In response to the Covid-19 pandemic Simply Supply Chain have organised virtual weekly supplier meetings to enable fellow Chilled and Ambient suppliers to share their challenges, frustrations, opportunities and successes with like-minded peers, to develop and share best-practice and understand common practice on the issues arising from managing the impact of COVID-19, within the supply chain (Customer Fulfillment).
Our first two meetings got off to a confident start, with circa 30 suppliers attending to discuss the many current challenges surrounding In-store Availability, Physical Supply and Demand Management.
Feedback has been that, following the recent massive surges in demand (10-100% dependent upon category) as a result of panic-buying in Grocery sector, volumes are now increasing in key retail wholesaler, independent and specialist sectors.
Poor in-store availability has inflicted product, brand and even category switching, rendering retailer forecasts largely irrelevant, making it hard for suppliers to make accurate predictions on anticipated demand. Underlying uplifts were being predicted at between 10 and 30%, dependent upon category.
Whilst the highest demand peaks appear to be easing, there is little likelihood of a stable demand signal for a number of weeks yet, and with Easter and the start of the traditional BBQ season almost upon us, it is particularly challenging.
Some suppliers have deployed Brexit mitigation plans by rationalising ranges, focusing on core volume lines, to increase production capacity and recover availability. Co-packing/ repacking has also reduced due to close-working conditions, as well as impacting potential availability on key lines. Simplifying supply operations, by eliminating/reducing case and layer picking, reducing delivery frequency and moving to full loads has increased shipping volumes to record levels in some cases, but service levels have suffered under such extreme conditions.
Others have experienced range reductions being imposed by retailers and many have seen changes in buying behaviour as sales of single bag snack, lunch and one-shot sizes plummet, causing wastage challenges especially on lower-shelf life products. Multi packs however are selling much higher volumes, resulting in packaging and production challenges.
Product supply is largely back on track, pipelines appear to have filled and Retailer Primary Consolidation Centres are confirming that ‘close to normal’ supply has resumed (albeit at higher volumes) however, no one has a clear read on what true demand is. Suppliers are having to second guess product demand levels with limited input from the retailers.
High in-store availability relies on retailers ability to fill and maintain full shelves, when demand is high, using finely tuned models to replenish shelves based upon sales through the day . However, typical store demand peaks are being impacted by changes in consumer buying behaviour (product quantity, selection and time/ day of purchase), and whilst volumes are smoothed by quantity restrictions and the limited flow of consumers through the store as social distancing measures take hold, this is offset by a near tripling of on-line orders, mostly picked from store.
Store resource levels are also being swelled by new, but inexperienced colleagues, while regular staff are depleted by the virus and self-isolation so, despite the best endeavours of everyone throughout the retail supply chain, maintaining full shelves and being able to predict consumer demand are likely to remain two of the greatest challenges for a few weeks yet.
Jonathan Kittow, MD of SSC commented, "I was proud this week to be able to facilitate a group of circa 30 suppliers coming together to support each other during Covid-19. This has never been a better time to explore, share, learn and plan to improve the efficiency of the retail supply chain and help serve our consumers. Our industry is facing one if its biggest challenges in recent history, everyone is impacted, and everyone can help. We are stronger together."
Our weekly meetings are open to all suppliers: Ambient sector - Wednesdays at 3pm / Chilled sector - Wednesdays at 4pm
Our groups are open to peer FMCG suppliers where they can gain access to our shared virtual channels, sharing key themes, questions and comments across our closed supplier network during the week. The threads and polls will also continue to inform our agenda items for discussions each week.