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Coronavirus requires increased speed and agility in the retail supply chain

960 640 Stuart O'Brien

A major study from the University of Warwick has provided insights into how retailers have responded to COVID-19 crisis, highlighting a need for human intervention with existing processes unable to keep up with changes in the markets.

The research, conducted by the university in partnership with Blue Yonder, concludes that, going forward, future systems will need to be more robust and responsive, to increase speed and agility in the supply chain.

The pandemic means both online and physical retailers have experienced a combination of unprecedented demand for some particular products, whilst no demand for others. Many stores have been forced to close, or adapt their operations to accommodate social distancing. Where possible, there has been a shift to online shopping, but this is not always possible and presents its own operational challenges.

The study gathered insights from 105 different retailers from Europe, Asia and the Americas who offered a glimpse into their survival and navigation of the COVID-19 crisis. The study found that:

  • The majority (61%) of retailers used inventory to buffer against the disruption of COVID-19. Supply chain processes and systems were effective, but more than half (58%) of retailers said a high degree of manual intervention was required to respond to the fluctuation in demand and supply.
  • Workforce issues were dominant issues for retailers with 59% of warehouse and 48% store operatives being affected by quarantine or illness. This often resulted in the closure of online operations and the need to recruit temporary staff.
  • Retailers were polarised in their treatment of supplier payments, with 37% delaying payments and 30% making early payments.

The survey was administered on-line by Qualtrics in late April 2020. It was targeted at senior executives in retail supply chains, in Europe, Asia and the Americas. 105 responses were received with relatively equal distribution across the regions.

Jan Godsell, Professor of Operations and Supply Chain Strategy at WMG, University of Warwick, said: “Using inventory to buffer against the disruption of COVID-19 was the most common strategy deployed by retailers. This provides the greatest certainty of supply but comes at a cost. In contrast, only just over a quarter (29%) of retailers relied on suppliers with more agile manufacturing and distribution networks, which is a potentially more resource efficient and resilient response.

“With 75 to 80% of products seeing a demand fluctuation, retailers were slightly better at responding to decreases rather than increases in demand. Whilst retailers found that their supply chain processes and systems to be effective in responding to the demand fluctuations, many were still dependent on the human touch.

“From warehouse and store operatives being affected by quarantine or illness to an over-dependence on human intervention within supply chain planning, COVID-19 has highlighted the human vulnerabilities across retail supply chains.”

Wayne Snyder, Vice President Retail Strategy, EMEA at Blue Yonder, added: “Early indications in Asia show that customers have been most supportive of those retailers they deemed to have responded best to the crisis and we’d expect that pattern to follow across Europe and the US. A critical learning for retailers is the need to invest in creating supply chains with greater flexibility, visibility and automation. Here technologies such as artificial intelligence and machine learning will play a key role in helping retailers navigate future disruption, whilst still meeting customers’ expectations.”

 

Coronavirus means surge in online ordering continues

960 640 Stuart O'Brien

Online food shopping has seen steady growth within the UK for a number of years, with one in five UK internet users aged 18 and over buying groceries online, according to a YouGov survey conducted in Q3 2019.

However, this has surged with the outbreak of COVID-19, and supermarkets are struggling to keep up with the demand for online orders as shoppers choose to avoid bricks and mortar retail premises.

14.2 percent of UK internet users aged 18+ polled in March admitted that they had increased their online grocery shopping, according to research by RetailX Coronavirus Consumer Confidence Tracker published by Internet Retailing, along with 6.9 per cent of those polled that said they ordered more takeout online.

The demand has created its own problems, with many users left frustrated as they’re left in ‘virtual’ queues which can be thousands of people long, while new customers are seemingly barred from using online services.

Supermarket websites and apps have also taken a hit with many crashing due to the large numbers of traffic using the platforms, with a mid-March Ipsos MORI survey of adults in the UK revealing that more than 40 per cent were buying more supermarket items than they normally would as a result of panic buying across physical and online stores.

Online shoppers forced to search for alternatives has been good news for a plethora of smaller UK firms that might not have benefitted from this new attention, along with restaurants making the change from guests dining in-house to direct-to-home delivery services of meals prepared by chefs.

With the COVID-19 outbreak only getting worse, many UK businesses are fearing the worst about the coming months. However, it’s clear that for the entrepreneurial and resourceful, business specialising with online shops and ecommerce platforms have a much better chance of survival and growth in the days ahead.

Coronavirus: Tesco limits online orders

1024 301 Stuart O'Brien

Retail giant Tesco is limiting online grocery orders to 80 items only in a bid to prevent stockpiling as a result of the COVID-19 outbreak.

Previously, the average number of products ordered online by consumers would have been under 60 products, but that figure has risen sharply in recent weeks.

The new limit by Tesco aims to allow shoppers to continue with their weekly purchasing.

According to a statement by the company: “By introducing this new limit, we can get more orders onto each van, allowing us to release significantly more delivery slots over the coming weeks, as part of our efforts to ensure all customers can access the essentials they need.”

Tesco has also requested that members of the public not at a high risk from the virus should visit stores in lieu of online shopping, giving the store more available time slots to offer those at a high risk from COVID-19.

“We know that it’s difficult to get a delivery slot for online shopping at the moment due to high demand, and we ask those who are able to safely come to stores to do so, so that we can start to free up more slots for the more vulnerable,” said a spokesperson for the company.