Lessons Learned - COVID-19

Jim Courtwood
Author of the Time & Attendance Consultant's Guide Series

As a business owner, it is my responsibility to anticipate threats to my business and manage those risks. Still, I must admit to being caught a little short when it came to the impact of the Coronavirus.

The immediate impact to our business was the delay in both product imports and, of more significant concern, a lack of communication from my Chinese suppliers. I was left wondering whether any of the outstanding stock orders would ever be delivered. A spike in sales just before the outbreak meant my normal stock levels were getting low, so I had added a second order of product to cover any further growth in sales.

To add to my concerns, one of my employees was originally from Hong Kong and, with contacts in the medical sector, advised me that the shutdowns in the primary manufacturing sector of Shenzhen were extensive. Certainly, the situation was much more significant than was being portrayed by the Chinese government.

However, I took a deep breath and thought about it with a clear head and realised that regardless of the short term pain this is a temporary situation and my suppliers will no doubt be doing everything they can to maintain production and distribution. They are as keen to manufacture and ship as I am to receive the product.

The situation did, however, reinforced my view of how important it is for Australian companies to deal with reputable, commercially stable, local companies, particularly when it comes to the provision of mission-critical products, even more so when the products concerned are imported.

Many Australian businesses source products from China because market forces inevitably place downward pressure on prices for all products and services. However, it's when that pricing pressure results in marginal profitability or JIT supply issues for your suppliers that your business can be very severely impacted by the interruptions to supply.

If it is your business that imports product from overseas, you are very much a buffer zone between the product manufacturer and the end-user. You buffer your clients from communication barriers when dealing with product inquiries, training and support. You provide a local stock of products, so there are no delays of new purchases or warranty claims. You cannot provide this buffer zone if you are not well resourced.

Underestimating the impact of the Corona Virus won't impact my clients because we have some reserve stocks held for maintenance and support purposes, but it will affect our new sales in a particular market sector. The virus is not likely to impact our support services, and this is not because we anticipated and adjusted, but instead because of the very nature of the way we provide customer support. However, this situation could have been much different.

It would have been very different if we didn't keep reasonable stock levels. It would have been very different if we relied on the manufacturer for technical or warranty support. It would have been very different if our support systems were not geared for remote support, and it would have been very different if we did not have team members who spoke the same language as our suppliers.

The Corona Virus has simultaneously caused me concern and relief. Concern that I underestimated the impact and relief that our business practices will get us through the potential challenges. Clearly, we are yet to feel the full impact of the pandemic, but in terms of the continued provision of our support services, the most effective way to deal with this potential crisis is for employees to be able to work from home. Fortunately, our staff have been doing this part-time for more than ten years, so this can easily be extended to full time if required.

The cost of doing business will undoubtedly increase over the next six months. Airfreight charges are about to rise due to limited availability of flights and subsidising employees working from home adds costs to the business. Supply and demand will undoubtedly drive pricing up for many of the products and services we use in our company.

All that aside, I believe that this is an opportunity to assist our clients, and to this end, we will be absorbing the immediate cost increases associated with the delivery of our products and services. Many organisations are taking the same approach, and we applaud their efforts and encourage all businesses to consider how they can ease the burden of their clients, employees and the general community.


Jim Courtwood

Time & Attendance Consultant

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