Covid Two Years Later

The PPP

• Two years ago on April 3, 2020, many bank customers applied for a loan all at the same time. Thus was the birth of the PPP – the Paycheck Protection Program. Many banks (not all), went full tilt, working until 3 a.m. many nights to process the applications.

• Did everyone that got a loan need it? Nope. Did everyone that needed a loan get it? Nope. Was there fraud? Yep.

• However, I still maintain that given the speed with which it was put together from concept to funding – two weeks - it was phenomenally successful and helped very many businesses stay afloat. I think the business landscape would look very different without it.

• It will be interesting to see what the reaction is to the next pandemic. 

So, two years later…

• Remote work is here to stay, whether it’s one day/week or 5 days/week. Is your business set up for it?

  • Many businesses were pleasantly surprised how productive their employees were.

    • The employees that were not productive remotely were the ones that weren’t productive in the office, either. More on that next week.

  • One of my clients prefers WFH – working from home. All of her 44 employees are women and only a few come into the office anymore.

    • This has dramatically reduced the office drama - her words, not mine.

    • Employee cliques will be significantly reduced by WFH.

    • But now that you think about it, it must be much tougher to be sexually harassed remotely. But I’m sure some guy with a ‘70’s ‘stache will give it a try. HR must like it.

  • At any rate, people realize that given a choice, they’d really rather not be on the road 60 to 90 minutes each way.

• Millennials realized that hey, it’s nice to have your own place and NOT be crammed into an apartment or condo complex. So they moved.

  • San Franciscans and Angelenos fled the city for counties further out.

    • In L.A. San Bernardino and Riverside counties grew while L. A. City shrank in population.

• “Dude, you’re on mute” – I don’t miss hearing that.

• Zoom meetings were the big winner; Microsoft Teams was the second biggest winner.

• Kids were the biggest losers in all of this.

• So why does the L.A. Times keep pushing for a Covid surge? Maybe they don’t want to return to the office. 

On to better things…

The Toyota Way and The Supply Chain – work with me here… please.

• In the 1970’s Toyota came up with the Toyota Production System. This is tied in with Kanban, a Japanese scheduling system. Combined, this is called JIT or Just in Time inventory management. When executed correctly, the practice is VERY efficient, but relies heavily on a steady supply chain from the suppliers; material is delivered to the manufacturer “just in time” to be made into a finished product. The benefit to the manufacturer is that inventory costs are kept as low as possible. This was a key part of graduate business studies in the 70’s and 80’s and is still part of operations today. 

…and this is important because…? 

• Toyota sales (by number of vehicles) are down 15% in the first quarter of 2022 compared to 2021. March alone was down 24% from the previous year. Not to be outdone, GM sales were down 20%. For the entire industry, unit sales are expected to be 3.2 million compared to 3.9 million for the first quarter last year. VW group had the largest drop at 30%. Tesla had a 42% increase in deliveries, with BMW in a close second at a 3.8% increase - Rolls Royce leading the charge at an 18% growth. Who knew that BMW owns Rolls Royce?

• This is what happens when the supply chain gets challenged and everyone is blaming computer chips, or lack of them. The consequence is that new cars, for the most part, are selling at or over MSRP if you can find them. There are dealerships that normally have 1,200 cars and are now down to 35.

• Just-in-time inventory management is turning into just-in-case management. Keeping extra material on hand “just-in-case”.

• This car shortage is going to be felt for years. I would invest in auto parts dealers/manufacturers because people will be keeping their cars for a looooong time.

• Have you done a check-up on your supply chain? Are you worried? If you have a plan, you shouldn’t be, so put one together. 

Who was Steven Wilhite?

• I would bet money that all my readers have received or sent a picture utilizing the graphics interchange format, or GIF.

  • It’s pronounced ‘jif’, just in case you were wondering.

• In 1987, Steven created the GIF while working at CompuServe (that’s a blast from the past – it’s now owned by Verizon).

• He was looking for a way for incompatible computers to share graphics files. He found it.

  • This was the first ever GIF that he created.

• He retired at the age of 51 after suffering a stroke and he died last month at the age of 74.

• Now you have something to talk about at the next mixer you attend.

See previous Russell Reports here.  To be added to the distribution list, just email me at adam@ss4bllc.com.