Dave Plomin: Hello. Welcome to Plante Moran's "Adapt faster and emerge stronger" podcast. I'm Dave Plomin, and I'm here with my colleague, Joe Puglia. Say, hello, Joe.
Joe Puglia: Alright, my name is Joe Puglia. Welcome to the podcast.
Dave Plomin: Joe and I are in Plante Moran's management consulting practice, and we're going to share with you a couple of case studies today that talk about what companies need to do to restart their operations or revamp their operations if they've been running already. Our key message for this podcast is that companies really need to do two things. The first thing they need to do is develop the policies and procedures in order to restart safely.
And the second thing that they need to do, at the same time, is think about their long-term approach to their business and how they could be more efficient and operate effectively in the future. And so, to do that, we're going to talk about three case studies, and we'll start with the first one, which is establishing the policies and procedures in order to restart effectively.
Lesson one: Think about day-to-day operations
In this case study, the background is there’s a medical device company that’s been working since the beginning of May with an internal team. They’re developing policies and procedures in order to restart and they have three workstreams going. The first one is their office and their warehouse operations. Their second workstream is their sales force, and the third workstream is their clinical trial division.
Recently, a new CEO came on board. The board of directors, concerned about what they're doing, asked the CEO to try to find help to look into how they’re doing in developing these policies and procedures and if they’re ready to go. That's where we come into play. So, Joe, can you talk a little bit about what companies need to do in order to restart?
Joe Puglia: Yeah, Dave. You’ve got to take a different look at the way you do business, right? All the little processes and steps — people come into the office and people go into meetings. What used to be normal in office, where people are always engaging and connecting with each other, has become a problem and a challenge in this environment. So, you have to look at all those activities and figure out how to maintain safety while, at the same time, continuing the collaboration that you had before.
Dave Plomin: Yeah, that's great. One of the things that we found when we started working with this company is that they developed a whole bunch of procedures and some training materials, but they kind of started at the end of the process. They went right to the procedure part of it of 'Here's some steps that we want to take.'
What we recommend is that companies take a step back and think more strategically first. Then start looking at your major activities that you're going to do and assess the risk level for each of those activities, just to rank them either high risk, medium risk or low risk. From there, you can get more detailed. So, how would that look, Joe?
Joe Puglia: What you want to do is take each step, for example, entering the building, Dave. You parked in the parking lot and the first thing you want to think about is that you don't want to come in to work at 6 a.m. Think about people doing a self-assessment questionnaire online or a question on pen and paper that will determine if they're coming in or not. Then, as they come in, picture yourself pushing the button on the elevator, opening up the knob on the door, or sitting at your desk or going on a shared laptop—how are you going to protect people in those different activities? And what's the risk? If there's elevators, for example, it would be high risk. If there's eight people packed in the elevator, it’s really hard to maintain social distancing. So, what's the process to deal with those kinds of things? That's the kind of risk assessment you need to make, Dave.
Dave Plomin: Yes. Our recommendation to our client was start with the risk assessment at the very beginning and then really focus in on those high-risk areas. Make sure that you've got solid procedures and policies in place for these high-risk areas because those are the most important ones that you've got a focus on. Were there any other lessons that we needed to make sure that this client understood, Joe?
Joe Puglia: The workplace is going to be different, and you need to convey that. Make sure people understand that and understand what's expected, so they feel safer and everyone's more comfortable coming back to work.
Dave Plomin: Yeah, great. So, our final advice for this client was to, you know, take a risk-based approach. Make sure that you’ve got your policies and procedures documented.
Refer to all of information that's out and readily available from either the CDC or OSHA. There's plenty of guidance out there, but the important part is to start looking at risks. Make sure that it's well documented and that your team that’s coming on board are well trained. That's our first client example.
Lesson two: Analyze competencies and (maybe) pivot
Our next two are taking a different approach of, you know, at the same time that you're worried about getting everything ready to restart, you also have to think about your company and where you need to be in the future because everyone's business is being impacted by the COVID-19 crisis. Our next client example is a client that is in the cleaning supplies business. So they're a chemical manufacturer. They make cleaning supplies, and as a cleaning supplies manufacturer, they're in somewhat of a regulated industry. They have to deal with EPA audits and EPA regulations. As they were looking at their business, they haven't had any drop off from the type of products they make. Their volumes are a little bit down since companies have been closed. There's less cleaning going on a daily basis, so they didn't think that they needed to do something. And so, this company looked at their core competencies — what they do really well to gather more sales and more revenue based on what's going on in the marketplace.
One of the things they decided to do was to get in the hand sanitizer and antibacterial soap business. And that was an interesting pivot for them, because it does use their core competency of a chemical manufacturer. The other thing that it does, it also takes advantage of their distribution network, which is another core competency. And with that, there were some challenges. Joe, can you talk a little bit about some of the challenges they face as they try to pivot this way?
Joe Puglia: Yeah. Once you see these opportunities, in this particular case, it's an FDA-regulated product, so there's a need to meet all the regulations. Right now, the FDA has kind of lifted that as COVID-19 moves on. But at some point, they're going to come back and inspect all of these hand sanitizer facilities. It’s a profitable business from what we understand, and what they need to do is get the right quality manuals in place and all the right procedures and processes in place so they can keep this business when the virus passed by.
Dave Plomin: Yeah, fantastic. I think this is a great example of looking at your core competencies, figuring out what you do well and how you can do that more and in different areas. And then figuring out 'Ok, if I'm going to go in this direction and add a new product line, then what new skills do I need to learn? What things do I have to put in place?' In this case, they have to learn what it is to be in the FDA environment with hand sanitizers versus an EPA environment. And those are two related things, but they're a little bit different. It's not insurmountable, but there's a gap there and we're helping them plan through how they can bridge that gap.
Lesson three: Rethink organizational efficiencies
Our third and final client example is a power equipment manufacturer. They’re taking this opportunity to look at their manufacturing network and figuring out, based on changing demand profiles, what's going on in the industry, and for their future plans, where’s the best place that they should be manufacturing products. They currently have three locations spread on the coast and their question for us was, should we be operating in all three? Should we be operating in one or two? What does it look like for us? And so how did we approach that problem, Joe?
Joe Puglia: What we did is we looked at a total cost optimization — what's the least cost combination? We looked at the delivery channels where the customers are located, what it cost to manufacture in each location, what it cost to ship to each customer, and calculate what the different footprints would look like so they could make a better decision. What the goal here is now that demand is going to change, you've modified demand curve and what made sense a year ago may be significantly different today. They took this opportunity to look at that and make some changes.
Dave Plomin: Yeah, that's fantastic. I think that's another great example of taking an opportunity, now that there has been such a significant shift in industries with customer demand and supply, to look at your organization and figure out where you need to be pointed in the next 3 to 5 years in order to be as profitable and sustainable as you can be.
Going back to the beginning and what we want to talk about is that there's two things that companies need to do right now going forward. The first thing is to just focus on restarting your operation to make sure that you've got the right policies and procedures in place, that it's documented, and it's well-trained so that people can safely get back to work. The second thing that companies need to do is they need to think about their operation, their organization in the long term, and what can they do in order to improve as time goes on. And there's two things to think about there. One is what are your core competencies: what do you do really well and how can you take advantage of that in future areas? And the second is to understand what your fixed cost structures are today and what should they be in the future so that you're more responsive to what's going on in the environment today. So, I think those were our key messages. Joe, any final thoughts from you?
Joe Puglia: I think one of things to do as you come out of this is look back through this transition. What have you learned? Do you need the staff you had before? Second, what does your market look like? Have people dropped out? Have competitors dropped out? What are some opportunities to get yourself in a position where you can take advantage of those things?
Dave Plomin: If you'd like more information, visit our COVID-19 resource center. There you'll find a variety of articles, webinars, assessments, and other tools to help you adapt faster and emerge stronger. If you have any questions or want to discuss your personal situation, be sure to fill out the Contact Us form. We'll be happy to help.