Tag Archives: Post-COVID

Like most industries today, the building products industry is faced with a host of challenges. These uncertain economic times aren’t helping matters any. Here are some of the top challenges we’ve identified, and tactics to combat them.

Challenge #1: Post-COVID demand

As the tumultuous start to the decade began to ease back into normalcy, the industry saw an increase in consumer spending and a boom for the construction and building products industries. What was behind it? Potential customers had time to sit and think. A year or more of being involuntarily secluded in their homes put their current infrastructure to the test. Who thought that kitchen countertop was a good idea? Wouldn’t it be nice to open the wall up and put in a breakfast bar? And… while we’re at it, let’s install that screened-in porch to go with it. The projects consumers had been thinking about for months were finally able to be realized and construction started up again with a vengeance.

Great! But building products manufacturers have been struggling to meet this ever-growing demand.

Strategy: Don’t turn down work — extend your lead time

Many of our clients have more work than they can handle right now. While it may seem unrealistic to take on every project in sight, it’s important to shore up your bottom line that took such a hit during the pandemic. Extending your lead time by a few weeks will allow you to accept more jobs and keep business flowing.

Challenge #2: Supply chain bottlenecks

A post-COVID boom is great for business — until you can’t get the materials you need at a price that makes sense. Supply chain disruptions have been commonplace for a few years now and that disruption is touching nearly every industry imaginable.

The pandemic showed just how vulnerable the current state of the supply chain is across the globe. From shipping and transportation delays to factory disruptions and material shortages, it has never been more important to keep a close eye on where and how you are sourcing your materials.

Strategy: Implement SIOP to keep a careful watch on your inventory

Being mindful and proactive about your inventory is the best way to make sure you have the materials you need, when you need them. We are helping many of our clients implement Sales, Inventory and Operations Planning (SIOP) to do just that.

SIOP is a process that facilitates having the right inventory conversations at the right time by integrating customer-focused demand plans with production, sourcing and inventory. Using this method, companies can get a clearer look at their operations and create better-informed strategy decisions.

Read more about SIOP in our eBook, Sales, Inventory & Operations Planning: It’s about Time.

Challenge #3: Rising Costs

We get it. This problem is everyone’s problem these days. Despite the already razor-thin profit margins in the building and construction industry, material prices continue to rise across the board. Your business isn’t operating for free, and finding ways to complete projects under budget and stay profitable is proving to be a harder challenge with each passing quarter.

Strategy: Include an escalation clause in your contracts

There are a few strategies you can employ to combat rising costs, but each has its pros and cons. Should you finance material purchases? Raise your prices? Will these strategies help your bottom line, or will it cause customers to look elsewhere?

Ultimately, the wisest strategy seems to be including an escalation clause in your contracts, stating that if prices increase by a certain percentage or more during the duration of the project, you have the right to adjust your costs accordingly. This provides the most flexibility for your business without risking losing customers to cheaper alternatives.

At USC Consulting Group, we’re here to help you through these uncertain economic times. And the good times, too! If you’d like to learn more about these common industry disruptors and our solutions, download our free eBook, “Constructing the Building Products Industry: An Outlook of Challenges and Solutions.”

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How do you plan for the future when you’re just trying to get through the present? A present filled with crisis, uncertainty and wildly fluctuating demand, complicated by severely disrupted supply. If that situation sounds familiar, you’re not alone. We’ve all just lived through it.

Companies in just about every industry are riding the same supply-demand roller coaster, fueled by the ultimate disruptor of this century, COVID-19. Just a quick snapshot: The construction and furniture industries are now suffering from shortages of everything from lumber to foam, but demand is high as people, shuttered in their houses for the past year-plus, looked around and decided to spend their dollars on home improvements rather than vacations. Filling that demand, not so easy. Finished products like sofas and appliances are delayed because of shipping snafus. And that list goes on. Cars, chlorine, chips for video games, chicken, bacon (say it ain’t so!), and aluminum cans.

Not helping the problem: peaks and valleys in employment, with companies laying people off only to see demand for their products soar again.

It boils down to a whole lot of disruption, leading to long delays getting product to customers. Everyone is frustrated. The culprit, in the broad sense, is the pandemic. But closer to home, within your own company, it might be the result of lack of planning.

Many companies are in the same boat. Employees, managers and the C-suite alike have been focused on simply getting through the pandemic with the doors still open. We were dealing with work slow-downs because of new ways of working. Employees had to go through a dance of protocols (temperature checks, questionnaires) to even get onto the shop floor. Social distancing resulted in fewer people at work at one time, slowing it down even further. Supply chain disruptions ground businesses to a halt, or at least to a crawl. Demand in many industries dried up. For other industries, demand dramatically lessened as customers were put out of work and stopped buying much of anything that wasn’t a necessity.

We get it. Companies across all industries were just trying to keep their heads above water to get through the crisis. What they weren’t doing was planning for it to end.

Planning is the key

Now that there is an ever-growing light at the end of the pandemic tunnel, companies are scrambling to figure out what comes next. Dealing with current shortages of supply and, frankly, employees, as customer demand begins to creep up, it has been a struggle for people to define, forecast and plan for what comes next. The good news? We can help companies ramp up to meeting the demands of the coming months and beyond. It’s about efficiencies, planning and forecasting.

Here are some strategies we’ve seen to help companies ramp up for increasing demand in uncertain times.

Focus on efficiencies. If there was ever a time to throw out the “this is the way we’ve always done it” mentality, it’s now. It’s vital to focus on doing more with your current assets, even doing more with less. It’s about looking at your processes and procedures with a critical eye to determine if you can do things better, faster, leaner and more efficiently.

Implement a rolling forecast calendar vs. a yearly calendar. We recommend a flexible, rolling forecasting process, going 24 months out. When you’re finished with one month, it drops off and you add another at the end. Unlike a yearly forecasting and planning calendar that is written in stone once a year, this is flexible, requiring frequent refining, tweaking and amending, based on current market conditions. That concept, flexibility, is important here. If this past year-plus has taught us anything, it’s that the ability to be flexible, change plans, pivot and otherwise react or anticipate market conditions is vital to survival.

Sales, Inventory and Operations Planning. SIOP is a planning process that meshes demand forecasting with production, sourcing and inventory plans. Most people are used to this as the S&OP process, but at USC Consulting Group, we believe that leaves out the critical “inventory” piece of the puzzle. We feel SIOP is a more holistic approach that leads to greater efficiency.

Adopt an agile, lean mindset. Lean manufacturing is nothing new, and people think of it as optimizing inventory on the basis of demand. It’s about having enough, but not too much, inventory on hand. It’s also about carrying that mindset throughout your organization, with the goal of maximizing value for your customers while minimizing waste. It can also include things like employee cross training to make sure there are people on the job who can step in at critical moments.

At USC Consulting Group, we’ve been helping companies ramp up their operational efficiencies for more than 50 years. If you’d like to talk about how we can help you position yourself for a post-pandemic world, give us a call today.

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What is your vision for a post-COVID future for your company?

Our country and the world are going to come out of this pandemic, ideally sooner rather than later. What then? Companies are naturally going to be focused on growth, not only to make up for lost time, productivity and revenue, but to chart the course for future success. Hiring more staff, especially if you’ve had COVID-related layoffs, may well be part of your growth strategy. But growth in a post-COVID era is also going to be about focusing on operations efficiency and continuous improvement. Even more than hiring, efficiency and continuous improvement will be crucial to what comes next.

Continuous improvement matters now

At USC Consulting Group, we’re committed to a continuous improvement mindset. We recommend it to our clients and we put it into practice every day in the work that we do for them. What does it mean, exactly? It means not resting on our laurels. Instead, we use those “laurels” as rungs on a ladder. We build upon our successes to reach for the next level. Higher, better, stronger, more efficient, it’s what we’re striving for all the time. We take a hard look at what works and what doesn’t, and learn from it. It’s about doing it better, every time, no matter what “it” is.

Here are some ways to incorporate continuous improvement:

• Become more people-focused. You know what they say about having no “I” in “Team.”
• Prioritize communication. Employees need to be clear on the strategy and goals, and know the playbook to get there.
• Embrace the unending journey. You’ve never reached the end of continuous improvement. You need to build on successes and strive to reach higher each time.
• Look at processes with a critical eye. Being honest about what works and what doesn’t is key.
• Use available tools. Resource capacity planning and operational performance reviews can ramp up your process and provide direction for further investments.
• Be open. There is always room for improvement, and being open to it is crucial.

It matters in a post-COVID world because many companies can’t and shouldn’t go back to business as usual. All of us have learned lessons from keeping our heads above water during this pandemic. Those lessons can help us improve, coming out of it stronger than before.

React, Reassess, Rebound

This pandemic has put companies through three distinct phases. Deloitte calls it Respond, Recover and Thrive. We see it a little differently. We’d call it React, Reassess, Rebound.

React: Survival

Back in April 2020, COVID threw all of us into the deep end of the pool. Companies had to react to this sudden, new reality and pivot on a dime just to keep the doors open. People who could work at home did, in greater numbers than ever before. For manufacturers, it meant immediately coming up with new protocols and procedures in order to keep their people safe on the shop floor while they got the job done.

This new reality wasn’t just affecting our clients. We had to react and pivot on a dime, too, changing our proven processes to help our clients quickly.

[For more on this, download our free eBook, “Times Have Changed. USC Consulting Group Can Help You Adapt.“]

Reassess: Finding efficiencies

During the pandemic, many of our clients came to us to help them with one of the things we do best — finding hidden opportunities for efficiency in their processes and procedures using their current assets. Our methodology involves listening, looking at your operating system and procedures, and finding opportunities that you don’t see. Nine times out of ten, we find those opportunities for efficiency by looking at issues that are generally accepted as “just the way things are.”

It’s about reassessing established, longstanding processes and procedures and questioning whether or not they’re the best way forward. More often than not, there’s a better, more efficient, streamlined way of getting the job done.

Rebound: It’s about growth

Here’s where it gets interesting, and where continuous improvement comes in. Dare we suggest that something positive can come from the new COVID protocols and procedures we’ve all had to implement? We can all learn from what we had to endure in 2020. Has your company found new efficiencies? Have you streamlined ways to get the job done? Have you figured out how to do more with less? We’ve helped our clients do all of those things through this pandemic. When we come out of this COVID era, which will go down in the history books as one of the most difficult trials our country has been through, there’s no reason to go back to business as usual. Using the continuous improvement mindset, it’s time to go forward, building on what we’ve learned. That’s the key to growth in a post-COVID world.

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