The Global Covid19 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 “Maybe” when we are not even sure of what is happening in the first place.
Staying with the business of business, a number of our prospective customers who were expecting to place orders in the first half of 2020, have deferred decisions to purchase, siting either exchange rates or general uncertainty.
Certain businesses will be affected by disrupted logistics, reduced consumer capacity to spend, more than others. Airlines for one have had an overnight shut down. Many will reduce activity and some will vanish, and we can be sure that ticket prices will escalate. Will the Industry disappear? Probably not.
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?
While most of us slow down to look at a car smash on the freeway, pretty swiftly, we have to move on.
My 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 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.
We have already learned from PC suppliers that their prices move like a stock exchange.
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.