Bullwhip: How Coronavirus Hit Meat Distribution
734% More Toilet Paper: How Should I Adapt My Logistics to the Coronavirus Pandemic?
By Hugh Sinclair | Founder, CommerceBlitz
The global supply chain faces an unprecedented challenge in its response to COVID-19 and its associated economic impact. Data and anecdotal evidence reveal that industries with antiquated processes and less flexibility are among the hardest hit, so we recommend multiple solutions, including software automation, process optimization, and more.
The pandemic caused by the latest strain of novel coronavirus, SARS-CoV2, and its associated respiratory illness, COVID-19, is currently shaping global politics, economics, and logistics. Besides the global death toll and near-extinction of entire markets, our current state of affairs has exposed countless vulnerabilities in logistical processes, from healthcare to consumer goods; these may either exacerbate or become exacerbated by geopolitical and logistical inequities, resulting in the inefficient or wasteful distribution of key resources, as well as goods of all shapes, sizes, and importance. As the situation evolves the world is tepidly returning to equilibrium while bracing for a second outbreak and adapting to new cultural norms – and the distribution sector must follow accordingly. In the following material, we’ll examine some notable case studies from the early COVID-19 outbreak in the United States, review aggregate data that attempts to take a pulse of the industry as it stands, and make common-sense recommendations based on insights from industry leaders and our own observations.
The Outbreak: Strained Supply Chains Clamor to Adapt
“You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.” – Dwight D. Eisenhower
What we have seen in the aggregate is nothing short of a cataclysmic disruption of supply and distribution chains due to pandemic responses. What now remains to be seen is which players are most willing to make investments in adaptation and progress.
The Answer: Recommendations Adapting to the New Normal
However, automation is not the only area where businesses can improve. A recent McKinsey report based on larger industry surveys has suggested that other processes that can adapt include retail shopping, fulfillment, and distribution capacity – all areas which still require human interaction.
Based on decades of industry experience, as well as analysis of survey data and market trends, the following recommendations are issued for enterprises of any size looking to excel heading into the “new normal:”
UPDATE DEFINITION OF DIVERSE SOURCING
INTEGRATE LEAN, FLEXIBLE AUTOMATION
Companies looking to invest in surge capacity must realize that even if they invest in state-of-the-art hardware, processes cannot be made fully lean unless human resources can be onboarded quickly. Warehouse and inventory software is often cumbersome and unnecessarily expensive; warehouse managers should seek out software that is cloud-based (easy to integrate multiple facilities, minimal and flexible hardware requirements, remote work-friendly), can operate without preexisting product catalogs (easy to migrate and onboard personnel, easy to use, reduces lag, and makes shifting production to emergency goods easy and profitable), updates in real time (reduces lost inventory and confusion), and offers API integration with existing systems (reducing manual CSV export/import improves data integrity). Consider unique warehousing approaches like zone nesting, which reduces time spent packing/unpacking trucks, pallets, and cases.
FULFILLMENT: THINK OUTSIDE THE BOX
Equip brick-and-mortar locations to handle contactless curbside pickup, and reconsider distribution routes to include more frequent visits between retail locations and warehouses so that inventory is available on-site. Increase delivery time windows to level expectations while taking greater care to ensure inventory is accurate and stockouts are minimal. Be more flexible with returns, knowing full well that opportunities to “try before you buy” will be reduced or eliminated altogether; this will improve customer retention and lifetime value.
INVEST IN A SAFE WORKSPACE
Make the marginal investment in sanitary facilities upfront to prevent illness, improve quality control and quality assurance, and keep morale and productivity high. Stagger shifts and enable remote work where possible to make sure personnel maintain safe distance from one another. Digitize Standard Operating Procedure documents and make them available online to improve accessibility and reduce the sharing of physical objects.
DATA, DATA, DATA
Review reports more frequently and use them to quickly shift inventory toward high-demand products. Host daily or weekly meetings, remotely when possible, between cross-functional teams to download business intelligence and update forecasts accordingly.
The post-COVID paradigm will be one of increased sensitivity, precaution, and tepid, informed purchasing. Companies that adapt to new social and economic norms will be better-suited to keep revenue numbers afloat while maintaining predictable fixed expenses, which will serve as a stopgap to a new era of product and service innovation. By automating the gaps in reduced human contact, quicker training and onboarding on leaner software, understanding business data, and taking the steps to ensure a clean environment, distribution chains can not only see a quick return to previous operating capacities, but become primed for expansion. As always, the fittest will survive – and start to thrive quickly.
About Hugh Sinclair and Logistics for Hire
Hugh Sinclair is an experienced technology professional. He started his career deep into audiovisual systems, designing his own multichannel inventory and logistics platform to handle equipment rentals. In 2009 he designed a messenger-based logistics system around the open-source RabbitMQ software; that platform grew to support his first company, ShoppingBlitz. After a decade using the ShoppingBlitz platform to handle more than 400 brands, two million SKUs, and drop-shipped, pre-ordered, and stocked inventory, Hugh exited ShoppingBlitz to build on its tech as the CEO of a new venture, Logistics for Hire.