Cash reserves will be crucial for businesses struggling to recover from the pandemic. The shutdown led to a build up of outdated inventory that may not sell until next year. Many retailers may never reopen due to financial difficulties, leaving vacant buildings. However, the document suggests on-demand local manufacturing of seasonal goods could help fill the need and utilize empty facilities. Improved technology and understanding of offshoring costs make this strategy more viable now compared to the past. Support through crowdfunding and public-private partnerships may help provide necessary cash for innovative solutions during the recovery period.
2. Cash Is King for Struggling Entities Coming Out of the
Covid-19 Pandemic#1:
The Massive Re-shoring of Products
Cash is a huge problem when it is time to restart the previously
shut-down operations or when a major ramp-up is required.
One executive suggested that, in the future, we will see a
massive “re-shoring” of seasonal goods to the US. Why? Let’s
take the clothing and fashion industry with storefronts as an
example.
In December, these businesses agreed to inventories of
off-shore spring and summer products to be distributed in
their stores starting in February and moving into April. When
non-essential retailers were ordered to close their operations,
all those products were held in a state of limbo. They may not
come out until next year.
What needs to be on the shelves as retailers are reopening?
Hint: products for Fall and Winter. If all of their cash is now
tied into old inventories that will not move until next year, it
becomes a real issue for them.
3. The Retail Apocalypse
The other fact the executive said is that much of the
commercial structures we see today will not reopen at all.
This may trigger another retail collapse with vacant strip
malls and big-box shops.
Now, we have hundreds of millions of vacant square feet of
buildings everywhere and a homeless, jobless retail industry
populace. What do we do now?
The answer is here. Light manufacturing can erupt in the
metropolitan region in which they are sold on demand,
producing seasonal products. There are workers eligible for
doing the job at fair salaries. There are vacant buildings
available as well. All we need now is a well-planned
strategy.
Why Is It Feasible Today?
There are many reasons why this is now practical, though it
was totally unfeasible ten years ago. You need to know
there are two dynamics.
• Industry 4.0
• Activity-based costing and understanding the true cost
of off-shoring.
There are things that I do not discuss here, but
improvements are coming. For the bold and creative few
able to take the lead, the cash for this revolutionary concept
is not that hard to come by.
Fortunately, many options for financial support are
available today, including crowdfunding and public/private
partnerships clustered around incubators across the US and
beyond. I think a longer-term view of the cash problem can
help solve everything.
What are your views about the cash challenges being faced
by the “Crushed” entities? There are lots of movable pieces.
Some bigger private equity firms have the necessary means
to deal with the cash problem without “disaster” loans.
However, thousands of other small companies and entities
can only survive with the help of emergency and disaster
loan assistance.
Next time, we will discuss the Talent challenges for the
“pandemic-crushed” entities out there.
4. Now What...
What do you think about cash and
its role in the modern market?
https://metaexperts.com/five-things-dictating-
how-bad-it-will-be-coming-out-of-the-pandemic
5. 1. Get on my calendar: https://metaops.as.me/roncrabtree
2. Email: Rcrabtree@MetaOps.com
3. Call: 734-425-1455 ext 103
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