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Is the Food Supply Chain Breaking Down?

By Doug Voss, Ph.D.

Tyson Foods Chairman John Tyson made news with a full-page ad published recently in The New York Times, The Washington Post and Arkansas Democrat-Gazette that warned “the food supply chain is breaking” and “millions of pounds of meat will disappear” from the supply chain as COVID-19 continues to spread and food processing plants are forced to close.

It is true some production facilities in the meat supply chain are being strained by COVID-19. Meat companies are taking incredible steps to protect their hard-working employees who are trying to feed their own families and yours.

Doug Voss, Ph.D., professor of logistics and supply chain management

But is the food supply chain truly breaking down as a result of COVID-19? We’ll take it claim-by-claim in a good news, bad news format. Want the bad news first? OK, here goes.

BAD NEWS: Yes, multiple meat processing facilities have been taken offline to protect employees. These facilities will generally only be offline for two weeks but this causes supply chain issues.

The supply chain functions best when we remove variability in supply, production, delivery, and demand. Supply chain costs increase, delivery service decreases, and inventory availability suffers when there are big spikes in demand, late deliveries, or manufacturing interruptions. Shutting down the meat processing facilities puts a kink in the supply chain, and there will be local impacts.

GOOD NEWS: Nobody has to go without meat.

Our protein supply chain is robust. The United States produces incredible quantities of pork, beef, chicken, turkey, and fish. After processing, consumable protein is generally directed into consumer or business-oriented channels. Some of it will be refrigerated and some will be frozen.

To give some perspective on how much inventory is held in the meat supply chain, we have enough frozen chicken in storage to feed every American at their average consumption levels for about 21 days. We have large frozen quantities of other protein types as well.

BAD NEWS: While this is encouraging, it’s not quite that simple. Frozen product destined for business-oriented channels (i.e. restaurants and foodservice organizations who sell product to restaurants and institutional customers) is packaged differently and in larger quantities than that destined for consumer-oriented channels (i.e. dominated by retailer buyers that sell the product with little to no further processing). Further processing would be necessary to bring it to consumers.

GOOD NEWS: Most meat processing plants are still running. COVID-19 has hit some areas harder than others and meat processing plants are generally located in fairly close proximity to farms and ranches where animals are raised. When an outbreak occurs in an area where a meat processing plant is located, that plant will be impacted.

The virus has impacted areas where pork and beef processing occur. The impacts have not been as severe in areas where chicken processing occurs. For instance, Arkansas food processing plants have remained open throughout the pandemic. Some meat processors have increased the production of chicken to compensate for decreased pork and beef production.

BAD NEWS: You won’t starve, but you won’t have as much variety to choose from, either. When someone says meat shortage, you probably think of an empty meat cooler. There will be less meat, particularly pork and beef, in the cooler. However, impacted meat processors also produce meat used in many other products you buy in the store such as frozen pizzas.

GOOD NEWS: In some ways, the meat processing plants are easier to start up than they are to shut down. If you’re impacted by fewer protein choices at the store, your situation will not last long.

In sum, the situation is real but nobody is going to starve as a result. At this point, the worst-case scenario is restricted variety at your local meat cooler and for products with pork and beef ingredients. To conclude with good news, would it be the worst thing if we took the time to be thankful for all of our blessings and had a few turkey dinners in May, then, another in late November?

Doug Voss, Ph.D., is a professor of logistics and supply chain management at the University of Central Arkansas College of Business, director of the college’s Center for Logistics, Education, Advancement & Research, and holds the Scott E. Bennett Arkansas Highway Commission Endowed Chair. He serves on the Arkansas Trucking Association Board of Directors.

Posted in: COB News on April 28, 2020 Tagged: , , , , , ,

Anthony McMullen Named IPDA Debate Coach of the Year

Anthony McMullen, J.D., assistant professor of business law

Anthony McMullen, J.D., assistant professor of business law in the Department of Accounting, has been named Coach of the Year by the International Public Debate Association.

In addition to his position in the UCA College of Business, McMullen is director of forensics in the School of Communication and coaches the UCA Debate and Forensics Team.

This year’s team finished fourth overall in the IPDA and won the Arkansas Championship competition in January.

“I have had the honor and privilege to compete and coach alongside Anthony for many years and this award is certainly a reflection of all of his hard work and commitment to his students and this organization as a whole,” said Keith Milstead, IPDA president. “It is well deserved and we could not be happier for him.”

Posted in: COB News on April 17, 2020 Tagged: , , , , , , , ,

Internal Drive, Supportive Faculty Helped Ericka Gutierrez Be Successful in COB

Attaining her master’s in business administration was going to be a daunting task, but Ericka Gutierrez was up for it.

Most days began around 5 a.m. for her. She finished up tasks and assignments she hadn’t the night before at the library, prepared for another day and saw her 5-year-old daughter, Aryana, off to school. She was at her desk by 8 a.m., working as outreach coordinator for the UCA Office of Diversity & Community.

From there, she either worked several hours at her part-time job or attended night class. That was followed by a few hours in the library each night to work on assignments. Then, she tried to get a few hours of sleep before the next day began.

“It’s difficult to be in school at the post-graduate level and have all those moving parts,” said Gutierrez. “But I never doubted that no matter what happened, I could reach out to my professors and they would support me. I knew from my undergraduate in the College of Business I could take all this on and have the support I needed.”

Gutierrez first came to UCA in 2012 as a transfer student from the University of Arkansas Community College at Morrilton.

MORE: Transferring from UACCM? Check UCA’s 2+2 Transfer Agreements

“I was a first-generation college student in my family so I needed a little extra help in navigating through college, finding my bearings and navigating the next steps,” said Gutierrez. “My professors were the best throughout that process and impacted me tremendously.”

After she settled on a management degree with an emphasis in logistics and supply chain management, Gutierrez said Scott Nadler, Ph.D., associate professor of management, walked her through her first career fair, introducing her to his contacts in the industry.

“That first career fair can be intimidating,” she said. “There are a lot of people and recruiters, and it’s hard to know what to say and how to present yourself. Dr. Nadler diffused the tension and helped me through it.”

That type of support and encouragement continued throughout her undergraduate with other professors including Doug Voss, Ph.D., associate professor of logistics and supply chain management, and Michael B. Hargis, Ph.D., dean of the UCA College of Business and then-associate professor of marketing and management.

LEARN MORE: Logistics & Supply Chain Management

“It was unheard of to have that type of support,” said Gutierrez. “I felt at home with a group of professors who were willing to walk with me through my education. It was great to have that type of support from people I looked up to.”

When she graduated in 2014, Gutierrez had various opportunities in logistics and supply chain, but the pull to work at UCA was too strong to ignore. She accepted a position as an admissions counselor and began recruiting throughout central and northwest Arkansas.

“I loved UCA, and the position sounded great,” said Gutierrez. “The more I learned about it, the more I knew that was where I needed to be. As a Hispanic woman and first-generation college student, it was incredible to connect with so many students who were like me and reassure them they could achieve the educational goals they had and have the support at UCA to do so.”

Her previous experiences in the college, along with an opportunity she saw to grow personally and in her career, Gutierrez returned to the College of Business in 2016 to pursue an MBA.

“I wanted to continue to learn about myself and see what area of business I wanted to enter eventually,” said Gutierrez. “It was an amazing experience.”

Gutierrez immediately saw the benefits of the program. Concepts in Organizational Behavior helped Gutierrez better address and counsel students in a new position as coordinator for Hispanic and Latino outreach initiatives in the Office of Diversity & Community. Now, Gutierrez is a recruiter at Pediatrics Plus, and the things she learned continue to be beneficial.

Her Innovation Leadership course with Jeff Standridge, Ph.D., adjunct instructor of finance and member of the College of Business Advisory Board, “changed my perspective in my personal life, motherhood and in my career,” said Gutierrez.

“It’s a do-and-learn class,” said Gutierrez. “It’s about implementing new products or ideas in effective ways. It presents a process you can follow and implement whatever you’re doing, get feedback, adjust and reapply. It’s something I’ve been able to apply in my career and it’s been rewarding to see how it’s helped.”

LEARN MORE: Master of Business Administration

While many of the days were long, Gutierrez said smaller class sizes, paired with helpful professors and hybrid courses helped her tremendously.

“I was able to take face-to-face classes when I felt I needed to do that, but I had the flexibility to take online classes, too,” she said. “Having that option was amazing and makes it possible to achieve.”

Ultimately, her time in the MBA program was transformational for Gutierrez.

“I took a lot of self-development and growth out of that program,” she said. “I was able to explore my strengths and weaknesses which is invaluable. Whether it is personally, academically or professionally, if you’re able to see your strengths and weaknesses, you can be strategic in those areas.”

Posted in: COB News on April 6, 2020 Tagged: , , , , , , , , , , , ,

How Does the CARES Act Impact You?

By Ashley Phillips, Ph.D.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act addresses the economic impact of the COVID-19. The CARES Act provides tax relief to individuals through direct cash payments. Here’s how it could help you.

Who will receive the direct cash payments and in what amounts?

Ashley Phillips, Ph.D.

The direct cash payment will be $1,200 for each adult, $2,400 for a married couple filing jointly and $500 per child age 16 and younger.

Single individuals with adjusted gross income (AGI) over $75,000 will have their checks reduced by $5 for every $100 over the amount of $75,000, and married couples who file joint returns will have their checks reduced by $5 for every $100 over the amount of $150,000. Individuals who file as head of household will have their checks reduced by $5 for every $100 over the amount of $112,500. The payments phase out at $99,000 for individuals, $198,000 for married couples, and $136,500 for heads of household.

Most payments will be based on the taxpayer AGI as reported on a 2019 federal income tax return if it has already been filed. If the 2019 federal income tax return has not yet been filed, then AGI will be based on the 2018 federal income tax return.  If a retiree did not file a tax return in 2018 or 2019 due to their only source of income being Social Security benefits, the payments will be based on any Social Security benefits statement. For individuals who do not receive Social Security benefits and who do not typically file taxes because they do not have a filing obligation, they will need to file a tax return to receive a stimulus check. Individuals in this situation may take advantage of the IRS free file program. Details may be found here.

Is anyone ineligible to receive direct cash payments and in what amounts?

Parents will not receive a $500 payment for dependent children ages 17 or 18. Furthermore, college students and adults who can be claimed as a dependent will not receive a payment. Moreover, individuals must have a Social Security number to receive direct cash payment.

Is the payment taxable income and will the payment amount be reduced if back taxes are owed?

The payments will not be considered taxable income. The payment will not be reduced if you owe back federal or state income taxes. However, the payment may be reduced if an individual owes back child support.

When will the payments be made?

Treasury Secretary Steven Mnuchin stated that individuals can expect a direct deposit into their bank accounts within 3 weeks. If the IRS does not have an individual’s bank account information, then a check will be mailed and there will likely be a delay.

Ashley Phillips is an Assistant Professor of Accounting at the University of Central Arkansas College of Business.

Posted in: COB News on April 3, 2020 Tagged: , , , , ,

Understanding Economic Data in the COVID-19 Crisis

By Jeremy Horpedahl, Ph.D.

As the country continues to deal with the COVID-19 crisis, accurate data is one of our most important tools for understanding what is happening in our country and the world. In particular, economic data can tell us a lot about how the virus and public policy response is playing out. Accurately interpreting the data is crucial so that we understand what it means.

Last year, I co-authored a book designed to help Arkansans better understand economic data. In this blog post, I will highlight a few data sources you can follow to better understanding what is happening in our country and economy.

Unlike most economic downturns, the current crisis is a largely planned economic slowdown used to encourage people to reduce contact with others. We have not seen an economic downturn like this. Even so, our conventional economic data provides a way of seeing what is happening in the world, as long as we understand what the data is telling us.

What does the stock market crash tell us?

Since Jan. 1, the S&P 500 is down about 21% through March 27. The S&P 500 is a good, broad gauge of the 500 largest publicly traded companies, and much better than the Dow Jones Industrial Average, which only covers 30 companies and is calculated strangely.

The stock market crash tells us investors are worried about the future profitability of U.S. companies. Stock prices are based on the perception of how profitable a company will be in the long run. Stock prices provide us a real-time snapshot of how the economy is doing, updated not only every day but every minute. As opposed to some of the other economic data I’ll be describing, which can take weeks or months to collect and report, the stock market gives us some information in real-time.

But stock markets can also overreact, especially in a time of great uncertainty like the present. For example, earlier in the week of March 23, the stock market was down 30%, rather than the 21% it closed out at March 27. That’s a big change in a week. Expect more big changes over the coming weeks and months. This means you can’t always depend on the stock market to tell you what is happening in the economy. It’s a noisy measurement.

And not all companies have seen their stocks decline. Zoom, a video conferencing company that many are using to stay in touch while we practice social distancing, is up 120% this year. Blue Apron, a company that delivers fresh food to be prepared at home, is up about 80% this year. Investors expect these companies to be much more profitable than they expected before the crisis hit.

It is also worth noting that stock markets are declining across the world. The U.S. is not an outlier. Stocks in Europe are down about 27% this year. Even in Japan and South Korea, which have handled the crisis relatively well, stocks are down 18% and 22% this year (all figures are through March 27). We are not alone, and not noticeably worse than any other democratic, market-based economies.

Your retirement portfolio probably looks a lot worse than it did on Jan. 1. That’s a difficult thing to see. But the overall stock market is roughly where it was in 2017, so we have not gone back to the dark ages. I recommend following the stock market as a way of seeing what is happening in the economy, but I don’t recommend checking your 401(k) balance daily.

What is the best overall measure of how the economy is doing?

Gross Domestic Product is widely viewed as the best measure of the overall economy. It is a measure of the market value of all the goods and services produced in our economy. Knowing what is happening with GDP can tell us a lot about how the economy is doing and how bad the partial shutdown of the economy has been. It’s also sometimes used to determine whether the economy is in a recession or not.

But there’s a major problem with GDP: It is only reported quarterly and takes time to compile. While the first-quarter of 2020 will be ending in a few days, we won’t have the first GDP estimate until April 29. And that is only considered an “advance” estimate, with the final estimate coming June 25. Plus, only one month of the first quarter, March, was seriously hit by the economic slowdown in the U.S.

The second-quarter is expected to be the hardest hit, but right now, we can only speculate. I’ve seen lots of estimates of how bad it will be, including the president of the St. Louis Federal Reserve saying that GDP could decline by 50%. That would be bad. The worst quarterly decline on record was in 1958, when GDP fell by 10%, also during a flu pandemic. Quarterly estimates don’t cover the Great Depression, which was much worse.

We won’t have an estimate of second-quarter GDP until July. It’s not helpful for watching what is happening in real-time.

There are economic indicators that provide some glimpse of the economy faster than GDP, and might even tell us what will happen with GDP. For example, the Conference Board produces an index that uses 10 “leading” economic indicators, such as the stock market performance and unemployment claims, to give a picture of how the economy is performing. The Conference Board releases its index monthly, and the March report is scheduled to be released on April 17.

The Federal Reserve Board’s Industrial Production Index is also released monthly and tells us how many goods the industrial sector is producing. It is narrower than GDP, since it does not include services, but it will still give us some idea of the extent of the economic downturn. The March report is scheduled for release on April 15.

How bad has the labor market been hit?

One of the most immediate impacts of the economic slowdown is that many individuals have been laid off or had their hours significantly cut back. The unemployment rate is one of the best measures of how the labor market is performing. It is released as part of the monthly Employment Situation Report from the Bureau of Labor Statistics. The unemployment rate is not a perfect measure since it only counts those looking for work as unemployed, but along with the other information in the employment report, it provides a good picture of the health of the labor market. Currently, the unemployment rate is near record lows at 3.5%, but, of course, this will be changing soon. The question is how much.

We will get a report for March on April 3. However, BLS uses a “reference week” to conduct the survey, and that reference week was March 8-14. As you may recall, that was the week before most of the U.S. began shutting down businesses and practicing social distancing. We won’t have a report for April until May 8.

How bad the unemployment rate will get is anyone’s guess. The same St. Louis Fed president that predicted GDP will decline by 50% also guessed that unemployment would hit 30%. Economists at the St. Louis Fed have produced estimates that 46% of US workers are at “high-risk” for becoming unemployed in the current crisis. These are some of the highest guesses I have seen, but remember, they are just that — guesses. We’ll have to wait for the real data to see how bad it truly is.

One measure of the labor market that is available more frequently is the new filings for unemployment insurance claims. National data are released every week, a timely measure. While this measure is not perfect, since not everyone unemployed qualifies, and not everyone eligible applies, it is useful due to how often that data is released.

On March 26, we had the release of this data for March 15-21, the first week significantly impacted by the slowdown. And it was record-breaking bad news: around 3 million Americans applied for unemployment insurance. For reference, there were fewer than 6 million total unemployed Americans before the crisis started.

The prior week, fewer than 300,000 had applied for unemployment insurance, so we had 10 times as many new unemployment claims in one week. During previous recessions, such as 1982 and 2008-2009, the weekly number never got above 700,000. Three million in one week is historic and historically bad. The next weekly report is scheduled to be released on April 2 and could be just as bad.

One of the major parts of the economic stabilization bill just passed by Congress provides support to the newly unemployed. Unemployed workers would get $600 per week from the federal government in addition to the state benefits they already qualify for, which can be as much as $451 per week in Arkansas. In a future blog post, I’ll discuss this economic stabilization bill in more detail and what it could mean for the labor market and economy.

Jeremy Horpedahl is an Assistant Professor of Economics at the University of Central Arkansas College of Business and Research Scholar at the Arkansas Center for Research in Economics. Read The Citizen’s Guide to Understanding Arkansas Economic Data here .

Posted in: COB News on March 30, 2020 Tagged: , , , ,

COB Alumni, Advisory Board Member Win Chamber Awards

Two UCA College of Business alumni and an advisory board member are among the honorees for the Conway Area Chamber of Commerce’s Annual Meeting awards.

Jeff Standridge, Ed.D., adjunct professor of finance and COB Advisory Board member, received the Guy W. Murphy Distinguished Service Award. The award is the highest honor given each year to an individual or group for special service for the benefit of the community who has taken a leadership role in business, civic and social service organizations.

“Dr. Jeff Standridge is a catalyst behind many initiatives and organizations in Conway,” said the chamber in its release announcing this year’s honorees. “He is an advocate for the community and a driver of the economy.”

Standridge’s work as managing director at Conductor, a public-private between the University of Central Arkansas and Startup Junkie, which provides assistance, mentorship and coaching to entrepreneurs, innovators and small businesses in Arkansas.

“Standridge works to propel innovation and entrepreneurship in Conway and central Arkansas,” said the chamber’s release. “He is an innovator at his core, but his true talents lie in his ability to connect and inspire those around him and to help others develop and perform as highly as possible.”

Standridge and his wife, Lori, established the Dr. Jeff and Lori Standridge Innovation & Entrepreneurship Scholarship in 2019. The award benefits an upperclassman majoring in innovation and entrepreneurship in the College of Business. The scholarship was the first endowed scholarship in innovation and entrepreneurship at UCA.

Drew Gainor (BBA ’10) was named Business Executive of the Year. The award recognizes the top leader at a business who is a driving force and works to maintain an enriched business climate and enhanced quality of life in Conway.

Gainor is managing director at Northwestern Mutual.

“Gainor’s leadership within Northwestern Mutual has been instrumental at a local, regional, and national level,” said the chamber, which also commended Gainor’s development of other advisors to “flourish in the community.”

READ MORE: Up Close with Drew Gainor

“He does this by casting a vison for others and helping them build the roadmap to achieve success.” said the chamber. “His vison and leadership extend well beyond the Conway location, where he consults and participates in joint partner work with advisors nationally to help them better serve their clients.”

Gainor and his wife, Lauren, established the Drew Marshall Gainor Scholarship in the College of Business on UCA Day of Giving in 2018. The scholarship benefits minority Hispanic students who are studying economics, finance, insurance and risk management, or innovation and entrepreneurship.

Paul Bradley (BBA ’06, MBA ’10) was named Young Business Leader of the Year. The award recognizes a community business leader under 40 who has helped create a more vibrant business and social environment in Conway.

READ MORE: ‘COB Gave Me Advantage in Career’

Bradley is the director of marketing at Conway Regional Health System.

“He has brought innovation and creativity to the organization,” said the chamber. “He has developed strong peer relationships and has been effective in building and empowering a new marketing team.”

For a full list of Chamber award winners, click here.

Posted in: COB News on March 27, 2020 Tagged: , , , , , , , , , ,

How To Approach the Tax Extension

Ashley Phillips, Ph.D.

In response to COVID-19, the Internal Revenue Service has extended the due date for filing 2019 federal income tax returns and remitting federal income tax payments until July 15.

This relief applies to federal income tax payments — including the payment self-employment income tax — and federal income tax returns due on April 15. The July extension is automatic. Arkansas Gov. Asa Hutchinson extended the deadline for filing state income tax returns to July 15, as well. However, the deadline for Arkansas’ estimated tax payments has not been extended.

To understand how Arkansans should approach the federal and state tax deadline extension, we spoke with Ashley Phillips, Ph.D., assistant professor of accounting, who was a tax attorney with the IRS for five years before joining the UCA College of Business in 2016.

When should a return be filed?

“Everyone should file their federal and state income tax returns as soon as possible rather than waiting until July 15. One important reason for filing your return as early as possible is to reduce the risk of tax identity theft. Filing tax returns prevents an identity thief from later electronically filing a return using your personal information to claim a fraudulent refund. The IRS is encouraging taxpayers who expect a refund to file their return as soon as possible. For those expecting a refund, filing a tax return electronically with direct deposit is the quickest way to receive the refund.

If a tax payment is due, the return may still be filed now and the tax due may be remitted closer to July 15. If you are concerned that you will not have the ability to pay the tax due, then a payment plan with the IRS should be considered. The IRS has short-term (120 days or less) payment plans and long-term (more than 120 days) installment plans. More information on these payment plans can be found on the IRS website. It is important to remember interest, penalties and additions to tax for postponed federal income tax filings and payments will begin to accrue on July 16 for returns not filed or tax payments not remitted by July 15.

If an extension of time beyond the July deadline is needed, then an application for extension should be filed on Form 4868 by July 15.”

What is the impact of the extension on estimated payments?

“All first-quarter estimated income tax payments for the 2020 tax year due on April 15 are now due July 15. The extension of time does not apply to the second-quarter estimated income tax payments due on June 15.”

What is the deadline for 2019 IRA contributions?

“The deadline for making IRA contributions for 2019 has also been extended until July 15.”

Posted in: COB News on March 25, 2020 Tagged: , , , , , , , ,

Furnishing a Nation: Supply Chain During COVID-19

Doug Voss, Ph.D.

The country’s response to COVID-19, known as the coronavirus, has seen busy times for grocery stores as Americans stockpile canned goods, non-perishable food and household supplies to prepare for more time at home.

Doug Voss, Ph.D., director of the Center for Logistics, Education, Advancement & Research and Scott E. Bennett Arkansas Highway Commission Chair, said inventory in the channel to grocery stores is plenty as most stores receive multiple loads of product a week, and some multiple shipments a day.

“Thank a truck driver next time you see one,” he said.

Voss took part in a Q&A with us to explain how the supply chain and logistics industry responds to a crisis like COVID-19.

How does the supply chain industry respond to situations like this? Does it compare to the everyday hustle with just a few more shipments, or are there certain trips in the system that brings about a change?

“Demand is the primary driver for supply chains. As demand for certain items increases, production and transportation of that item will frequently increase as well. Demand fluctuations are an everyday occurrence. The current spike in demand for some items is pretty extraordinary but manageable thanks to the hard work of our truck drivers, warehouse workers and supply chain managers.”

Many news reports show empty shelves in several stores in the past couple of weeks. Are stores running out of products too quickly? How often are stores in our area receiving shipments?

“A simplified supply chain consists of a network of suppliers, manufacturers, storage facilities, transportation service providers and retail outlets. Inventory is held by each member of this network to some degree. The bare shelves at your local retailer are caused by demand that exceeded inventory availability in a short amount of time.

However, that doesn’t mean there isn’t plenty of product. There is plenty of inventory in the supply chain for almost every product. It’s just a matter of moving that inventory from the supplier or warehouse to the supermarket where we buy our goods.

The retailer monitors real-time sales and inventory levels. The replenishment process begins when inventory gets low. The supply chain is specifically designed to quickly replenish goods. Your local supermarket may be replenished by several trucks each day with each truck delivering a specific assortment of goods for that store.

Store shelves are constantly replenished, but now that the initial COVID-19 demand spike is complete, the supply chain will be able to catch up. That’s what the system is designed to do and it does it very well. Other than hand sanitizer, there would be plenty of product to go around if we all showed a little more restraint at the store.”

What are the problems or issues that could cause issues in the supply chain?

“The ‘kinks’ that would cause this system to break down include labor shortages or other calamitous events that stop the manufacture or flow of goods. We haven’t seen anything that would shut down the supply chain yet. Things will generally go well as long as we can keep manufacturing and moving product.”

The federal government has taken steps to remove regulations in response to the crisis. Why was that seen to be necessary to deal with COVID-19?

“The federal government has suspended many regulations on trucking companies engaged in the movement of goods critical to support our medical community and societal needs. Trucks are the only mode of transportation that can deliver goods to the front door of most locations. Without trucks, everything shuts down including the ability to decontaminate drinking water.

As an example of a suspended regulation, the federal government has temporarily removed hours of service regulations for companies hauling critical freight. This effectively expands the amount of trucking capacity by allowing drivers to work more hours each day while also speeding time to market for the critical goods they carry. We are all better off if medical supplies and food are replenished faster.”

What are the issues to watch for in the next few days or weeks?

“There was a big increase in demand for trucking services following the initial surge in grocery demand. However, many other shippers — the “Big 3” auto manufacturers — have idled production and the initial consumable demand has subsided to a degree. This means that some trucking companies will have idle capacity but, perhaps more importantly, many shippers may not be able to pay their bills. Cash flow is always important but especially at this critical juncture. Companies need to avail themselves of assistance resources available from the state and federal governments.”

For more information on programs available to small businesses, click here.

Posted in: COB News on March 24, 2020 Tagged: , , , , , , , , , , , , ,

How do Small Businesses Respond to COVID-19?

If you’re a small business owner, the last couple of weeks have been filled with long days, more stress and anxiety, and questions about the future as the country responds to the COVID-19 pandemic.

School closings, mass event cancellations and postponements, and social distancing have challenged small business models across the country, including in Arkansas. How can small businesses respond to obstacles created by COVID-19?

Remain Calm

Jeff Standridge, Ed.D., adjunct instructor of Finance and managing director of the Conductor, said small business clients, customers and employees are looking to the owner for guidance.

“Your attitude and demeanor can make them feel comfortable or worried,” said Standridge. “Your thoughts impact your feelings, your feelings impact your actions, and your actions impact your results.”

Put Yourself in Your Customer’s Shoes: Reach Out!

Business owners should figure out ways to make customers more comfortable in doing business with them in the middle of self-isolation and reduced trips outside the home, said Standridge.

“Before you decide to close for two weeks, look for ways to reduce human contact points within your business,” he said. “If you can serve your customers remotely, you should do it.”

It is important for customers to see care, concern and empathy from businesses, said Standridge.

“It builds trust and loyalty,” he said. “Reduce risks, increase convenience, go above and beyond to meet their physical and emotional needs.”

Reaching out to top customers or clients, asking how they can be helped and informing them of changes your business is making can be helpful.

“Everyone is facing this crisis together, so be transparent about what your business is going through,” said Standridge. “Customers can empathize with brands facing a crisis, as long as you communicate with them properly.”

Doing the Right Thing Now Will Benefit You in the Long Run

The potential for negative press, ill will or loss of business from the general public is possible for the firms and businesses that do nothing or are slow to respond to the crisis, said Parker Woodroof, Ph.D., assistant professor of Marketing.

Whether it is transitioning to online services, reimbursing clients for missed or canceled services or offering gratuities, “being the first small business in the competitive environment gives you a competitive edge and advantage,” said Woodroof.

Go Online

When many stores shuttered in China and workers stayed home in response to COVID-19, Standridge said the savvy business owners shifted their sales strategy to social media, email and phone calls to avoid heavy losses.

“If you’re closing your store, find ways to keep your employees earning a paycheck by reaching out to your clients, selling on social media, putting your email list to good use or using a video tool to reach new leads,” he said.

Keep Your Routine

Things may not seem the same at the moment, but it’s important to keep some semblance of a routine.

Always have coffee with a mentor? Lunch with a fellow small business owner? Keep those appointments, said Vance Lewis, Ph.D., assistant professor of Management, just adapt.

“You can still have those morning coffee chats, greetings, lunches and comradery over the phone or internet just as easily as in-person.”

Plan for Cash Flow Implications & Get Help

Develop and plan for scenarios likely to result in an increase or decrease in demand for your products and services during the outbreak, said Standridge.

“Determine any potential impact on business financials using multiple possible scenarios that affect different product lines or store locations,” he said.

Other strategies that can be implemented include:

  • Reduce or eliminate all non-business-critical tasks and expenses.
  • Identify essential, revenue-critical employees and make sure they are focused on business-critical tasks.
  • If you reduce staffing levels, consider developing rotating work schedules to continue serving clients. Maintain some level of income to as many employees as possible.
  • Talk to your bank and suppliers about alternate payment arrangements. Talk to suppliers about extending payables. Talk to your bank about temporary interest-only payment arrangements.
  • Eliminate excess inventory to generate cash.
  • If the situation calls for it, reach out to your bank about the SBA Economic Injury Disaster Recovery Loan program.

Cynthia Burleson, director of the Center for Insurance & Risk Management, said it could be beneficial for small business owners to consider business income coverage.

“This is nuanced and often misunderstood,” said Burleson. “Owners need to understand their policy to see if they may have the potential for partial help due to loss of income.”

For more information regarding the policy, click here.

Doug Voss, director for the Center for Logistics, Education, Advancement & Research and Scott E. Bennett Arkansas Highway Commission Chair, encouraged small businesses to negotiate payment terms with financial institutions.

“Protect your employees’ health and financial well-being to every extent possible, and avail yourself of state and federal assistance programs,” said Voss.

For more information on programs available to small businesses, click here.

The Conductor provides free, one-on-one virtual consultation for small businesses.

“We work every day to help business owners in Arkansas to get their game plan together if they need guidance or assistance,” said Standridge.

Go to arconductor.org to set up a session.

Posted in: COB News on March 23, 2020 Tagged: , , , , , , , , , ,

BIT Club Meeting – 3/10/20

The Business & Information Technology (BIT) Club is having its third meeting on Tuesday, March 10th.  The event, which will be held in the College of Business Auditorium (Rooms 107/208) during X-period (1:40 – 2:30 p.m.), is open to all majors on campus.  Phi Beta Lambda is co-hosting the event.  Our speaker will be Ms. Shari Natovitz, former Senior Vice-President, Director of Risk Management, Silverstein Properties and World Trade Center Properties, New York, NY.  Shari has spent the past fifteen years providing leadership, direction and creative solutions for the risk management challenges of the company’s real estate, development and financial services businesses.  This included the WTC development project and the Silverstein portfolio of buildings, acquisitions, operations and new construction projects.  Refreshments will be served and door prizes will be awarded.  All students, faculty, and staff are invited to attend.

Posted in: COB News on March 5, 2020