Don't hold back on supply chain investments in a time of economic uncertainty, says Heather Carroll, chief revenue officer of Covariant. Every period of turmoil is followed by one of creativity and innovation.
Retailers and customers share the same concerns today about the state of the economy, Carroll says. They’re worried about the prospect of recession — whether it’s coming and how deep it might be. And on the retailer side, that influences decisions about capital investment.
There’s a tendency to view the crises of the last three years as unprecedented. But Carroll urges retailers to put them in perspective. “This isn’t new — we’ve seen this before,” she says. “Prior post-pandemic trends inform us how companies successfully came out of those periods — what led them onto a trajectory of growth.” She cites the historical examples of the Black Plague, followed by the Renaissance, and the flu pandemic of 1918, followed by the “Roaring 20s.”
Carroll says the space between chaos and recovery is shrinking thanks to modern technology, which is speeding up the pace of innovation. Still, companies must decide where to direct their spend. “You have to focus investments on things that are going to deliver on your value proposition — getting closer to the customer, and removing disturbances when you can’t find labor.”
The need for innovation and investment might be all too evident on the warehouse floor, but there’s a need to convey that message to the C-suite. “It’s all about the ROI,” Carroll says. In particular, there’s a need to address the issue of labor acquisition and retention. The cost of high turnover can amount to millions of dollars in a typical operation, she notes.
Companies must move fast, she says, adding that 52% of those on the Fortune 500 in 2000 no longer exist. “If you don’t innovate in times of crisis, you get disrupted.”
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