Podcast: Managing vendor and supply chain disruptions during times of uncertainty

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Full transcript of the audio below:

Hi, I’m Philip Guiliano and I’m a partner at BrandActive. Welcome to the second episode of our 10 minute podcast series. In the first talk we focused on moving your rebranding project forward in the current environment and in this talk we will cover managing vendor and supply chain disruptions during COVID-19. Unlike the first podcast in this series, this is more of a tactical conversation because this is all very tangible and real and we wanted to give you some things to put into action right now. I’m just going to dive right in and I’ll start by giving you a quick overview of what we’re seeing as we work with our fortune 1000 clients. As I mentioned in our last talk, rebranding programs are continuing to move forward with most of our clients. So your agencies and specialty consultancies like BrandActive are still working.

Creative agencies will be disrupted, don’t get me wrong. The extent of that really depends upon their client mix and the health of their operations prior to COVID and that is worth considering. That said, some parts of the rebranding ecosystem are seeing immediate COVID-19 impacts with more to come. If you need to manufacture and install signage for example or fix decals or other types of branding to fleet vehicles, order printed materials, merchandise or uniforms for example. The signs of disruption are already apparent. To be able to accurately access your risks of project delay and figure out work arounds you. You need to be proactive right now, and this starts by gathering information from vendors and government bodies. We’re in communication with local government officials in regions where our clients have locations to find out if they are continuing to process permits and waiver applications and to find out what they expect in the coming weeks and months.

In some localities, government hours have been reduced or staff had been moved to a remote model which slows down this process and in some cases such as California, government offices are focusing on essential activities only and they may define permitting and processing signs and emergency expansions as essential activities. Still, other offices have figured out ways to continue to provide service at their usual operating pace. If you or your vendor have excellent relationship with government staffers, now is really a good time to reach out to those contacts. Figuring out the lay of the land here is critical to do now across your entire branded assets supply chain, whether it’s for your regular business needs or if you are in the middle of a rebrand or an MNA. This is really massively important as you may even have to revisit your launch and completion objectives for that program just based off of this supplier disruption.

As many of us are experiencing right now in some regions, governments have shut workplaces and even in areas without government restrictions for now, some businesses that are open and operating aren’t able to do that with a full compliment of workers coming to work, so this is affecting their output. As it pertains to procuring branded asset, this affects all vendors while definitely being heavier on the smaller and local vendors. As a really contemporary example, only one vendor rather than the expected eight vendors responded to a really big RFP for signage that was issue just last week. The vendor that did respond is one of the larger firms, one that is allowed to stay open as it serves industries that are designated as essential such as healthcare, financial services. These businesses have more capacity and they have diversified operations to handle COVID-19 issues such as worker absences. As it has turned out some of the larger manufacturers are being classified as construction firms and that alone is giving them permission to operate.

As keeping on top of the situation is essential to our work with our clients, we are continually updating a database of signage vendors for example and their operating status. Doing this legwork is very time consuming for all of you and we know that that’s a really scarce resource right now, so we’re really happy to share our research with you. Just reach out to us via the contact button on our podcast page, brandactive.wpengine.com/podcast with your specific concerns or reach out to me directly and we’ll provide a rundown on the status of appropriate signage vendors in your region. The bottom line of all of this is that when you’re preparing RFPs, you’ll probably have to reach out beyond your usual set of vendors in order to get competitive responses.

Printing is another impacted area even though in some States printers are still considered as essential businesses, but small shops, even some of the larger shops may find it difficult to provide services, particularly at high volumes right now. So that’s the government and vendor operations side of things. Now let’s turn our attention to the supply of materials in the short term. For now, many vendors in the US and Taiwan are open and are looking for work and most large shops keep on hand, roughly four months worth of materials that they need to manufacture signs or to print vinyl graphic production. But other vendors such as printers may not have such a deep inventory, especially the smaller ones and that could affect your ability to deliver the collateral, the letterhead, point of purchase displays and other items in your rebrand plan or things that you need for your daily operations.

Some early indication of trouble brewing in the supply chain include McKinsey’s findings that trucking capacity to ship goods to ports in China is at 60 to 80% of normal and they’re running at an average of 8 to 10 days behind schedule. That’s without factoring in shipping issues in North America related to the virus which affects driver availability, closed DMV offices creating a shortage of licensed drivers, the unavailability of replacement parts to make fleet repairs and a lot more things like that. At this point, no one is even certain about the longer term availability of key raw materials such as metals and LED lighting and other components. Most of which comes from overseas and when the supply does come back, demand is almost certainly going to outstrip availability for really some time to come here.

Again, small vendors are going to bear the brunt of those shortages as larger vendors just they just have more clout and they’ll likely be able to be more successful. Given all of this uncertainty, what can you do today to keep your plans moving? We have three major tips beyond the primary need of just staying in close communication with your vendors and re-evaluating your vendor strategy. So, what are the three things? First, do the work that you can do today. Second, continually revisit and revise your plans. And third, prepare alternative approaches.

The first point means doing much as you can do today to prepare for the transition of branded assets without having to go onsite. Go ahead and place orders that you can today as the situation is not likely to ease anytime soon. Box up branded materials such as signage and collateral and label them for shipping to the local sites once these locations are open again. And the biggest holdup right now is the ability to do work on site in areas where either the government or the organization itself is restricting site access. Expect to have to either incorporate delays in your plans or find alternative ways to handle local site surveys and local installations.

For site surveys for example, we’ve been using our survey technology to enable data gathering by facilities managers during this period when local surveyors aren’t permitted to go on site. Virtual prototyping is also another option, diving deeper into preparing technical specifications prior to releasing an RFP. This is critical to ensure the quality of outcomes and also to be able to negotiate more effectively and pit people apples to apples against each other. Using technology for site mockups is another option. We have a subject matter expert on this area in virtual prototyping here on staff and if you’d like to speak with him just reach out to me through our website. I know he’s happy to explain how we’re executing this and to provide you with free guidance on how best to use virtual prototyping to speed up the process and reduce costs.

The second point is about revisiting your project plan as you become aware of changes in the supply chain and vendor availability. For our clients, we’re addressing budgets, timelines, staffing in light of the COVID-19 impacts and in some cases we have developed alternative scenarios that change how certain branded assets are addressed and when. Advanced planning is really critical right now that you can get ahead and get into the production queue as early as possible. In some situations it’s necessary for clients to reallocate dollars, plan for rebranding into other areas of the business at this time. That said, if you have a budget allocated and your objectives are business critical, then spending those approved capital and operational funds earlier becomes a solid way to ensure you achieve your outcome metrics before you lose that money due to budget re allocations or expiration of a fiscal period.

Which brings us to the third point. It is time to get creative. Being strategic for a moment, focusing your rebrand efforts more on the digital side and also on cultural change and employee engagement side of things is a cost effective and impactful way to achieve solid results, with the often more expensive physical conversion to follow that. Getting tactical, for one energy client for example, who is mid rebranding and has restricted access to their sites. We’ve created an interim signage package to meet compliance requirements, the temporary signage packages that were sent to each of the affected facilities managers include a simple final decal that was quick and easy to manufacturer, a three panel brochure with easy installation instructions and also a request to verify completion of the task.

Another company is no longer planning to brand all of their touch points previously planned to be branded including work wear and they’ll revisit that situation post COVID-19. This tactic of not putting the brand on touch points that were originally slated to be branded is called neutralization and we are seeing and we expect to see more of that in the projects to come. With that I’ll wrap up today’s talk. We will continue to keep these segments short because we are conscious of the fact that so many of you have so little time right now. I hope that I’ve given you some things to help you think about branded asset vendor and supply chain issues, and if you have any questions at all about what I’ve covered today, don’t hesitate to click the blue button below and ask a question or to reach out to me directly. To hear additional talks in this series, visit brandactive.wpengine.com/podcast. Thank you all very much.