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Grant Thornton


Economic recovery remains uncertain with COVID-19 restrictions continuing to change. With one-third of UK businesses telling us they have closed, suspended or reduced the capacity of their operations, Oliver Bridge, Business Consulting Director at Grant Thornton, looks at the role operations can play in safeguarding a company’s future. T e regular COVID-19 restriction changes bring


added challenges to business leaders navigating their organisation through the global pandemic. T e impact of new restrictions varies between sectors and there is no one-size-fi ts-all approach to creating an eff ective operations strategy. However, there are three main concerns we see from mid-market business leaders; having the ability to continue delivering, financial flexibility, and operations supporting business continuity.


Delivering to stakeholders Many businesses have had to change their model as a result of lockdown and are likely to continue with the new model once the pandemic is over. Even those intending to return to their pre-COVID-19 model are entering a market where customers’ needs and expectations have undergone a radical transformation. In light of these changes and anticipated further


restrictions, it is vital to review assumptions about the nature and scale of future operations. For example, is the business looking to diversify


into more stable sectors or to spread risk by using assets to supply a broader group of customers? If so, are operations set up to support the future strategy and deliver for clients and stakeholders?


Oliver Bridge


Business Consulting Director at Grant Thornton.


Effective operations safeguard future for business


With a clear understanding of future operational requirements,


consider whether any new divestments or investments are necessary. T e current disruption means there may now be opportunities to pick up businesses with assets and capabilities that can help meet future needs.


Flexibility in your cost base Minimising the need to raise debt, either to survive ongoing disruption or to seize new opportunities, means retaining cash in the business. A serious eff ort to drive down costs, with a strong focus on operational effi ciency, could be the starting point. Some of our manufacturing clients tell us their customers are


buying in smaller volume and that producing smaller batches is reducing effi ciency. If this is the case in your business, optimise output to refl ect current levels of demand. T is does not have to result in lowering profi ts. Removing non-


profi table products from production and selling only to profi table customers optimises output at a level that delivers higher profi ts. Make sure you pass rising costs on to customers.


Business continuity The pandemic has exposed the risks inherent in complex, global supply chains. A common strategy is to source from suppliers closer to home, to improve resilience and establish a clear understanding of where supply chain risk lies. One solution is to use specialist software, such as Llamasoft. T e AI-powered platform provides transformative insights, such as early warning of supply partners at risk of failure, allowing for timely action to protect the supply chain.


Get ready for recovery Changing restrictions mean signifi cant uncertainty is likely to be a feature of the trading environment for some time. Leaders need to be planning now and looking to operations to play their part in supporting future strategy, strengthening the business’s cash position and enhancing resilience.


For advice on planning the future of operations contact Grant Thornton at www.grantthornton.co.uk


38 ALL THINGS BUSINESS


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