Hope for the Best, Plan for the Worst

Hope for the Best, Plan for the Worst

I hope that we are going to have an easy ride and an open summer with lots of fun in the sun with family and friends. I hope that we will have freedom to go where we want and see who we want. I hope that I don’t know anyone that gets very sick, or dies, from some new disease. I hope my kids can play on a jungle gym, visit their grandparents and eat ice cream from a cone. I hope Santa comes.

What I am planning for is that Delta is here to stay. That we are going to have community infection in every part of the country and that we are going to be facing a summer of high infection and huge disruption to our way of life. I am planning for a Christmas where the whole country is locked down, not because we have been instructed to during a 1pm briefing, but because the unvaccinated are sick and our health system is on its knees, which will impact our way of life more than we have ever experienced.

We can’t get rid of it, so now we have to get through it.

I am not wanting to drive fear or make a political statement, I am only wanting to look at what could impact our businesses and present some practical solutions to help get through and ensure we all come out the other side in the strongest possible position.

Our role in your future.

Fero’s purpose is to support local manufacturing and ensure that New Zealand manufactures can operate and compete on the world stage. In order to live to this, we must look forward and see what we can do to help our industry get through.

I expect that we are going to face an impact on our capacity, as an industry and country, to maintain our productivity. We have done a fantastic job until now, but it has mostly been theoretical. The next few months are going to see us face Covid-19 in the same way as every other country has had to.

The good news is we are facing this period of infection with the vaccine as a tool to minimise the impact. There is no doubt that this will shorten the period that we have to get through and will see us coming out the other side with less societal impact and faster than if we did not have it.

The other good news is, we will see a return to normal life by the end of this summer and, 12 months from now, will be preparing for the end of 2022 in a much more normal way. Soon Covid will be a thing of the past. Until then we need to get through the best that we can.

What have we done in the last few months?

  • We have increased our stock holding by about 40% since April in preparation for disruption.
  • We have worked with our customers to understand better the future demand on our resources.
  • We have increased our capacity, and now we are wanting to get ahead of production in order to buffer against any productivity reduction that we see impacting us or our customers.

We have found some additional solutions with some customers.

One customer has filled a warehouse with 8 weeks of All stock that they need for their production. This buffer is to protect against any supply chain issues and already has allowed them to continue manufacturing whilst some of their suppliers struggle to deliver.

Another customer has provided us with orders for all their expected demand out to January. We have produced this and are confident that no matter what happens we will be able to dispatch to their required dates for the next 4 months. We also understand that under the model, there will still be some unforeseen demand, but we have capacity for this and it is much easier to achieve.

Our recommendation to you.

I strongly recommend getting orders placed with us as far out as possible. Please communicate to us that you would like us to make this and to deliver to the future dates. It helps us to ensure that we have product ready to go a long time in advance of when it is needed and it does not impact your cash flow at all.

I encourage anyone that is wanting to plan for the worst to get in touch and look at what Fero can do to help you ensure that your supply chain is as strong as possible and that if you have demand and capacity, you will be able to continue to supply you customers and maintain your productivity.

This is a call to all to protect our capacity, productivity and business continuity and ensure that you have orders in to see you at least until the new year. We are working frantically to get as far ahead as possible and ensure that we have finished product that we will be able to send.

We will get through this and those of us that have planned and taken steps to do so and allow our businesses to continue will come out the strongest. Please get in touch to discuss how we can help to ensure continuity and the best outcome for your recovery.

I hope our health system can cope and that our vaccine rates mean we will be able to live without restrictions, however if this is not to be, we want to be ready for it.

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