Finance in Manufacturing – Sharing Best Practice in Response to COVID 19

Rutherford Cross is hosting a number of virtual networking events aimed at bringing our clients together to discuss their responses to unique challenges facing business at this time, and to share ideas and best practice.

Our first event focused on the manufacturing sector – a cornerstone of the Scottish market.  We invited Andrew Dane, Finance Director at Argent Energy – the UK’s foremost sustainable biodiesel producer and fuel supplier, and client 2, Operations Finance Manager at a major international manufacturing business based in central Scotland, who asked to remain anonymous.

Here, we summarise the experience and advice of each of our participants:

Manufacturing Under Lockdown – the Challenges

Early on in the conversation it became apparent that Argent Energy and client 2 find themselves facing very different scenarios as a result of the COVID 19 pandemic.  Argent is still operating and are in full production given their business model allowing them to adhere to the safe government social distancing, and the need for fuel in these testing times. Client 2 however find themselves on the opposite situation, with the business ceasing production for a number of weeks to protect their employees given the volume of individuals who work along their production lines.

Argent Energy’s initial challenges have included balancing the need to maintain strict control over cash, with being supportive of customers who are facing their own liquidity challenges, in particular those hauliers who are providing critical services (e.g. to UK supermarkets).

Client 2 finds itself with a number of additional challenges with the sector as a whole taking a hit with reduced number using their product and the added factor of the business having to cease production for a number of weeks.

Client 2 discussed how the business navigated through the planned production shut down with a key focus on an increased volume of product out of the door before the closing date. The business also implemented a plan for when production is expected to be back up and running to ensure a smooth transition.

The business has had to implement the new Furlough scheme, which has been well received across the business, with a number of long-standing employees who are grateful that their roles being held available until it is deemed safe to return to production.

With client 2 being an international business, there is a complex international supply chain which has caused issues with a number of their parts coming from various international countries into the UK.  With the global COVID 19 pandemic affecting different countries at different times this has brought some complications on attaining key parts etc.


Running a Remote Finance Team

This question is relatable to many organisations which find themselves with their full finance team working remotely all at once.   Both our participants agreed that one of the main challenges of running a remote finance team was maintaining staff morale.

Client 2’s tips were to ensure that communication over video call/telephone was not just work related to ensure morale and team dynamics are kept as high as possible, which was echoed by Andrew.

Technology plays a significant role in managing remotely, with Andrew stating Argent’s new  cloud based ERP system has made remote working significantly easier, allowing his team to interact and utilise shared files etc.

Client 2 confirmed that the business is also moving to a virtual communication model through Zoom with an imminent role out across the business of internal/external calls through this software.

Both agreed that a positive that should come out of this is that organisations with provide more remote/flexible patterns which Rutherford Cross have recently seen as a high priority for job seekers in their new roles as technology and the need for flexibility progresses.


COVID 19 – Support and Advice

Interestingly the best support/advice both Andrew and client 2 have come across has been from internal networks. Given both organisations are positioned in the manufacturing sector, they have relied heavily on previously formulated ‘Hard Brexit’ business plans which were created over the last year to help navigate the business through the potential challenges of a Hard Brexit.

Key contingencies around an international supply chain and the disruptions that a hard Brexit may present meant both organisations had scenarios in place and contingencies to fall back on when this becomes a challenge with COVID 19.

Andrew also confirmed he has had some external advice from EY, who have been in touch with an ‘holistic check list’ which allowed Andrew to complete a short questionnaire covering the key operational and finance elements of the business. This pulled up a graphic chart pulling up any areas of focus/concern to help navigate the business through these times.


Looking to the Future – the Positives

Towards the end of our call, we discussed what we felt as a collective would be the positives that would come out the back end of the pandemic. These were as follows:

  • The increased use of video technology, resulting in less travel for senior finance professionals should they have a national/international role
  • Staff motivation to be back in the office and interacting again face to face will be at a high given the remote working pattern we find ourselves in
  • More flexibility for working from home/remotely
  • The utilisation of cloud-based systems that can be accessed remotely across the business

It was a pleasure to host a discussion between to senior finance professionals in manufacturing, and to learn from their very different situations.  We agreed the following to be key points arising from our discussion:

  • If a business has a Hard Brexit strategy revert back to this on a grounding for navigating through the complicated COVID 19 scenario
  • Embrace technology and keep connected with your teams to ensure morale is kept as high as possible
  • Utilise the Furlough scheme with most employees taking this as a positive measure to protect their jobs in the future

We will be hosting a number of finance video networking forums in the coming weeks.   Should you be interested in joining one of these forums please contact [email protected]