The coronavirus pandemic is an unprecedented crisis, leaving companies to face challenges never before experienced. What should be done, and where does one begin? For starters, shake off the shock and resume focus, manage cash carefully, and use the time to prepare for after COVID-19 subsides.
Slump in demand, employees dismissed or furloughed, disrupted supply chains … the COVID-19 outbreak is a substantial and unexpected supply and demand shock for the global economy. “Unlike in 2008/09, the shock we are facing is universal: it is common both across countries and across all sections of society,” said Christine Lagarde, President of the European Central Bank.
With COVID-19, economic activity will decline considerably, disrupting production globally. “We now think that the COVID-19 shock will produce a global recession” said Bruce Kasman, Chief Economist at J.P. Morgan. In addition to health problems and human suffering, the economy is going through a scenario that few could have imagined. Companies are scrambling for resources to get through this period at the lowest economic cost – or perhaps simply to survive.
Procurement can act as an important partner in the crisis
It is important to adjust as quickly as possible. Governments around the world have promised comprehensive economic aid measures. Until such possible support becomes readily available, the liquidity of businesses must be safeguarded by the companies themselves. Procurement can play a crucial role and significantly contribute to this objective