When things are good and supply chain is working, things teem on store shelves and our cupboards. Economy and employment are strumming their rhythms. No one worries. But as we know and taking cue from nature, everything goes in cycles. Meaning, ups and downs are the norm.
We enjoy the good times but must prepare for when things go wrong. This applies to individuals as well as governments and corporations. The axiom of failing to plan is a plan for failure has been proven again and again.
The Coronavirus pandemic is a real life case. Workers are in short supply. No driver to transport the goods, or longshoreman to offload the containers. Material shortages cause lopsided demand-supply curve. News about not enough resource to meet the demand from factory to toiletry are common headlines.
Understandably that business likes to be lean and profitable. Not excess inventory nor waste. Efficiency is king. But at the same time, prudent management practice requires coverage of the downbeats, based on forecast, to ensure stability and workarounds to tide the companies over the crises.
It’s called Risk Management. Which trades short term profit for long run continuity and survival.
What is your contingency plan?