In the face of COVID-19, companies across the globe have experienced some of the harshest business conditions. The unprecedented global crisis has shaken many leaders to the core as the events of the crisis have unfolded quickly and unexpectedly.
In response to COVID-19’s first and second waves, leaders who survive and thrive are the ones that quickly navigate their businesses effectively through unchartered waters and keep their companies afloat. And in this mission, Procurement appears to be a critical area that many CEOs and CFOs have prioritized to free up cash and better manage their liquidity position, especially as economic conditions continue to worsen around the globe.
Companies in diverse industries, including manufacturing and retail, are bracing for a hit to their results amid halted production, supply issues and changed consumer behavior. Reduced revenues can impact companies’ overall financial situation and force them to rely on liquidity reserves, raise additional capital or reduce spending to make up for the shortfall.
Adding to the challenge is uncertainty about how long the pandemic will last, which means that companies have to draw short, medium and long-term contingency plans. The list of things for leaders to consider and think about is endless as they try to preserve cash. From managing uncertainty in demand and supply to having clear visibility of accounts receivables and payables in real- time to determining whether your supplier’s very existence is at risk, freeing up liquidity is both ‘the greatest opportunity’ and ‘the biggest challenge’ right now. However; when it comes to ensuring the sustainability of your business, enacting a future-proof procurement is the most valuable weapon that leaders can develop. The reality is that whichever way you look at it; the next few months will be harsh and painful. Yet, developing a safe operating environment and focusing your cash release efforts needs to take place now.