Although the full impact of this inadvertent experiment won’t be known for some time, one thing is for sure – the business environment will never be the same again.
Globalisation has been attacked but it’s not the problem – the problem is clustering. To date, we’ve glibly believed that if we have multiple suppliers and several sources, then we are resilient. What we haven’t considered is the now obvious need in having multiple suppliers in multiple geographies. Localisation doesn’t necessarily solve this problem, particularly when the entire country is forced to shut down, but there is an argument to be made for ensuring that we always have a local source available.
There will be some purchasing decision makers who will already be considering this. Whilst value for money is important, they will recognise the increased value of reduced risk, business resilience and widespread geographical supply including local suppliers. Let’s not forget how much freight costs have rocketed in the last three months, and as such, these same decision makers will be prepared, within reason, to pay a premium. This could present a great opportunity for UK businesses where buffer stocks and safety stocks could, once again, become a value proposition for customers allowing local distributors to bring real value. Will we see a resurgence? Only time will tell. The sad fact is that for many businesses, cost rather than value will continue to rule.
Driving operational and environmental efficiencies
The global health crisis has forced us to fundamentally change the way we do business and although there was huge scepticism in the beginning as to how we could continue to all operate remotely, the tide has certainly turned.
Our sales visits have been replaced with calls via Microsoft Teams, meaning that we can hold more meetings than was ever possible before. Of course, it’s not utopia but it certainly pulls into question the 35,000 miles our sales engineers were driving every year. There will always be a need for face to face interaction – it’s part of what makes us human - but moving forward, a salesperson that is filing 1500 miles worth of fuel expenses every month will, at a minimum, find themselves having to justify both the time and expense.
According to Pacer’s Strategic Sales Manager, Lorna Lawson: “At the beginning of lockdown, there was certainly some adjustment needed. Even for those of us who were used to working from home occasionally and already set up to do so, a different level of discipline is required to work at home for five days a week. However, there followed a gradual realisation that working hours could be much more productive with fewer interruptions, and it also removed many of the office-based logistical time drains.
"The extra time we’ve gained from not having to commute or travel to customer sites has made a significant positive impact on productivity, work-life balance, and energy levels. The overall feeling is one of calmness, with the situation creating space for creativity, proactivity and even some personal development time. Yes, we’re likely to now be at our desk earlier but we no longer have the frustrations of travel, and all the associated logistical demands – a virtual visit in Cornwall can take place straight after one in Glasgow! We can follow up on a virtual meeting immediately, while information is fresh, rather than having to travel home and not always being able to address and follow up actions that same day. That said, we are finding demos more difficult, and we’re missing out on natural sales opportunities such as chance meetings in corridors, spotting a new product, or overhearing talk of a new project, but the number of hours saved is a huge advantage.
"The mood of the wider team also seems better despite the situation - happier and more relaxed. Video meetings are working very well, and the team bond is even stronger with this feeling of being in this together with shared experiences and challenges.
"We’re lucky that most of our customers have remained open for business with many employees still active. Buyers are more available for virtual meetings as they aren’t rushing between appointments; engineers are finding time to discuss new technologies and blue-sky ideas rather than having to concentrate solely on project deadlines.”
Showing we care
We’ve also learnt even more about what it means to partner with our suppliers. Partner has become an overused and often devalued word but it’s demonstrated well when a Chinese supplier sends 500 face masks free of charge because they’re concerned by reports that we don’t have any, or when an American billion-dollar supplier offers extended credit terms or a Taiwanese supplier offers credit terms for the first time - all to support their partners through what could potentially be difficult times. How do we therefore hang on to that and the true meaning of partnership in the post-Covid world that we are all longing to get to? For me, it’s clear. We continue to care because we genuinely do. We behave openly and honestly - if we have a problem we discuss it, if we have an idea that can help the other party, we discuss it – even if that means we don’t make the profit we would have liked to make on that specific transaction. In the long term, we will benefit, and a true partner will reciprocate.
Social technology
I’ve been somewhat surprised and in awe of the increase in socialisation across the business. From quizzes to ‘This Group’s got Talent’ events, bingo and after work online drinks on a Friday, we’ve come together as a team to embrace the chaos we’ve all been thrown into. We’ll never replace the ‘drinks after work down the pub’ but we have discovered the enjoyment we can get from bringing our business environment into our homes and involving our families.
Nor will we ever replace social contact, but we will forever be changed. What this has reinforced is that our staff are our most important asset and every penny we spend on supporting them is returned tenfold. It’s also brought to light that our suppliers are our partners and our customers are people we genuinely care about.
By continuing to embrace the technology that is available to us, we can be significantly more efficient, more profitable and as a result able to return more to our stakeholders and staff. We may not have wanted this experiment, we may not like this experiment, but we will learn from it and come out stronger.
Author details: John MacMichael is Managing Director, Pacer International
