Months after the first case of the novel coronavirus, businesses continue to struggle. Demand for most luxury goods remains low, and many customers are still wary of shopping in-person, despite attempts to re-open the economy.
New strategies are keeping struggling businesses afloat. Data was important across the economy before COVID, but the current crisis has made it even more essential to business operations. Across the economy, expanded data collection and analysis have become key to business resiliency.
Retail and Small Businesses
Small and medium businesses were hit hard by COVID-19. In the wake of the virus, non-essential stores were forced to close their physical storefronts and all vendors had to contend with greatly reduced demand for most items.
For these businesses, data has been key to weathering the storm.
Uncertain market conditions have small and medium businesses concerned about their ability to estimate future demand and adapt. New short-term forecasting models may help SMBs adapt to the moment and develop a better sense of what the near future will look like.
Data is also helping these businesses take a more informed approach to advertising. Expanded collection of advertising and consumer behavior data has also helped these companies keep track of where people are spending their time — allowing them to create more effective ad campaigns.
Manufacturing and Machining
The manufacturing sector was also significantly disrupted by the first wave of the pandemic. As the virus spread in China, major industrial companies kept factories closed in order to keep workers safe. By the end of February, only 70 percent of these companies had started to resume normal operations, and just 43 percent of small and medium companies, which were hit harder by the virus, was open.
Almost every manufacturer relies on Chinese manufacturing or raw materials in one way or another — meaning that when Chinese factories began to shutter temporarily or reduce output, there were real fears that the supply chain could grind to a halt.
While this scenario never really materialized, it would have had major knock-on effects. For example, CNC machining essential to other major sectors, including the medical, aerospace, and transportation industries. The temporary loss of this sector could easily have a devastating impact on the broader economy.
Over the past few months, supply chain adaptability and resilience has quickly become a key topic across sectors and especially in manufacturing. More businesses are adopting or encouraging a data-driven approach to supply chain management.
Through a combination of internal and publicly-available information on supply chain structure, companies in the manufacturing sector are beginning to identify exactly who they depend on for normal operations, as well as vulnerabilities and risks they need to account for.
In the future, China may become one of many manufacturing hubs as companies look to diversify their relationships with suppliers and component vendors.
Shipping and Transportation
Data has also helped companies within the supply chain adapt to unstable market conditions.
Better data, for example, is making the supply chain much more transparent — which is good for both logistics companies and their clients. New, real-time data collection solutions, like IoT or GPS tracking devices in trucks and cargo containers, allow logistics companies to know exactly where a shipment is at any given moment.
This data can help them create better estimates of shipping times and improve communication with clients. If a shipment is going to be delayed — or arrive early — the logistics company has the data they need to give their clients a heads-up.
Some suppliers are also using advanced forecasting models to dynamically adjust prices. As supply and demand fluctuate, traditional pricing models have been made less effective. Newer pricing models, which take into account historical and real-time data on supply and demand, allow suppliers to more accurately price their goods — ensuring the profit margins necessary to keep the supply chain functions.
How Data Can Make Businesses More Resilient During COVID
The market disruptions caused by COVID-19 are likely to continue well into the future, potentially through 2020 and the end of 2021. While some areas of the country are beginning to loosen social distancing measures, it's likely that consumers will remain cautious about being in public.
For businesses that want to stay afloat during this time, good data will be important. The predictive power that new models can offer will be essential for staying on top of demand in a highly chaotic market. Supply chain audits and analysis will also help companies adapt to disruptions and instability and prepare for an uncertain future.