May 17, 2020

COVID-19: five priorities for retail supply chain

Supply Chain
Risk Management
Georgia Wilson
3 min
As COVID-19 continues to impact supply chains, we take a look at the five prority areas in which retail supply chains are taking action to mitigate the...

As COVID-19 continues to impact supply chains, we take a look at the five prority areas in which retail supply chains are taking action to mitigate the risks.

AS the COVID-19 pandemic continues to spread, retailers have stepped up their efforts when it comes to providing consumers with essential goods and to protect the health and well-being of communities. 

In order to achieve this retail supply chains are facing challenges that require extraordinary measures to ensure that essential goods continue to be delivered to stores and consumer doorsteps. To mitigate the short term fallout, supply chain leaders are creating transparency and building rapid response capabilities. 

Research on consumer spend amidst the outbreak:

With the supply chain industry facing several challenges, including shifting customer demand, restrictions and potential material shortages, the outbreak has forced many to rapidly adapt their supply chains.

Suppliers

Due to surging demand for essential non-discretionary goods, retailers are facing network-wide shortages. To combat this retailers are working closely with companies across their supplier bases.

For the most important products, daily meetings are being held with strategic suppliers to work through the options for securing an adequate supply of essential high-demand items. This is the first and foremost priority for those in the food, drug and mass (FDM) categories, to secure a fast and reliable supply.

Actions taken:

  • Simplifying SKU profiles to reduce variety and boost quantities 

  • Easing payment terms

  • Widening delivery-appointment windows

  • Relaxing on time and in full (OTIF) requirements

  • Redirecting resources

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Merchandising operations

With retailers looking to recalibrate their product orders to be in line with customer demand, they will also need to feed the change across their purchasing, planning and inventory management operations. 

Actions taken:

  • Revising purchasing plans favouring items in high demand 

  • Directing inventories towards locations where sales are particularly active

  • Bypass or override inventory replenishment and inventory allocation algorithms

  • Reassign merchandising operations staff

  • Reassigning in-store marketing budgets to build operational flexibility for essential items  

  • Relocating inventory already owned to conserve cash

Distribution

In this part of the supply chain, distribution is where demand trends for non-discretionary and discretionary goods start to overlap significantly. 

Actions taken: 

  • Reassignment of employees to increase capacity 

  • Cross-training and reassigning back-office and store personnel

  • Temporary movement of office works into distribution centers

  • Staggering shifts to maintain worker health and safety as well as improve retention and reduce turnover

  • Suspending operations between shifts to deep clean distribution centers 

  • Conducting health screenings 

Logistics

More so than ever before, maintaining flexibility within logistics is essential. The current surge in demand is slowing consuming the excess capabilities. 

Actions taken: 

  • Bypassing distribution centers and ship goods directly to stores and simplifying assortments and packaging processes putting speed ahead of product variety.

  • Supplementing non-discretionary transportation capacity via partnership with under used discretionary goods transportation fleets

Fulfillment

Due to self-isolation, quarantining and stay-at-home orders emerging as a result of the pandemic, companies are seeing a notable increase in online shopping and local deliveries for non-discretionary goods.

Actions taken:

  • Widening delivery windows from immediate or same day delivery, to two or three day delivery, in order to give retailers time to rationalise the scheduling and routing of deliveries in order to save time and mileage 

  • Converting some outlets to ‘dark stores’,to compensate for the decline in store traffic

  • Hiring full-service shoppers

  • Temporarily shifting in-store employees to delivery jobs

  • Lower online order size to qualify for free shipments and relaxing return windows to provide more flexibility for customers

  • Capping purchases of high demand products 

  • Reserving periods of the day for high-risk shoppers, as well as for cleaning and sanitising the store

  • Shortening the stores opening hours

For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.

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Jul 13, 2021

5 minutes with: Ivalua’s Sundar Kamak

Ivalua
supplychain
Manufacturing
Procurement
2 min
Ivalua
Procurement and manufacturing veteran Sundar Kamak, Head of Manufacturing Solutions, Ivalua weighs in on challenges and opportunities in the industry

Who are you? 

My name is Sundar Kamak, I’m Head of Manufacturing Solutions at Ivalua. I’ve been with the company for around two years now, and I’m responsible for our industry solutions and our pre-sales team. Before joining Ivalua I spent almost 20 years in the source-to-pay procurement space, working for a number of providers. But I got my career started in manufacturing and supply chain, specifically in automotive and aerospace.

And what is currently taking up the majority of your professional time?
 

The last year I've been focused in helping organisations put together a digital transformation strategy, especially manufacturing companies, so they can continue to address some of the challenges they face due to the COVID pandemic. 

The traditional approach of engineers designing their latest product then procurement going off to source no longer works


What are the biggest challenges facing your corner of supply chain? 
 

We have a lot of clients coming from different backgrounds - aerospace, high-tech, automotive - and they’re feeling the pressure and the crunch. There’s a lack of product, lack of material availability, lack of resources, labour shortages. So, I work with the leadership in these organisations, try to understand what problems they're looking to solve and come back with Ivalua solutions that can help them address some of these challenges.

Where do the biggest opportunities lie? 
 

If we look at manufacturing, it all comes back to procurement and supply chain being involved sooner in the process. The traditional approach of engineers designing their latest product then procurement going off to source no longer works. It’s important to treat suppliers like partners, which means you build trust, so they can participate very early on in the product design and product development process. It’s not done consistently in the manufacturing sector, but it will be key. 
 

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