KANSAS CITY, MO. — As more people are vaccinated and economies around the world transition from the pandemic toward a post-pandemic normalcy, many business leaders have begun preparing for the next shock. It may not be another pandemic, and it may be local rather than global, but chief executive officers are heeding lessons learned from COVID-19 to build greater agility into their organizations and harden supply chains.
“(That) there will be another shock in the future is the one certainty of all of this,” said James Robert B. Quincey, chairman and chief executive officer of The Coca-Cola Co., during the virtual Consumer Goods Forum, held the week of June 21.
Agility was critical, said Mark Schneider, CEO of Nestle SA, during the meeting.
“What struck me was the sheer speed of transmission that we saw,” he said. “From the moment the virus jumped outside of China and then made its way around the globe (was) so fast, disrupting supply chains and normal business activity. The speed with which we had to reconfigure our daily lives and workplaces to continue to operate safely — that was something we certainly have never seen before.”
Global companies are improving internal communications. W. Rodney McMullen, chairman and CEO of Kroger Co., said he believes global companies were at an advantage during the pandemic, because they were able to communicate with employees in regions affected the earliest and better understand what solutions would work best in regions not yet affected.
Mr. Schneider added that in addition to communication, collaboration is necessary to weather a major shock like the pandemic.
“To me it was collaboration between manufacturers and retailers,” he said. “They (retailers) connect so well in all of the communities, and they see consumers come day in and day out that gives them ways of reaching consumers and shaping behaviors that we as manufacturers don’t have. But we as manufacturers and brand owners can shape messages with an intensity and in a global way that maybe the retailers can’t.
“So, when you put this all together, the firsthand experience and data from the retailers and then the technological and planning capability for manufacturers, I think together we can get a lot done.”
Mr. Quincey said the Coca-Cola Co. is focusing on building resiliency into its supply chain, even if it means adding cost.
“A lot of industries moved very heavily to just in time, very heavily to even single source of supply,” he said. “In a shock like this it takes maybe a ship stuck in the Suez Canal or a country in lockdown where a factory closes, and you lose the global supply of x or y.
“So, we have built a supply chain that has inbuilt more resilience for those types of shocks. And yes, it comes with a little bit of cost, but it has the flexibility to respond to changing conditions and circumstances.”
These learnings are valuable and deserve the consideration of all business leaders. One hopes the COVID-19 pandemic is a once-in-a-century event, but it is incumbent upon all leaders to prepare as much as is practicable for the next shock, understanding it could arrive far sooner.