Contemplating the Next Normal: Two Truths and a Lie

By Stan Aronow | April 15, 2020 | 0 Comments

Supply ChainBeyond Supply Chain

What a surreal time to be alive. The speed at which we’ve moved from “normal” pre-COVID times into our current locked-down state is dizzying. Plotting a path forward is also a challenge, as we had no modern, global pandemic playbook lying on our shelves.

Some aspects of the 9/11 event and response will likely apply to our collective experience moving out of the COVID crisis. For instance, before most global air travel shut down in March, our day-to-day experience of flying was, at once, absent the fear of terrorism felt during the early 2000s and replete with the security protocols forged by that era. Our post-pandemic lives will likely echo this pattern.  We’ll go back to work, school and play, but with extra protections and precautions.

Stuck at home, in this time of quarantine, many are rediscovering old hobbies and games. In that spirit, let’s play an oldie, but a goodie: two truths and a lie, albeit sans guessing.

Truth #1: We Just Don’t Know How This Will Play Out

With so many open variables relating to the epidemiology, economics, market dynamics and stakeholder behaviors, scenario planning is the best we can do to plot a way forward.

A general assessment of how effective we’ll be at containing the spread of the virus and responding to the corresponding economic impacts, is a good starting point. Assigning educated guesses to the probability of these two dimensions enables a more informed outlook and points corporate teams toward the most likely scenarios for which they’ll need defined responses.

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Once the probable macro scenarios are established, the next step will be an assessment of the demand, supply and go-to-market situation, specific to the various product families and markets served. Is future demand pent-up or already pulled forward? How does each business track (leading, at parity or lagging) with the general economy or has a market simply entered new territory (think: senior cruise vacations)?  Within markets, will customers demand the same or different products, and will distribution channels shift, post-COVID?

Supply chain organizations are more experienced in managing supply-side disruptions and so the next-level analysis will be table-topping the frequency, type and magnitude of these disruptions, post-COVID. What cracks appeared in your multiple tiers of upstream suppliers that need shoring up? Where is greater resilience generally required?

Truth #2: Greater Resilience = A License to Operate

It has been quite interesting to observe corporations and their supply chain risk tolerance over the years. Even after major disruptive events, such as hurricanes, earthquakes and fires, many corporate boards have flinched at writing big checks for “insurance policies” to mitigate future exposures. In better times, the argument is that investments in new products and capabilities yield a higher and more certain return on investment than shoring up the supply chain.

But these are not better times. The scope of the disruption from COVID on both demand and supply have been existential for some companies. The ability for a supply chain to be agile in simultaneously supporting massive demand swings and supply disruptions is now a precondition for the license to operate.

During the crisis, many of you have done your best to pull this off with existing resources, but building a resilient business that is sustainable in the long-term will require investment. Partial blueprints exist in our pre-COVID capital spending and digital transformation roadmaps and now is the time for a stop/start/continue type of exercise to determine the incremental capabilities and capacities required.

The Lie: We Go Back to “Normal”

Some might think we can “crack open the odometer” and, at some point, dial it back to late 2019. There is comfort in the familiarity of that thought, but would we really want to do that? So many assumptions about our modern world have been laid bare by this crisis:

  • The magnitude of human impact on the environment. We can’t “unsee” how quickly our air and water quality improved as human activity downshifted. This is no longer just a thought experiment. We’ve been given a unique opportunity and should seek pathways to bring better balance between the economy and environment.
  • The tradeoff between privacy and security. As mentioned above, 9/11 marked a critical inflection point in the way our movements are controlled, and communications monitored. Over time, we’ve traded additional personal information for greater convenience and consumer services. Now, as we contemplate reopening the economy, we will make our next great privacy tradeoff in the form of health and location data, for security (virus contact tracing, immunity passports, etc.) Readers of my past blogs know this is a hot button topic for me. We should be eyes wide open on this trend.
  • The illusion that we are separate. On a more positive note, it is encouraging to see people stepping up to support one another through the COVID crisis. In particular, the strength and creativity of the supply chain community to keep us fed, supplied and healthy has been heroic. On a personal level, many of us have also used this “pause” to deepen connections with our families and friends, despite our restrictions.

It is my deepest hope that we learn to better care for one another, as a society, as a result of this trying experience. We are truly stronger together!

Stay safe and healthy,

Stan Aronow,
VP Distinguished Advisor,
Gartner Supply Chain


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