Nancy Jalbert
Partner | CPA, CA | Management consulting

It’s no secret; if you want to get your business back on track, you must rethink your supply chain and relationships with your suppliers.

Businesses everywhere are currently facing an unprecedented crisis and it’s highly likely that business will resume gradually and progressively. Businesses that learn to adapt to this new normal and shift to dynamic planning mode will have a better chance of succeeding.

As the situation evolves, so will the restrictions and you’ll have to reassess your plan in order to remain aligned with your priorities. Organizations must be agile and speed up their planning and execution cycles, especially when it comes to managing their supply chains.

When economic activity resumes, uncertainty will linger due to constraints in the international markets and concerns surrounding health and health measures. So, you’ll need to ask yourself a number of questions in order to rebuild a strong supply chain and reduce all potential risks of supply chain disruption.

1. Who are your suppliers and what are your critical products?

Things won’t pick up all at once and that’s why it’s imperative that you analyze and map your supply chain to identify your strengths and weaknesses. Before restarting your business, create a profile of your suppliers:

  • Who are they?
  • Where are they located?
  • Who supplies what?

Whether you source your products internationally or locally—from Quebec and elsewhere in Canada—the value chain with certain countries or supplies may be broken. They might not yet be authorized to resume their activities either because of laws in effect or they did not survive the crisis.

It’s also important to identify your critical products and look for alternative solutions in case your supply chain is disrupted.

2. Are your supply levels and stockpiles sufficient?

We’re already seeing a shortage of certain products and consumer insecurity can be misleading and give off the impression that there’s a shortage on the market. The current context is creating a disequilibrium with major demand-supply fluctuations in all markets. Your supply level may therefore not be balanced along your supply chain.

You must review your stockpiles. During the relaunch period, be alert and anticipate the needs and requirements of your clients and suppliers in an effort to synchronize all stages of your supply chain. This will help you take quick action if there’s a problem.

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3. How can you ensure that health measures are observed throughout the supply chain?

Health security measures vary from one country to another. Before going back to offering a product or service to a client, make sure that public health recommendations are observed at all levels. Mandatory quarantines may trigger delays along your supply and production chain, in turn resulting in cost overruns and impacting your profit margins.

4. Should you repatriate your production to Canada?

In addition to the recent issues that have surfaced and to ensure supply chain continuity, you might have to consider new routes or methods of transportation to source from certain impacted markets, or even find new suppliers. It’s a great opportunity to consider relocating your production to Canada, or Quebec, in order to lower your costs and support the local economy.

For example, a business that normally sources from China because of low production costs but is experiencing a delay in production due to logistical or health constraints may be better off switching to a local supplier. Even if the local manufacturer has a higher production cost, the cost difference may be offset by a productivity gain.

The current crisis is showing us not only how fragile our ecosystem is, but also how important it is for us to invest in our local economy.

5. Do you have enough liquidity to meet demand and do you have adequate financing?

Current constraints have a direct impact on the financial return of organizations and moving forward, everyone will need liquidity.

For example, as a business, you’ll need liquidity and want to make payments within 60 days. Your supplier will also need liquidity and want you to settle your payments as soon as possible. So, you’ll need to reconsider your payment mechanisms and assess your financing needs.

What type of payment terms should you negotiate with your suppliers? That will likely have an impact on the line of credit you’ll need to take out—speak with your banker.

6. Ultimately, how will all of these constraints affect your customer service?

The decisions you’ll end up making after answering these questions may result in delays in your supply chain, in turn affecting your manufacturing and distribution timelines and, ultimately, your customer service. Some businesses have integrated new technologies to their manufacturing and distribution processes that may no longer be reliable because the entire chain is now disrupted. Delays will fluctuate and you may change suppliers—and it will all affect your processes.

It’s more important than ever that you communicate with your clients and set clear priorities regarding your products and services. This doesn’t mean you should propose a brand-new offer as soon as business resumes. However, you could prioritize certain products or formats that will allow you to meet your clients’ urgent needs. Gradually as you build your supply chain back up, you can begin to reintroduce other products.

Developing a stronger supply chain for the future

The decisions that you’ll make today will determine how successful you are when you resume your business activities. As the situation becomes more stable, you can review the options that will allow you to consolidate your supply chain. If you tread with caution over the next few months, you will pull your business out of this crisis and come out stronger and better prepared to face the next waves.

23 Apr 2020  |  Written by :

Nancy Jalbert is a partner at Raymond Chabot Grant Thornton. She is your expert in strategic and...

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Jean-François Boudreault
Partner | Human resources consulting

Continuous improvement has always been a major driver of success. But today’s turbulent times present a unique opportunity to redefine your business.

Is your business experiencing a slowdown? Take advantage of the lull to revisit your business plans and realign your activities. Now is a good time to try new practices, switch to better tools and update your action plans for the short, medium and long terms. Updated processes will help your business adapt to a changing market and set you on track to a brighter future.

But you can’t implement these changes effectively unless your staff has the right training. The Quebec Government recently unveiled the Programme actions concertées pour le maintien en emploi (PACME–COVID-19), which covers employee training for businesses affected by the crisis.

Investing in training makes sense for a lot of reasons, including:

  • Attracting and retaining competent employees;
  • Keeping employees engaged and motivated;
  • Adapting better to internal and external changes;
  • Staying competitive in a highly competitive and evolving market;
  • Preparing successors;
  • Reducing staff turnover;
  • Maintaining loyalty and trust in the organization.

Professional development is a broad category that covers several different areas, including hard and soft skills. For example, as manufacturing businesses shift to Industry 4.0, their employees are having to update their technical skills.

The current crisis has only accelerated the pace of change, affecting certain job descriptions and increasing demand for specific skill sets. Plus, the current labour shortage means it’s doubly advantageous to invest in the people you already have and help them develop new skills.

A competitive advantage

There’s a correlation between training investments and productivity gains. Skill development is a key differentiator that can help your business rise above the rest. That’s why it needs to be a key aspect of your strategic plan, right up there with finance.

Investing in professional development can also increase employees’ trust in you as an employer, leading to higher engagement. When you give staff the chance to learn and gain new skills, you create a better overall employee experience, which in turn enhances your brand image and helps you attract top talent.

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The training plan

However, including skill development in your overall strategy can be challenging. How do you ensure all issues are addressed?

To do it right, we recommend following these key steps:

  1. Identify your organization’s current and future needs (strategies and objectives);
  2. Establish the skills profile of each job (current and projected);
  3. Assess the skills of job incumbents;
  4. Design the Individual Development Plan (IDP);
  5. Determine the incumbents’ skills development objectives and the means to achieve them;
  6. Identify skills development activities and teaching approach in line with your objectives;
  7. Monitor activities on an ongoing basis, provide encouragement and readjust as needed;
  8. Provide skills development training for your managers.

Changing appraisal practices

If you’re used to holding annual employee performance appraisals, take note: this practice is changing, as employers shift their attention to talent management and skill development instead. The once-yearly practice has been replaced with an ongoing process in which managers meet with employees regularly to provide feedback and coaching.

Training and skill-development activities can be led by your in-house team (peer training, mentoring, coaching) or by external resources (online courses and guest instructors).

It’s important to make sure your plan reflects your business needs. But the real key to a successful skill development initiative is to address each person’s needs as well as those of the organization. Take the time to prepare meaningful IDPs and use teaching methods that make sense for the individuals and their work environments.

Investing in equipment isn’t enough to keep you at the forefront of your market. Knowledge transfer is also essential for maximizing efficiency.

By making employee development a strategic priority, you’ll be rewarded with short-term performance gains and improve your business’ long-term viability.

20 Apr 2020  |  Written by :

Jean-François Boudreault is a partner at Raymond Chabot Grant Thornton. He is your expert in human...

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Municipalities have long been champions of emergency management. We need only think of the floods in recent years that required considerable effort from many municipalities. They responded promptly and successfully to ensure the protection of citizens and the reconstruction of the affected areas.

However, the COVID-19 pandemic is unlike anything we have ever experienced. First and foremost, this is a health and economic crisis. Not only do municipalities have to go into emergency operating mode to maintain and transform services to citizens, their own operations are significantly impacted.

Once the crisis is over, the recovery of our communities will be a priority. Municipalities will be at the forefront of this recovery and will have to reassess a number of aspects:

Vision and organization

During a crisis, the focus is on immediate, short-term measures. The recovery will require that the focus be re-adjusted to ensure that elected officials continue to have a long-term vision at the heart of their actions. In addition, these profound changes will require a fundamental transformation of management and human resource practices within the municipality.

Finances and taxes

New financial management strategies will need to be developed. Some municipalities may be in a deficit situation in 2020 due to reduced revenues, deferred property tax payments, lower property transfer fees as well as a slow down in additional invoicing and revenues from user-paid leisure and cultural activities. Additionally, it will be difficult to justify a tax increase in 2021, when most citizens will have been financially impacted.

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Infrastructures

The federal government has already announced investments to foster economic recovery. Municipal infrastructure investment planning must be started quickly in order to take advantage of the infrastructure plans that the governments of Quebec and Canada will put in place.

Local organizations

There are numerous local sports, leisure, cultural and community organizations and it can be expected that there will be significant requests for support. Ensuring that these requests are managed equitably during this period of considerable need, while maintaining community mobilization will be critical. The goal will be to ensure that the service offering to citizens is maintained, and even improved!

Economic vitality

Economic development will be paramount and at the heart of recovery. Since the adoption of Bill 122, municipalities can take a leadership role in this respect as a result of the Quebec government transferring management of the $150 million Fonds local d’investissement to them. Cities will also need to quickly establish strategies to revitalize commercial arteries and be proactive in the global local purchasing movement.

Digital offering

In recent years, there has been a lot of talk about smart cities. A majority of municipalities have implemented some measures. However, social distancing and the need to isolate have shown that continuing to provide services will depend on the digital transformation of working arrangements and the supply of services to citizens. For example, conducting virtual public consultations could become a way to stay in touch with your citizens. However, this will require that information security be reviewed to counter the constant increase in fraud and cyber attacks and safeguard the integrity of your citizens’ and third parties’ data.

The recovery will therefore be the greatest challenge of the 21st century and will affect all aspects of municipal life. It will require planning, sound management and a great deal of openness, innovation and flexibility to adapt to a world that, we hope, will be better for our communities.

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The novel coronavirus (COVID-19) pandemic is spreading around the globe rapidly. The virus has taken its toll on not just human life but businesses and financial markets too, the extent of which is currently indeterminate.

Entities need to carefully consider the accounting implications of this situation. The Grant Thornton International Ltd. IFRS team has published two documents on the impacts of the COVID-19 pandemic on the financial reporting under IFRS:

  • COVID-19: Financial Reporting and Disclosures;
  • Reporting the impact of COVID-19 on your business.

The publication COVID-19: Financial Reporting and Disclosures identifies key financial reporting areas that entities need to consider when determining the impact on their business and, on the results, financial position and disclosures in their financial statements prepared in accordance with IFRS. This is not an exhaustive list and there may be other areas not included in this publication that entities should consider. The areas are not listed in order of importance.

The document Reporting the impact of COVID-19 on your business sets out ten questions CFOs should ask themselves to ensure that the financial statements not yet issued present fairly the financial position, financial performance and cash flows of the entity. This is not an exhaustive list. The questions are not listed in any order of priority, because their applicability will depend on facts and circumstances.

Consult all the documents in the pdf below.