ROI

Peter Bigelow

A counterargument to cutting staff and inventory.

One of those rituals that takes place around this time is developing the business plan and related budgets for the new year. Deciphering the crystal ball, discerning optimism from reality in the sales forecast, determining budget capital investments and human resource needs, and so on, is always a complex task. The very unusual pandemic/post-pandemic world we are now in makes it even more so.

As we look to 2022, we see some unusual and especially onerous hurdles: a more strained supply chain, deteriorating consumer sentiment, increasing inflation, and segments of the economy still reeling from the worst days of the pandemic. While no single hurdle can be compensated for, the combination of threats can tempt the planner to take a conservative approach and decide it’s time to hunker down.

But what does a conservative approach to planning and budgeting really mean? Typically, plans might include reducing inventory, cutting back capital spending and trimming staff (or hours worked by staff) to “right size” expenditures with the projected (feared?) lower levels of business. All are prudent steps that in normal times should be considered when an industry or the economy shows symptoms of fatigue. The problem is these are not normal times!

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Read more: Planning is Always Challenging. This Year It May Be Worse.

Peter Bigelow

The current crisis was years in the making.

One of the biggest current concerns for the economy, in virtually every country in the world, is the state of the global supply chain. Whether discussing the shortage of chip’s impact on the auto industry or the shortage of paper goods (think toilet paper), all fingers point to a supply chain that is showing signs of fatigue.

To fully appreciate the situation we face, one needs to first look at how the supply chain got to this point.

Historically companies strived for a fully integrated manufacturing capability, so materials, parts, subassemblies, etc., were designed and controlled by the company that produced the end-product they were to be used in. As an example, an automaker would own the steel mill, glass-making facility, radio manufacturer, paint factory, etc., so virtually all parts that went into their automobiles were manufactured – controlled – by one company. Shortages, if and when they occasionally might occur, could be quickly rectified by moving resources around within the parent company to increase supply of needed items.

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Peter Bigelow

Today’s builders have data analytics skills that match their manual dexterity.

Sometimes you see things a hundred times or more before it hits you the image presented does not match the message it intended to convey.

Case in point: A common television ad of late for a fairly high-tech product. The message was about the quality that goes into “making” these devices. So far, so good. But the ad fades to a man decked in a flannel shirt, blue jeans and the obligatory well-groomed beard, eyeing with pride some woodworking project. I get it: Pride in workmanship. The skilled craftsman produces a fine item. The message and imagery are ageless. One problem, though: That’s not how it goes!

It’s been decades since I purchased an item that is not the result of vigorous, data-driven engineering, followed by a slew of process, manufacturing, quality, and even finance folks obsessed with the analyses, measurement, inspection and costing of every piece of anything that gets even close to the product. While I’d like to think some flannel-shirted woodworker hand-built a device, the reality is data, and more data, and a little data on top of that, are what it takes to turn a concept into a successful product.

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Peter Bigelow

If ever employees deserved a big “Thank You,” now is it.

The world has been through the ringer over the past 18 months. Pandemics have a way of shaking things up in ways no one could possibly imagine. It’s sort of like being tossed into the wash cycle of a washing machine, being soaked from every possible direction, only to be rewarded by needing to survive the spin cycle! Covid-19 has brought nothing less. Regrettably, as summer turns to autumn, thanks to the Delta variant the end of this pandemic looks nowhere near.

For too many the disease itself has been devastating, from loss of life to the scores of friends, family and colleagues who fell seriously ill. No words can be said to ease the pain for those who have lost loved ones. For many others, the disease has cost them employment and caused dramatic changes in day-to-day lifestyles. For some, total despair. Indeed, the impact of Covid still can be seen and felt across the globe.

In some industries the impact of Covid has brought a complete change in the cadence of daily life. Rather than adults heading out the door each morning to go to an office to work, the work has moved into their home much like a loved (but unliked) distant relative. Ditto children: Rather than heading to school each day to learn in a classroom and play with friends, they have been confined to home. Parents, children, coworkers and teachers all inhabit limited space and fight for enough bandwidth to handle the seemingly never-ending virtual meetings and lessons. This new Covid paradigm, while enabling people to remain in a safe environment, has still caused displacement, inconvenience, and for many levied an emotional toll.

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