PJ Bain is the Chief Executive Officer head revenueA global leader in working capital financial technology solutions.
It was never my intention to sound like a broken record. But if you’re the weatherman, your job is to report on the weather, even when the forecast shows big, complicated, dark clouds of uncertainty month to month and quarter to quarter.
As we all continue to navigate through these adversity, we must continue to find the best ways to adapt and prevail. From that perspective, here’s my forecast of the most prominent economic and supply chain trends during the rest of the year, as well as what business leaders—and their employees—can do to not only weather the various storms, but also come out Can Second ending better and stronger.
1. Continued Uncertainty, Volatility and Disruption
While I am, and always will be, an optimist for the long term, there are undeniably at least a number of significant, potentially imminent risks that threaten supply chains as well as the wider economy:
• International tensions over trade, technology, security and global conflict.
• Banking Transition.
• Failure of the US government to reach a debt-ceiling agreement.
• A recession, with fears over how long it will last and how bad it will be.
Since it is impossible to predict how each of these situations will ultimately play out, I would say that one important takeaway for businesses is this: In this new normal defined by great uncertainty, two key characteristics will prove crucial: discipline and resilience.
2. Power transfers from buyer to seller
From a supply chain perspective, we have seen a significant shift in the landscape over the last three years, with power and leverage shifting from the buyer side to the seller side.
Today, buyers are in a position where they must continue to reexamine, reshape and redefine all aspects of their supplier relationships, from payment terms to inventory levels to deployment of working capital. As long as widespread uncertainty, instability and disruption continue, varying degrees of tension in this power dynamic is likely to continue.
3. Reshoring and Diversification
Another trend that has emerged is the revitalization and diversification of supply chains.
Countries such as India, Vietnam, Thailand, Malaysia and Bangladesh are stepping up their manufacturing efforts. The US is also one of those countries, and, in my role at Prime Revenue, I’m particularly excited by the activity I’m seeing from companies based out of South America and East Africa.
While this trend will continue, the reality is that this is a long-term process that is still in its infancy, and it will take years before we see a truly reshaped and stable global supply chain landscape.
From Mike Tyson to the Pareto Principle
There’s a famous Mike Tyson quote that I love, “Discipline is doing what you hate to do, but doing it like you love it.” Adopting that mindset and approach – by working both physically and mentally, doing the tedious work that no one else wants to do and making the tough decisions that no one else will – is the key to staying resilient and successfully navigating these tough times. through contrary winds.
What can you do differently? What upfront, difficult thing can you do now that will have a positive, compound effect later? How can you make yourself and your impact invaluable? Or even undeniable? Having the discipline to sit down and answer those questions—and then follow through with careful, consistent action—is a defining component for both executives and employees in staying resilient.
For guidance through uncertainty, I also look to the Pareto Principle. Which 20% of inputs cause 80% of the problems, and how can you identify and reduce those inputs? Which 20% of inputs make up 80% of the successes, and how can I replicate them? Thinking about these questions, and how they apply to your time, attention, and resources, is also key to resilience through uncertainty at both an individual and organizational level.
putting it back in the supply chain
So, how do you take the above approach to discipline and flexibility and apply it to your supply chain? Start by checking:
• Taking actions that will deliver the most long-term benefits, from building contingency plans and inventory buffers to investing in automation and sustainability.
• Your supply chain finance program, and the terms—including the amount of capital required, length of the payback period, geographic area of business and overall program goals—will best position your company for both immediate and long-term success .
• The subset of factors responsible for most of your supply chain problems.
This internal audit will help you identify the difficult-but-necessary steps that will ultimately make your company invaluable in your supply chain relationships. In addition, it will help you determine how best to deploy your working capital liquidity – despite uncertainty – to make an immediate and lasting impact, whether that means investing in supplier diversification, recruiting or product development. Liquidity has to be used for.
The key to this type of self-reflection, whether you’re examining yourself or your company, is not only asking these types of questions, but also taking the time and resources to allocate them and be thorough, honest, and accurate. Have to answer them from. , with actionable follow-up.
If the self-examination process was easy, you did it wrong. But if it was difficult, and involves serious effort, analysis and reflection, the creation of new ideas, and healthy debate with consequences for difficult decisions, that’s a sign of progress, and a sign that your company—and its supply chain — will be equipped with the proper discipline, resilience and fluidity required to not only survive adversity, but also come out on the other side better and stronger than before.
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