Navigating Through an Unpredictable Environment
Remember the iconic image of the world’s largest container ship stuck crossways in the Suez Canal? Who could have predicted that one?
But more importantly, who could have predicted the Covid-19 pandemic that created an environment in which a single ship getting stuck in a canal meant a domino fallout in the world-wide supply chain?
We have always lived in an unpredictable economic environment, but rarely more so than during the past eighteen Covid-dominated months.
March of 2020 saw schools shut down, restaurants, gyms, hair salons, and hotels laying off employees. Grocery store shelves were empty of paper and cleaning products and even some foods.
During those first weeks and months of the Covid-19 pandemic, both the supply and demand sides of commerce were adversely affected. Many companies found themselves stuck and floundering like that ship in the canal.
On the supply side – factories shut down or found themselves over capacity. At the same time, they faced shortages of things like spun blown polyester, nitriles, and hand sanitizers.
On the demand side, cruise lines shut down, hospitality businesses closed, elective surgeries were cancelled. Shortages of goods like ketchup, toilet paper, and cleaning supplies frustrated shoppers.
Like most other companies, Calderon Textiles faced being “stuck in the canal” in terms of keeping our business afloat. But flexibility and innovation served as life savers as we navigated through the unpredictable pandemic-driven environment of 2020 and 2021.
Calderon Pivots to Enter the PPE Product Line: Flexibility and Innovation Required
The first major challenge, back in March of 2020, was to shift our staff to working at home, which meant embracing tools like virtual meeting apps. It wasn’t until April of the following year, that we were able to transition back to our base facility.
The second major challenge was that multiple of our business units lost demand for products as numerous clients temporarily shuttered or downsized their own businesses. The domino effect of this lost demand was a suddenly static inventory. Of course, Calderon is not unique in this experience. But having gone through it, we have a deeper understanding of what our clients have also faced.
So, while flexibility was needed in terms of dealing with our workforce and our inventory, innovation was on call to meet a tsunami demand engineered by the pandemic: the need for PPE—Personal Protective Equipment. An acronym that everyone over the past eighteen months has become intimately familiar with.
How to Quickly Pivot to Meet Demand, Supply, and Execution
There are five essential steps to successfully pivot when challenged with an unexpected demand, supply, and execution opportunity:
- Identify what is needed.
- Conduct market research.
- Focus on core competencies.
- Develop a plan.
- Communicate changes.
Let’s take a closer look at each of these steps with examples from Calderon’s pandemic experience.
The first step in pivoting from an inventory geared toward industries that were temporarily stalled to meeting a critical demand for PPE was for Calderon’s team to identify exactly what was needed. And in our pandemic-driven world, what was needed was pretty clear—masks.
Healthcare and hospitality (our usual clients) suddenly found themselves short of masks. Businesses, institutions, government entities—anywhere that people worked and gathered—were desperate for quality protective face coverings. So masks became our first priority.
We soon found we could provide other needed PPE as well, such as face shields and isolation gowns. Meanwhile, home essentials, cleaning equipment, and home office supplies were also in demand as businesses, schools, and government offices transitioned to work from home.
Conduct Market Research
As we looked at potential products to meet the PPE demand, the Calderon team focused our market research on levels of performance of individual items and features and benefits of the product we planned to offer.
We also needed to take into account the factory competencies of our suppliers. What were their manufacturing capabilities? Were their products FDA approved? Did they have product lines that met the needs we had identified?
And finally, we did a cost-benefit analysis. All this – in an extremely short amount of time – if we were going to pivot from warehousing a static inventory to filling a hole in the demand chain.
Focus on Core Competencies
The key, of course, is to assess and build from what is already working. For Calderon our core competencies in terms of providing PPE included:
- Current suppliers who had the manufacturing capabilities needed to produce specific types of PPE (e.g. reusable and disposable facemasks);
- An established relationship with a proven supplier of isolation gowns; and
- Our own track record of being a consistent source of textile innovation.
Develop a Plan
The Calderon team quickly went to work to develop plans for both sourcing and distribution of PPE.
The plan for sourcing included factoring in lead times, estimating quantities needed of both raw materials and finished product, and determining the cost of production.
The distribution plan focused on pricing and distribution channel alignment.
Communicate Changes in Product Offerings
No plan can be efficiently and successfully executed without communication. From the producer to the consumer, Calderon as the distributor made sure our suppliers and manufacturers were always on the same page as we were.
In-house, we worked to keep open fluid channels of communication with and between our Sales Support team and our Marketing team.
We strove for transparency with our clients, keeping them informed about timing parameters, product specs, and quantities needed and available.
And we made sure that our distribution centers were always included in the communication loop.
Of course, this is how Calderon always operates, but during this critical time of pivoting, communication was more important than ever.
Calderon’s Experience with the Pandemic
We are proud to say that we successfully pivoted and navigated the pandemic in a way that kept Calderon Textiles viable and even profitable.
So far, during the 2020-2021, Calderon has sourced and distributed:
- 9.3 million masks
- 1.7 million gowns
Was Calderon’s experience a perfect economic transition? As we look back and analyze our decisions and our outcomes, we acknowledge that there are opportunities for improvement.
For instance, we realize that we focused too much on the needs of current clients and didn’t attempt to branch off and gain new clients with our new product line. We also took on projects that weren’t as important to our particular consumer base.
What we also learned were that the traits of agile companies included being:
- Value focused
- Prospective thinking
- Investment driven
- Comfortable with ambiguity
Through our pandemic experience, the team at Calderon found that the difference between moving forward and getting stuck—between evolution and irrelevance—lies in our ability to stay the course by tactically navigating near-term disruptions, adapt strategically by augmenting strategic capabilities to create robustness or competitive advantage, and redefine our business by leveraging the new reality to identify new opportunities to position our business for new growth.
At Calderon, we take pride in how we navigated the challenges of the 2020/2021 Covid pandemic, and we are determined to navigate future unpredictable challenges just as successfully.