A natural disaster can cause a waterfall of issues for businesses. Industry titans and small startups alike can feel the impact, as huge industry trade shows are cancelled, travel is delayed, supply chains are interrupted, and production is stalled. As a business owner, you may feel powerless with no choice but to wait it out, and hope for a speedy recovery for all. However, both in life and in business, sometimes the best road to recovery is “mind over matter”. Use this opportunity to practice some business self-care and reflect on your current business habits, establish some best practices, and build up your strength, so your business can emerge rejuvenated for success.
Here are some tips to get you started:
1. Communicate Clearly to Your Stakeholders.
While no one likes to be the bearer of bad news, you should be direct with your stakeholders, directors, and customers about any anticipated delays and negative impacts. When delivering disappointing news, be honest, and empathetic. Commiserating about your shared frustration will help humanize the conversation, but be sure to remain solutions oriented. Remember that every customer is your most important customer, so you should make sure your communication with them reassures them that they are a top priority, and you are going to do everything in your power to deliver a quality product that meets their expectations as quickly as possible. Offer to make reasonable concessions for the delay which you can absorb without added cost to you, such as discounted shipping, more favorable payment terms, or complimentary trial enrollment in one of your service programs you can entice them to commit to later on, such as a month of free social media advertising.
2. Diversify Your Supply Chain Globally.
If you’re experiencing production delays, review your current agreements and educate yourself about potential secondary and tertiary suppliers you can utilize, across regions. Engage with them now and begin the contract negotiations process, so long as you are not violating any current exclusivity agreements. Having multiple partners on your roster, in different geographic zones of the world, will help you stay nimble in the event of a future production delay, or natural disaster. When drafting agreements with new supply chain partners, be sure to ask your attorney to do a quick review before you sign.
3. Mitigate Price Hikes.
Use this time to educate yourself about market trends so you can take advantage of them. Your knowledge may alleviate supply chain disruption, while also creating a competitive advantage for you. Keep tabs on the factors that contribute toward price increase, such as political climate, supply-chain disruption, and raw goods, and commodities pricing. Subscribe to text alerts for pertinent news updates so you can stay informed. Negotiate with your suppliers now so you can place bulk orders, or freeze pricing for future orders, and stock up when prices are low.
4. Vet Your Carriers.
Research and partner with a quality carrier. This is crucial if you want your cargo to be delivered safely, accurately, and on time. If you’ve run into shipping or transportation delays, have an attorney review your current contract to advise you of your termination options. Ask other contacts in your industry who they use for shipping and logistics services. Carriers operating in the U.S. are assigned a United States Department of Transportation (“U.S. DOT”) safety rating. You can view this rating on the U.S. DOT Federal Motor Carrier Safety Administration Safety and Fitness Electronic Records (SAFER) System.
5. Implement a Digital Warehouse Management System (WMS).
If you’re not already using one, now is a great time to research and install a digital warehouse management system (WMS) that will track the precise location of each component, finished product, and item in your inventory from the moment it’s created by your supplier/manufacturer, through warehousing, distribution, and delivery to the end-user. A WMS will allow you to reduce shrinkage, optimize your stock levels, manage production and ordering efficiently, and increase employee output. Some WMS programs allow you to collaborate with your vendors, sales partners, and customers. Many are cloud-based, giving you remote access from anywhere, even if your systems go down. You may be able to enter into an agreement where you pay for this system monthly. Ask your attorney to review the contract to make sure your IP and data are adequately protected.
6. Cross-Train Employees.
Note which employees are impacted most by the temporary shift in workflow. For example, you may be aware of a sales employee who is restricted from selling their category of products because of various production delays, and you may be aware of another employee who is working on overdrive to handle complaints and prevent your customers from going to your competitors. Team up these employees, and train the sales employee to assist the customer service employee with responding to the complaints. Cross-training employees permits increased flexibility in the future with employee scheduling, boosts productivity, encourages collaboration, increases workplace sustainability, and allows your company to be more agile.
7. Fill Up Employee Downtime.
If you have some employees with a newfound chunk of downtime, assign them back burner or housekeeping tasks, even if they are in a separate department. Employees will welcome the opportunity to break out of the monotony of their day-to-day jobs, and you may be surprised to discover they have a strong skill set you weren’t aware of. You can also assemble these employees into a task force to strategize, roll out, and manage a new process or system that creates efficiency in your organization, such as self-audits, risk prevention/compliance programs, drafting and implementing standard operating procedures (SOPs), and streamlining legal processes, such as contract negotiation, execution, and storage.
You may not be able to anticipate the next disaster, but by employing the above strategies you will be better prepared to effectively navigate through it, and emerge rejuvenated for success.
Andrea A. Tarshus, Esq. founded Tarshus Law Firm in 2015 to provide efficient, accessible, and fair General Counsel legal services to businesses and business owners. Tarshus Law Firm represents Western New York and Buffalo based businesses as well as large international and publicly traded corporations in industries such as: audio video ("AV"), products distribution, transportation and logistics, medical marijuana, marketing, social media, healthcare, and other sectors.
Andrea’s engagement with businesses regularly includes negotiating and executing favorable contracts, legal research and writing, project management, administering internal legal and operational controls, problem-solving, and strategizing. She enjoys working with business owners, C-suite executives, and company managers to create a comprehensive legal and business framework that supports operational efficiencies and strategies for growth.
This article is intended to be informational in nature, should not be relied upon by the reader without consultation with an attorney, and does not create an attorney-client relationship between the author and reader.