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Seven ways to cope with supply chain disruptions during a global crisis

(Image credit: Image source: Shutterstock/KAMONRAT)

Enterprises right now are channelling all of their energies into analysing their business continuity plans. But companies that are delivering essential supplies, such as food and medicines to customers have one more critical thing to worry about – crisis management.

Nationwide lockdowns in many countries around the world during the Coronavirus pandemic have triggered challenging disruptions in supply chains.

More than ever retailers, suppliers, transport operators and online delivery companies have a crucial role to play when it comes to serving society, especially those badly affected by the ongoing crisis and by ongoing lockdowns. It is a herculean task and demands that businesses introduce major changes in their existing supply chain operations.

How to cope with a spike in demand for online deliveries

With consumers in many countries advised to stay in their homes or limit their movements, online deliveries have become the safest and most convenient way to buy essentials. This has led to an unprecedented surge in demand for online deliveries with panic buying in the first few weeks helping to fuel this demand.

Figures from Quartz show that since 9 March there has been a big increase in the demand for drivers and resources to support this growing demand, including a 78 per cent increase in food delivery and 15 per cent increase in package delivery. Some supermarkets in the UK, for example, have announced hiring sprees, including Tesco, which has added 200 vans to its fleet and hired thousands of new drivers to help grow its home delivery business, as well as ramp up click & collect services.

Some have turned to partnering with other organisations, such as Marks & Spencer, which recently partnered with Deliveroo to deliver around 60 M&S essentials like milk and bread. While others are still struggling with demand. Amazon recently highlighted that it has been experiencing Prime Delivery delays and running out of stock of popular household items, while online retailer Ocado suspended its online food delivery service for a period of time saying it simply cannot meet demand. In Australia, Coles’ delivery windows were closed for a week in many areas of Melbourne and Sydney, with the website automatically prompting consumers to select the ‘click & collect’ option if they wanted their groceries sooner.

As countrywide restrictions intensify, incidents of poor scalability, delivery cancellations and delays will keep happening unless businesses introduce measures to get their supply chain up and running. Now, more than ever, efficiency of supply chains will determine how well businesses are coping up with the ongoing challenges.

Seven ways to bring supply chain and delivery operations up to speed:

  • Leverage crowdsourcing capabilities

To meet such unprecedented demand for home deliveries, businesses must focus on optimising their key assets, including staff and vehicle capacity. They can leverage advanced crowdsourcing technologies to optimise staff capacity by on-boarding temporary or part-time delivery executives from across disparate delivery provider ecosystems.

  • Ensure contactless payment and deliveries

As ‘social distancing’ becomes the norm for now and some time in the future, retailers should provide customers with contactless or “tap-and-go” payment options, eliminating cash transactions. OTP based transactions or even payment by touching cards are recommended now. Businesses also need to strictly follow ‘leave at door’ deliveries guidelines. Deliveries should be made flexible by allowing customers to choose where a particular order should be placed and when.

  • Encourage employees to drive decision-making

To quickly respond to immediate supply chain challenges, it is important to build a ‘Crisis Team’. But a crisis team that does not have enough authority to make decisions is not useful. Retailers should have the confidence to leave key aspects of decision-making to employees below their management levels as these teams have first hand knowledge about ground-level activities. Research has highlighted Chinese retailers that have empowered those below management to take prompt action and decisions to address immediate concerns, and to avoid overwhelming already overburdened senior management.

  • Implement real-time dynamic routing

Businesses should introduce real-time and dynamic routing capabilities to maximise staff-vehicle utilisation capacity. Such capabilities not only increase delivery productivity and reduce the cost of fuel consumption, but also ensure businesses can efficiently plan multiple drops on a particular delivery route. Businesses should ensure the needs of vulnerable people are met as a priority. Hence, it’s crucial to develop capabilities that allow emergency collections and deliveries while a driver is out on the road.

  • Control price and reduce promotions

Increasing the price of essentials to manage margins is not a good idea. It will lead to high levels of customer disappointment, negative media coverage and potentially hefty fines from the government. Fortunately, most retailers are shrinking their margins further to keep the prices of essential commodities the same. Retailers need to introduce additional layers of control to ensure prices do not increase even by mistake. Brands should also avoid promotions, which can result in an increase in demand and pressure on manpower. Also, with lockdowns and travel bans, there is a limit to how much one can boost sales through promotions. It also gives an opportunity to shift investments in promotions to more vulnerable areas like operations, inventory and last-mile delivery.

  • Embrace the dark store strategy for online orders

Surging demands amid lockdowns make inventory management extremely difficult. One way to deal with this challenge is to open up ‘dark stores’, something that retailers in the US and UK have already started doing. These stores look like supermarkets but are closed to the customers. They can be treated as mini warehouses that are closer to customer locations. This ensures that pick-up orders are executed faster and automating pickups within these stores will make inventory even more efficient.

  • Onboard new platforms remotely

If businesses are willing to invest in new technologies to ensure rapid scalability, they should look for platforms with very short go-live cycles and can be implemented remotely without physical intervention.

Kushal Nahata, CEO & Co-founder, FarEye