Tackling the challenges of the COVID-19

Considerations for business leaders

The COVID-19 outbreak has been declared a pandemic by the World Health Organization, impacting people's lives, families and communities. Organisations are facing several potentially significant challenges to which they need to quickly respond. 

How to manage crisis?

Develop an action plan – identify and quantify potential issues, assess resources that are available to the business and develop an action plan for your people, operations, finances and provide a framework and strategic guidance.

Gather the right team – support your action plan, create a strong, cross-functional crisis team to drive a holistic approach. The response will demand high-level sponsorship to provide a framework and strategic guidance

Communicate – determine your internal and external communication strategy and approach.

Focus on reliable data – during a crisis, a lot of data is needed for informed decision making… and fast. Establishing facts accurately is a priority. Strong data also reinforces a central element of crisis planning.

Personnel – Communicating to all stakeholders and understanding impact on personnel, sub-contractors and customers

Impacts and challenges
  • Personnel may face different health risks depending on the type of work they do and where they work
  • Changes in workforce requirements – need to understand resource changes, employment obligations, critical roles and remote working requirements
  • Workforce mobility – travel interruptions, compliance issues and internal coordination
How to respond
  • Set up a specific task force, and crisis management and communication plan
  • Assess potential impact to your workforce and develop options to support, move or evacuate
  • Identify critical tasks and roles and manage employment obligations, costs, benefits and taxes
  • Ensure that the right technologies and systems are in place to support efficient remote working
  • Communicate proactively to all stakeholders

Liquidity & Financing – Ensuring short-term cash position and managing available sources of financing

Impact and challenges
  • Short-term liquidity and cash position - cash shortages due to changing customer demand and payment behaviours
  • Looming debt maturities as capital repayments become due, risk of breaching any possible covenants
  • Decreasing profitability as a result of economic slowdown
How to respond
  • Review business plan to provide a realistic basis to critically assess the necessary actions, analyse the liquidity of the business and forecast actual cash position to mitigate likely shortages
  • Critically review debt service obligations to identify potential events of default, assess likely consequences and suggest mitigating strategies
  • Consider if the business qualifies for financial relief initiatives recently implemented by relevant governments
  • Identify and quantify cost reduction measures

Operations & Supply Chain – Managing supply chain disruptions, inventory shortages and operational discontinuity

Impacts and challenges
  • Supply chain disruptions - sourcing, production and logistical interruptions, delay in return of workforce, delays in sourcing goods, unusual demand
  • Inventory shortages, logistics disruptions and idle capacity
  • Business contracts and obligations are stretched – disputes and claims etc. to increase rapidly
How to respond
  • Identify how exposed you are to interruptions - what will fail first, and how to cope with it
  • Identify and mitigate supply chain disruption/cancellations caused by delays and transport suspensions – assess impact on revenues, penalties, discounts, order behavior – update sales forecasts & risk profiles, ensure right input to cash flow & NWC modeling
  • Revisit supply chain model and consider short term changes e.g. alternative suppliers apply flexible, CMA/tolling/subcontracting supported models to cope with unusual demand
  • Review contractual agreements to identify and mitigate potential disputes in production and delivery arising from delay or failure to fulfil orders (e.g. interpretation of force majeure clauses)

Studies and webinars

Studies
Webinar recordings:

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Marko Koski

Marko Koski

Partner, Transaction Services, PwC Finland

Tel: +358 (0)20 787 8745

Michael Hardy

Michael Hardy

Partner, Transaction Services, PwC Finland

Tel: +358 (0)20 787 7442

Enel Sintonen

Enel Sintonen

Partner, Retail and Consumer, PwC Finland

Tel: +358 (0)20 787 7225

Tero Malmivaara

Tero Malmivaara

Partner, Lakipalvelut, PwC Finland

Tel: +358 (0)20 787 7684

Juha Laitinen

Juha Laitinen

Partner, Tax Services, PwC Finland

Tel: +358 (0)20 787 7409

Antti Palkén

Antti Palkén

Partner, Fund and Debt Advisory, PwC Finland

Tel: +358 (0)20 787 7281

Kimmo Nieminen

Kimmo Nieminen

Partner, Consulting Leader, PwC Finland

Tel: +358 (0)20 787 7504

Joni Painilainen

Joni Painilainen

Partner, Legal Services, PwC Finland

Tel: +358 (0)20 787 8803

Timo Takalo

Timo Takalo

Partner, Risk Assurance Services Leader, PwC Finland

Tel: +358 (0)20 787 7489

Jari Viljanen

Jari Viljanen

Partner, Finance & Accounting, PwC Finland

Tel: +358 (0)20 787 7505

Jani Arnell

Jani Arnell

Director, Cybersecurity & Privacy Leader, PwC Finland

Tel: +358 (0)20 787 8844

Netta Mikkilä

Netta Mikkilä

Partner, Accounting Consulting Services, PwC Finland

Tel: +358 (0)20 787 7386

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