Why wait for certainty when we aren’t certain about what is happening?
The Global Covid-19 phenomenon has taken us all by surprise and the repercussions will become clear over the coming months.
In the meantime, it does not seem to make sense to react to what might be when we are not sure of what is currently happening.
Staying with the business of business, a number of our prospective customers who we expected to place orders in the first half of 2020, have deferred decisions to purchase, citing either exchange rates or general uncertainty. Many, many more of these companies simply froze or suspended budget applications until the market returns to “normal.”
Certain businesses will be affected by disrupted logistics and reduced consumer capacity to spend more than others. Airlines for one have had an overnight shut down while the local food processing company has seen a sharp increase in sales due to the increase in at-home bakers. As companies try to work out if they fall on the shutdown business side or the increase production side of the coin, they often delay in making progress until there is more certainty.
Many of our customers are national or global giants in the business of supplying food to the world, or are global auto manufacturers, or suppliers to these two industries. Do they all expect to get wiped out? Probably not. So why are there delays in purchasing equipment that makes an impact to production and quality.
While most of us slow down to look at a car smash on the freeway, pretty swiftly we have to move on and continue on the journey we had set out in the first place.
Our perception is that supply chains have been globally interrupted. This will lead to manufacturers facing delays for maybe missing minor components, but still necessary to complete a product. Disruption will lead to more disruption. This suggests that while stocks last, we will have a false perception that things are still “Normal”. In reality, once the Just in Time (JIT) supply chain fails, it will take months or even years to return to some sort of normalcy.
Even if things look a lot clearer by August, will there be enough stock in the system to meet a rush of orders? If everyone concludes that the future is looking better at the same time, it does not mean that there will be sufficient stocks in a reduced and restricted pipeline.
Waiting for better exchange rates may be a purchasing tactic, but is it sound management?
I can’t imagine that customers are buying R100 solutions for R10 problems, but rather R1 000’s so the exchange fluctuation represents only a small fraction of the overall savings.
Carpe Diem. Seize the day. If your business is overall viable, now is the time to build inefficiencies, and reap the benefits sooner rather than later.