Economy slowdown: How can distributors prepare for it?

The impact of an economy slowdown varies depending on the size of the company and how they have prepared to cope with it. One of the lessons derived from the COVID pandemic slowdown is that the world is changing fast and companies that are not prepared to deal with sudden changes are bound to disappear. These are some of the impacts economic downturns might have on companies:

·????????Decrease in sales

·????????Delays in customer payments

·????????Access to sources of capital decreases and becomes more complicated

·????????Increased laydowns and reduced employee benefits

·????????Decrease in net profit

How to cope with this economy slowdown

Actions aimed at improving sales

In “How to overcome the Distribution challenges in this new age?” we covered some of the actions that should be taken. I summarize some of them.

Diversify your sales channels: be prepared to expand your operation to be servicing stores, but add some B2C capabilities.

Add ecommerce capabilities: be it directly or through alliances with established companies in that sector.

Focus on customer satisfaction

Empower your sales force through training and involving them in the challenges the company is facing.

Actions aimed at improving adjustment to external changes

Effective leadership: Resilient cultures begin with committed leaders who understand and support employees. Lack of senior leadership support creates risks of a disengaged workforce and therefore a weak company culture.

Transparency and communication: Communication is a powerful tool to drive behavior and creates open conversations around key issues. The corporate intranet platform (for large organizations) and regular departmental meetings (for smaller companies) are two of the mechanisms used to promote transparent communications.

Soothing Workplace: The workplace can be a stressful and overwhelming place, especially when undergoing change or disruption. Instead of encouraging employees to keep to themselves, build a more social and safe work environment. There are various digital tools that can help HR and talent teams improve employee collaboration.

Complexity and accountability: To function effectively at this level of organizational complexity, it is necessary to increase cooperation and information sharing, while establishing shared responsibilities across the whole team. Integrated software solutions like ERP + Warehouse Management + Route Accounting, can provide the necessary tools to do this.