COVID-19 Insights

As the global pandemic continues to gain momentum, more people, businesses, and economies are impacted. WP&C is committed to helping our clients steer through this crisis—providing the insights, resources, and support they need.

Act now, while the business world is holding its breath

It’s not clear exactly when we will shift from crisis to recovery, but it is certain that businesses will be changed by this experience. In the near term, most businesses will see lower revenues for multiple quarters and face liquidity challenges. In the longer term, they will need to not only rethink annual targets but also the viability of pre-COVID-19 operating models. Below, we highlight immediate actions to take to navigate through this crisis. 

    Aggressively attack complexity to boost liquidity

    Companies will tap credit markets, but most will also need to learn to manage with less cash. Fortunately, there are many specific, operational levers for companies to consider. For example, minimizing cash tied up in inventory by: adjusting customer policies, stratifying inventory targets, enabling factory-direct fulfillment, leveraging distribution, moving to make-to-ordering, deepening supply-base collaboration, and so on.

    FIRST STEP: Leverage liquidity strategies to unlock capital by reducing complexity. Size the overall opportunity and liquidity lift, and launch “no-regrets” quick policy changes. 

    complexity curve with transparent background

    Identify profit-generators in your business using Square Root Costing methodology 

    Profit-generators are the 20–30% of products, customers, etc., that generate more than 300% of your profitability. In other words, 70–80% of your products are consuming cash with no returns! In the pre-COVID-19 world, most companies were fine managing to an aggregate gross margin, but this is no longer tenable. Now, more than ever, you need to quickly gain a true picture of product and customer profitability in order to focus (or defocus) time, cash, and capacity, as well as more confidently cut costs.

    FIRST STEP: Deploy Square Root Costing methodology, develop an initial view of true value-generators, and launch your intervention plan. 

    Product Portfolio Optimization (PPO2)

    Take “no-regrets” cost-reduction moves

    Given the current uncertainty, the onus should be on developing cost structure alternatives for a post-COVID-19 world and executing no-regrets cost reductions. At the heart of this is identifying the 2–3 operating model alternatives and related cost-structures, tied to different business outcomes, and determining the triggers to execute on each. Most firms will require significant complexity reduction in their businesses, hitting organizational, process, and product/service dimensions.

    FIRST STEP: Sketch out the range of operating models/cost-structures and associated triggers in a “clean sheet” exercise. Identify the “no-regrets” cost-reduction actions common to all options and begin implementation.

    3 phases graphic-1
    Liquidity

    Boost Liquidity for Success Now and Post-Pandemic

    Boosting liquidity is more important now than ever before. Discover 8 liquidity levers to boost your balance sheet and free cash flow from operations. Typical results can yield increases in cash flow by 30%.

    Download our Liquidity Guide

    liquidity image
    Cost Reduction

    Emerge stronger and leaner in the post-pandemic world

    Most companies have implemented immediate cost reductions in response to the crisis. Many are now starting to adapt to a potentially protracted reduction in demand by looking deeper at structural and organizational costs. WP&C accelerates capturing cost reductions by leveraging 3 complementary lenses to identify next-level cost reduction opportunities.

    Read More

    Cost Reduction
    GETTING BACK TO WORK

    Safely rebound from crisis with a Restart Playbook

    Restarting isn’t as simple as flipping a switch—developing actionable plans to restart while addressing new concerns and rapidly changing stakeholder interests is challenging and complex. Leverage a restart playbook—a critical tool for guiding rapid decision making, getting the best from your team, and quickly restoring sound operational footing.

    Read More

    Restart Playbook Image
    PROFIT GENERATION

    Most companies do not know where they truly make money

    For most companies, only 20-30% of products generate up to 300% of profit, with the remaining products actually destroying up to 200% of profit. At the core of both pandemic survival and recovery is having a true understanding of where your company generates profits—products, customers, markets, channels—to support strategic decision making.

    Read More

    Profit Generators
    LIQUIDITY

    Six smart moves to boost liquidity

    In the face of COVID-19, companies are moving fast to preserve cash and maximize the return on spending. For many companies, raw materials and finished goods inventories are the largest consumers of cash—working capital that can be locked up for weeks or months before it yields a return. It is key to look beyond the supply chain and also consider go-to-market approach and product offerings.

    Read More

    banner for linkedin v2
    CYBERSECURITY

    Protect your company from COVID-19 cyberthreats targeting remote-workers 

    It is critical to take two sets of actions—upgrade your security protocols for the new work-from-home dynamics and assess your organizational readiness to defend against cyberthreats along three lines of defense. Measuring your company’s alignment with the behaviors of High Reliability Cybersecurity Operations (HRCO) will allow you to identify vulnerabilities due to human performance and develop new lines of defense. 

    Read More

    cybersecurity artwork for linkedin and blog
    WWOCC
    BOOKS

    Waging War on Complexity Costs is a roadmap for uncertain times. 

    Download Chapter 1
    “WP&C is helping us transform our business. Their insights are phenomenal!”
    Dave Hoogmoed
    Dave Hoogmoed, President Land O’Lakes Purina Feed
    “Wilson Perumal & Company's approach treats complexity as the enemy. Declaring war is the most direct route to an efficient, profitable enterprise. We declared war on the complexity in our portfolio, resulting in streamlined customer offerings and a more nimble business.”
    Ed Lonergan
    Ed Lonergan, President and CEO Diversey, Inc.
    “This was a quick and painless way to understand our true product profitability, and it challenges how we think about our business. I am extremely pleased with the results.”
    Fernando Palacios
    Fernando Palacios, EVP and Chief Integrated Supply Chain Officer MillerCoors LLC
    “WP&C’s insights into our portfolio, cost structure and growth drivers have changed the way we think about our business. The brand management playbooks they developed for the business will be critical to how we make decisions going forward.”
    Hilliard Lombard
    Hilliard Lombard, Managing Director Valeo Foods Group Ltd.
    “I have been more than pleased with what you have been able to accomplish in this time. Beyond my expectations...Spectacular!”
    Peter Benton
    Peter Benton, COO Worldwide Clinical Trials, Inc.
    “Fantastic piece of work! You’ve really shed a lot of light on our business. Inmarsat will benefit enormously from your contribution and we will be using your structured thinking to guide us through the decision-making to come.”
    Rupert Pearce
    Rupert Pearce, CEO Inmarsat plc
    “If you take all six times [past projects] where we looked at this, over the past ten years, and rolled them all up together, and multiplied by ten, it would still not be as good as this work.”
    Bill McNabb
    Bill McNabb, CEO Vanguard Group, Inc
    “Army personnel credit the collaboration between Joint Munitions Command, CAAA's higher headquarters, and consulting firm Wilson Perumal & Company for identifying areas to improve the munitions distribution process.”
    U.S. Army News
    U.S. Army News

    COVID-19 News Roundup

    Is your company ready for transformation?
    Contact

     

    Connect
    ©2024 Wilson Perumal & Company, Inc. All Rights Reserved.