By Ralph Tkatchuk
The coronavirus crisis has essentially left no one unscathed. You don’t need to have contracted the disease to feel the effects of the economic crunch brought about by the pandemic. Government-imposed measures limited mobility and forced non-essential businesses in some provinces to close in order to curb the spread of the virus. The situation has certainly taken a toll on the economy. Canada's GDP fell 11 percent in April alone, due to the drop in consumption and limited commercial activities.
Retail is one of the hardest hit sectors, with sales dropping a record 26.4 percent in April. Supply chain networks also continue to be strained by the limited flow from global manufacturers, the sudden shifts in demand for certain products, and difficulties in fulfillment and logistics.
To cope, businesses must evaluate how they can better manage their own supply chains to ensure that they have the capability to continue doing business and meet customer demand.
Here are three ways retailers can improve their supply chains to help them weather the pandemic.
1. Monitor shipments
Despite the improvements in shipping technologies and processes, supply chains still face the problem of waste. Canadians return 8.6 percent of what they buy, totalling $26 billion in revenue value each year. This figure doesn’t take reverse logistics costs into account, mind you.
Claims on defective and damaged goods account for part of these returned purchases. which are typically caused by deficient quality controls and poor handling. Often, retailers have to absorb the costs of processing these returns. Such expenses typically weigh more during an economic crunch.
Retailers can curb this by implementing shipment monitoring solutions. Logmore, for instance, provides quick response (QR) tags which are equipped with sensors that detect temperature, humidity, ambient light exposure, shock, and scanning location. These can be simply placed on packages, and the tags will automatically record any changes in the shipment's condition. Information can easily be scanned through the tag's dynamic QR code using any smartphone and the scanned data is automatically sent to the cloud for their review.
By knowing the state of each shipment in the supply chain, retailers can readily act on any issues in transit or even switch service providers, in cases where certain suppliers and other partners consistently perform poorly.
2. Go local
Many Canadian supply chains rely on cross-border shipments. The pandemic and other recent events have impacted the flow of goods going into the country. China accounts for 13 percent of Canada's imports, and shipment slowdowns from Asia have put a strain on inventory replenishment and stockpiles of China-sourced goods.
Operations in the Port of Montreal was also recently marred by a labor dispute, which further strained supply chains. The port handles over 40.5 million metric tonnes of products annually, including consumer goods, food and petroleum. Fortunately, parties agreed to a truce that led to the resumption of operations.
In response, there have been calls to lessen the dependence on overseas supply by shifting manufacturing back locally. Retailers can also explore similar strategies by going local. Supplies and logistics are expected to be affected by the limited mobility worldwide for quite a long while, so developing a local network of suppliers now can help guarantee the availability of products for retailers to sell. This can also help stimulate local economies.
3. Streamline or diversify offerings
Retailers must also consider how consumer behaviours are being reshaped by the pandemic. Canadians are spending more on essentials such as groceries and less on fashion and leisure. Even seasonal consumption such as back-to-school shopping has taken a hit.
Given these trends, businesses can review their product lineup and inventory to identify which of their products will be in demand. It may even be wise to either streamline or diversify product offerings in order to better serve their customers. They can also factor in the challenges in supply so that they can anticipate how soon they should be placing restock orders from their suppliers.
By ensuring that they have the right products and ample supply to meet demand, retailers can lock in on their sales.
Ensuring Continuity
Continuity is key to any business's survival during this pandemic. Retailers should make the effort of improving their supply chains. Efficient supply chains help cut waste and ensure that they have constant a supply of products to meet their demand.
These should result in improving their bottom line despite the coronavirus crunch. As such, they need to partner with dependable suppliers and improve their process so that goods keep flowing in the right quantities, at the right time, and always in the best condition.
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