Thursday, June 4, 2020

Big Names in Retail and Supply to Try and Plan for Pandemic Induced Problems

Logistics Groups Highlight the Changing Face of Delivery Market
Shipping News Feature

UK – In order to better understand the many changes being witnessed due to the current pandemic, supply chain and logistics consultancy SCALA has facilitated an assembly of more than 30 leading grocery and home appliance businesses into a Covid-19 Supply Chain Collaboration Group.

Names such as Premier Foods, Unilever and Bosch Home Appliances have together been assessing these changes and the group sessions have revealed that consumer behaviour patterns have changed significantly for both retailers and suppliers across a variety of sectors over the past few weeks as the UK continues to grapple with the realities of life in lockdown.

Group discussions take the format of weekly virtual conferences every Wednesday, with guest contributions from retailers and suppliers such as Morrisons, Asda and DHL, where members can share ideas. All members are invited to collaborate, and membership is completely free to all organisations that wish to join. As well as bringing the group together, SCALA acts as a neutral advisor, ensuring confidentiality and best-practice is followed at all times.

As to the changing face of trade, specifically many more people are now shopping online and customers are leaning towards single shopping trips to larger stores, instead of shopping around and undertaking top-up visits as was the previous norm. Consequently, convenience stores and discount retailers are often seeing unusual demand patterns due to a change in UK shopping habits, as was revealed in earlier group sessions.

Marketing and supply plans have to be in place well before such things as the traditional retail ‘peak’ season, which includes Halloween, the Black Friday weekend, China’s Singles’ Day and Christmas, and this year we have to add in the end of the Brexit transition period. These are all fast approaching and questions are also now arising as to how these seasonal challenges can effectively be managed when capacity is already stretched.

To overcome these challenges, retailers have cited a need for the sector to work more closely with suppliers to share data and information. Through this, it is hoped that greater supplier performance management can be achieved, facilitating innovation while gaining a clearer picture of the challenges suppliers face, creating greater transparency and understanding across the supply chain.

Labour availability and worker safety are also a widely-reported challenge for both sides. These are issues which are high on the priority list of both retailers and manufacturers. Safety of workers and the impact that more widespread testing will have on the availability of labour, changing advice on Covid-19, and availability of PPE have all been cited by group members.

Finally, third-party logistics providers (3PLs) have also highlighted a challenging shift in customer patterns for home deliveries. Whereas, pre-Covid, peak delivery days were traditionally Wednesday-Friday, these days have now shifted from Monday-Wednesday. Interestingly, 3PLs are also reporting shifting product mixes due to retailers prioritising different product categories and stock keeping units. John Perry, managing director at SCALA, said:

“Going forward, suppliers should accept that the pre-Covid-19 world has gone forever and expectations will now be based around demand in the ‘new normal’. Looking specifically to the months ahead, a major question is how suppliers will effectively manage the seasonal challenges of summer, Halloween and Christmas given ongoing industry uncertainty.

”We must also consider the ever-looming spectre of Brexit, preparation for which was already virtually impossible, how will businesses be able to adequately prepare when capacity is already so stretched? The spirit of collaboration that we have seen so far between our member businesses and their wider supply networks has been heartening to see, and will be integral to ensuring the industry can continue to maintain the fantastic service levels it has shown so far in the months to come.”

Photo: Amazon Mercedes Benz Sprinter home delivery vans by the thousand. Courtesy of Mercedes Benz/Daimler AG.