Simon Geale

10 April 2020
Topics in this article
  • Agility
  • Cost Optimization

Plan ahead, but take action now.

There is a once in a generation chance to restart businesses in response to the immediate challenges of today, the need for an accelerated reboot and the emergence of a new normal. The need for strategic procurement is more important now than ever, due to COVID-19.

Success will be defined by the speed at which businesses can take action and the accuracy of the actions that they take. This means shifting from ‘question mode’ into ‘answer mode’ in real-time.

Businesses must navigate their way through a series of operational challenges coming from their customers, competitors, supply chains, and internal resources. The new operating necessity is speed and agility. Achieving this will depend upon the clarity of thinking; how leaders can frame challenges, see opportunities and take action without delay as they move through three post-crisis phases;

  • Readjustment – Rapid actions that respond to sharp changes in demand that render existing business models obsolete.
  • Recovery – Accelerating out of recovery at a speed that wins market share and a faster return to target liquidity levels.
  • Reboot – Adjusting the business model to meet new customer, economic, societal and operational norms.

Business rules will get rewritten. It is not enough to simply repackage what we have done before. Businesses are burning, category plans are obsolete and supply chains are broken. New challenges need new thinking.

No business comes out unscathed, but not all will be equal

There are two types of business in COVID terms – characterized by changing demand patterns:

  • Type 1 – Businesses that have seen a substantial increase in demand and consumer buying patterns such as Grocery, Gaming, Communications or Healthcare
  • Type 2 – Businesses that have seen full or partial evaporation in demand due to enforced changes in consumer behavior such as High Street Retail, Hospitality or Aviation

No business of either type comes out unscathed. Even those that prosper have suffered operational issues, and rapid cost increases. They may also still face mid-term demand challenges and the emergence of new and disruptive business models with which to compete.

The mid to long term question for both must be “if we were to start this business again, what would we do differently?” In the short term, the questions focus on what they must do to survive and then, as time permits, prosper.

Those that simply hope to return to the old normal will likely fail. The old normal will no longer exist.

Operational Reboot and Strategy Acceleration from Proxima

Success will be for those that are fastest to the right answers and fastest to act. This means those that can solve problems quickly, react to demand, put in place the right partnerships, build operational controls, and execute on reboot and growth strategies, building the sorts of businesses that will thrive in the new economic normal.

Operational Reboot and Strategy acceleration services from Proxima are designed to do just this. We bring operational expertise and supply market knowledge to the heart of today’s business operations through a series of Business Operations Consulting packages.

The process starts with ‘what we can do for you now’; how we can practically help you with the answers, actions, and immediacy that make a difference in hours and days.

This is realized by putting a “Response Control” capability into the heart of the recovery and reboot effort. This Proxima support is there to map out the short and mid-term challenges and program manage strategy delivery, utilizing a range of new and established on-demand Proxima services, alongside internal and supplier resources. These can be flexed up and down as needed without long-term commitment.

The approach enables businesses to conduct agile planning, monitor vital signs and quickly dial up and down the support needed, pivoting as needs change, and opportunities arise. The ability to establish ‘operational certainty’ fast, will be a critical factor in achieving speed to market and build customer trust first. Those that achieve this may well build competitive advantage.

We are here to step in, collaborate, and make a difference now

What characterizes today is that it is not a time for protracted assessments or complex strategies. It is a time for answers, answers that fuel pragmatic yet fast actions. It is a time for taking the most informed decisions possible, monitoring progress, and quickly course-correcting when required. It is impossible to underestimate the need for speed and experience.

As operators, we get the difference. Our services come with a simple commitment to put in a Proxima ‘Operations Director’ (as part of the Response Control) and a promise to work with you to “figure it out,” hour by hour, and day by day, bringing you the experience needed and answers required to make sense of what faces you.

No long-term commitments, no complicated contracts. Our on-demand services are specifically designed to respond to the immediacy of today, but also take advantage of the once in a generation opportunity in which we find ourselves. They are ready to go, and they can be turned on and off as needed as we readjust, recover, and reboot towards the new norm.

Our bespoke Operational Reboot, Strategy Acceleration Services are outlined below:

Operations Director (and PMO)

The Operations Director is the lynchpin of the Proxima Reboot and Recovery Services. They become a key conductor, responsible for quickly ascertaining the start point and immediacy of challenges and opportunities facing the business. They then orchestrate the response using the resources available and on-demand support packages from Proxima;

  • Quickly assimilates and frames key challenges
  • Orchestrates response through available resource and on-demand support
  • Manages the plan

Capacity and Capability on-demand

Over the coming days, weeks, and months organizations will face a variety of challenges as they tackle numerous issues and seek to react quickly to demand, sure up operations, and drive towards growth. This will require different skills at different times, at a time when provision of skills at pace, and trusted skills availability may be scarce;

  • Identification of skill required on a rolling basis
  • Immediate deployment of Proxima support or fast identification of suppliers
  • Easy roll-on and off on-demand type models

Operational Cost Optimization

Most businesses have undertaken rapid and deep cuts to ‘non-essential’ services, becoming experts in a crude version of ZBB almost overnight. Cost Optimization seeks to build the right cost base by supporting the business through the investment decisions. Decisions that will underpin recovery, reboot, and acceleration of business strategy;

  • Make vs. buy 2.0 – rapid comparison of internal, external and digital solutions
  • Risk assessed balancing of fixed vs. variable cost levels
  • Agile planning and next-generation ZBB establishing operating minimums

Supplier Rapid Cost Down

While cost optimization will create a fast and balanced view, most businesses will still be facing numerous legacy supplier agreements that are either not operationally fit for purpose or not reflecting the new commercial norms. Rapid Cost Down uses Proxima intelligence to quickly challenge supplier costs as part of overall operating costs and strategy (without the need for protracted tenders);

  • Identification of key cost buckets and suppliers
  • Understand new demand level and any operational sensitivities
  • Rapid benchmarking and renegotiations

Supply Chain Re-engineering and Resilience

Supply chains have come into focus over recent weeks, with the consensus being that visibility and resilience have been sacrificed in pursuit of the lowest cost. Re-engineering and Resilience will take a fresh look at supply chains framing local and global capability against business needs and the competitive landscape.

  • Mapping of supply chains and assessing criticality
  • Set up new, temporary or shadow supply chains where necessary
  • Put in place monitoring and management solutions

Liquidity Management

As the economic turmoil continues to unfold, new rules are being written with the importance of liquidity at their heart. Liquidity is becoming an organization’s biggest asset, and the ability to monitor and manage this up and down supply chains is key to maintaining health and attracting suppliers for reboot;

  • Assess current state and new working capital priorities
  • Audit key partners and agree on liquidity management priorities
  • Investigate collaborative tech fixes (e.g. SCF/Blockchain)

Supply Chain Startup

With numerous businesses hibernating or ceasing trading, organizations face a challenge on reboot to identify available and capable suppliers that can flex and power growth. Furthermore, with competition likely to be intense, it is vital to be a “customer of choice” in what may be a sellers’ market.

  • Create collaborative start-up program plans
  • Rapid vendor identification and on-demand contracting and reward models
  • Supplier management within broader operations effort

Innovation Enablement

With a ‘new normal’ to work towards, many businesses will be reconsidering legacy business models and operating practices. In many instances, supplier innovation will be the key to increasing speed, lowering operating costs, and connecting with customers. Innovation Enablement brings parties together to solve business challenges;

  • Identify key problems, opportunities, and future strategy pillars
  • Bring partners together for innovation workshops
  • Coordinate development and manage delivery ecosystems

Supplier Management and Ecosystems

As organizations rebalance what is done internally and externally, the coordination and management of suppliers will take on added impetus with commerciality, resilience, and visibility at its core. While there will be some digitally enabled solutions, key partner ecosystems will offer opportunities to accelerate and innovate at best cost;

  • Segment suppliers and services alongside internal capabilities
  • Bring together and create collaborative partnerships
  • Facilitate cross-industry CPO collaboration

Digital Acceleration

Digital solutions are going to be critical to businesses driving toward and competing in the new normal. Digital Acceleration will help organizations to not only quickly stand up procurement and commercial solutions by getting straight to answers, but will also provide the expertise to digitize business operations;

  • Rapid procurement model design and digital enablement
  • Key business/operating process assessment vs. digital capabilities
  • Fast digital adoption to enable speed, flexibility, and resilience

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