sofco announce new long-term partnership with Carrington Textiles
Let’s reframe the narrative: an economic downturn can, in fact, be an opportunity to thrive and grow.
We can all agree that supply chain issues remain a problem and the natural impulse is to cut costs across the board by postponing new projects amongst other “necessary” cuts.
But making immediate cost cuts to protect your bottom line can, in fact, compound a decrease in productivity through labour shortages. It can also cause you to increase waste and thus impact your sustainability goals as you have limited visibility of an accurate forecast and thus, overall, increase your costs as you struggle to meet targets.
This isn’t the best strategy for the present.
The current, albeit volatile, environment offers unique opportunities to wisely invest in the future and protect your business.
Recessions, although difficult and stressful, tend to be short-lived and are often followed by a long-term period of growth and prosperity. The wheat is separated from the chaff by highlighting those that plan to succeed and those that don’t.
Separate yourself from your competitors and plan for the next expansionary phase. By investing in a Planning Solution, and all the benefits that come with it – improved visibility, reduced costs, better customer experience, to name a few – you will focus your business efforts on profitability and efficiency, as well as ensuring the quality of your product set.
It’s important, even in these uncertain times, to not compromise on your digital planning strategy. According to the Harvard Business Review, “It is not the time to slow digital transformation. On the contrary, it’s the time to accelerate it.” [V. Govindarajan & A. Srivastava; https://hbr.org/2022/06/how-companies-should-invest-in-a-downturn].
The current economic downturn is providing both challenges and opportunities, both of which can be addressed / facilitated by a digital planning strategy. For example, a large retail company faced complex supply chain issues, which caused their revenue fulfilment to deteriorate and increased their costs, but both these problems were mitigated by implementing an effective Planning Solution. The Machine Learning aspect to the software enabled the retailer to identify the patterns and behaviours of their shoppers, adjust their Trade Promotions, adjust pricing in line with forecasting and balance supply with fast-changing demand and customer preferences.
The B Word
It’s almost impossible to discuss this topic without at least mentioning Brexit. In addition to the turbulence of the years since the 2007/2008 financial crash, Brexit has no doubt, according to leading economists, compounded these difficulties, making it harder to trade, and thus less attractive for businesses to invest.
But sadly, many companies do not have the longevity to simply ride the unknown tsunamic wave of Brexit, the Covid-19 Pandemic, and the impending recession, and unless they capitalise on this moment, and use the turmoil to create opportunity, they may perhaps find themselves no more.
Should I invest in Planning Software during an economic downturn a.k.a. a recession?
The sales answer is, of course, always yes, but considering investment from an operational perspective, supported by the data from many of our existing customers and analysing how their investment in a Planning Solution has helped them navigate these uncertain times, let’s unpack why the real answer is also yes.
Arguably, the prime suspect for low productivity growth is low investment. The UK is currently investing less as a proportion of GDP than compared to other countries. Many would argue that the climate for investment is unfavourable and would emphasise the role of uncertainty and volatility as the factor in why firms are delaying expenditure on big capital projects.
The recent economic downturn has created unique opportunities and threats. We are all facing challenges, but history has proven that downturns tend to be short-lived and are often followed by long periods of expansion. The successful businesses that materialise during these challenging times are those that don’t let these opportunities pass them by, as they are investing in comprehensive Planning Solutions. They accelerate their digital transformations through a comprehensive strategy seeing benefits from enhanced flexibility, adaptability, and scalability to more efficient supply chain management with increased productivity and faster product development.
Overall, our advice is to know your own circumstances, but we’ve yet to have an instance where a company found that investing in Planning Solution software wasn’t, ultimately, a good, profitable decision.