strategy reset’, even significant product diversification, in these changing and disruptive times. But by exploiting technology, data collection and automation to the fullest, companies will be able to stay more flexible and responsive to changing environments. Reviewing the supply chain to make it more resilient will significantly mitigate the risk of major disruption. These actions, plus taking care of the physical and mental wellbeing of employees, can help ensure your business stays in business in the future.

Electrocomponents is the parent company of RS Components (uk.rs-online.com/web)

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