Optimizing Operational Efficiency and Profitability Under the Impact of the Coronavirus

Executive Summary

The purpose of this report is to provide XYZ Pty. Ltd with operational recommendations to survive from the impact of the pandemic and improve the company’s profitability. A qualitative research design is used to gain information to study which strategies can improve the operation of the company under the influence of the coronavirus. The findings indicate that consumer patterns and behaviour are changing and are likely to remain permanent. It is recommended that XYZ uses an agile approach to adopt to changes as needed.

Introduction

The purpose of this report is to advise client XYZ Pty. Ltd, a manufacturer of disability products, on ways to optimizing its operational efficiency and profitability under the impact of the coronavirus. In the past two years, the epidemic of the coronavirus has brought a great impact on businesses all over the world. The purpose of this report is to provide the company with operational recommendations to survive from the impact of the pandemic and improve the company’s profitability.

Research

A qualitative research design is used to gain information to study which strategies can improve the operation of the company under the influence of the coronavirus, so as to further improve its profitability. Quantitative information is also needed to study the extent to which these strategies affect the company’s operations.

Findings

New Consumer Habits

Supply chain systems have been severely affected by the widespread spread of the coronavirus pandemic. Findings indicate that XYZ has a difficult time maintaining and efficiently managing its clients. Furthermore, the company has not yet established any new procedures that are relevant to dealing with COVID-19’s ramifications while maintaining the basic operations. Notably, XYZ Pty. Ltd. has not made technology a core component of its strategy for adapting to changing customer behavior patterns. As a direct consequence of the pandemic, consumers’ behaviors and demand patterns have been drastically impacted as image 1 below summarizes. A majority of the said changes, such as the significant rise in online purchasing since 2020 to date and the changes observed in regard to brand loyalty, have significant implications for the manufacturing and industries (Pinzaru et al., 2020). Meanwhile, changes in the supply chain have slowed the introduction of new items.

Image 1: A summary of shifts in consumer buying habits (online shopping change) (Adapted from Leinwand et al., 2022)

Improving Customer Experience

XYZ Pty. Ltd. has to adapt to its consumers’ changing buying habits, provide a better experience with the items they buy, and ensure that the firm stays in business by increasing the efficiency and profitability of its manufacturing. One of the greatest ways to assess customer experience will be evaluating how companies use and rely on information to respond to new demands and patterns amongst consumers (Li, 2021). This will play a significant role in determining how satisfied customers are with the items they purchase. By using customer experience best practices, companies have the opportunity to be at the forefront of longer-term changes in consumer behaviour following the changes caused by the pandemic as highlighted in image 2 below. The most essential thing will be to stay on top of how consumers’ preferences evolve in real time and to swiftly come up with new ideas in order to provide memorable experiences in a new setting.

Image 2: Changing consumer priorities that have shifted their experiences. Adapted from Leinwand et al., 2022)

Improving Production Efficiency

The COVID-19 issue led to a sharp decline in production levels and manufacturing effectiveness, raising concerns that the whole supply chain would collapse. Additionally, manufacturers face a slew of interconnected issues, including a scarcity of raw materials, unanticipated fluctuations in client demand, and a rise in staff absenteeism. It’s likely that supplies will remain scarce or become much more difficult to get than usual. Bonilla-Enriquez and Caballero-Morales (2020) highlight that it is probable that logistics and shipping may be hampered as businesses in the supply chain modify their operations to be safe during the pandemic. XYZ’s attempts to increase the efficiency of their production will rely heavily on technology.

Discussion

Shift to Online Retailing

Customers are increasingly buying items online; thus, businesses that overlook e-commerce may suffer. Retailers must now embrace a few realities as suggested by Nanda, Xu, and Zhang, (2021) not all growth is created equal, unproductive expansion destroys value, and the goal should be sustainable, long-term development. Success will need a concerted, enterprise-wide effort. As individuals get more used to internet shopping, changes in consumer behavior will become permanent. This trend will facilitate the spread of online commerce.

Develop an Agile Model of Operations

Due to a feeling of necessity, firms are more likely to embrace agile approaches, such as holding quick videoconferences to resolve problems and delegating more decision-making authority to remote teams. Agile requires building a new client-centric operational model supported by suitable processes and governance (Sharma et al., 2022). For instance, agile sales teams regularly prioritize customers and transactions and make quick choices about where to invest money.

Rebuilding Production Operations

The coronavirus pandemic has shifted consumer demand patterns within different sectors, unveiling flaws in the supply chain and service network of firms. The speed with which other organizations have changed has been impressive; they’ve been able to achieve new heights of openness, flexibility, profitability, and end-user connectivity. Succession-oriented businesses will adapt their operations to better protect themselves from the wide range of prospective threats (Sarkis et al., 2020). They will also work quickly to rearrange the company’s assets as well as supplier mixes.

Conclusion/Recommendations

In order for XYZ Pty. Ltd. to succeed in the new normal, they must be able to respond successfully in five major strategic areas. The company must avail its products for online sales by transitioning to more efficient pack sizes and ready-to-ship packaging. Second, XYZ must adopt a sustainable attitude, broadening its horizons in the whole value chain. Third, in order to preserve their shelf space and improve their entire experience, the firm must try to deepen its relationships with its consumers. It is recommended that XYZ Redesigns production and interactions to make shopping more efficient. Fourth, XYZ should improve its adaptability, responsiveness, and entrepreneurialism by adapting quickly and effectively to changing market circumstances and customer needs. Finally, to balance the expanding channel choices of customers, XYZ must build new ties as needed, such as using third-party platforms like Alibaba and Amazon to connect consumers more efficiently.

References

Bonilla-Enriquez, G. and Caballero-Morales, S.O., 2020. The opportunities of Industry 4.0 in the post-COVID-19 era. The International Journal of Business Management and Technology, 4(3), pp.243-247.

Leinwand, P., Puthiyamadam, T. and Sharma, S. 2022. Evolving priorities: COVID-19 rapidly reshapes consumer behavior. PwC. Accessed 7 June 8, 2022 from https://www.pwc.com/us/en/industries/consumer-markets/library/covid-19-consumer-behavior-survey.htmlLi, S., 2021. How Does COVID-19 Speed the Digital Transformation of Business Processes and Customer Experiences?. Review of Business, 41(1), pp.1-14.

Nanda, A., Xu, Y. and Zhang, F., 2021. How would the COVID-19 pandemic reshape retail real estate and high streets through acceleration of E-commerce and digitalization?. Journal of Urban Management, 10(2), pp.110-124.

Pinzaru, F., Zbuchea, A. and Anghel, L., 2020. The Impact of the COVID-19 Pandemic on Business. A preliminary overview. Strategica. Preparing for Tomorrow, Today, pp.721-730.

Sarkis, J., Cohen, M.J., Dewick, P. and Schröder, P., 2020. A brave new world: Lessons from the COVID-19 pandemic for transitioning to sustainable supply and production. Resources, conservation, and recycling, 159, p.104894.

Sharma, M., Luthra, S., Joshi, S. and Joshi, H., 2022. Challenges to agile project management during COVID-19 pandemic: an emerging economy perspective. Operations Management Research, pp.1-14.