We recognize the difficult and immediate impact COVID-19 is having on businesses and their employees. Our hearts and thoughts go out to everyone who has been affected.

 

Alliance Cost Containment is actively monitoring indirect supply chain issues across more than 30 expense categories to provide insights into how these issues may impact your business which you can view below.

 

Our team stands ready to assist you with the procurement challenges you’re facing. Feel free to reach out if you have any questions or would like input on indirect expense matters.

Telecom
  • Overall, industry is business as usual
  • Providers working 24/7 with clients in government like Homeland Security
  • Healthcare companies requesting emergency supply of service / iPhones
  • Some Apple iPhones in limited supply due to halted manufacturing
  • Credits for lines not needed should be requested through your telecom management provider
  • Credits will be issued back to origination dates
  • ACC Telecom providers operationally efficient with VoIP systems and employees working from home
MRO + Protective Equipment
  • Experiencing significant shortages in Personal Protective Equipment (PPE) with 1000+ items affected
  • All manufacturers / distributors / suppliers providing PPE items severely impacted
  • Began prioritizing government and health care clients in January
  • Government triggered Defense Production Act to stockpile medical and PPE supplies
  • Manufacturing and commercial clients will not have access to most PPE items for the foreseeable future
  • Grainger is considered essential; operating remotely at full staff
  • Approximately 40% of clients discontinued onsite services; % rising quickly and could soon see 90%
  • Curbside service available from many national MRO providers at physical locations
Freight
  • Account managers reaching out to customers regarding outbound and inbound (receiving) changes & policies
  • ACC’s national freight suppliers currently working with full staff
  • Every shipper / receiver has sanitation products available to minimize risk
  • As carriers scale back or close operations, layoffs & furloughs likely
  • As carriers operate with limited capacity, services may be redirected or prioritized to serve essential businesses (grocery, hospitals, etc.)
  • Major cities seeing biggest impact as roads, air freight and ports close
  • ACC recommends a robust TMS platform that allows for virtual business management
Express Mail
  • Providers considered essential and continue to operate under state of emergency and shelter in place orders
  • Staff scaling up to accommodate growing demand
  • Experiencing delays as of 2/23 due to increased shipping demand
  • Using all recommended precautions to avoid virus spread
  • Main industry concern: fulfillment workers become ill / unable to fill orders or could infect others
  • Temporarily suspended signatures typically required on delivery
  • ACC recommends clients move to automation shipping software
  • Prior to shipping, check if recipient is open, as many commercial businesses are now closed
Safety Supplies + Mats/Uniforms
  • High-demand products in short supply (hand sanitizer, cleaning concentrates, gloves, masks etc.)
  • Demand for safety (gloves, masks, toilet paper, hand sanitizer) beyond what manufacturers can sustain
  • Existing customers and health care receiving precedence on high demand items as they become available
  • Providers of Mats / Uniforms noted closures across verticals
  • Credit codes created to assist customers who need to delay services
  • Contact your provider for assistance with cancellation credits
Travel
  • Travel Industry reeling from cancellations refunding, tracking, credits, meetings rescheduled, etc.
  • Some national agencies already furloughed 50%+ of work force,
  • Reduced schedule for corporate employees
  • Revenue is declining despite busier activity than usual
  • Virtual conferencing tools are critical as businesses seek to maintain a communication without live, in-person connections — many travel providers can provide strategic planning and remote group meetings capabilities
  • Check with travel providers for airline credits, to cancel / reschedule flights, meetings, hotels
  • Expect delays in customer service
Payment Services
  • New services around ACH, Virtual Checks allow clients to send complete payment files remotely as needed; providers will then pay suppliers; contact ACC for details
  • Vendor enrollment lagging but expects to catch up by 04/01/20
  • Partners reviewing all clients to understand exposure / changes
  • Priorities are to ensure team safety and customer service
  • Uninterrupted service to existing clients
  • Working toward solutions to help with new realities and add convenience to consumers
  • Will continue to communicate / be transparent about challenges and provide updates as they become available
Contingency Workforce
  • Pandemic causing short-term lay-offs/outages of traditional talent
  • Businesses re-considering 18-month plans; leveraging project-oriented / freelance work
  • Companies across verticals will need to do more with less to survive, including relying on remote workers & freelance talent
  • During downturns, businesses develop stronger relationships with “known” talent: freelancers, contractors, retirees, etc.
  • Contract workers provide a means of aligning short-term needs with top available talent
  • Businesses should look to both existing teams and external talent to overcome COVID-19 challenges

Source: Ardent Partners and https://cporising.com/

Waste & Recycling
  • No service delays expected at present
  • In many cases, services suspension available for temporary business closures
  • Ideally, identify closures to providers ASAP so credits can be issued
  • If closures continue beyond April, service suspensions may be extended
  • Many providers have emergency teams in place across the country if needed
  • If companies do not need pickup, haulers may remove containers and re-deliver once re-open
  • Service level adjustments available through your waste providers
Office Supplies
  • Product availability changing daily; safety, cleaning products and toilet paper routed to health care providers first
  • Many janitorial paper products pulled from online to allow corporate customers to order, though supply is diminishing
  • General office supplies in stock
  • No deskside delivery in hospitals or healthcare facilities
  • Distribution expected to continue despite lockdowns
  • Ability to set up residential delivery for remote workers business to order business products
  • Internal resources up and running; no disruption to ACC clients
  • Large suppliers offering free delivery, no minimum required
Utilities: Gas / Electric
  • Lockdowns reducing commercial / industrial demand in March and April (10% projected)
  • Residential demand increasing exponentially
  • Abnormally warm weather reducing late-season heating demand
  • Some good news: these factors will result in a strong start to injection season, rapidly expanding the current 16% surplus to the five-year average
  • Injection pace is expected to slow in summer as energy production levels decline in response to low crude and natural gas prices.
  • Storage levels are now expected to flip to a deficit in October, four months later than a pre-coronavirus forecast
  • Expect substantial delayed recovery in gas prices
  • If nation goes into recession, commercial & industrial demand may see more prolonged declines / greater market uncertainty

*North American Weekly Energy Outlook, March 25, 2020, issued by Schneider Electric Global Research & Analytics.

Pest Control
  • Pest control is deemed an essential industry at the federal level
  • Many companies diversifying services with new sanitation offerings
  • Efforts underway on the state / local government level to deem essential
  • Companies taking precautions to ensure employee and customer safety
  • Service focus on exterior of homes and businesses
  • Services can be completed with little human interaction