Businesses across a wide range of industries are facing a unique planning horizon. As the fallout from the COVID-19 pandemic continues, organizations are now tasked with triggering a ‘cold’ restart of their operations. At the very least, they’ll be ramping back up buying/production/services levels to what they were before the crisis arrived.
For strategists, analysts, planners and merchandising teams, re-opening for “business as normal” presents a unique challenge, but also a unique opportunity.
Market experts are currently offering differing projections for how this industry-wide relaunch will play out, ranging from a slower, progressive, U-shaped recovery (as was the case post-2008 financial crisis), to the possibility of a sharper, more rapid V-shaped recovery.
In both scenarios, there is a significant opportunity for businesses to leverage their number one unique asset – their data – in order to begin informing their optimal restart planning decisions.
The longer the disruption, the tougher the restart
For those non-essential product manufacturing businesses who’ve had to significantly reduce – or completely cease – production output, decisions need to be made as a matter of urgency.
These are decisions on which products need to be produced as a priority, in what order and quantity, based on a variety of business factors. For instance, production capacity, inventory, product profitability, predicted demand by customer and region. The list goes on.
Such decisions are difficult to make, and the complexity is amplified even further when you have a portfolio of hundreds or thousands products.
On the other side of the coin, those companies that are continuing to produce or source essential goods for the nation face another version of the challenge; a temporarily reduced or rationalized product portfolio that will need to be re-grown post-crisis.
Major supermarkets, such as Tesco, Sainsbury’s and Asda, have reduced their product ranges to the essential core items that are most needed, freeing up essential storage, staff resources and shelf capacity in order to provide customers with more of these items.
Even behemoth platform companies such as Amazon, renowned for stocking 300,000+ items, aren’t immune – reducing its product range to focus storage and distribution capacity on critically-required items.
As I’ve already suggested, the answer to these new planning challenges lies in a business’ vast amounts of data. To put it simply, planning these myriad restart scenarios in spreadsheets, or with non-intelligent systems, will be a thankless and counter-productive approach.
Agility is key
Business leaders broadly agreed that the agility of an enterprise was the key to thriving in the modern day market, even before COVID-19 appeared. Now, more than ever, this will be tried and tested.
Data agility – a business’ ability to generate rapid, actionable and intelligent insights from multiple data sets – will be a core competence of businesses who win market share and value as the dust finally settles post-disruption.
How to build a winning business restart plan
Here are some things to consider when you start to think seriously about your business’ restart plan:
- Be aware that traditional demand planning systems are likely to struggle with a cold restart. You may have to augment these systems with a layer of data-driven intelligence – generating more dynamic insights in response to evolving conditions
- Start thinking about which SKUs are the most important to your business, both from a strategic and operational perspective. Also, consider what data you have readily available to support your decision making around which products to prioritize
- Prepare to operate in a more agile way. You’ll need to do this as you adapt to rapidly changing market conditions on the ground – keep in mind that there’s a chance customer behavior will never completely return to “normal”
These are turbulent times, yet industries’ responses so far have been nothing short of impressive. Companies that are taking a data-driven, rapid action-oriented approach will have the best chance of emerging stronger in the coming weeks and months ahead.
This blog was written by myself and my Peak colleague, data scientist Dr Simon Spavound. Simon recently recorded an on-demand webinar on forecasting under uncertainty, which you can watch here 👇