A further 10 suppliers joined our regular contributors this week where our discussions embraced the issues surrounding employee wellbeing as well as the usual supply and demand challenges. One market-leading supplier shared insights into their policy adjustments, ways of working and the social networks they have introduced to help staff work with the restrictions lockdown has imposed. Along with the support around flexi working, holiday entitlement, home-schooling and educational resources, they have also encouraged community groups to help with positive spirit - yoga, quiz evenings, film nights, exercise groups amongst other ideas. All suppliers endorsed how important it is for everyone to feel connected and part of a group, as well as a team, right now. Other suppliers also reported new initiatives including positive employee recognition policies, keeping-in-touch communications and attendance/ performance bonuses. Safety and a healthy work / life balance have been recognised as critical for organisations and it is encouraging that many have taken the opportunity to introduce these initiatives now.
Where supply is restored, EPOS is now beginning to stabilise as our ‘new normal’ emerges. Some categories however, are still struggling to maintain supply against increased demand, despite range rationalisation e.g. biscuits and sugar. A combination of higher consumption, supply challenges and brand/ product switching, continue to provide a challenging demand picture. More retailers are now pushing for promotions in the near to medium-term, compounding the issue in the supply-challenged categories in particular, where promotional uplift is exaggerated by a lack of competing promotions.
Ranges continue to be rationalised, but 5 day order lead-times and blanket reductions in shelf life, which have enabled them to ride out the worst of the peaks are steadily returning to normal. Some suppliers are now using the opportunity to ensure that customers return to levels that are appropriate and reign back in those (especially smaller customers) who had historically achieved more favourable terms and reinforce pallet and layer minimum order quantity restrictions which may have lapsed. Some range rationalisation is likely to stay as social distancing has impacted productivity in a number of factories, especially where hand-packing is involved. One supplier has relocated much of its hand-packing to a warehouse near its DC to enable more space for social distancing and to minimise the impact of on-costs. Many other suppliers are supplying previous multi-pack skus in parent packs (e.g. singles) as an alternative to maintain supply.
Alternative logistics solutions are being trialled, with Heinz launching their Direct To Customer to Home – pre-selected packages delivered direct to consumers, via a separate 3rd party solution. A chilled supplier is continuing to test the freezing of primarily foodservice products, to minimise waste and explore other methods of supply for the future. However, with frozen storage capacity running out fast there may be limited options in the run up to Christmas.
Packaging could become an issue on key lines due to increased demand as many consumers trade down, but for most products it should be recoverable. Some high-volume retail branded lines may present more of a challenge however, if current sales levels are maintained for ink-printed films where capacity and lead-times are already tight.
Service levels are beginning to make a return to the agenda for some retailers and, although the Advantage Survey has been moved back by a month, suppliers are increasingly aware they need to focus on the retailer relationships, planning for the longer term and getting back to ‘best in class’.
Chilled service levels already appear to be recovering with a couple of suppliers at previous high-90% levels, whilst for many ambient suppliers struggling with reduced ranges, many were still below 90%.
Meanwhile, a number of suppliers are seeking to recruit and on-board supply chain and customer service team members and we will review the processes and tactics being deployed at the next meeting to help and refine a virtual recruitment and induction best practice approach.
The last few weeks have seen both large and smaller suppliers across both Ambient and Chilled sectors openly sharing their issues, knowledge and opinions. This collaborative approach is helping everyone involved be able to plan a little better for the future.
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Our next meeting will focus on forecast accuracy, customer service levels, recruiting and on-boarding via remote working, range rationalisation, promotions and range changes
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