Today we bring you some strategy from the fast-changing world of retail to help deal with COVID-19-related disruptions. Written by Supply Chain experts Gary Newbury and John McClymont. Gary is a Retail Supply Chain Strategist & Serial Transformation Executive, and John is a Senior People Leader & Supply Chain Professional.
Our world of retail fulfillment seems to have become one of sudden extremes; highly sporadic demand patterns, frequent Out of Stocks (OOSs), empty shelves, huge efforts to keep product flowing, capacity constraints, resource bottlenecks, a contagious virus, multiple government interventions – an unprecedented disruption and an upheaval of what we have known to be true. Consumers are being bombarded with information, uncertain of how to synthesize all of the unknowns. Their behaviour has become erratic and influences demand patterns. To help bring focus to the hardworking supply chain teams across Canada, here are some thoughts on how to win:
1. Drive stability with a robust “Click and Collect” service.
“Physically distancing” consumers with heightened anxiety of COVID-19 risks at your stores. Create an easy to navigate online platform for consumers, one which allows store staff to pick orders and have them available for a “no contact” pick up (order today, pick up tomorrow) to best balance store staff resources with BOPIS (buy online, pick up in store) demand. Encourage an online shopping habit and, in turn, loyalty to drive share and basket size. You are in control of the experience and helping your customers to “keep safe”.
2. Introduce SKU simplicity.
Quickly reflect on open stores – Consumers are buying on a “needs” basis. Simplify assortment to have greater shelf width/item = less “empty shelves”, avoiding a sense of scarcity. Relax private brand production opening supplier capacity to produce against subclass demand patterns. Run in store promotions to clear non-core lines helping consumers acquire their “favourites.” Switch them into the core offering when these items are exhausted. Temporarily redesign planograms, establish new replenishment quantities. Implement auto replenishment algorithms. Monitor closely, adjust master data. Find local suppliers to shorten lead times.
3. Raise buffer stockholding in DC network – to provide reliable store replenishment and local emergency response.
Move to 24/7 warehouse operations. Reserve doors for product expediting. Advance store polling times – gain visibility of demand profile, plan selection resource and trailer loading more efficiently. Consider transferring high cube movers to a DSD (direct store delivery) program, reposition fast moving stock to front of aisles, and reduce dropdowns by changing inbound TiHis (Tiers and Highs) for faster pick rates. Consider any actions to consolidate stock in the field, such as reducing open stores to focus activities and productivity – This may happen through infection. Be ahead of this risk!
4. Use unconstrained transport routing approaches – shake out non-trailer access constraints.
Create “dry stock runs” – easier to subcontract (if supporting multi temp lines). Turn up store replenishment frequency with multi-stop “top up” routes. Take advantage of reduced noise restriction bylaws – stores deliveries evenings/overnight. Consider positioning switch trailers for high volume stores, providing short term capacity at stores to cope with high volume flow currently.
Applying these disciplines in the immediacy will help retail businesses cope with COVID-19 chaos.
A big thanks to both Gary and John for their contribution! If you’d like to get even more of their perspective, we’ve done interviews with both for the Argentus blog. Click here for our feature interview with Gary Newbury, and here for our interview with John McClymont.
Contributors contact info:
Gary Newbury – Retail Supply Chain Strategist & Serial Transformation Executive – email@example.com
John McClymont – Senior People Leader & Supply Chain Professional – firstname.lastname@example.org.