[Webinar Recording] In this first-ever FreightPOP fireside chat series, a panel of logistics experts – Kyocera’s Logistics and Supply Chain Director Christian Mannino, FreightOptics CEO Brad McBride, and FreightPOP's CEO Kurt Johnson and CRO Justin Dickson – discuss the plans they have for their companies during the predicted recession.
How Business is Already Responding to a Lagging Economy
The webinar’s discussion began by orienting listeners on the recession being tipped by various industry authorities and how they plan to combat its effects. Topics discussed included:
- Supply chain disruptions
- Digital transformation
- Data-driven decisions
- Handling change
The panel agrees that a recession is likely looming, bringing more changes to supply chains. They also discuss what they learned in 2008 that will help guide their actions now.
Many companies are still riding the upswing in business that occurred after coming out of the pandemic. Some are dealing with receiving inventory they ordered months or even a year ago. Ports are loosening up, so companies are filling pent-up demand and fulfilling backorders. Many businesses are waiting to see what happens, but they still want to prepare and anticipate what is coming.
In the course of the webinar, Kurt discusses the effect the pandemic had on freight and shipping, saying:
“COVID shutdowns and the resulting supply chain disruptions were unprecedented. At FreightPOP, we've seen an acceleration of digital transformation and automation – not mass adoption, but the beginning wave of it. We were headed that way five years before the pandemic, and COVID accelerated it with supply chain chaos, bad rates, and expenses that went through the roof. With no GDP growth for over two quarters this year (2022), we’re seeing faster adoption of solutions that help customers do more with less.”
Dealing with Change
Change has become a constant in the supply chain. Justin explains:
“Change is here to stay, and people either embrace it or try to run from it. However, in the larger economy, this shift can be a blessing for executives and companies because it provides an opportunity and an incentive to examine current processes and procedures to look for ways to increase savings and efficiencies in the current business model.”
Kurt describes how FreightPOP is navigating the moving pieces that complicate the current market:
“After 2008, we went through a process called deselection. We deselected unprofitable customers – which was pretty controversial internally – and unproductive employees. We also deselected processes that weren't working – that's where that complexity compounds and builds up.
Processes get stale, and you must reinvent them to ensure that people aren't just doing things because that's how they’ve always been done. Automating as many of our processes as possible is one way that we're also dealing with this uncertainty."
Brad agrees that companies must welcome change and look for ways to implement it:
“Each of us needs to go inside our own business and act to implement change. Whether it's hiring or redeploying people, you can’t be afraid to change. It's gone from a challenging time, to hire new labor, to all of a sudden tens of thousands of people getting laid off.
Companies must look at their people and ensure that their processes and services make sense in today's market. Whether you’re a supply chain manager, a logistics manager, or a county manager, you need to ask yourself, ‘What are we doing to make a difference and improve our current processes?’”
Strategies to Weather the Downturn
According to Kurt, data strategy is a must during these uncertain times.
“At FreightPOP, we're investing heavily in our data strategy. Making data-driven decisions is crucial, especially now – you must ensure you deliver a positive ROI to your customers. It's quantifiable, so make sure you communicate it to your customers. In addition, companies are looking at their financial statements to determine where they can cut. So when it comes to your line, you must ensure that you deliver more value than you take in payments.”
For Christian, internal housekeeping is critical.
“It's going back to those legacy practices or things we've been doing for the sake of doing, and we don't necessarily know why. I think those are the easiest ways to gain efficiency. It was a carrier market for a long time, and it still is to some degree, but I think we’ll see that go in the opposite direction very quickly. I think carriers were able to increase their prices while slipping on service because customers didn't have much choice. The environment was, ‘We're going to keep paying you because we have to ship our goods, and even though you're not giving us the best service, we don't have any other choice.’ I think many of those carriers will get the tables turned on them soon. We'll be looking at our existing carriers and ensuring that the ones we're working with give us the service that we need."
The pandemic taught manufacturing executives lessons they can use to survive the current challenges – as long as they choose to implement them. According to Christian, one of those critical lessons involved inventory:
“It'll be interesting to see how companies handle inventory because we all saw what happened when everyone followed the standard rule – when business slows, stop or slow down purchasing. However, when everyone did that simultaneously, it was chaos. So it will be interesting to see how we handle it this time around.”
Moving Forward with Strategic Resilience
Recessions and challenging market conditions are part of a natural process for businesses and economies. Business executives must develop the right frame of mind to come out stronger. According to Brad:
“Take the opportunity to look at literally everything in your organization from top to bottom and find places where you can improve, create a better return, and make small adjustments that will improve the client’s situation.”
My position is to make the hard decisions when they have to be made, make the right decisions, get buy-in from your team, and do it. If you have that going into it, you know you're going to be okay, and it will be a healthy process. I don't like to talk about cutting costs, but deselection does create a much stronger engine moving forward and helps ensure success in the long term.”
The recorded webinar is free to stream. Check it out to learn more!
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