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COVID-19: What we Can Learn from Previous Crises

Date posted: Mar 25, 2020
Estimated read: 3 min
Author: Kim Parisi

We remember the financial crisis of 2008 when markets suddenly collapsed and left nations and companies in deep financial trouble. What did we learn from this crisis? 

With more than 20 years of experience in the procurement industry, here’s a reflection from Scanmarket. 

In 2008, we here at Scanmarket saw how large companies freeze their investments and shift focus from top-line to the bottom-line. When faced with decreasing revenue, there was only one remaining viable strategy: cost reduction. We clearly saw the importance of procurement within companies’ overall key-strategy. Efficiency, process optimization, transparency and procurement driven savings (direct & indirect) helped many of our customers get through a really tough time without too many losses.

The current COVID-19-state shows many parallels, although we are only facing the beginning of the crisis. Are we more prepared to face this crisis today? Most likely, as we can and should learn from history and past experiences.

Is your company ready to handle risk in your supplier base?

Uncertainty leads to fear, and we all know fear inhibits logical thinking. Fear creates a threat response in our brains which is the way our brain has worked for millennia and part of human behavior. But, there are really two main aspects to this current situation.

  1. The first most immediate and important is the threat to lives. We are currently doing everything we can by self-isolating, avoiding large crowds, working from home, disinfecting all the time, etc. These safety measures should, according to science, eventually help us overcome the virus. 
  2. The second aspect is to make sure that we keep business operations moving, that we adapt and improve. This is no different to what we should always be striving for. In periods of economic growth we realize opportunities, adapt to new market situations and always keep an open mind and improve. The same can be applied to economic downturns, see opportunities, adapt and improve.

As with previous crises, we will gradually define and shape a new normal. We need to stay calm and consider the following:

  • What effect will this situation have to our new normal?
  • Which opportunities will this give us?
  • How can we adapt to this situation?
  • How can we improve and become better and more efficient?

One thing is for sure, there is no way back. We HAVE to look forward, and if we do choose to look back, we should only do so to learn from past experiences.

If you are not already doing so, now is the time to analyze, optimize and streamline your spend. We don't mean cutting where it could be most obvious like employees and material resources. Instead, take an overall look at your cost structure and make sure to analyze all possibilities. We at Scanmarket are here and ready to help. Technology makes it simple.

COVID-19 hit us out of the blue, but scientists predict that if we take precautions and all live up to our responsibilities as humans, we will see the end sooner rather than later. In the meantime, keep the wheels turning by taking your business online. 

At Scanmarket, we can can help. Our modules are built to help you better communicate, monitor and interact with your supply base. With implementation in a matter of days, there is no need to delay.

 

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About the author

Kim Parisi

With more than a decade of experience working with Global 1000 companies in the sourcing and procurement industry , Kim helps Scanmarket customers improve S2C processes with speed and accuracy while driving down costs.

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