Novel coronavirus: Five ways your business can respond
The spread of the novel coronavirus (COVID-19) impacts many businesses. In a fast-changing situation, it’s important to have a plan in place. Here are our five suggestions, providing a guide for your firm.
1. Look after employees and their families
- In an effort to halt contagion, employees in affected countries have been unable to work from their regular workplace.
- Ensure you can contact your staff and share information at short notice. Have a business continuity plan which enables remote working.
- Consider technology to enable this, such as video conferencing, through company or personal computers.
- If necessary, split teams across multiple sites or rotate office-based staff with those working remotely.
- Follow World Health Organisation, governmental and public health official updates - and keep employees updated.
2. Review your supply chain
- Following the 2011 Fukushima nuclear disaster, global car manufacturers discovered a significant supplier dependency when one company producing 40% of the world’s microcontrollers had to close a plant.
- You can unearth hidden dependencies through reviewing your supply chain from end to end, identifying your suppliers’ supply source down to component level and understanding who your customers sell onto.
- Undertake a risk assessment of contractual commitments and potential use of clauses relating to unforeseeable circumstances, by you or by your buyers and suppliers.
- Identify and connect with alternative supply options, right down to the component level.
3. Logistics and distribution
- Enforced office or factory closures and disruption to transport services – including roads, ports and loading facilities – could impact on goods being delivered and documents being processed on time.
- Map your dependencies, ensure you have visibility and a plan for disruptions – for example, using air freight in the event shipping is restricted.
- Anticipate disruption to service providers – from legal services to customs checks.
- Consider implications right across your operations - from sourcing to production to distribution.
4. Build resilience
- Replicate this exercise to plan for other potential disruptions – such as natural disasters, political instability or cyber-attack.
- Develop response protocols and internal chains of command for each scenario.
- Contingency planning for different scenarios will stand any business in good stead.
5. Manage financial risks
- Prepare for changes in market conditions including demand, price, and foreign exchange volatility.
- Stress test your working capital, as flows of goods and services are interrupted and consider any support you may offer your suppliers.
- Where necessary, build your inventory selectively and consider insurance requirements if interruptions occur.
- Speak to your bank about immediate support and building resilience against potential disruption.
We’re here to support our clients. We’ve introduced relief measures to help our clients in countries and territories affected, including mainland China, Hong Kong and Singapore. Speak to your Relationship Manager as you develop a plan for your business.