Agility is the new normal
How recession-hit businesses are changing tack to stay relevant5th May 2020
At a time when all non-essential services are either in lockdown or reeling from the multiple blows to the economy, a handful of businesses are changing the way they work to stay relevant, and to stay in operation, and to make a difference.
Meeting the demand for hand sanitiser
Companies that manufacture tobacco and alcohol came – quite famously – under pressure during the national COVID-19 lockdown, with sales of their products outlawed entirely. Some of them took action, partly out of a genuine desire to help, and partly out of a need to keep their factories going. Booze giant Distell, for example, announced at the start of the lockdown that it was producing hand sanitisers and other hygienic products at its production facilities, committing 100,000 litres of alcohol to the cause.
Distell was quickly joined by SAB, which donated 100,000 face shields (all made from recycled beer crates) to the Gauteng Health Department, and followed that up by donating food vouchers to 17,000 taverns across the country.
‘This decision was an easy one for us. It is intricately linked to our business and purpose at SAB,’ Zoleka Lisa, SAB’s Vice President of Corporate Affairs, said in a statement. Then came the kicker: ‘Not only are we fanatical about South Africa, we have access to alcohol and an extensive fleet and route network. This enables us to deliver the finished product to the most remote parts of South Africa.’
Big help from big business
Big companies tend to have deep wells of resources, and AngloGold Ashanti, Sasol and Imperial combined theirs to provide bulk supplies of hand sanitiser to frontline medical staff and patients at four major hospitals in Gauteng (Chris Hani Baragwanath Academic, Charlotte Maxeke Academic, Helen Joseph and Leratong). Sasol supplied the hand sanitiser, AngloGold Ashanti provided the bulk storage tanks, and Imperial contributed freight and logistics expertise.
Even arms manufacturer Denel had to pivot, with engineers from its Denel Dynamics and Denel Aeronautics teams seconded to work on the development of medical ventilators, in a task team that also includes experts from Armscor, Eskom and the CSIR.
It seems like a strange sideways step, but as Denel (perhaps best known for its Rooivalk and Oryx combat helicopters) pointed out in a statement, its engineers, researchers and scientists have a history of working on sophisticated technology projects. Denel is also reportedly looking at converting a fleet of its infamous Casspir armed vehicles into mobile field ambulances.
It helps, too, that many of the chemical ingredients used in manufacturing explosives can also be used to make hand sanitiser.
But it’s not just the big corporates who are taking an agile approach to the COVID-19 crisis. Nanodyn – a Stellenbosch-based tech company that optimises fluid reticulation processes in capital-intensive industries like sugar production, ethanol distillation and water desalination – is allocating some of its expertise to the development of ventilators.
‘We have no history in the medical field, and cannot afford to dilute attention to our primary mandate and objectives; however, we have embraced the national shutdown to pressure-test, refine, reimagine and reinvent our capabilities,’ says CEO Andrew Charter.
Inspired by Lockheed Martin’s Skunk Works philosophy, Nanodyn is taking what Charter describes as a ‘high-velocity, hyper-agile, multi-disciplinary approach that we adopt to frontier innovation’.
What it means in this particular case is a ventilator design concept that Nanodyn don’t intend to manufacture themselves, but will ‘parachute’ into a credible medical device manufacturing company and (as Charter puts it) ‘deliver our shareholders a welcome surprise’.
Sticking to it
Meanwhile, businesses like Cape Town-based Creative Graphics International changed their work streams almost entirely, just to keep going during the lockdown period. In the (now very distant!) time before the coronavirus outbreak, CGI manufactured badges and decals for automotive companies like Ford, VW, Toyota and Nissan. During lockdown, they went into the Personal Protection Equipment (PPE) business, making much-needed face shields for health workers.
‘The cash-to-cash cycle for a manufacturer is incredibly long,’ CGI Financial Director David King told Business Insider. ‘Raw materials need to be ordered, deposits paid, shipping, payments, clearing, production, shipping and collection, which places immense strain on cash flow and, as a result, cash being tied up in stock.’
In a bid to stay in business, the company obtained an Essential Services Certificate, adapted its business model, and quickly repurposed its machinery to make clear polymer face shields.
The new abnormal
And so the stories go on. French fashion group LVMH – home to the likes of Christian Dior, Louis Vuitton, Tiffany and Givenchy – switched from making expensive luxury perfumes to producing hand sanitisers (for free!) for hospitals in Paris.
A group of Airbnb hosts in Budapest, Hungary, opened their more than 10,000 properties to doctors and nurses as tourists disappeared and movement was restricted.
There’s a clear lesson in all of this: no matter what line of work you’re in, there’s invariably a Plan B – an innovative alternative to maintain productivity, keep production lines moving, and stay in business.