Recent articles in the “Economist” and reprints in “Supply Chain Management Review” reflect the pending wave of company bankruptcies (see references 1 and 2).
Don’t be caught out reacting to these potential disruptions. Smart companies are proactively measuring the risk profile of their vendors and customers. For example, by using the Emerald Rating tool you can obtain timely insights into the financial stability of your suppliers.
Emerald Rating combines Swiss quality, state-of-the-art rating methodology and decades of B-2-B experience.
2/. By Kai Hoberg and Knut Alicke · May 12, 2020, www.scmr.com
It is quite rare to see an article reprinted because its message is so timely again. The Supply Chain Management Review Magazine included the article by Knut Alicke and myself on “Five supply chain lesson from the Financial Crisis” (published in 2013) in the latest issue. The sudden demand contraction after the collapse of Lehman Brothers sent a shockwave through the global economy in 2008/2009 similar to the current COVID-19 crisis that is potentially triggering an even bigger decline in the global economy.
Accordingly, the five action areas we identified are more critical than ever: (i) understanding the true demand based on customer communication is essential, (ii) safeguarding supply as critical suppliers might go bankrupt will become critical and (iii) creating flexible supply chains that can cope with all the volatility is key. At the same time, (iv) conserving #cash by carefully managing inventories seems a basic today. Finally, (v) preparing for the #upswing that might come suddenly after quarantines are lifted is out of question.
GDP Growth Rates Q1 19 vs. Q1 20 for major European countries:
- Switzerland contracted 1.3 percent
- Germany shrank 2.3 percent
- France contracted 5 percent
- Italy contracted 5.4 percent
- Spain minus 4.1 percent
- UK minus 1.6 percent
Author: Danny Kaltenborn, Date: June 3, 2020