How strong is your weakest link?

April 14, 2020

Author: Guy Soreq

There is an entirely new lexicon to describe our common experience with COVID-19. Governments around the world have asked citizens to shelter-in-place or issued stay-at-home orders. On the rare occasion that we do gather, we’re asked to keep social distance with the hopes of flattening the curve. We’re either positive or negative, asymptomatic or symptomatic, and our businesses now exist in one of two categories: essential or nonessential.

The animal feed industry is without a doubt necessary for the continuation of our most basic way of life. It is mission-critical. But while the public may use a simple dichotomy in labeling businesses as essential versus not, we know that not all essential businesses are created equal. You shouldn’t be asking IF your business is essential, but HOW prepared your essential business is to maintain supply and service during a lockdown.

To illustrate this point, we only have to look as far as the recent case of L-Threonine. When Chinese ports failed to reopen after the New Year, a great chasm emerged between suppliers who were able to supply L-Threonine stock outside of China and those who could not. Around the world, customers who got the word too late, found themselves frantically searching for a new source for L-Threonine in this time of crisis. By mid-March, the global price of L-Threonine had spiked, and those same customers were now lucky to find supply priced 70% higher.

Your customers’ inability to pay or your suppliers’ inability to maintain supply can bring even the most essential business to its knees. The lesson is simple: in moments of crisis we are only as strong as our weakest link. As a company that must continue to work through a lockdown, you will always either pay the price now or really pay the price later. Short-termism has proven toxic. Invest in the right relationships today, so that you can still buy L-Threonine tomorrow.