Over the last six months, the Australian retail and supply chain landscape has weathered a multitude of disruptions. In January, bushfires swept through the nation burning an estimated 18 million hectares of land. In February, the fires were replaced with torrential rain, resulting in flash flooding; and in March, the COVID-19 crisis hit and took hold of the nation until about now. So here we are in June, restrictions are easing and things almost look normal.
But for many retailers, ‘normal’ is a distant memory. Why’s that? Because the ups and downs of consumer demand, accompanied by nation-wide environmental disasters made for a turbulent time in supply chain and logistics management. Each of these disasters has impacted the supply of goods, with retailers experiencing unstable supply and demand fluctuations.
A seamless delivery experience is key to the overall customer experience and has the power to greatly influence if a customer is feeling satisfied or dissatisfied with a brand. But what does this mean for supply chain and logistics managers?
Supply chain flexibility
While 2020 has certainly dealt the world an unstable hand, the good news is that supply chain disruption is not a new issue. The last few months may have exacerbated the feeling and pushed supply chain managers in new ways, but the best practice resolution and preventative measures remain the same. Rather than using costly reactive measures to stabilise the supply chain amid disruption, supply chain managers should invest in preventative measures to stay ahead of the game and reduce impact if and when disruption occurs again.
To withstand the unpredictability of disruption, a comprehensive, long-term strategy is needed. Prevention is better than reaction, so supply chain and logistics managers must optimise their supply chain to cope with ongoing fluctuations in consumer demand. Supply chains can no longer comprise of rigid and unmoving structures, but rather a resilient one with a commitment to optimise the supply chain for these circumstances. So where to start?
Minimising risk with source diversification
To minimise the risk that is felt with disruption, businesses should diversify how and from where their products are sourced. If the current climate has proved anything, it’s that an elastic approach needs to be considered. That means strategising and deploying an approach that is always-on, consumption-based and scalable. A lot of brands became stuck when the transportation of goods from China was halted, failing to deliver products and angering customers.
For this reason, an elastic supply chain strategy that includes a diverse range of sources is a smart and proactive move – it can help supply chain managers to alleviate risk in the face of disruption and continue to deliver a seamless customer experience.
Visibility is key
Uncertain times and unpredictable circumstances do not make visibility redundant. In fact, visibility is the cornerstone of flexibility. If anything, it renews the focus on its importance.
Forward-thinking businesses are always looking for ways to ‘water the plant’, enabling them to grow and improve. Part of this means evaluating the current landscape and leveraging it to innovate, capitalising on shifts in consumer demand and the market. Disruption and the ensuing fluctuations in demand reveal weak points in a supply chain.
To address this, businesses should adopt the use of insightful data sets and forecasting tools to make better business decisions and create operational efficiencies. For example, a courier organisation analysing 12 months of data through a fleet management optimisation tool will result in streamlined delivery routes, better utilisation of vehicles and staff which will then allow new product offerings (such as parcel shops).
A resilient supply chain arms organisations for disruption
A resilient supply chain is a collaborative one; it requires a network of trading partners and seamless connectivity to them. This helps partners locate resources needed on demand, providing capacity where and when businesses need it most. While supply chain is absolutely achievable, it doesn’t happen overnight; building trust among suppliers and partners is an integral step that can’t be rushed, but the end result is rewarding. A good example of this is Woolworths. Over the last few months, the grocer experienced demand like never before and to fulfill this, it partnered with PFD Foods, leaning on the collaboration to complete deliveries.
Those who are quick to collaborate will reap the benefits of improved operations with flexibility and scalability, allowing supply chain managers to adapt quickly to changing demand.
Disruption is inevitable and an organisation’s best defence is preparation and flexibility. With the right technology tools and partners, businesses will be equipped to stabilise their supply chain, even in the face of great uncertainty as has been experienced in the last few months of 2020.
Paul Soong is regional director ANZ at BluJay Solutions