Dave Culotta, Sr. Manager of US Buyer Underwriting at Atradius gives input on what the COVID pandemic has impacted, specifically the supply chain, work-life balance, and what Atradius can do to help your business through these challenges.
While the impact of the COVID pandemic has been significant and far-reaching, it has perhaps permanently changed the way we work and collaborate on a day-to-day basis and how companies approach supply chains. While more and more companies are calling employees back to traditional office environments as the labor market begins to show signs of early cracks (i.e. layoffs), many corporations remain committed to a hybrid model. Corporate real estate footprints are being re-considered. Current trends include companies downsizing office spaces and implementing a “hot-desk” approach. This trend may increase as leases come up for renewal and corporate expenses are put under the microscope given the current macro trends, including rising inflation. COVID-related technology investments are likely here to stay and have significantly altered our daily interaction with colleagues (i.e. Microsoft Teams).
While increased tariff activity during the Trump administration led to a rationalization of supply chain dynamics, the pandemic once again put this topic in the spotlight as manufacturing and port operations shut down across numerous industry sectors. Supply chain concentrations in heavily impacted locations created the inability to obtain key components necessary in the manufacturing process, a lack of finished goods inventory, and ultimately working capital and liquidity challenges for many companies. This has led many corporations to rethink supply chain operations, to diversify manufacturing footprints, to build relationships with new key suppliers, and to potentially shift away from JIT (just-in-time) inventory dynamics.
At Atradius, our U.S. Buyer Underwriting team is focused on asking the right questions and obtaining the “story behind the numbers”. We are looking to understand the cost implications of any type of shift in the workplace environment and asking questions about supply chain diversification, product lead times, and component accessibility. We are also looking to gauge the impact of raw material price inflation and the company’s ability to pass on price increases to customers. In addition, our team is assessing hedging and risk management strategies, the dollar impact of the rising rate environment on a company’s debt profile and the overall effectiveness of a company’s approach to managing working capital. Through a more nuanced understanding of these specific factors and our robust due diligence effort, we are able to deliver well-informed and supported underwriting decisions.