The global pandemic has the entire world in lockdown with a significant impact on both human lives and livelihood. Talking about businesses, both offline and online business models have taken a beating, with substantial disruptions across the supply chain and changes in demand and revenue patterns.
Even e-commerce giants like Amazon have not been able to cushion the impact of the virus (and the ensuing lockdown) on the supply chain, with Prime members having to wait for a couple of weeks for products they previously received in a day.
On the other hand, the local Kirana stores in India have emerged as superheroes, offering quick deliveries and better customer service.
And that’s exactly where the learning lies for retailers in this lockdown — that is — reduced reliance on e-commerce platforms and major re-planning of logistics for store-to-home deliveries, to meet the emerging business norms during and after the pandemic.
Another important consideration is the digitization of supply chains to make them omnichannel instead of multichannel, effectively breaking down the organizational silos and bridging the gap between offline and online to meet the new demand patterns of the post-COVID-19 era.
Reinventing the Supply Chain in the Wake of the Coronavirus
The disruptions caused by the coronavirus have impacted every step of the supply chain — including the last-mile delivery, which is affected by lack of proper route planning, drivers, and other resources. It is also a fact that the disturbances caused by the coronavirus will lead shoppers to spend more time online as compared to shopping in stores — straining the supply chain further, especially the last mile.
McKinsey has shared a six-point program to revamp the supply chain in the face of the coronavirus pandemic. One of these steps focusses on reassessing the logistic capabilities — which is essential for meeting demand through an optimized warehouse and route planning, by keeping in view the hotspots and other restricted areas in real-time.
“In a time of crisis, understanding current and future logistics capacity by mode — and their associated trade-offs — will be even more essential than usual, as will prioritising logistics needs in required capacity and time-sensitivity of product delivery. … To improve contingency planning under rapidly evolving circumstances, real-time visibility will depend not only on tracking the on-time status of freight in transit but also on monitoring broader changes, such as airport congestion and border closings. Maintaining a nimble approach to logistics management will be imperative in rapidly adapting to any situational or environmental changes.” — McKinsey
In this scenario, major retail brands, whether it is Nike, Spar, or Samsung, would have to start utilizing their stores as inventory points or dark stores for fulfilling online orders.
With existing stocks languishing in various physical locations, partnering with a digitally forward 3PL company could facilitate an omnichannel supply chain.
These supply chains accept online orders according to the location of the customer (for existing and future stocks in various locations), and then seamlessly deliver these orders, from dark stores to homes or other delivery locations, as specified by customers.
The recent multi-billion dollar deal between Jio and Facebook supports this view, wherein tech giants are coming together to create a hyper-local online shopping and delivery system. However, a key enabler in any such model, as also pointed out by McKinsey above, is the logistics and distribution capability of a retailer.
For example, a distribution center in a hotspot may see lesser demand while another distribution center in a green zone may register higher demand. To keep up with these constant changes, retailers need smart logistics with an extensive distribution network.
Real-time checks, automated systems, data analytics, and automated route planning offered by technology-driven logistics companies like Shadowfax could be vital in fulfilling such changing demand patterns efficiently and swiftly while keeping the costs in check.
If you are looking to transform your supply chain for more agility, transparency, and resilience, a technology-first 3PL company can help you bring about the transformation.